[X] |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
Maryland
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46-0778087
|
|
(State or Other Jurisdiction
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(I.R.S. Employer Identification No.)
|
|
of Incorporation or Organization)
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||
2221 Olympic Boulevard
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||
Walnut Creek, California
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94595
|
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(Address of Principal Executive Offices)
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(Zip Code)
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(925) 935-3840
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Registrant’s Telephone Number,
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||
Including Area Code
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Title of Each Class
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Name of Each Exchange on Which Registered
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|
Common Stock, par value $0.01 per share
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NYSE American
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Large accelerated filer [ ]
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Accelerated filer [X]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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Emerging growth company [ ]
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Page |
Item 1. |
Business | |
Item 1A. |
Risk Factors | 11 |
Item 1B. |
Unresolved Staff Comments | 33 |
Item 2. |
Properties | 33 |
Item 3. |
Legal Proceedings | 37 |
Item 4. |
Mine Safety Disclosures | 37 |
ORM Stockholders’
Equity |
Loans
|
Real Estate
Properties
|
Net Income
Attributable to Common Stockholders
|
||||||||||
2018……………………….
|
$
|
191,358,782
|
$
|
142,682,243
|
$
|
56,642,510
|
$
|
6,889,531
|
|||||
2017……………………….
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$
|
200,989,727
|
$
|
146,171,650
|
$
|
80,466,125
|
$
|
8,679,848
|
|||||
2016……………………….
|
$
|
215,527,877
|
$
|
129,682,311
|
$
|
113,123,398
|
$
|
24,409,770
|
|||||
2015……………………….
|
$
|
194,979,998
|
$
|
106,743,807
|
$
|
153,838,412
|
$
|
23,569,116
|
|||||
2014……………………….
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$
|
184,571,858
|
$
|
68,033,511
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$
|
163,016,805
|
$
|
7,929,629
|
Number of Loans
|
Amount
|
Percent
|
||||
Senior loans
|
56
|
$
|
137,808,788
|
96.58%
|
||
Junior loans
|
3
|
4,873,455
|
3.42%
|
|||
59
|
$
|
142,682,243
|
100.00%
|
|||
Maturing on or before December 31, 2018 (past maturity)
|
11
|
$
|
26,790,826
|
18.78%
|
||
Maturing on or between January 1, 2019 and
December 31, 2020
|
45
|
108,821,628
|
76.27%
|
|||
Maturing on or between January 1, 2021 and
March 1, 2028
|
3
|
7,069,789
|
4.95%
|
|||
59
|
$
|
142,682,243
|
100.00%
|
|||
Commercial
|
48
|
$
|
132,519,461
|
92.88%
|
||
Residential
|
7
|
5,209,357
|
3.65%
|
|||
Land
|
4
|
4,953,425
|
3.47%
|
|||
59
|
$
|
142,682,243
|
100.00%
|
·
|
$4,514,000 in cash and cash equivalents and restricted cash required to transact our business and/or in
conjunction with contingency and escrow reserve requirements;
|
·
|
$56,643,000 in real estate held for sale and investment;
|
·
|
$2,697,000 in deferred tax assets;
|
·
|
$2,139,000 in investment in limited liability company;
|
·
|
$1,105,000 in interest and other receivables;
|
·
|
$351,000 in deferred financing costs, net; and
|
·
|
$417,000 in other assets.
|
· payments on the loan become delinquent;
· the loan is past maturity;
· it learns of physical changes to the property securing the loan or to the area in which the property is located; or
· it learns of changes to the economic condition of the borrower or of leasing activity of the property securing the loan.
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||
Delinquent/Impaired Loans
|
$
|
11,862,000
|
$
|
8,534,000
|
$
|
4,884,000
|
$
|
8,694,000
|
$
|
22,316,000
|
|||||
Loans Foreclosed
|
$
|
1,937,000
|
$
|
—
|
$
|
1,079,000
|
$
|
—
|
$
|
7,671,000
|
|||||
Total Loans
|
$
|
142,682,000
|
$
|
146,172,000
|
$
|
129,682,000
|
$
|
106,744,000
|
$
|
68,034,000
|
|||||
Percent of Delinquent Loans to Total Loans
|
8.31%
|
5.84%
|
3.77%
|
8.14%
|
32.80%
|
·
|
Reduced Management Fee: The
Amendment revises the management fee by making permanent the recent “Interim Management Fee” adjustment described above along with an additional adjustment such that the “Management Fee”, calculated and payable to the Manager monthly in
arrears, equals (i) one-twelfth (1/12) multiplied by (ii) (a) 1.50% of the first $300,000,000 of the Company’s Stockholders’ Equity (as defined in the Amendment), and (b) 1.25% of the Stockholders’ Equity that is greater than
$300,000,000.
|
·
|
Company to Receive 30% of Loan Fees:
The Company will receive thirty-percent (30%) of the gross fees and commissions paid to the Manager in connection with the Company making or investing in mortgage loans, including thirty-percent (30%) of gross fees paid in connection with
the extension or modification of any loans, with the exception of certain miscellaneous administration fees collected in association with loan funding, demand, and partial release fees, with the remaining seventy-percent (70%) of such
fees to be paid to the Manager.
|
·
|
Company to Receive 30% of Late
Payment Charges: The Company will receive thirty-percent (30%) of all late payment charges from borrowers on loans owned by the Company, with the remaining seventy-percent (70%) to be paid to the Manager.
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·
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Elimination of Service Fees:
The Company will no longer pay the Manager any servicing fees for the Manager’s services as servicing agent with respect to any of its mortgage loans.
|
·
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Elimination of Certain Expense
Reimbursements: The Company will no longer reimburse the Manager for salary and related salary expense of the Manager's non-management and non-supervisory personnel.
|
·
|
the ratio of the amount of the investment to the value of the property by which it is secured;
|
·
|
the property’s potential for capital appreciation;
|
·
|
expected levels of rental and occupancy rates;
|
·
|
current and projected cash flow generated by the property;
|
·
|
potential for rental rate increases;
|
·
|
the marketability of the investment;
|
·
|
geographic location of the property;
|
·
|
the condition and use of the property;
|
·
|
the property’s income-producing capacity;
|
·
|
the quality, experience and creditworthiness of the borrower;
|
·
|
general economic conditions in the area where the property is located; and
|
·
|
any other factors that OFG believes are relevant.
|
·
|
OFG makes or purchases such loans in its own name and temporarily holds title thereto for the purpose of facilitating the acquisition
of such loans, and provided that such loans are purchased by us for a price no greater than the cost of such loans to OFG (except for compensation in accordance with the terms of the Management Agreement and the charter);
|
·
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There is no other benefit arising out of such transactions to OFG;
|
·
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Such loans are not in default, and;
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·
|
Such loans otherwise satisfy, among other things, the following requirements:
|
·
|
We will not make or invest in loans on any one property if at the time of acquisition of the loan the aggregate
amount of all loans outstanding on the property, including loans by the Company, would exceed an amount equal to 80% of the appraised value of the property as determined by independent appraisal, unless substantial justification exists
because of the presence of other documented underwriting criteria.
|
·
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We will limit any single loan and limit the loans to any one borrower to not more than 10% of our total assets as
of the date the loan is made or purchased.
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·
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We will not invest in or make loans on unimproved real property in an amount in excess of 25% of our total assets.
|
·
|
the Ready Capital stockholders and the ORM stockholders may be prevented from realizing the anticipated benefits
of the Merger;
|
·
|
the market price of Ready Capital Common Stock or ORM Common Stock could decline significantly;
|
·
|
reputational harm due to the adverse perception of any failure to successfully consummate the Merger;
|
·
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Ready Capital and the Company being required, under certain circumstances, to pay to the other party a
termination fee or expense amount;
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·
|
incurrence of substantial costs relating to the proposed Merger, such as legal, accounting, financial advisor,
filing, printing and mailing fees; and
|
·
|
the attention of Ready Capital’s and the Company’s management and employees may be diverted from their day-to-day
business and operational matters as a result of efforts relating to attempting to consummate the Merger.
|
|
•
|
Judicial foreclosure is subject to the delays of protracted litigation. Although we expect non-judicial foreclosure to be quicker, our
collateral may deteriorate and decrease in value during any delay in foreclosing on it;
|
|
|
•
|
The borrower’s right of redemption during foreclosure proceedings can deter the sale of our collateral and can for practical purposes
require us to manage the property;
|
|
||
|
•
|
Unforeseen environmental hazards may subject us to unexpected liability and procedural delays in exercising our rights;
|
|
||
|
•
|
The rights of senior or junior secured parties in the same property can create procedural hurdles for us when we foreclose on
collateral;
|
•
|
We may not be able to pursue deficiency judgments after we foreclose on collateral; and
|
|
•
|
State and federal bankruptcy laws can prevent us from pursuing any actions, regardless of the progress in any of these suits or
proceedings.
|
|
•
|
the application of the loan proceeds to the construction or rehabilitation project must be assured;
|
|
•
|
the completion of planned construction or rehabilitation may require additional financing by the borrower; and
|
|
•
|
permanent financing of the property may be required in addition to the construction or rehabilitation loan.
|
|
•
|
their position is subordinate in the event of default; and
|
|
•
|
there could be a requirement to cure liens of a senior loan holder, and, if this is not done, we would lose our entire interest in the
loan.
|
|
•
|
earning less income and reduced cash flows on foreclosed properties than could be earned and received on loans;
|
•
|
incurring costs to carry, and in some cases make repairs or improvements to these assets, which requires additional liquidity and
results in additional expenses that could exceed our original estimates and impact our operating results;
|
|
|
||
|
•
|
not being able to realize sufficient amounts from sales of the properties to avoid losses;
|
•
|
not being able to sell properties, which are not liquid assets, in a timely manner when we need to increase liquidity through asset
sales;
|
|
|
•
|
properties being acquired with one or more co-owners (called tenants-in-common) where development or sale requires written agreement or
consent by all; without timely agreement or consent, we could suffer a loss from being unable to develop or sell the property;
|
|
||
|
•
|
maintaining occupancy of the properties;
|
|
•
|
controlling operating expenses;
|
|
•
|
coping with general and local market conditions;
|
•
|
complying with changes in laws and regulations pertaining to taxes, use, zoning and environmental protection;
|
|
•
|
possible liability for injury to persons and property;
|
|
•
|
possible uninsured losses related to environmental events such as earthquakes, fires, floods and/or mudslides; and
|
|
•
|
possible liability for environmental remediation.
|
|
|
•
|
Reliance upon the skill and financial stability of third party developers and contractors;
|
|
•
|
Inability to obtain governmental permits;
|
|
•
|
Delays in construction of improvements;
|
|
•
|
Increased costs during development and the need to obtain additional financing to pay for the development and reduced liquidity and
capital available for us to invest in new loans; and
|
|
•
|
Economic and other factors affecting the timing or price of sale or the leasing of developed property, including competition with
entities seeking to dispose of similar properties.
|
|
•
|
economic recession in that area;
|
|
•
|
overbuilding of commercial or residential properties; and
|
|
•
|
relocations of businesses outside the area due to factors such as costs, taxes and the regulatory environment.
|
|
•
|
Responding to such actions by activist stockholders can disrupt our operations, are costly and time-consuming, and divert the attention
of our Board and senior management team from the pursuit of business strategies, which could adversely affect our results of operations and financial condition;
|
|
•
|
Perceived uncertainties as to our future direction as a result of changes to the composition of our Board may lead to the perception of
a change in the direction of the business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential borrower clients, may result in the loss of potential business opportunities
and make it more difficult to attract and retain qualified personnel and business partners;
|
•
|
these types of actions could cause significant fluctuations in our stock price based on temporary or speculative market perceptions or
other factors that do not necessarily reflect the underlying fundaments and prospects of our business; and
|
|
|
•
|
if individuals are elected to our Board with a specific agenda, it may adversely affect our ability to effectively implement our
business strategy and create additional value for our stockholders.
|
|
•
|
additional increases in loans defaulting or becoming non-performing or being written off;
|
|
•
|
actual or anticipated variations in our operating results or our distributions to stockholders;
|
•
|
sales of (or the inability to sell in a timely manner) and prices we receive for significant real estate properties;
|
|
|
•
|
publication of research reports about us or the real estate industry, or changes in recommendations or in estimated financial results by
securities analysts who provide research to the marketplace on us, our competitors or our industry;
|
|
•
|
changes in market valuations of similar companies;
|
|
•
|
changes in tax laws affecting REITs;
|
|
•
|
adverse market reaction to any increased indebtedness we incur; and
|
|
•
|
general market and economic conditions, including, among other things, actual and projected interest rates and the market for the types
of assets that we hold or invest in.
|
·
|
the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including
securities issued by other real estate related companies;
|
·
|
our financial performance; and
|
·
|
general stock and credit market conditions.
|
·
|
Board Classification. As a
result of the election under Subtitle 8, our Board is classified into three separate classes of directors. At each annual meeting of the stockholders of the Company, the successors to the class of directors whose term expires at that
meeting will be elected to hold office for a term continuing until the annual meeting of stockholders held in the third year following the year of their election and until their successors are elected and qualified.
|
·
|
Removal of Directors. As a
result of the election to be subject to Section 3-804 of the MGCL, the removal of directors will require the affirmative vote of at least two-thirds of all of the votes entitled to be cast by the stockholders generally in the election of
directors.
|
·
|
Board Size. The election to be
subject to Section 3-804 of the MGCL also provides that our Board has the exclusive right to set the number of directors on the Board. This election did not result in substantive change to the requirements already provided in the
Company’s charter and bylaws.
|
·
|
Vacancies on the Board. As a
result of the election to be subject to Section 3-804 of the MGCL, our Board has the exclusive right, by the affirmative vote of a majority of the remaining directors, even if the remaining directors do not constitute a quorum, to fill
vacancies on the Board, and any director elected by the Board to fill a vacancy will hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until his or her successor is elected and
qualified.
|
·
|
Special Meetings Called at the
Request of Stockholders. As a result of the election to be subject to Section 3-805 of the MGCL, special meetings of stockholders called at the request of stockholders may now be called by the Secretary of the Company only on the
written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting.
|
|
•
|
actual receipt of an improper benefit or profit in money, property or services; or
|
•
|
a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of
action adjudicated.
|
·
|
The Company’s (or related entities) title to all properties is held as fee simple.
|
·
|
There are mortgages or encumbrances to third parties on one of our real estate properties (see below for Tahoe
Stateline Venture, LLC (“TSV”)).
|
·
|
Of the thirteen properties held, six of the properties are income-producing. Only minor renovations and repairs to
the properties are currently being made or planned (other than continued tenant improvements on real estate held for sale and investment).
|
·
|
The Manager believes that all properties owned by the Company are adequately covered by customary casualty insurance.
|
|
December 31, 2018
|
December 31, 2017
|
||||
Commercial buildings, Roseville, California – transferred from Held for Investment in 2018
|
$
|
482,609
|
$
|
—
|
||
Undeveloped, industrial land, San Jose, California – transferred from Held for Investment in 2018
(sold in January 2019)
|
1,850,343
|
—
|
||||
Undeveloped land, Auburn, California (formerly part of golf course owned by Darkhorse Golf Club,
LLC) – transferred from Held for Investment in 2018
|
103,198
|
—
|
||||
Office condominium complex (2 units - sold in January 2019), Roseville, California – transferred
from Held for Investment in 2018
|
389,881
|
—
|
||||
73 improved, residential lots, Auburn, California (held within Zalanta Resort at the Village, LLC
(“ZRV”))
|
4,121,867
|
4,121,867
|
||||
Undeveloped, residential land, Coolidge, Arizona – transferred from held for investment in 2017
|
1,017,600
|
1,017,600
|
||||
Golf course, Auburn, California (held within Lone Star Golf, Inc.) – sold in 2018
|
—
|
1,999,449
|
||||
12 condominium and 3 commercial units, Tacoma, Washington (held within Broadway & Commerce,
LLC) – transferred from Held for Investment in 2018
|
2,239,125
|
—
|
||||
2 improved residential lots, Coeur D’Alene, Idaho – 1 lot sold in 2018
|
266,103
|
350,897
|
||||
Marina and yacht club with 179 boat slips, Isleton, California (held within Brannan Island, LLC)
|
1,269,650
|
2,207,675
|
||||
2 vacant houses and 20 acres of residential land, San Ramon, California – obtained through
foreclosure in 2018
|
2,062,729
|
—
|
||||
Unimproved, residential and commercial land, Bethel Island, California (held within Sandmound
Marina, LLC) – sold in 2018
|
—
|
2,338,233
|
||||
Assisted living facility, Bensalem, Pennsylvania – sold in 2018
|
—
|
5,253,125
|
||||
Retail complex and residential condominium units (12 and 23 units in 2018 and 2017), South Lake
Tahoe, California (held within ZRV) - 11 and 7 units sold in 2018 and 2017
|
20,290,685
|
32,260,603
|
||||
Residential land, South Lake Tahoe, California (held within Zalanta Resort at the Village - Phase
II, LLC (“ZRV II”)) - transferred to Held for Investment in 2018
|
—
|
6,561,023
|
||||
$
|
34,093,790
|
$
|
56,110,472
|
|||
|
December 31, 2018
|
December 31, 2017
|
|||||
Commercial buildings, Roseville, California – transferred to Held for Sale in 2018
|
$
|
—
|
$
|
492,350
|
|||
Undeveloped, industrial land, San Jose, California - transferred to Held for Sale in 2018
|
—
|
1,914,870
|
|||||
Undeveloped land, Auburn, California (formerly part of golf course owned by DarkHorse Golf Club,
LLC) – transferred to Held for Sale in 2018
|
—
|
103,198
|
|||||
Office condominium complex (13 units in 2017), Roseville, California – transferred to Held for
Sale in 2018
|
—
|
2,865,002
|
|||||
1/7th interest in single family home, Lincoln City, Oregon - sold in 2018
|
—
|
93,647
|
|||||
12 condominium and 3 commercial units, Tacoma, Washington (held within Broadway & Commerce,
LLC) – transferred to Held for Sale in 2018
|
—
|
2,263,348
|
|||||
Retail Complex, South Lake Tahoe, California (held within TSV)
|
15,987,697
|
16,623,238
|
|||||
Residential land, South Lake Tahoe, California (held within ZRV II) – transferred from Held for
Sale in 2018
|
6,561,023
|
—
|
|||||
$
|
22,548,720
|
$
|
24,355,653
|
2018
|
2017
|
2016
|
|||||||
Average Annual Rental per Square Foot
|
$
|
69.68
|
$
|
67.48
|
$
|
61.45
|
|||
Federal Tax Basis of Depreciable Assets (all Commercial Buildings and Improvements)
|
$
|
17,589,399
|
$
|
17,581,911
|
$
|
17,579,856
|
|||
Depreciation Rate
|
Various
|
Various
|
Various
|
||||||
Depreciation Method
|
MACRS Straight Line
|
MACRS Straight Line
|
MACRS Straight Line
|
||||||
Depreciable Life
|
5-39 Years
|
5-39 Years
|
5-39 Years
|
||||||
Realty Tax Rate (1)
|
1.0830
|
%
|
1.0871
|
%
|
1.0860
|
%
|
|||
Annual Realty Taxes
|
$
|
97,088
|
$
|
98,322
|
$
|
192,253
|
|||
(1) Millage rate per Taxable Value.
|
2018
|
2017
|
2016 (2)
|
|||||||
Average Annual Rental per Square Foot
|
$
|
67.44
|
$
|
66.00
|
$
|
N/A
|
|||
Federal Tax Basis of Depreciable Assets (all Commercial Buildings and Improvements)
|
$
|
N/A
|
$
|
N/A
|
$
|
N/A
|
|||
Depreciation Rate (3)
|
N/A
|
N/A
|
N/A
|
||||||
Depreciation Method (3)
|
N/A
|
N/A
|
N/A
|
||||||
Depreciable Life (3)
|
N/A
|
N/A
|
N/A
|
||||||
Realty Tax Rate (1)
|
1.0830
|
%
|
1.0871
|
%
|
N/A
|
||||
Annual Realty Taxes
|
$
|
88,282
|
$
|
89,140
|
$
|
N/A
|
|||
(1) Millage rate per Taxable Value.
|
|||||||||
(2) Construction of retail/residential complex was completed in 2017. Thus, this data is not applicable in 2016.
|
|||||||||
(3) The ZRV properties are not being depreciated as all of the retail and residential units are held for sale.
|
Year of
Lease
Expiration
December 31,
|
Number of
Leases Expiring
Within the
Year
|
Rentable Square
Footage Subject
to Expiring
Leases
|
Final Annualized
Base Rent
Under Expiring
Leases (1)
|
Percentage of Gross Annual Rental Represented by Such Leases
|
|||||||
2019
|
5
|
11,497
|
$
|
921,868
|
38.3%
|
||||||
2020
|
2
|
1,635
|
121,075
|
5.0%
|
|||||||
2021
|
1
|
1,000
|
68,666
|
2.8%
|
|||||||
2022
|
1
|
4,553
|
341,060
|
14.2%
|
|||||||
2023
|
1
|
788
|
55,191
|
2.3%
|
|||||||
2024
|
3
|
9,614
|
645,225
|
26.8%
|
|||||||
2025
|
—
|
—
|
—
|
—%
|
|||||||
2025
|
—
|
—
|
—
|
—%
|
|||||||
2027
|
1
|
1,011
|
92,328
|
3.8%
|
|||||||
2028
|
1
|
2,297
|
164,015
|
6.8%
|
|||||||
15
|
32,395
|
$
|
2,409,428
|
100.0%
|
|||||||
(1)
|
“Final Annualized Base Rent” for each lease scheduled to expire represents the cash rental rate of base rents,
excluding tenant reimbursements, in the final month prior to expiration multiplied by 12. Tenant reimbursements generally include payment of a portion of real estate taxes, operating expenses and common area maintenance and utility charges.
|
Occupancy % (1)
|
||||||
Property Description/Location
|
Year Foreclosed
|
2018
|
2017
|
2016
|
2015
|
2014
|
Commercial buildings, Roseville, California
|
2001
|
100.0%
|
85.2%
|
91.2%
|
100.0%
|
81.2%
|
Office condominium complex (2 units at 12/31/18), Roseville, California
|
2008
|
0.0%
|
72.6%
|
76.0%
|
62.9%
|
70.5%
|
12 condominium and 3 commercial units, Tacoma, Washington
|
2011
|
80.4%
|
80.4%
|
80.4%
|
80.4%
|
75.8%
|
Retail complex, South Lake Tahoe, California (TSV)
|
2013
|
100.0%
|
86.7%
|
91.1%
|
95.5%
|
75.0%
|
Retail complex, South Lake Tahoe, California (ZRV)
|
2013
|
47.6%
|
22.5%
|
N/A
|
N/A
|
N/A
|
Industrial building/land, Santa Clara, California (1850 De La Cruz, LLC)
|
2005
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Notes:
|
||||||
(1) Calculated by dividing net rentable square feet included in leases signed on or before December 31, 2018 at the property by the aggregate net rentable square feet of the property.
|
Year of
Lease
Expiration
December 31,
|
Number of
Leases
Expiring
Within the
Year
|
Rentable
Square Footage
Subject to
Expiring
Leases
|
Final
Annualized Base Rent
Under
Expiring
Leases (1)
|
|||||||
2019
|
7
|
13,407
|
$
|
948,490
|
||||||
2020
|
4
|
12,355
|
185,362
|
|||||||
2021
|
3
|
4,200
|
111,866
|
|||||||
2022
|
1
|
4,553
|
341,060
|
|||||||
2023
|
2
|
201,643
|
778,597
|
|||||||
2024
|
3
|
9,614
|
645,224
|
|||||||
2025
|
—
|
—
|
—
|
|||||||
2026
|
—
|
—
|
—
|
|||||||
2027
|
1
|
1,011
|
92,328
|
|||||||
2028
|
1
|
2,297
|
164,015
|
|||||||
22
|
249,080
|
$
|
3,266,942
|
(1) |
“Final Annualized Base Rent” for each lease scheduled to expire represents the cash rental rate of base rents, excluding tenant reimbursements, in the final
month prior to expiration multiplied by 12. Tenant reimbursements generally include payment of a portion of real estate taxes, operating expenses and common area maintenance and utility charges.
|
Leased
Square
Feet
|
Annualized
Base Rent (1)
|
Expiration
Date
|
Renewal
Options
|
|||
Tenant Name
|
||||||
Avis Rent A Car (1850 De La Cruz) (2) (3)
|
200,855
|
$
|
642,737
|
7/15/2023
|
1-5 yr. Option
|
|
Up Shirt Creek (TSV) (3)
|
4,689
|
351,509
|
9/30/2019
|
2-5 yr. Options
|
||
Powder House (TSV) (3)
|
5,778
|
493,145
|
9/30/2019
|
2-5 yr. Options
|
||
Powder House (ZRV)
|
4,553
|
314,157
|
4/30/2022
|
2-5 yr. Options
|
||
Big Vista (ZRV) (4)
|
2,340
|
154,440
|
5/31/2024
|
2-5 yr. Options
|
||
McP’s Pub Tahoe (TSV)
|
5,777
|
329,763
|
10/31/2024
|
2-5 yr. Options
|
||
Taste of Europe (TSV)
|
2,297
|
130,851
|
4/30/2028
|
2-5 yr. Options
|
(1) |
Annualized Base Rent represents the current monthly Base Rent, excluding tenant reimbursements, for each lease in effect at December 31, 2018 multiplied by
12. Tenant reimbursements generally include payment of a portion of real estate taxes, operating expenses and common area maintenance and utility charges.
|
Period Ended
|
||||||
Index
|
12/31/13
|
12/31/14
|
12/31/15
|
12/31/16
|
12/31/17
|
12/31/18
|
Owens Realty Mortgage, Inc.
|
100.00
|
122.98
|
116.07
|
163.10
|
144.14
|
177.05
|
Russell 2000
|
100.00
|
104.89
|
100.26
|
121.63
|
139.44
|
124.09
|
SNL U.S. Finance REIT
|
100.00
|
114.52
|
105.02
|
129.36
|
150.94
|
145.09
|
|
As of or For the Years Ended December 31,
|
|||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||
Operating Data:
|
||||||||||||||||
Interest income
|
$
|
12,281,261
|
$
|
10,840,730
|
$
|
8,922,142
|
$
|
8,277,004
|
$
|
5,382,019
|
||||||
Rental income
|
4,129,261
|
4,505,385
|
7,977,400
|
12,791,096
|
12,268,214
|
|||||||||||
Other revenues
|
386,499
|
187,013
|
179,449
|
175,451
|
170,018
|
|||||||||||
Total revenue
|
16,797,021
|
15,533,128
|
17,078,991
|
21,243,551
|
17,820,251
|
|||||||||||
Real estate operating expenses
|
3,858,962
|
4,980,900
|
7,045,848
|
8,510,110
|
8,158,038
|
|||||||||||
Depreciation and amortization
|
761,717
|
1,138,515
|
1,258,305
|
2,052,181
|
2,255,577
|
|||||||||||
Management fees
|
2,906,333
|
3,546,085
|
3,286,470
|
2,051,134
|
1,726,945
|
|||||||||||
Interest expense
|
2,132,776
|
1,587,695
|
2,859,294
|
1,938,113
|
1,161,822
|
|||||||||||
(Reversal of) provision for loan losses
|
(239,144
|
)
|
(360,012
|
)
|
1,284,896
|
(1,026,909
|
)
|
(1,869,733
|
)
|
|||||||
Impairment losses on real estate properties
|
1,053,161
|
1,423,286
|
3,227,807
|
1,589,434
|
179,040
|
|||||||||||
Other expenses
|
3,484,667
|
2,596,641
|
1,882,338
|
1,618,266
|
1,821,601
|
|||||||||||
Total expenses
|
13,958,472
|
14,913,110
|
20,844,958
|
16,732,329
|
13,433,290
|
|||||||||||
Operating income (loss)
|
2,838,549
|
620,018
|
(3,765,967
|
)
|
4,511,222
|
4,386,961
|
||||||||||
Gain on sales of real estate, net
|
4,610,824
|
14,728,921
|
24,497,763
|
21,818,553
|
3,243,359
|
|||||||||||
Gain on foreclosure of loans
|
—
|
—
|
—
|
—
|
464,754
|
|||||||||||
Settlement expense
|
—
|
(2,627,436
|
)
|
—
|
—
|
—
|
||||||||||
Net income before income taxes
|
7,449,373
|
12,721,503
|
20,731,796
|
26,329,775
|
8,095,074
|
|||||||||||
Income tax (expense) benefit
|
(559,842
|
)
|
(4,041,655
|
)
|
7,248,977
|
(93,335
|
)
|
—
|
||||||||
Net income
|
6,889,531
|
8,679,848
|
27,980,773
|
26,236,440
|
8,095,074
|
|||||||||||
Net income attributable to non-controlling interests
|
—
|
—
|
(3,571,003
|
)
|
(2,667,324
|
)
|
(165,445
|
)
|
||||||||
Net income attributable to common stockholders
|
$
|
6,889,531
|
$
|
8,679,848
|
$
|
24,409,770
|
$
|
23,569,116
|
$
|
7,929,629
|
||||||
Earnings per common share (basic and diluted)
|
$
|
0.79
|
$
|
0.85
|
$
|
2.38
|
$
|
2.22
|
$
|
0.74
|
||||||
Dividends declared per common share
|
$
|
0.76
|
$
|
0.38
|
$
|
0.32
|
$
|
0.41
|
$
|
0.27
|
Balance Sheet Data:
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||
Loans, net
|
$
|
141,204,055
|
$
|
144,343,844
|
$
|
126,975,489
|
$
|
104,901,361
|
$
|
65,164,156
|
||||||
Real estate held for sale
|
34,093,790
|
56,110,472
|
75,843,635
|
100,191,166
|
59,494,339
|
|||||||||||
Real estate held for investment
|
22,548,720
|
24,355,653
|
37,279,763
|
53,647,246
|
103,522,466
|
|||||||||||
Other assets
|
11,223,475
|
14,201,304
|
19,463,568
|
13,254,472
|
13,742,960
|
|||||||||||
Total assets
|
209,070,040
|
239,011,273
|
259,562,455
|
271,994,245
|
241,923,921
|
|||||||||||
Total indebtedness
|
14,526,903
|
31,747,433
|
38,361,934
|
66,374,544
|
49,019,549
|
|||||||||||
Total liabilities
|
17,711,258
|
38,021,546
|
44,034,578
|
72,485,398
|
53,177,310
|
|||||||||||
Non-controlling interests
|
—
|
—
|
—
|
4,528,849
|
4,174,753
|
|||||||||||
Total equity
|
191,358,782
|
200,989,727
|
215,527,877
|
199,508,847
|
188,746,611
|
|||||||||||
Book value per share
|
$
|
22.56
|
$
|
22.10
|
$
|
21.03
|
$
|
19.03
|
$
|
17.14
|
||||||
·
|
the level of foreclosures and related loan and real estate losses experienced;
|
·
|
the income or losses from foreclosed properties prior to the time of disposal;
|
·
|
the amount of cash available to invest in loans;
|
·
|
the amount of borrowing to finance loan investments and our cost of funds on such borrowing;
|
·
|
the level of real estate lending activity in the markets serviced;
|
·
|
the ability to identify and lend to suitable borrowers;
|
·
|
the interest rates we are able to charge on loans; and
|
·
|
the level of delinquencies on loans.
|
·
|
Capitalize on market lending opportunity by leveraging existing origination network to expand our commercial real estate loan
portfolio.
|
·
|
Enhance and reposition our commercial real estate assets through the investment of capital and strategic management.
|
·
|
Increase liquidity available for lending activities by focusing on opportunities to remove real estate assets from our balance sheet.
|
·
|
Manage leverage to marginally expand sources of liquidity while maintaining a conservative balance sheet.
|
·
|
The Company sold two real estate properties in January 2019 for net sales proceeds totaling $2,706,000 and gain totaling $466,000.
|
·
|
The Company extended the maturity dates on five loans that were past maturity as of December 31, 2018 with principal balances totaling
approximately $15,010,000 in January and February 2019.
|
|
Year Ended December 31,
|
Increase/(Decrease)
|
|||||||||||
2018
|
2017
|
Amount
|
Percent
|
||||||||||
Revenues:
|
|||||||||||||
Interest and related income from loans
|
$
|
12,281,261
|
$
|
10,840,730
|
$
|
1,440,531
|
13
|
%
|
|||||
Rental and other income from real estate properties
|
4,129,261
|
4,505,385
|
(376,124
|
)
|
(8)
|
%
|
|||||||
Other income
|
386,499
|
187,013
|
199,486
|
107
|
%
|
||||||||
Total revenues
|
16,797,021
|
15,533,128
|
1,263,893
|
8
|
%
|
||||||||
Expenses:
|
|||||||||||||
Management fees to Manager
|
2,906,333
|
3,546,085
|
(639,752
|
)
|
(18)
|
%
|
|||||||
Servicing fees to Manager
|
95,143
|
362,411
|
(267,268
|
)
|
(74)
|
%
|
|||||||
General and administrative expense
|
3,389,524
|
2,234,230
|
1,155,294
|
52
|
%
|
||||||||
Rental and other expenses on real estate properties
|
3,858,962
|
4,980,900
|
(1,121,938
|
)
|
(23)
|
%
|
|||||||
Depreciation and amortization
|
761,717
|
1,138,515
|
(376,798
|
)
|
(33)
|
%
|
|||||||
Interest expense
|
2,132,776
|
1,587,695
|
545,081
|
34
|
%
|
||||||||
(Recovery of) provision for loan losses
|
(239,144
|
)
|
(360,012
|
)
|
120,868
|
(34)
|
%
|
||||||
Impairment losses on real estate properties
|
1,053,161
|
1,423,286
|
(370,125
|
)
|
(26)
|
%
|
|||||||
Total expenses
|
13,958,472
|
14,913,110
|
(954,638
|
)
|
(6)
|
%
|
|||||||
Operating income
|
2,838,549
|
620,018
|
2,218,531
|
nm
|
|||||||||
Gain on sales of real estate, net
|
4,610,824
|
14,728,921
|
(10,118,097
|
)
|
(69)
|
%
|
|||||||
Settlement expense
|
—
|
(2,627,436
|
)
|
2,627,436
|
(100)
|
%
|
|||||||
Net income before income taxes
|
7,449,373
|
12,721,503
|
(5,272,130
|
)
|
(41)
|
%
|
|||||||
Income tax expense
|
(559,842
|
)
|
(4,041,655
|
)
|
3,481,813
|
(86)
|
%
|
||||||
Net income
|
$
|
6,889,531
|
$
|
8,679,848
|
$
|
(1,790,317
|
)
|
(20)
|
%
|
|
Year Ended December 31,
|
Increase/(Decrease)
|
|||||||||||
2017
|
2016
|
Amount
|
Percent
|
||||||||||
Revenues:
|
|||||||||||||
Interest and related income from loans
|
$
|
10,840,730
|
$
|
8,922,142
|
$
|
1,918,588
|
22
|
%
|
|||||
Rental and other income from real estate properties
|
4,505,385
|
7,977,400
|
(3,472,015
|
)
|
(44)
|
%
|
|||||||
Other income
|
187,013
|
179,449
|
7,564,
|
4
|
%
|
||||||||
Total revenues
|
15,533,128
|
17,078,991
|
(1,545,863
|
)
|
(9)
|
%
|
|||||||
Expenses:
|
|||||||||||||
Management fees to Manager
|
3,546,085
|
3,286,470
|
259,615
|
8
|
%
|
||||||||
Servicing fees to Manager
|
362,411
|
298,770
|
63,641
|
21
|
%
|
||||||||
General and administrative expense
|
2,234,230
|
1,568,890
|
665,340
|
42
|
%
|
||||||||
Rental and other expenses on real estate properties
|
4,980,900
|
7,060,526
|
(2,079,626
|
)
|
(29)
|
%
|
|||||||
Depreciation and amortization
|
1,138,515
|
1,258,305
|
(119,790
|
)
|
(10)
|
%
|
|||||||
Interest expense
|
1,587,695
|
2,859,294
|
(1,271,599
|
)
|
(44)
|
%
|
|||||||
(Recovery of) provision for loan losses
|
(360,012
|
)
|
1,284,896
|
(1,644,908
|
)
|
nm
|
|||||||
Impairment losses on real estate properties
|
1,423,286
|
3,227,807
|
(1,804,521
|
)
|
(56)
|
%
|
|||||||
Total expenses
|
14,913,110
|
20,844,958
|
(5,931,848
|
)
|
(28)
|
%
|
|||||||
Operating income (loss)
|
620,018
|
(3,765,967
|
)
|
4,385,985
|
nm
|
||||||||
Gain on sales of real estate, net
|
14,728,921
|
24,497,763
|
(9,768,842
|
)
|
(40)
|
%
|
|||||||
Settlement expense
|
(2,627,436
|
)
|
—
|
(2,627,436
|
)
|
100
|
%
|
||||||
Net income before income taxes
|
12,721,503
|
20,731,796
|
(8,010,293
|
)
|
(39)
|
%
|
|||||||
Income tax (expense) benefit
|
(4,041,655
|
)
|
7,248,977
|
(11,290,632
|
)
|
nm
|
|||||||
Net income
|
8,679,848
|
27,980,773
|
(19,300,925
|
)
|
(69)
|
%
|
|||||||
Net income attributable to non-controlling interests
|
—
|
(3,571,003
|
)
|
3,571,003
|
(100)
|
%
|
|||||||
Net income attributable to common stockholders
|
$
|
8,679,848
|
$
|
24,409,770
|
$
|
(15,729,922
|
)
|
(64)
|
%
|
December 31,
2018
|
December 31,
2017
|
|||||||
By Property Type:
|
||||||||
Commercial
|
$
|
132,519,461
|
$
|
127,873,281
|
||||
Residential
|
5,209,357
|
13,170,795
|
||||||
Land
|
4,953,425
|
5,127,574
|
||||||
$
|
142,682,243
|
$
|
146,171,650
|
|||||
By Position:
|
||||||||
Senior loans
|
$
|
137,808,788
|
$
|
142,782,492
|
||||
Junior loans
|
4,873,455
|
3,389,158
|
||||||
$
|
142,682,243
|
$
|
146,171,650
|
December 31,
2018
|
December 31,
2017
|
||||||
Commercial Real Estate Loans:
|
|||||||
Office
|
$
|
26,052,765
|
$
|
29,480,103
|
|||
Retail
|
57,108,646
|
32,329,395
|
|||||
Storage
|
5,996,619
|
15,807,016
|
|||||
Apartment
|
15,382,892
|
24,582,181
|
|||||
Hotel
|
8,985,000
|
11,777,351
|
|||||
Industrial
|
2,856,911
|
2,690,000
|
|||||
Warehouse
|
3,000,000
|
3,000,000
|
|||||
Marina
|
3,638,121
|
3,580,000
|
|||||
Assisted care
|
7,550,858
|
1,650,000
|
|||||
Golf course
|
1,550,000
|
1,212,851
|
|||||
Restaurant
|
397,649
|
1,764,384
|
|||||
$
|
132,519,461
|
$
|
127,873,281
|
|
Fixed
Interest Rate |
Variable
Interest Rate |
Total
|
|||||||||
Year ending December 31:
|
||||||||||||
2018 (past maturity)
|
$
|
21,874,240
|
$
|
4,916,586
|
$
|
26,790,826
|
||||||
2019
|
55,144,317
|
15,780,197
|
70,924,514
|
|||||||||
2020
|
4,319,448
|
33,577,666
|
37,897,114
|
|||||||||
2021
|
5,519,317
|
1,351,912
|
6,871,229
|
|||||||||
Thereafter (through 2028)
|
198,560
|
—
|
198,560
|
|||||||||
$
|
87,055,882
|
$
|
55,626,361
|
$
|
142,682,243
|
December 31, 2018
|
December 31, 2017
|
||||||||||
|
Balance
|
Percentage
|
Balance
|
Percentage
|
|||||||
California
|
$
|
98,865,551
|
69.29%
|
$
|
110,884,117
|
75.86%
|
|||||
Arizona
|
—
|
—%
|
815,890
|
0.56%
|
|||||||
Colorado
|
6,447,573
|
4.52%
|
4,380,616
|
3.00%
|
|||||||
Hawaii
|
1,445,964
|
1.01%
|
1,450,000
|
0.99%
|
|||||||
Illinois
|
—
|
—%
|
1,364,384
|
0.93%
|
|||||||
Indiana
|
—
|
—%
|
388,793
|
0.27%
|
|||||||
Michigan
|
8,985,000
|
6.30%
|
10,714,764
|
7.33%
|
|||||||
Nevada
|
—
|
—%
|
1,653,107
|
1.13%
|
|||||||
Ohio
|
—
|
—%
|
3,755,000
|
2.57%
|
|||||||
Pennsylvania
|
5,519,317
|
3.87%
|
—
|
—%
|
|||||||
Texas
|
17,565,952
|
12.31%
|
6,625,000
|
4.53%
|
|||||||
Washington
|
—
|
—%
|
3,159,460
|
2.16%
|
|||||||
Wisconsin
|
3,852,886
|
2.70%
|
980,519
|
0.67%
|
|||||||
$
|
142,682,243
|
100.00%
|
$
|
146,171,650
|
100.00%
|
2018
|
2017
|
2016
|
|||||||
Balance, beginning of period
|
$
|
1,827,806
|
$
|
2,706,822
|
$
|
1,842,446
|
|||
(Recovery of) provision for loan losses
|
(239,144
|
)
|
(360,012
|
)
|
1,284,896
|
||||
Charge-offs
|
(186,708
|
)
|
(546,004
|
)
|
(447,520
|
)
|
|||
Recoveries
|
76,234
|
27,000
|
27,000
|
||||||
Balance, end of period
|
$
|
1,478,188
|
$
|
1,827,806
|
$
|
2,706,822
|
2018
|
2017
|
2016
|
|||||||
Balance, beginning of period
|
$
|
80,466,125
|
$
|
113,123,398
|
$
|
153,838,412
|
|||
Real estate acquired through foreclosure
|
2,062,729
|
—
|
700,800
|
||||||
Investments in real estate properties
|
496,826
|
11,274,904
|
29,061,735
|
||||||
Amortization of deferred financing costs capitalized to construction project
|
—
|
76,260
|
119,471
|
||||||
Sales of real estate properties
|
(24,609,167
|
)
|
(41,505,148
|
)
|
(66,183,589
|
)
|
|||
Impairment losses on real estate properties
|
(1,053,161
|
)
|
(1,423,286
|
)
|
(3,227,807
|
)
|
|||
Depreciation of properties held for investment
|
(720,842
|
)
|
(1,080,003
|
)
|
(1,185,624
|
)
|
|||
Balance, end of period
|
$
|
56,642,510
|
$
|
80,466,125
|
$
|
113,123,398
|
|
Net Sales Proceeds
|
Gain (Loss)
|
|||||
Assisted living facility, Bensalem, Pennsylvania*
|
$
|
5,470,700
|
$
|
(494,786
|
)
|
||
Residential condominium units (11 units), South Lake Tahoe, California (held within ZRV)**
|
13,558,657
|
1,114,255
|
|||||
Office condominium complex (10 units – 7 sales), Roseville, California
|
5,995,715
|
3,561,143
|
|||||
1/7th interest in single family home, Lincoln City, Oregon
|
88,161
|
(9,486
|
)
|
||||
One improved residential lot, Coeur D’Alene, Idaho
|
392,120
|
303,519
|
|||||
Golf course, Auburn, California (held within Lone Star Golf, Inc.)***
|
2,176,047
|
136,178
|
|||||
Unimproved, residential and commercial land, Bethel Island, California
|
2,284,260
|
—
|
|||||
$
|
29,965,660
|
$
|
4,610,823
|
||||
* Net sales proceeds included carryback loan of $5,875,000, net of $468,705 discount ($5,406,295 net).
** Net sales proceeds included two carryback loans totaling $1,462,500.
***Net sales proceeds included two carryback loans totaling $1,810,270. One with a principal balance of $260,000 was repaid during 2018.
|
|
Net Sales Proceeds**
|
Gain (Loss)
|
|||||
Commercial and residential land under development, South Lake Tahoe, California (held within TSV)
|
$
|
42,329,110
|
$
|
13,210,826
|
|||
Seven condominium units, South Lake Tahoe, California (held within ZRV)
|
10,578,517
|
997,239
|
|||||
Two office condominium units, Roseville, California
|
978,431
|
515,959
|
|||||
Marina with 52 boat slips and campground, Bethel Island, California (held within Sandmound
Marina, LLC)
|
967,825
|
(1,646
|
)
|
||||
Office condominium complex, Oakdale, California (held within East G, LLC)
|
732,389
|
(150
|
)
|
||||
Undeveloped, residential land, Marysville, California
|
398,483
|
(4,717
|
)
|
||||
One improved, residential lot, West Sacramento, California*
|
154,901
|
3,108
|
|||||
Unimproved, residential and commercial land, Gypsum, Colorado
|
139,467
|
(31
|
)
|
||||
1,000 square feet of commercial floor coverage area (held within TSV)
|
50,000
|
8,333
|
|||||
$
|
56,329,123
|
$
|
14,728,921
|
||||
* There is deferred gain related to this sale of $93,233 as of December 31, 2017.
|
|||||||
** Includes carryback notes receivable totaling $450,000.
|
|
Net Sales Proceeds**
|
Gain (Loss)
|
|||||
Light industrial building, Paso Robles, California
|
$
|
6,023,679
|
$
|
4,557,979
|
|||
Commercial building in building complex, Roseville, California
|
455,132
|
280,836
|
|||||
169 condominium units and 160 unit renovated and unoccupied apartment building, Miami, Florida
(held within TOTB Miami, LLC)*
|
74,072,951
|
19,292,364
|
|||||
61 condominium units, Lakewood, Washington (held within Phillips Road, LLC)
|
5,030,384
|
846,998
|
|||||
2 improved, residential lots, Auburn, California (held within ZRV)
|
186,353
|
89,675
|
|||||
Medical office condominium complex, Gilbert, Arizona (held within ZRV)
|
3,793,870
|
(30,010
|
)
|
||||
Unimproved, residential and commercial land, Gypsum, Colorado (three separate sales)
|
1,434,273
|
(540,079
|
)
|
||||
$
|
90,966,642
|
$
|
24,497,763
|
||||
* $32,881,000 of proceeds were used to pay off debt securing the properties and $7,934,000 was distributed to the non-controlling
interest.
|
|||||||
** Includes carryback note receivable of $1,595,000.
|
·
|
prevailing economic conditions;
|
·
|
our historical loss experience;
|
·
|
the types and dollar amounts of loans in the portfolio;
|
·
|
borrowers’ financial condition and adverse situations that may affect the borrowers’ ability to pay;
|
·
|
evaluation of industry trends;
|
·
|
review and evaluation of loans identified as having loss potential; and
|
·
|
estimated net realizable value or fair value of the underlying collateral.
|
•
|
fund future loan investments;
|
||
•
|
to develop, improve and maintain real estate properties;
|
||
•
|
to repay principal and interest on our borrowings;
|
||
•
|
to pay our expenses, including compensation to our Manager;
|
||
•
|
to pay U.S. federal, state, and local taxes of our TRSs;
|
||
•
|
to distribute annually a minimum of 90% of our REIT taxable income and to make investments in a manner that enables us to maintain our
qualification as a REIT; and
|
||
•
|
to make tax payments associated with undistributed capital gains.
|
•
|
the use of our cash and cash equivalent balances of $1,014,000 (not including restricted cash) as of December 31, 2018;
|
||
•
|
cash generated from operating activities, including interest income from our loan portfolio and income generated from our real estate
properties;
|
||
•
|
proceeds from the sales of real estate properties;
|
||
•
|
proceeds from our line of credit;
|
||
•
|
proceeds from future borrowings including additional lines of credit; and
|
||
•
|
proceeds from potential future offerings of our equity securities.
|
Year Ended December 31,
|
|||||||||
2018
|
2017
|
2016
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
4,860,977
|
$
|
(1,695,167
|
)
|
$
|
(763,292
|
)
|
|
Net cash provided by investing activities
|
30,629,671
|
28,071,852
|
)
|
40,542,620
|
|||||
Net cash used in financing activities
|
(36,647,163
|
)
|
(27,640,112
|
)
|
(41,326,298
|
)
|
|
|
Payment due by Period
|
|
|||||||||||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
|
Less Than
1 Year |
|
|
1-3
Years |
|
|
3-5
Years |
|
|
More Than
5 Years |
|
|||||||||||||||
Recourse indebtedness:
|
|
|
|
|
|
|||||||||||||||||||||||||
Line of credit payable (1)
|
|
$
|
1,728,000
|
|
|
$
|
—
|
|
|
$
|
1,728,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||||||||
Loan payable on real estate
|
|
|
12,872,556
|
|
|
|
387,136
|
|
|
|
12,485,420
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||
Total recourse indebtedness
|
|
|
14,600,556
|
387,136
|
14,213,420
|
—
|
—
|
|
||||||||||||||||||||||
Non-recourse indebtedness:
|
|
|||||||||||||||||||||||||||||
Notes payable on real estate
|
|
|
—
|
—
|
—
|
—
|
—
|
|
||||||||||||||||||||||
Total non-recourse indebtedness
|
|
|
—
|
—
|
—
|
—
|
—
|
|
||||||||||||||||||||||
Total indebtedness
|
|
14,600,556
|
387,136
|
14,213,420
|
—
|
—
|
|
|||||||||||||||||||||||
Interest payable (2)
|
|
|
1,234,032
|
|
|
|
635,151
|
|
|
|
598,881
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||
Funding commitments to borrowers (3)
|
|
|
29,301,255
|
|
|
|
29,301,255
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||
Total Obligations
|
|
$
|
45,135,843
|
|
|
$
|
30,323,542
|
|
|
$
|
14,812,301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||||||||
(1)
|
As of December 31, 2018, the Company had the ability to borrow $47,235,000 on its line of credit.
|
|||||||||||||||||||||||||||||
(2)
|
Variable-rate indebtedness assumes a prime rate of 5.5% (actual rate at December 31, 2018) through the original maturity date of the
financing. Interest payable is based on balances outstanding as of December 31, 2018.
|
|||||||||||||||||||||||||||||
(3)
|
Amounts represent the commitments we have made to fund borrowers in our existing lending arrangements as of December 31, 2018.
|
December 31, 2018 Consolidated Financial Statements:
|
||
Supplemental Schedules:
|
||
Assets
|
2018
|
2017
|
||||
Cash, cash equivalents and restricted cash
|
$
|
4,514,301
|
$
|
5,670,816
|
||
Loans, net of allowance for loan losses of $1,478,188 in 2018 and $1,827,806 in 2017
|
141,204,055
|
144,343,844
|
||||
Interest and other receivables
|
1,104,638
|
2,430,457
|
||||
Other assets, net of accumulated depreciation and amortization of $85,944 in 2018 and $309,686 in
2017
|
416,615
|
725,341
|
||||
Deferred financing costs, net of accumulated amortization of $82,635 in 2018 and $265,276 in 2017
|
351,199
|
26,823
|
||||
Deferred tax assets, net
|
2,697,480
|
3,207,322
|
||||
Investment in limited liability company
|
2,139,242
|
2,140,545
|
||||
Real estate held for sale
|
34,093,790
|
56,110,472
|
||||
Real estate held for investment, net of accumulated depreciation of $2,679,823 in 2018 and
$3,316,753 in 2017
|
22,548,720
|
24,355,653
|
||||
Total assets
|
$
|
209,070,040
|
$
|
239,011,273
|
||
Liabilities and Equity
|
||||||
Liabilities:
|
||||||
Dividends payable
|
$
|
1,696,576
|
$
|
1,572,047
|
||
Due to Manager
|
242,170
|
277,671
|
||||
Accounts payable and accrued liabilities
|
1,245,609
|
1,390,329
|
||||
Deferred gains
|
—
|
302,895
|
||||
Forward contract liability – share repurchase
|
—
|
2,731,171
|
||||
Line of credit payable
|
1,728,000
|
1,555,000
|
||||
Notes and loans payable on real estate
|
12,798,903
|
30,192,433
|
||||
Total liabilities
|
17,711,258
|
38,021,546
|
||||
Commitments and Contingencies (Note 15)
|
||||||
Equity:
|
||||||
Stockholders’ equity:
|
||||||
Preferred stock, $.01 par value per share, 5,000,000 shares authorized, no shares issued and
outstanding at December 31, 2018 and 2017
|
—
|
—
|
||||
Common stock, $.01 par value per share, 50,000,000 shares authorized, 11,198,119 shares
issued, 8,482,880 and 9,095,454 shares outstanding at December 31, 2018 and 2017
|
111,981
|
111,981
|
||||
Additional paid-in capital
|
182,437,522
|
182,437,522
|
||||
Treasury stock, at cost – 2,715,239 and 2,102,665 shares at December 31, 2018 and 2017
|
(41,753,190
|
)
|
(31,655,119
|
)
|
||
Retained earnings
|
50,562,469
|
50,095,343
|
||||
Total stockholders’ equity
|
191,358,782
|
200,989,727
|
||||
Total liabilities and equity
|
$
|
209,070,040
|
$
|
239,011,273
|
2018
|
2017
|
2016
|
|||||||
Revenues:
|
|||||||||
Interest and related income from loans
|
$
|
12,281,261
|
$
|
10,840,730
|
$
|
8,922,142
|
|||
Rental and other income from real estate properties
|
4,129,261
|
4,505,385
|
7,977,400
|
||||||
Other income
|
386,499
|
187,013
|
179,449
|
||||||
Total revenues
|
16,797,021
|
15,533,128
|
17,078,991
|
||||||
Expenses:
|
|||||||||
Management fees to Manager
|
2,906,333
|
3,546,085
|
3,286,470
|
||||||
Servicing fees to Manager
|
95,143
|
362,411
|
298,770
|
||||||
General and administrative expense
|
3,389,524
|
2,234,230
|
1,568,890
|
||||||
Rental and other expenses on real estate properties
|
3,858,962
|
4,980,900
|
7,060,526
|
||||||
Depreciation and amortization
|
761,717
|
1,138,515
|
1,258,305
|
||||||
Interest expense
|
2,132,776
|
1,587,695
|
2,859,294
|
||||||
(Recovery of) provision for loan losses
|
(239,144
|
)
|
(360,012
|
)
|
1,284,896
|
||||
Impairment losses on real estate properties
|
1,053,161
|
1,423,286
|
3,227,807
|
||||||
Total expenses
|
13,958,472
|
14,913,110
|
20,844,958
|
||||||
Operating income (loss)
|
2,838,549
|
620,018
|
(3,765,967
|
)
|
|||||
Gain on sales of real estate, net
|
4,610,824
|
14,728,921
|
24,497,763
|
||||||
Settlement expense
|
—
|
(2,627,436
|
)
|
—
|
|||||
Net income before income tax expense
|
7,449,373
|
12,721,503
|
20,731,796
|
||||||
Income tax (expense) benefit
|
(559,842
|
)
|
(4,041,655
|
)
|
7,248,977
|
||||
Net income
|
6,889,531
|
8,679,848
|
27,980,773
|
||||||
Less: Net income attributable to non-controlling interests
|
—
|
—
|
(3,571,003
|
)
|
|||||
Net income attributable to common stockholders
|
$
|
6,889,531
|
$
|
8,679,848
|
$
|
24,409,770
|
|||
Per common share data:
|
|||||||||
Basic and diluted earnings per common share
|
$
|
0.79
|
$
|
0.85
|
$
|
2.38
|
|||
Basic and diluted weighted average number of common shares outstanding
|
8,764,568
|
10,162,496
|
10,247,477
|
||||||
Dividends declared per share of common stock
|
$
|
0.76
|
$
|
0.38
|
$
|
0.32
|
|||
Common Stock
|
Additional
|
Treasury Stock
|
Total
|
Non-
|
|||||||||||||||||||||||
Paid-in
|
Retained
|
Stockholders’
|
controlling
|
Total
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Shares
|
Amount
|
Earnings
|
Equity
|
Interests
|
Equity
|
|||||||||||||||||||
Balances, January 1, 2016
|
11,198,119
|
$
|
111,981
|
$
|
182,437,522
|
(950,642
|
)
|
$
|
(12,852,058
|
)
|
$
|
25,282,553
|
$
|
194,979,998
|
$
|
4,528,849
|
$
|
199,508,847
|
|||||||||
Net income
|
—
|
—
|
—
|
——
|
—
|
24,409,770
|
24,409,770
|
3,571,003
|
27,980,773
|
||||||||||||||||||
Dividends declared
|
—
|
—
|
—
|
——
|
—
|
(3,279,193
|
)
|
(3,279,193
|
)
|
—
|
(3,279,193
|
)
|
|||||||||||||||
Tax payment made on behalf of stockholders (Note 9)
|
—
|
—
|
—
|
—
|
—
|
(582,698
|
)
|
(582,698
|
)
|
—
|
(582,698
|
)
|
|||||||||||||||
Contribution from non-controlling interest
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
44,207
|
44,207
|
||||||||||||||||||
Distributions to non-controlling interests
|
—
|
—
|
—
|
——
|
—
|
—
|
—
|
(8,144,059
|
)
|
(8,144,059
|
)
|
||||||||||||||||
Balances, December 31, 2016
|
11,198,119
|
$
|
111,981
|
$
|
182,437,522
|
(950,642
|
)
|
$
|
(12,852,058
|
)
|
$
|
45,830,432
|
$
|
215,527,877
|
$
|
—
|
$
|
215,527,877
|
|||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
8,679,848
|
8,679,848
|
—
|
8,679,848
|
||||||||||||||||||
Dividends declared
|
—
|
—
|
—
|
—
|
—
|
(3,774,670
|
)
|
(3,774,670
|
)
|
—
|
(3,774,670
|
)
|
|||||||||||||||
Tax payment made on behalf of stockholders (Note 9)
|
—
|
—
|
—
|
—
|
—
|
(640,267
|
)
|
(640,267
|
)
|
—
|
(640,267
|
)
|
|||||||||||||||
Purchase of treasury stock
|
—
|
—
|
—
|
(1,152,023
|
)
|
(18,803,061
|
)
|
—
|
(18,803,061
|
)
|
—
|
(18,803,061
|
)
|
||||||||||||||
Balances, December 31, 2017
|
11,198,119
|
$
|
111,981
|
$
|
182,437,522
|
(2,102,665
|
)
|
$
|
(31,655,119
|
)
|
$
|
50,095,343
|
$
|
200,989,727
|
$
|
—
|
$
|
200,989,727
|
|||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
6,889,531
|
6,889,531
|
—
|
6,889,531
|
||||||||||||||||||
Net effect of adoption of new accounting standards
|
—
|
—
|
—
|
—
|
—
|
166,895
|
166,895
|
166,895
|
|||||||||||||||||||
Dividends declared
|
—
|
—
|
—
|
—
|
—
|
(6,589,300
|
)
|
(6,589,300
|
)
|
—
|
(6,589,300
|
)
|
|||||||||||||||
Purchase of treasury stock
|
—
|
—
|
—
|
(612,574
|
)
|
(10,098,071
|
)
|
—
|
(10,098,071
|
)
|
—
|
(10,098,071
|
)
|
||||||||||||||
Balances, December 31, 2018
|
11,198,119
|
$
|
111,981
|
$
|
182,437,522
|
(2,715,239
|
)
|
$
|
(41,753,190
|
)
|
$
|
50,562,469
|
$
|
191,358,782
|
$
|
—
|
$
|
191,358,782
|
2018
|
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
|||||||||
Net income
|
$
|
6,889,531
|
$
|
8,679,848
|
$
|
27,980,773
|
|||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|||||||||
Gain on sales of real estate, net
|
(4,610,824
|
)
|
(14,728,921
|
)
|
(24,497,763
|
)
|
|||
Deferred income tax benefit
|
509,842
|
4,041,655
|
(7,248,977
|
)
|
|||||
Distribution received from equity method investee
|
384,500
|
185,000
|
180,000
|
||||||
Income in earnings of equity method investee
|
(383,197
|
)
|
(185,063
|
)
|
(179,450
|
)
|
|||
(Reversal of) provision for loan losses
|
(239,144
|
)
|
(360,012
|
)
|
1,284,896
|
||||
Impairment losses on real estate properties
|
1,053,161
|
1,423,286
|
3,227,807
|
||||||
Depreciation and amortization
|
761,717
|
1,138,515
|
1,258,305
|
||||||
Amortization of deferred financing costs
|
267,932
|
317,419
|
456,168
|
||||||
Accretion of discount on loans
|
(241,061
|
)
|
—
|
—
|
|||||
Deferred loan fees, net of amortization
|
385,682
|
—
|
—
|
||||||
Changes in operating assets and liabilities:
|
|||||||||
Interest and other receivables
|
575,657
|
(266,122
|
)
|
(441,985
|
)
|
||||
Other assets
|
227,432
|
34,172
|
(420,759
|
)
|
|||||
Accounts payable and accrued liabilities
|
(225,062
|
)
|
(2,351,676
|
)
|
(2,314,291
|
)
|
|||
Due to Manager
|
(35,501
|
)
|
(82,956
|
)
|
(48,016
|
)
|
|||
Forward contract liability
|
(459,688
|
)
|
459,688
|
—
|
|||||
Net cash provided by (used in) operating activities
|
4,860,977
|
(1,695,167
|
)
|
(763,292
|
)
|
||||
Cash flows from investing activities:
|
|||||||||
Principal collected on loans
|
78,632,376
|
69,266,337
|
55,849,884
|
||||||
Investments in loans
|
(68,792,474
|
)
|
(85,824,680
|
)
|
(78,272,140
|
)
|
|||
Investment in real estate properties
|
(496,826
|
)
|
(11,232,758
|
)
|
(26,406,879
|
)
|
|||
Net proceeds from disposition of real estate properties
|
21,286,595
|
55,879,123
|
89,401,642
|
||||||
Purchases of vehicles and equipment
|
—
|
(16,170
|
)
|
(29,887
|
)
|
||||
Net cash provided by investing activities
|
30,629,671
|
28,071,852
|
40,542,620
|
||||||
Cash flows from financing activities
|
|||||||||
Advances on notes payable
|
243,267
|
10,543,172
|
23,966,383
|
||||||
Repayments on notes payable
|
(17,789,514
|
)
|
(13,972,820
|
)
|
(36,380,880
|
)
|
|||
Advances on lines of credit
|
71,634,706
|
19,945,000
|
79,416,793
|
||||||
Repayments of lines of credit
|
(71,461,706
|
)
|
(23,366,000
|
)
|
(95,356,293
|
)
|
|||
Payment of deferred financing costs
|
(439,591
|
)
|
(12,500
|
)
|
(279,599
|
)
|
|||
Distributions to non-controlling interests
|
—
|
—
|
(8,144,059
|
)
|
|||||
Contribution from non-controlling interest
|
—
|
—
|
44,207
|
||||||
Purchase of treasury stock
|
(12,369,554
|
)
|
(16,531,578
|
)
|
—
|
||||
Dividends paid
|
(6,464,771
|
)
|
(4,245,386
|
)
|
(4,592,850
|
)
|
|||
Net cash used in financing activities
|
(36,647,163
|
)
|
(27,640,112
|
)
|
(41,326,298
|
)
|
|||
Net decrease in cash, cash equivalents and restricted cash
|
(1,156,515
|
)
|
(1,263,427
|
)
|
(1,546,970
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
5,670,816
|
6,934,243
|
8,481,213
|
||||||
Cash, cash equivalents and restricted cash at end of year
|
$
|
4,514,301
|
$
|
5,670,816
|
$
|
6,934,243
|
|||
Supplemental Disclosures of Cash Flow Information
|
|||||||||
Cash paid during the year for interest
(excluding amounts capitalized)
|
$
|
1,893,988
|
$
|
1,291,743
|
$
|
2,495,000
|
|||
Cash paid during the year for interest that was capitalized
|
—
|
472,357
|
555,453
|
||||||
Supplemental Disclosure of Non-Cash Activity
|
|||||||||
Increase in real estate from loan foreclosures
|
2,062,729
|
—
|
700,800
|
Decrease in loans, net of allowance for loan losses, from loan foreclosures
|
(1,937,475
|
)
|
—
|
(631,232
|
)
|
||||
Decrease in interest and other receivables from adding balances to loans
|
—
|
—
|
(69,568
|
)
|
|||||
Decrease in interest and other receivables from loan foreclosures
|
(44,912
|
)
|
—
|
—
|
|||||
Increase in loans from sales of real estate
|
8,679,065
|
450,000
|
1,595,000
|
||||||
Amortization of deferred financing costs capitalized to construction project
|
—
|
(76,260
|
)
|
(119,471
|
)
|
||||
Capital expenditures financed through accounts payable
|
—
|
(42,146
|
)
|
(2,654,856
|
)
|
||||
Dividends declared but not paid
|
(1,696,576
|
)
|
(1,572,047
|
)
|
(1,402,496
|
)
|
|||
Repurchase of treasury stock accrued as forward contract liability
|
—
|
(2,271,483
|
)
|
—
|
|||||
Reversal of deferred gain on adoption of ASU 2014-09
|
(302,895
|
)
|
—
|
—
|
|||||
Loan discounts established on adoption of ASU 2014-09
|
136,000
|
—
|
—
|
|
Commercial
|
Residential
|
Land
|
|
||||
2018
|
Total
|
|||||||
|
|
|||||||
Allowance for loan losses:
|
|
|||||||
Beginning balance
|
$
|
1,069,458
|
$
|
451,537
|
$
|
306,811
|
$
|
1,827,806
|
Charge-offs
|
—
|
(186,708)
|
—
|
(186,708)
|
||||
Recoveries
|
—
|
76,234
|
—
|
76,234
|
||||
Provision (Reversal)
|
(9,944)
|
(218,779)
|
(10,421)
|
(239,144)
|
||||
Ending balance
|
$
|
1,059,514
|
$
|
122,284
|
$
|
296,390
|
$
|
1,478,188
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
Ending balance: collectively evaluated for impairment
|
$
|
1,059,514
|
$
|
122,284
|
$
|
296,390
|
$
|
1,478,188
|
Ending balance
|
$
|
1,059,514
|
$
|
122,284
|
$
|
296,390
|
$
|
1,478,188
|
Loans:
|
|
|||||||
Ending balance
|
$
|
132,519,461
|
$
|
5,209,357
|
$
|
4,953,425
|
$
|
142,682,243
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
9,304,587
|
$
|
2,557,526
|
$
|
—
|
$
|
11,862,113
|
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
123,214,874
|
$
|
2,651,831
|
$
|
4,953,425
|
$
|
130,820,130
|
|
Commercial
|
Residential
|
Land
|
|
||||
2017
|
Total
|
|||||||
|
|
|||||||
Allowance for loan losses:
|
|
|||||||
Beginning balance
|
$
|
864,971
|
$
|
1,331,318
|
$
|
510,533
|
$
|
2,706,822
|
Charge-offs
|
—
|
(546,004)
|
—
|
(546,004)
|
||||
Recoveries
|
27,000
|
—
|
—
|
27,000
|
||||
Provision (Reversal)
|
177,487
|
(333,777)
|
(203,722)
|
(360,012)
|
||||
Ending balance
|
$
|
1,069,458
|
$
|
451,537
|
$
|
306,811
|
$
|
1,827,806
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
—
|
$
|
186,708
|
$
|
—
|
$
|
186,708
|
Ending balance: collectively evaluated for impairment
|
$
|
1,069,458
|
$
|
264,829
|
$
|
306,811
|
$
|
1,641,098
|
Ending balance
|
$
|
1,069,458
|
$
|
451,537
|
$
|
306,811
|
$
|
1,827,806
|
Loans:
|
|
|||||||
Ending balance
|
$
|
127,873,281
|
$
|
13,170,795
|
$
|
5,127,574
|
$
|
146,171,650
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
1,212,851
|
$
|
7,321,359
|
$
|
—
|
$
|
8,534,210
|
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
126,660,430
|
$
|
5,849,436
|
$
|
5,127,574
|
$
|
137,637,440
|
|
Commercial
|
Residential
|
Land
|
|
||||
2016
|
Total
|
|||||||
|
|
|||||||
Allowance for loan losses:
|
|
|||||||
Beginning balance
|
$
|
1,140,530
|
$
|
455,587
|
$
|
246,329
|
$
|
1,842,446
|
Charge-offs
|
(447,520)
|
—
|
—
|
(447,520)
|
||||
Recoveries
|
27,000
|
—
|
—
|
27,000
|
||||
Provision
|
144,961
|
875,731
|
264,204
|
1,284,896
|
||||
Ending balance
|
$
|
864,971
|
$
|
1,331,318
|
$
|
510,533
|
$
|
2,706,822
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
—
|
$
|
732,712
|
$
|
—
|
$
|
732,712
|
Ending balance: collectively evaluated for impairment
|
$
|
864,971
|
$
|
598,606
|
$
|
510,533
|
$
|
1,974,110
|
Ending balance
|
$
|
864,971
|
$
|
1,331,318
|
$
|
510,533
|
$
|
2,706,822
|
Loans:
|
|
|||||||
Ending balance
|
$
|
102,442,111
|
$
|
19,001,677
|
$
|
8,238,523
|
$
|
129,682,311
|
|
||||||||
Ending balance: individually evaluated for impairment
|
$
|
—
|
$
|
4,883,866
|
$
|
—
|
$
|
4,883,866
|
|
||||||||
Ending balance: collectively evaluated for impairment
|
$
|
102,442,111
|
$
|
14,117,811
|
$
|
8,238,523
|
$
|
124,798,445
|
Loans
30-59 Days
Past Due
|
Loans
60-89 Days
Past Due
|
Loans
90 or More Days
Past Due
|
Other
Impaired/Non-Accrual
Loans
|
|||||||||||
|
Total Past
Due Loans
|
Current
Loans
|
Total
Loans
|
|||||||||||
December 31, 2018
|
||||||||||||||
|
||||||||||||||
Commercial
|
$
|
4,388,000
|
$
|
4,916,587
|
$
|
—
|
$
|
—
|
$
|
9,304,587
|
$
|
123,214,874
|
$
|
132,519,461
|
Residential
|
2,358,966
|
—
|
—
|
198,560
|
2,557,526
|
2,651,831
|
5,209,357
|
|||||||
Land
|
—
|
—
|
—
|
—
|
—
|
4,953,425
|
4,953,425
|
|||||||
|
$
|
6,746,966
|
$
|
4,916,587
|
$
|
—
|
$
|
198,560
|
$
|
11,862,113
|
$
|
130,820,130
|
$
|
142,682,243
|
Loans
30-59 Days
Past Due
|
Loans
60-89 Days
Past Due
|
Loans
90 or More Days
Past Due
|
Other Impaired/
Non-Accrual
Loans
|
|||||||||||
|
Total Past
Due Loans
|
Current
Loans
|
Total
Loans
|
|||||||||||
December 31, 2017
|
||||||||||||||
|
||||||||||||||
Commercial
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
1,212,851
|
$
|
1,212,851
|
$
|
126,660,430
|
$
|
127,873,281
|
Residential
|
1,938,895
|
2,737,538
|
2,430,878
|
214,048
|
7,321,359
|
5,849,436
|
13,170,795
|
|||||||
Land
|
—
|
—
|
—
|
—
|
—
|
5,127,574
|
5,127,574
|
|||||||
|
$
|
1,938,895
|
$
|
2,737,538
|
$
|
2,430,878
|
$
|
1,426,899
|
$
|
8,534,210
|
$
|
137,637,440
|
$
|
146,171,650
|
As of December 31, 2018
|
Year Ended December 31, 2018
|
||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||
With no related allowance recorded:
|
|||||||||||
Commercial
|
$
|
9,467,157
|
$
|
9,304,587
|
$
|
—
|
$
|
1,855,535
|
$
|
173,711
|
|
Residential
|
2,557,526
|
2,557,526
|
—
|
5,966,958
|
380,761
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
12,024,683
|
$
|
11,862,113
|
$
|
—
|
$
|
7,822,493
|
$
|
554,472
|
||
With an allowance recorded:
|
|||||||||||
Commercial
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|
Residential
|
—
|
—
|
—
|
114,327
|
—
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
—
|
—
|
$
|
—
|
$
|
114,327
|
$
|
—
|
|||
Total:
|
|||||||||||
Commercial
|
$
|
9,467,157
|
$
|
9,304,587
|
$
|
—
|
$
|
1,855,535
|
$
|
173,711
|
|
Residential
|
2,557,526
|
2,557,526
|
—
|
6,081,285
|
380,761
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
12,024,683
|
$
|
11,862,113
|
$
|
—
|
$
|
7,936,820
|
$
|
554,472
|
As of December 31, 2017
|
Year Ended December 31, 2017
|
||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
|||||||
With no related allowance recorded:
|
|||||||||||
Commercial
|
$
|
1,222,499
|
$
|
1,212,851
|
$
|
—
|
$
|
101,875
|
$
|
19,189
|
|
Residential
|
6,610,216
|
6,505,469
|
—
|
753,711
|
50,369
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
7,832,715
|
$
|
7,718,320
|
$
|
—
|
$
|
855,586
|
$
|
69,559
|
||
With an allowance recorded:
|
|||||||||||
Commercial
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|
Residential
|
1,302,707
|
815,890
|
186,708
|
3,188,101
|
—
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
1,302,707
|
815,890
|
$
|
186,708
|
$
|
3,188,101
|
$
|
—
|
|||
Total:
|
|||||||||||
Commercial
|
$
|
1,222,499
|
$
|
1,212,851
|
$
|
—
|
$
|
101,875
|
$
|
19,189
|
|
Residential
|
7,912,923
|
7,321,359
|
186,708
|
3,941,813
|
50,369
|
||||||
Land
|
—
|
—
|
—
|
—
|
—
|
||||||
$
|
9,135,422
|
$
|
8,534,210
|
$
|
186,708
|
$
|
4,043,688
|
$
|
69,559
|
Year Ended December 31, 2016
|
|||||
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||
With no related allowance recorded:
|
|||||
Commercial
|
$
|
1,684,877
|
$
|
38,187
|
|
Residential
|
236,042
|
20,598
|
|||
Land
|
—
|
—
|
|||
$
|
1,920,919
|
$
|
58,785
|
||
With an allowance recorded:
|
|||||
Commercial
|
$
|
865,285
|
$
|
—
|
|
Residential
|
6,209,540
|
—
|
|||
Land
|
—
|
—
|
|||
$
|
7,074,825
|
$
|
—
|
||
Total:
|
|||||
Commercial
|
$
|
2,550,162
|
$
|
38,187
|
|
Residential
|
6,445,582
|
20,598
|
|||
Land
|
—
|
—
|
|||
$
|
8,995,744
|
$
|
58,785
|
Modifications
During the Year Ended December 31, 2017
|
||||||
|
|
Number of
Contracts
|
|
Pre-Modification
Outstanding
Recorded Investment
|
|
Post-Modification
Outstanding
Recorded Investment
|
|
||||||
|
||||||
Troubled Debt Restructurings That Occurred During the Year
|
|
|
|
|
|
|
Commercial
|
|
1
|
$
|
1,173,625
|
$
|
1,212,851
|
|
December,
2018
|
December 31,
2017
|
|||||
Residential
|
$
|
16,855,359
|
$
|
24,627,710
|
|||
Land
|
7,359,111
|
14,389,620
|
|||||
Retail
|
7,737,181
|
7,632,893
|
|||||
Golf course
|
—
|
1,999,449
|
|||||
Marina
|
1,269,650
|
2,207,675
|
|||||
Assisted care
|
—
|
5,253,125
|
|||||
Office
|
872,489
|
—
|
|||||
$
|
34,093,790
|
$
|
56,110,472
|
|
December 31,
2018
|
December 31,
2017
|
|||||
Retail
|
$
|
15,987,697
|
$
|
16,623,238
|
|||
Land
|
6,561,023
|
2,018,068
|
|||||
Residential
|
—
|
2,356,995
|
|||||
Office
|
—
|
3,357,352
|
|||||
$
|
22,548,720
|
$
|
24,355,653
|
December 31,
2018
|
December 31,
2017
|
||||||
Land and land improvements
|
$
|
7,908,072
|
$
|
5,112,063
|
|||
Buildings and improvements
|
17,320,471
|
22,560,343
|
|||||
25,228,543
|
27,672,406
|
||||||
Less: Accumulated depreciation and amortization
|
(2,679,823
|
)
|
(3,316,753
|
)
|
|||
$
|
22,548,720
|
$
|
24,355,653
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
||||||||
|
|
|
|
|
|
|
|
||||||
|
Outstanding
Balance
|
|
Total
Commitment
|
|
Outstanding
Balance
|
|
Total
Commitment
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||
CB&T Line of Credit
|
|
$
|
1,728,000
|
|
$
|
47,235,245
|
|
$
|
1,555,000
|
|
$
|
27,259,000
|
|
Loans:
|
December 31,
2018
|
|||
Commercial
|
$
|
69,569,181
|
||
Residential
|
—
|
|||
Total
|
$
|
69,569,181
|
|
December 31,
2018
|
Interest Rate
|
December 31,
2017
|
Interest Rate
|
Payment Terms/Frequency
|
Maturity Date
|
||||||||
Tahoe Stateline Venture, LLC Loan Payable
|
$
|
12,872,555
|
4.22%
|
$
|
13,242,514
|
4.22%
|
Amortizing
Monthly
|
January 2021
|
||||||
Zalanta Construction Loan Payable
|
—
|
N/A
|
17,176,288
|
6.00%
|
Interest Monthly
Principal Quarterly
|
November 2018
|
||||||||
Principal amount
|
$
|
12,872,555
|
$
|
30,418,802
|
||||||||||
Less unamortized deferred financing costs
|
(73,652
|
)
|
(226,369
|
)
|
||||||||||
Notes and loans payable, net
|
$
|
12,798,903
|
$
|
30,192,433
|
Years ending December 31:
|
||||
2019
|
$
|
387,135
|
||
2020
|
403,792
|
|||
2021
|
12,081,628
|
|||
2022
|
—
|
|||
2023
|
—
|
|||
Thereafter
|
—
|
|||
$
|
12,872,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Classified as Return of Capital
|
|
||||||||||||
|
|
|
|
|
|
Dividends Classified as
Ordinary Income |
|
Capital Gain
Distribution |
|
|||||||||||||||||||
|
|
Total
Dividends Paid |
|
|
|
|||||||||||||||||||||||
Year
|
|
Dividends
Paid Per Share |
|
Percent
|
|
Dividends
Paid Per Share |
|
Sec 199A Dividends Per Share
|
|
Percent
|
|
Dividend
Paid Per Share |
|
Percent
|
|
Dividends
Paid Per Share |
|
|||||||||||
Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2018 (1)
|
$
|
5,237,571
|
$
|
0.601
|
91.21
|
%
|
$
|
0.548
|
0.548
|
8.79
|
%
|
$
|
0.053
|
— |
%
|
$
|
0.000
|
|||||||||||
2017 (2)
|
$
|
3,789,108
|
$
|
0.380
|
87.67
|
%
|
$
|
0.333
|
0.000
|
12.33
|
%
|
$
|
0.047
|
—
|
%
|
$
|
0.000
|
|||||||||||
2016 (3)
|
|
$
|
3,279,193
|
|
$
|
0.320
|
|
|
15.05
|
%
|
$
|
0.048
|
|
|
0.000
|
|
|
84.95
|
%
|
$
|
0.272
|
|
|
—
|
%
|
$
|
0.000
|
|
(1) Cash distributions made on January 14, 2019 with a record date of December 31, 2018 are treated as received by shareholders
on December 31, 2018, to the extent of the Company’s tax earnings and profits for 2018. Therefore, $0.041 per share of the January 14, 2019 cash distribution is included in the 2018 Form 1099 while the remainder in the amount of $0.159 per
share will be treated as a 2019 distribution for U.S. federal income tax purposes and is not included on the 2018 Form 1099.
(2) Dividends declared and paid in 2017 per above do not include $640,267 which represented capital gains tax on 2017 undistributed
capital gains paid on behalf of shareholders to the U.S. Treasury in January 2018 (and recorded as dividends paid and payable in the consolidated financial statements).
(3) Dividends declared and paid in 2016 per above do not include $582,698 which represented capital gains tax on 2016 undistributed
capital gains paid on behalf of shareholders to the U.S. Treasury in January 2017 (and recorded as dividends paid and payable in the consolidated financial statements).
|
|
|
Year Ended December 31, 2018
|
||||||||
|
Federal
|
|
State and Local
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|||
Change in valuation allowance
|
|
$
|
388,408
|
|
$
|
129,166
|
|
$
|
517,574
|
|
Other
|
(39,625
|
)
|
31,893
|
(7,732
|
)
|
|||||
Income tax expense (benefit)
|
|
$
|
348,783
|
$
|
161,059
|
|
$
|
509,842
|
|
|
|
|
Year Ended December 31, 2017
|
||||||||
|
Federal
|
|
State and Local
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|||
Change in valuation allowance
|
|
$
|
2,602,441
|
|
$
|
418,020
|
|
$
|
3,020,461
|
|
Reduction in Federal corporate tax rate
|
1,358,272
|
—
|
1,358,272
|
|||||||
Other
|
(293,814
|
)
|
(43,264
|
)
|
(337,078
|
)
|
||||
Income tax expense (benefit)
|
|
$
|
3,666,899
|
$
|
374,756
|
|
$
|
4,041,655
|
|
|
Year Ended December 31, 2016
|
||||||||||
Federal
|
State and Local
|
Total
|
||||||||
Deferred expense (benefit)
|
$
|
(6,655,774
|
)
|
$
|
(1,387,947
|
)
|
$
|
(8,043,721
|
)
|
|
Change in valuation allowance
|
794,744
|
—
|
794,744
|
|||||||
Income tax expense (benefit)
|
$
|
(5,861,030
|
)
|
$
|
(1,387,947
|
)
|
$
|
(7,248,977
|
)
|
Year Ended
December 31, 2018
|
Year Ended
December 31, 2017
|
|||||
Tax (benefit) expense at Federal statutory rate
|
$
|
(5,867
|
)
|
$
|
(149,766
|
)
|
State income tax expense (benefit), net of Federal effect
|
127,236
|
250,193
|
||||
Other
|
65
|
(19,485
|
)
|
|||
Change in Federal valuation allowance
|
388,408
|
2,602,441
|
||||
Reduction in Federal corporate tax rate
|
—
|
1,358,272
|
||||
Income tax expense (benefit)
|
$
|
509,842
|
$
|
4,041,655
|
Deferred tax assets (liabilities):
|
December 31, 2018
|
December 31, 2017
|
||||
Real estate basis differences
|
$
|
4,144,365
|
4,255,681
|
|||
Net operating losses
|
1,499,186
|
1,380,138
|
||||
Total deferred tax assets
|
5,643,551
|
5,635,819
|
||||
Valuation allowance
|
(2,946,071
|
)
|
(2,428,497
|
)
|
||
Net deferred tax assets
|
$
|
2,697,480
|
3,207,322
|
·
|
Reduced Management Fee: The
Amendment revises the management fee by making permanent the recent “Interim Management Fee” adjustment described above along with an additional adjustment such that the “Management Fee”, calculated and payable to the Manager monthly in
arrears, equals (i) one-twelfth (1/12) multiplied by (ii) (a) 1.50% of the first $300,000,000 of the Company’s Stockholders’ Equity (as defined in the Amendment), and (b) 1.25% of the Stockholders’ Equity that is greater than
$300,000,000.
|
·
|
Company to Receive 30% of Loan
Fees: The Company will receive thirty-percent (30%) of the gross fees and commissions paid to the Manager in connection with the Company making or investing in mortgage loans, including thirty-percent (30%) of gross fees paid in
connection with the extension or modification of any loans, with the exception of certain miscellaneous administration fees collected in association with loan funding, demand, and partial release fees, with the remaining seventy-percent
(70%) of such fees to be paid to the Manager.
|
·
|
Company to Receive 30% of Late
Payment Charges: The Company will receive thirty-percent (30%) of all late payment charges from borrowers on loans owned by the Company, with the remaining seventy-percent (70%) to be paid to the Manager.
|
·
|
Elimination of Service Fees:
The Company will no longer pay the Manager any servicing fees for the Manager’s services as servicing agent with respect to any of its mortgage loans.
|
·
|
Elimination of Certain Expense
Reimbursements: The Company will no longer reimburse the Manager for salary and related salary expense of the Manager's non-management and non-supervisory personnel.
|
Year ending December 31:
|
||||
2019
|
$
|
2,842,830
|
||
2020
|
2,163,672
|
|||
2021
|
2,057,822
|
|||
2022
|
1,837,332
|
|||
2023
|
1,395,151
|
|||
Thereafter (through 2028)
|
2,071,519
|
|||
Total
|
$
|
12,368,326
|
Fair Value Measurements Using
|
|||||||||
Carrying Value
|
Quoted Prices In Active Markets for Identical Assets
(Level 1) |
Significant Other Observable Inputs
(Level 2) |
Significant Unobservable Inputs
(Level 3) |
||||||
2018
|
|||||||||
Nonrecurring:
|
|||||||||
Impaired loans:
|
|||||||||
NONE
|
$
|
$
|
—
|
$
|
—
|
$
|
|||
Total
|
$
|
$
|
—
|
$
|
—
|
$
|
|||
Real estate properties:
|
|||||||||
Commercial
|
$
|
1,269,650
|
$
|
—
|
$
|
—
|
$
|
1,269,650
|
|
Land
|
1,850,342
|
—
|
1,850,342
|
—
|
|||||
Total
|
$
|
3,119,992
|
$
|
—
|
$
|
1,850,342
|
$
|
1,269,650
|
|
2017
|
|||||||||
Nonrecurring:
|
|||||||||
Impaired loans:
|
|||||||||
Residential
|
$
|
1,115,999
|
$
|
—
|
$
|
—
|
$
|
1,115,999
|
|
Total
|
$
|
1,115,999
|
$
|
—
|
$
|
—
|
$
|
1,115,999
|
|
Real estate properties:
|
|||||||||
Commercial
|
$
|
7,460,800
|
$
|
—
|
$
|
—
|
$
|
7,460,800
|
|
Land
|
1,914,870
|
1,914,870
|
|||||||
Total
|
$
|
9,375,670
|
$
|
—
|
$
|
—
|
$
|
9,375,670
|
Description
|
Fair Value
|
Valuation Technique
|
Significant Unobservable Inputs
|
Input/Range
|
Weighted Average
|
|||||
Impaired Loans:
|
||||||||||
NONE
|
||||||||||
Real Estate Properties:
|
||||||||||
Commercial
|
$
|
1,269,650
|
Appraisal
|
Comparable Sales Adjustment
|
(45.3)% to 2.1%
|
N/A
|
Description
|
Fair Value
|
Valuation Technique
|
Significant Unobservable Inputs
|
Input/Range
|
Weighted Average
|
|||||
Impaired Loans:
|
||||||||||
Residential
|
$
|
1,115,999
|
Comparable Sales
|
Comparable Sales Adjustment
|
(4.6)% to 4.2%
|
N/A
|
||||
Real Estate Properties:
|
||||||||||
Commercial
|
$
|
7,460,800
|
Appraisal
|
Comparable Sales Adjustment
|
(23.7)% to (11.6)%
|
(13.5)%
|
||||
Land
|
1,914,870
|
Appraisal
|
Comparable Sales
Adjustment
|
(50.8)% to 21.9%
|
N/A
|
|||||
Capitalization Rate
|
32.5%
|
N/A
|
Fair Value Measurements at December 31, 2018
|
|||||||||||
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||
Financial assets
|
|||||||||||
Cash, cash equivalents and restricted cash
|
$
|
4,514,000
|
$
|
4,514,000
|
$
|
—
|
$
|
—
|
$
|
4,514,000
|
|
Loans, net
|
141,204,000
|
—
|
—
|
139,532,000
|
139,532,000
|
||||||
Investment in limited liability company
|
2,139,000
|
—
|
—
|
7,711,000
|
7,711,000
|
||||||
Accrued interest and advances receivable
|
1,023,000
|
—
|
—
|
1,023,000
|
1,023,000
|
||||||
Financial liabilities
|
|||||||||||
Accrued interest payable
|
$
|
86,000
|
—
|
41,000
|
45,000
|
$
|
86,000
|
||||
Lines of credit payable
|
1,728,000
|
—
|
1,728,000
|
—
|
1,728,000
|
||||||
Notes payable
|
12,799,000
|
—
|
—
|
12,568,000
|
12,568,000
|
||||||
Fair Value Measurements at December 31, 2017
|
|||||||||||
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||
Financial assets
|
|||||||||||
Cash, cash equivalents and restricted cash
|
$
|
5,671,000
|
$
|
5,671,000
|
$
|
—
|
$
|
—
|
$
|
5,671,000
|
|
Loans, net
|
144,344,000
|
—
|
—
|
144,255,000
|
144,255,000
|
||||||
Investment in limited liability company
|
2,141,000
|
—
|
—
|
4,819,000
|
4,819,000
|
||||||
Accrued interest and advances receivable
|
1,459,000
|
—
|
—
|
1,459,000
|
1,459,000
|
||||||
Financial liabilities
|
|||||||||||
Accrued interest payable
|
$
|
115,000
|
—
|
77,000
|
38,000
|
$
|
115,000
|
||||
Lines of credit payable
|
1,555,000
|
—
|
1,555,000
|
—
|
1,555,000
|
||||||
Notes payable
|
30,192,000
|
—
|
17,176,000
|
13,233,000
|
30,409,000
|
||||||
|
Three Months Ended
|
||||||||||||
December 31, 2018
|
September 30, 2018
|
June 30, 2018
|
March 31, 2018
|
||||||||||
Total revenues
|
$
|
3,735,550
|
$
|
4,723,505
|
$
|
4,346,044
|
3,991,920
|
||||||
Total expenses
|
3,790,374
|
3,696,281
|
2,978,230
|
3,493,586
|
|||||||||
Operating (loss) income
|
(54,824
|
)
|
1,027,224
|
1,367,814
|
498,334
|
||||||||
Gain on sale of real estate, net
|
2,126,084
|
1,372,925
|
957,239
|
154,577
|
|||||||||
Net income before income taxes
|
2,071,260
|
2,400,149
|
2,325,053
|
652,911
|
|||||||||
Income tax (expense) benefit
|
(243,122
|
)
|
(150,910
|
)
|
17,635
|
(183,445
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
1,828,138
|
$
|
2,249,239
|
$
|
2,342,688
|
$
|
469,466
|
|||||
Earnings per common share (basic and diluted)
|
$
|
0.22
|
$
|
0.26
|
$
|
0.26
|
$
|
0.05
|
|||||
Weighted average number of common shares outstanding (basic and diluted)
|
8,482,880
|
8,572,614
|
8,922,280
|
9,089,270
|
|||||||||
Dividends declared per share of Common Stock
|
$
|
0.20
|
$
|
0.20
|
$
|
0.20
|
$
|
0.16
|
|
Three Months Ended
|
||||||||||||
December 31, 2017
|
September 30, 2017
|
June 30, 2017
|
March 31, 2017
|
||||||||||
Total revenues
|
$
|
3,850,940
|
$
|
4,277,493
|
$
|
3,867,290
|
3,537,405
|
||||||
Total expenses
|
3,964,664
|
3,427,969
|
4,164,895
|
3,355,582
|
|||||||||
Operating (loss) income
|
(113,724
|
)
|
849,524
|
(297,605
|
)
|
181,823
|
|||||||
Gain (loss) on sale of real estate, net
|
268,891
|
582,496
|
13,877,715
|
(181
|
)
|
||||||||
Settlement expense
|
(2,627,436
|
)
|
—
|
—
|
—
|
||||||||
Net (loss) income before income taxes
|
(2,472,269
|
)
|
1,432,020
|
13,580,110
|
181,642
|
||||||||
Income tax (expense) benefit
|
(1,951,828
|
)
|
(1,275,700
|
)
|
(824,163
|
)
|
10,036
|
||||||
Net (loss) income attributable to common stockholders
|
$
|
(4,424,097
|
)
|
$
|
156,320
|
$
|
12,755,947
|
$
|
191,678
|
||||
(Loss) earnings per common share (basic and diluted)
|
$
|
(0.44
|
)
|
$
|
0.02
|
$
|
1.24
|
$
|
0.02
|
||||
Weighted average number of common shares outstanding (basic and diluted)
|
9,984,352
|
10,173,448
|
10,247,477
|
10,247,477
|
|||||||||
Dividends declared per share of Common Stock
|
$
|
0.10
|
$
|
0.10
|
$
|
0.10
|
$
|
0.08
|
|
Three Months Ended
|
||||||||||||
December 31, 2016
|
September 30, 2016
|
June 30, 2016
|
March 31, 2016
|
||||||||||
Total revenues
|
$
|
3,667,283
|
$
|
4,493,977
|
$
|
4,692,114
|
4,225,617
|
||||||
Total expenses
|
3,942,004
|
5,587,213
|
6,999,063
|
4,316,678
|
|||||||||
Operating loss
|
(274,721
|
)
|
(1,093,236
|
)
|
(2,306,949
|
)
|
(91,061
|
)
|
|||||
(Loss) gain on sale of real estate, net
|
(536,419
|
)
|
20,195,367
|
—
|
4,838,815
|
||||||||
Net (loss) income before income taxes
|
(811,140
|
)
|
19,102,131
|
(2,306,949
|
)
|
4,747,754
|
|||||||
Income tax (expense) benefit
|
(380,706
|
)
|
260,848
|
7,368,835
|
—
|
||||||||
Net (loss) income
|
(1,191,846
|
)
|
19,362,979
|
5,061,886
|
4,747,754
|
||||||||
Less: Net loss (income) attributable to non-controlling interests
|
15,960
|
(3,630,318
|
)
|
56,847
|
(13,492
|
)
|
|||||||
Net (loss) income attributable to common stockholders
|
$
|
(1,175,886
|
)
|
$
|
15,732,661
|
$
|
5,118,733
|
$
|
4,734,262
|
||||
(Loss) earnings per common share (basic and diluted)
|
$
|
(0.11
|
)
|
$
|
1.54
|
$
|
0.50
|
$
|
0.46
|
||||
Weighted average number of common shares outstanding (basic and diluted)
|
10,247,477
|
10,247,477
|
10,247,477
|
10,247,477
|
|||||||||
Dividends declared per share of Common Stock
|
$
|
0.08
|
$
|
0.08
|
$
|
0.08
|
$
|
0.08
|
Description
|
Encumbrances
|
Initial Cost
|
Capitalized
Costs
|
Sales
|
Impairment
Write-downs
|
Accumulated
Depreciation
|
Carrying
Value
|
Date
Acquired
|
Depreciable
Lives
|
|
Retail Complex (TSV), South Lake Tahoe, California
|
$12,872,556
Note Payable
|
6,409,617
|
$ 12,299,570
|
$ (41,667)
|
—
|
$(2,679,823)
|
$15,987,697
|
Various
|
5-39 Years
|
|
Retail Complex and 12 Residential Condominium Units (ZRV),South Lake Tahoe, California
|
None
|
5,016,443
|
37,299,922
|
(22,025,680)
|
—
|
—
|
Note
4
|
20,290,685
|
Various
|
N/A
|
Residential Land (ZRV II),
South Lake Tahoe, California
|
None
|
2,032,963
|
4,528,060
|
—
|
—
|
—
|
Note
4
|
6,561,023
|
Various
|
N/A
|
73 Residential Lots, Auburn, California
|
None
|
13,746,625
|
376,746
|
(96,678)
|
(9,904,826)
|
—
|
Note
5
|
4,121,867
|
9/27/2007
|
N/A
|
12 Condominium & 3 Commercial Units, Tacoma, Washington
|
None
|
2,154,217
|
84,909
|
—
|
—
|
—
|
Note 6
|
2,239,126
|
7/8/2011
|
N/A
|
Two Houses on 20 Acres
San Ramon, CA
|
None
|
2,062,729
|
—
|
—
|
—
|
—
|
2,062,729
|
11/13/2018
|
N/A
|
|
Marina & Boat Club with 179 Boat Slips,
Isleton, California
|
None
|
1,809,663
|
713,318
|
—
|
(1,253,331)
|
Note
7
|
1,269,650
|
1/29/2013
|
N/A
|
|
Undeveloped, Industrial Land,
San Jose, California
|
None
|
3,025,992
|
98,681
|
—
|
(1,274,331)
|
—
|
Note
8
|
1,850,342
|
12/27/2002
|
N/A
|
Miscellaneous Real Estate
|
None
|
—
|
2,259,391
|
Various
|
Various
|
|||||
TOTALS
|
$(2,679,823)
|
$56,642,510
|
Balance at beginning of period (1/1/16)
|
$
|
153,838,412
|
|
Additions during period:
|
|||
Acquisitions through foreclosure
|
700,800
|
||
Investments in real estate properties
|
29,061,735
|
||
Amortization of deferred financing costs capitalized to construction project
|
119,471
|
||
Subtotal
|
183,720,418
|
||
Deductions during period:
|
|||
Cost of real estate properties sold
|
66,183,589
|
||
Impairment losses on real estate properties
|
3,227,807
|
||
Depreciation of properties held for investment
|
1,185,624
|
||
Balance at end of period (12/31/16)
|
$
|
113,123,398
|
|
Balance at beginning of period (1/1/17)
|
$
|
113,123,398
|
|
Additions during period:
|
Acquisitions through foreclosure
|
—
|
||
Investments in real estate properties
|
11,274,904
|
||
Amortization of deferred financing costs capitalized to construction project
|
76,260
|
||
Subtotal
|
124,474,562
|
||
Deductions during period:
|
|||
Cost of real estate properties sold
|
41,505,148
|
||
Impairment losses on real estate properties
|
1,423,286
|
||
Depreciation of properties held for investment
|
1,080,003
|
||
Balance at end of period (12/31/17)
|
$
|
80,466,125
|
|
Balance at beginning of period (1/1/18)
|
80,466,125
|
||
Additions during period:
|
|||
Acquisitions through foreclosure
|
2,062,729
|
||
Investments in real estate properties
|
496,826
|
||
Subtotal
|
83,025,680
|
||
Deductions during period:
|
|||
Cost of real estate properties sold
|
24,609,167
|
||
Impairment losses on real estate properties
|
1,053,161
|
||
Depreciation of properties held for investment
|
720,842
|
||
Balance at end of period (12/31/18)
|
$
|
56,642,510
|
Balance at beginning of period (1/1/16)
|
$
|
2,915,596
|
|
Additions during period:
|
|||
Depreciation expense
|
1,185,624
|
||
Subtotal
|
4,101,220
|
||
Deductions during period:
|
|||
Accumulated depreciation on real estate moved to held for sale
|
949,793
|
||
Balance at end of period (12/31/16)
|
$
|
3,151,427
|
|
Balance at beginning of period (1/1/17)
|
$
|
3,151,427
|
|
Additions during period:
|
|||
Depreciation expense
|
1,080,003
|
||
Subtotal
|
4,231,430
|
||
Deductions during period:
|
|||
Accumulated depreciation on real estate moved to held for sale
|
914,677
|
||
Balance at end of period (12/31/17)
|
$
|
3,316,753
|
|
Balance at beginning of period (1/1/18)
|
3,316,753
|
||
Additions during period:
|
|||
Depreciation expense
|
720,842
|
||
Subtotal
|
4,037,595
|
||
Deductions during period:
|
|||
Accumulated depreciation on real estate moved to held for sale
|
1,357,772
|
||
Balance at end of period (12/31/18)
|
$
|
2,679,823
|
Description
|
Interest Rate
|
Final Maturity date
|
Carrying Amount of Mortgages
|
Principal Amount of Loans Subject to Delinquent Principal
|
Principal Amount of Loans Subject to Delinquent Payments
|
||||||||
TYPE OF PROPERTY
|
|||||||||||||
Commercial
|
5.00-9.65%
|
Current to July 2021
|
$
|
132,519,461
|
$
|
24,431,860
|
$
|
9,304,587
|
|||||
Residential
|
5.00-8.00%
|
Current to March 2028
|
5,209,357
|
2,358,966
|
2,557,526
|
||||||||
Land
|
4.00-9.82%
|
January 2019 to October 2020
|
4,953,425
|
—
|
—
|
||||||||
TOTAL
|
$
|
142,682,243
|
$
|
26,790,826
|
$
|
11,862,113
|
|||||||
AMOUNT OF LOAN
|
|||||||||||||
$0-500,000
|
6.00-9.65%
|
Current to March 2028
|
$
|
2,581,001
|
$
|
573,606
|
$
|
760,166
|
|||||
$500,001-1,000,000
|
5.00-8.00%
|
Current to October 2019
|
3,887,834
|
870,458
|
870,458
|
||||||||
$1,000,001-5,000,000
|
4.00-9.82%
|
Current to July 2021
|
70,448,597
|
16,511,762
|
10,231,489
|
||||||||
Over $5,000,000
|
5.00-8.25%
|
Current to March 2021
|
65,764,811
|
8,835,000
|
—
|
||||||||
TOTAL
|
$
|
142,682,243
|
$
|
26,790,826
|
$
|
11,862,113
|
|||||||
POSITION OF LOAN
|
|||||||||||||
First
|
4.00-9.65%
|
Current to March 2028
|
$
|
137,808,788
|
$
|
26,790,826
|
$
|
11,862,113
|
|||||
Second
|
8.00-9.82%
|
July 2019 to October 2020
|
4,873,455
|
—
|
—
|
||||||||
TOTAL
|
$
|
142,682,243
|
$
|
26,790,826
|
$
|
11,862,113
|
Balance at beginning of period (1/1/16)
|
$
|
106,743,807
|
||
Additions during period:
|
||||
New loans, including from sale of real property
|
79,867,140
|
|||
Subtotal
|
186,610,947
|
|||
Deductions during period:
|
||||
Collection of principal
|
55,849,884
|
|||
Foreclosures
|
1,078,752
|
|||
Balance at end of period (12/31/16)
|
$
|
129,682,311
|
||
Balance at beginning of period (1/1/17)
|
$
|
129,682,311
|
||
Additions during period:
|
||||
New loans, including from sale of real estate property
|
86,274,680
|
|||
Subtotal
|
215,956,991
|
|||
Deductions during period:
|
||||
Collection of principal
|
69,785,341
|
|||
Foreclosures
|
—
|
|||
Balance at end of period (12/31/17)
|
$
|
146,171,650
|
||
Balance at beginning of period (1/1/18)
|
$
|
146,171,650
|
||
Additions during period:
|
||||
New loans, including from sale of real estate property
|
77,471,539
|
|||
Discount and loan fee amortization
|
227,801
|
|||
Subtotal
|
223,870,990
|
|||
Deductions during period:
|
||||
Collection of principal
|
78,742,850
|
|||
Foreclosures
|
1,937,475
|
|||
Loan fees collected
|
508,422
|
|||
Balance at end of period (12/31/18)
|
$
|
142,682,243
|
Description
|
Interest Rate
|
Final Maturity Date
|
Periodic Payment Terms
|
Prior Liens
|
Face Amount of Mortgages
|
Carrying Amount of Mortgages
|
Principal Amount of Loans Subject to Delinquent Principal or Interest
|
||||||||||
Retail Building
Irving, Texas
|
7.50%
|
6/1/19
|
Interest only, balance due at maturity
|
0
|
14,822,000
|
14,784,945
|
0
|
||||||||||
Retail Building
Walnut Creek, California
|
7.25%
|
5/15/20
|
Interest only, balance due at maturity
|
0
|
9,000,000
|
8,953,623
|
0
|
||||||||||
Hotel
Novi, Michigan
|
8.25%
|
12/31/18
|
Interest only, balance due at maturity
|
0
|
8,835,000
|
8,835,000
|
8,835,000
|
||||||||||
Office Building
Pleasanton, California
|
7.50%
|
11/1/19
|
Interest only, balance due at maturity
|
0
|
8,250,000
|
8,200,150
|
0
|
||||||||||
Retail Building
Folsom, California
|
7.75%
|
1/15/19
|
Interest only, balance due at maturity
|
0
|
8,006,000
|
7,170,186
|
0
|
||||||||||
Retail Building
Antioch, California
|
8.00%
|
10/15/19
|
Interest only, balance due at maturity
|
0
|
7,000,000
|
6,979,074
|
0
|
||||||||||
Assisted Care Facility
Bensalem, Pennsylvania
|
5.00%
|
3/15/21
|
Interest only, balance due at maturity
|
0
|
5,875,000
|
5,519,317
|
0
|
||||||||||
Apartment Building
Concord, California
|
7.50%
|
7/15/20
|
Interest only, balance due at maturity
|
0
|
6,350,000
|
5,322,516
|
0
|
||||||||||
Office Building
Chula Vista, California
|
8.00%
|
11/1/18
|
Interest only, balance due at maturity
|
0
|
5,600,000
|
4,916,586
|
4,916,586
|
||||||||||
TOTALS
|
$
|
0
|
$
|
73,738,000
|
$
|
70,681,397
|
$
|
13,751,586
|
(a)
|
||
(1)
|
List of Financial Statements filed as part of Item 8 in
this Annual Report:
|
|
(2)
|
List of Financial Statement Schedules filed as part of
Item 8 in this Annual Report:
|
|
(3) List of Exhibits:
|
* 2.1
|
||
* 3.1
|
||
* 3.2
|
||
* 3.3
|
||
* 3.4
|
||
* 3.5
|
* 4.1
|
||
* 10.1
|
||
* 10.2
|
||
* 10.3
|
||
* 10.4
|
||
* 10.5
|
||
** 21.1
|
||
** 23.1
|
||
** 24.1
|
||
** 31.1
|
||
** 31.2
|
||
** 32.1
|
||
***101.INS
|
XBRL Instance Document
|
|
***101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
***101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
***101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
***101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
***101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*Previously filed.
|
** Filed herewith.
|
***This exhibit is being furnished rather than filed, and
shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
|
OWENS REALTY MORTGAGE, INC.
|
|||
Dated: March 15, 2019
|
By:
|
/s/ Bryan H. Draper |
|
Bryan H. Draper, Chief Executive Officer and President
|
Dated: March 15, 2019
|
By:
|
/s/ Bryan H. Draper
|
|
Bryan H. Draper, Director, Chief Executive Officer and President (Principal Executive Officer)
|
|||
Dated: March 15, 2019
|
By:
|
/s/ Melina A. Platt |
|
Melina A. Platt, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
|||
Dated: March 15, 2019
|
By:
|
/s/ William C. Owens |
|
William C. Owens, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Dennis G. Schmal
|
|
Dennis G. Schmal, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Gary C. Wallace |
|
Gary C. Wallace, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Ann Marie Mehlum |
|
Ann Marie Mehlum, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Gilbert E. Nathan
|
|
Gilbert E. Nathan, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Benjamin Smeal
|
|
Benjamin Smeal, Director
|
|||
Dated: March 15, 2019
|
By:
|
* Steven D. Hovde
|
|
Steven D. Hovde, Director
|
|||
*
|
By:
|
/s/ Bryan H. Draper
|
|
Bryan H. Draper, Attorney-in-fact
|
State of
|
Fictitious
|
|
Subsidiary Name
|
Organization
|
Business Name
|
Lone Star Golf, Inc.
|
Maryland
|
|
Broadway & Commerce, LLC
|
Washington
|
|
Brannan Island, LLC
|
California
|
|
Tahoe Stateline Venture, LLC
|
California
|
|
Zalanta Resort at the Village, LLC
|
California
|
|
Zalanta Resort at the Village- Phase II, LLC
|
California
|
Dated: March 15, 2019
|
/s/ Dennis G. Schmal
Dennis G. Schmal
Director
|
Dated: March 15, 2019
|
/s/ Gary C. Wallace
Gary C. Wallace
Director
|
Dated: March 15, 2019
|
/s/ Ann Marie Mehlum
Ann Marie Mehlum
Director
|
Dated: March 15, 2019
|
/s/ Gilbert E. Nathan
Gilbert E. Nathan
Director
|
Dated: March 15, 2019
|
/s/ Benjamin Smeal
Benjamin Smeal
Director
|
Dated: March 15, 2019
|
/s/ Steven D. Hovde
Steven D. Hovde
Director
|
1. |
I have reviewed this annual report on Form 10-K of Owens Realty Mortgage, Inc. (the “Registrant”);
|
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 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 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.
|
1. |
I have reviewed this annual report on Form 10-K of Owens Realty Mortgage, Inc. (the “Registrant”);
|
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 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 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.
|
3@<<< '6KM 'G_P#PB7Q#_P"BG_\ E M_\:/^
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Document And Entity Information - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Mar. 13, 2019 |
Jun. 30, 2018 |
|
Document Information [Line Items] | |||
Entity Registrant Name | Owens Realty Mortgage, Inc. | ||
Entity Central Index Key | 0001556364 | ||
Trading Symbol | orm | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Common Stock, Shares Outstanding (in shares) | 8,482,880 | ||
Entity Public Float | $ 139,041 | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets (Parentheticals) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loans, allowance of losses | $ 1,478,188 | $ 1,827,806 |
Other assets, accumulated depreciation and amortization | 85,944 | 309,686 |
Deferred financing costs, accumulated amortization | 82,635 | 265,276 |
Real estate held for investment, accumulated depreciation | $ 2,679,823 | $ 3,316,753 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, share authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 11,198,119 | 11,198,119 |
Common stock, shares outstanding (in shares) | 8,482,880 | 9,095,454 |
Treasury stock, shares (in shares) | 2,715,239 | 2,102,665 |
Consolidated Statements of Stockholders' Equity - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Treasury Stock [Member] |
Retained Earnings [Member] |
Parent [Member] |
Noncontrolling Interest [Member] |
Total |
---|---|---|---|---|---|---|---|
Balances (in shares) at Dec. 31, 2015 | 11,198,119 | (950,642) | |||||
Balances at Dec. 31, 2015 | $ 111,981 | $ 182,437,522 | $ (12,852,058) | $ 25,282,553 | $ 194,979,998 | $ 4,528,849 | $ 199,508,847 |
Net income | 24,409,770 | 24,409,770 | 3,571,003 | 27,980,773 | |||
Dividends declared | (3,279,193) | (3,279,193) | (3,279,193) | ||||
Tax payment made on behalf of stockholders (Note 9) | (582,698) | (582,698) | (582,698) | ||||
Contribution from non-controlling interest | 44,207 | 44,207 | |||||
Distributions to non-controlling interests | (8,144,059) | (8,144,059) | |||||
Balances (in shares) at Dec. 31, 2016 | 11,198,119 | (950,642) | |||||
Balances at Dec. 31, 2016 | $ 111,981 | 182,437,522 | $ (12,852,058) | 45,830,432 | 215,527,877 | 215,527,877 | |
Net income | 8,679,848 | 8,679,848 | 8,679,848 | ||||
Dividends declared | (3,774,670) | (3,774,670) | (3,774,670) | ||||
Tax payment made on behalf of stockholders (Note 9) | (640,267) | (640,267) | (640,267) | ||||
Purchase of treasury stock (in shares) | (1,152,023) | ||||||
Purchase of treasury stock | $ (18,803,061) | (18,803,061) | (18,803,061) | ||||
Balances (in shares) at Dec. 31, 2017 | 11,198,119 | (2,102,665) | |||||
Balances at Dec. 31, 2017 | $ 111,981 | 182,437,522 | $ (31,655,119) | 50,095,343 | 200,989,727 | 200,989,727 | |
Net income | 6,889,531 | 6,889,531 | 6,889,531 | ||||
Dividends declared | (6,589,300) | (6,589,300) | (6,589,300) | ||||
Purchase of treasury stock (in shares) | (612,574) | ||||||
Purchase of treasury stock | $ (10,098,071) | (10,098,071) | (10,098,071) | ||||
Balances (in shares) at Dec. 31, 2018 | 11,198,119 | (2,715,239) | |||||
Balances at Dec. 31, 2018 | $ 111,981 | 182,437,522 | $ (41,753,190) | 50,562,469 | 191,358,782 | 191,358,782 | |
Net effect of adoption of new accounting standards | $ 166,895 | $ 166,895 | $ 166,895 |
Note 1 - Organization |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – ORGANIZATIONOwens Realty Mortgage, Inc. (the “Company”) was incorporated on August 9, 2012, under the laws of the State of Maryland. The Company is authorized to issue 50,000,000 shares of its $0.01 par value common stock (the “Common Stock”). In addition, the Company is authorized to issue 5,000,000 shares of preferred stock at $0.01 par value per share. The Company was created to effect the merger (the “OMIF Merger”) of Owens Mortgage Investment Fund, a California Limited Partnership (“OMIF”) with and into the Company as described in the Registration Statement on Form S-4, as amended, of the Company, declared effective on February 12, 2013 ( File No. 333 -184392 ). The OMIF Merger was part of a plan to reorganize the business operations of OMIF so that it could elect to qualify as a real estate investment trust (“REIT”) for Federal income tax purposes. The OMIF Merger was completed on May 20, 2013. The Company now, by virtue of the OMIF Merger, directly or indirectly owns all of the assets and business formerly owned by OMIF and is a deemed successor issuer to OMIF pursuant to Rule 12g -3 (a) under the Securities Exchange Act of 1934, as amended. For accounting purposes, the OMIF Merger was treated as a transfer of assets and exchange of shares between entities under common control. The accounting basis used to initially record the assets and liabilities in the Company was the carryover basis of OMIF. The consolidated financial statements reflect the extinguishment of OMIF’s partners’ capital and replacement with 11,198,119 shares of Common Stock and additional paid –in capital as if the OMIF Merger occurred on January 1, 2013. The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company is permitted to deduct distributions made to its stockholders, allowing its operating income represented by such distributions to avoid taxation at the entity level and to be taxed generally only at the stockholder level. The Company currently intends to distribute all of its REIT taxable income, excluding net capital gains. As a REIT, however, the Company is subject to separate, corporate-level tax, including potential 100% penalty taxes under various circumstances, as well as certain state and local taxes. In addition, the Company’s taxable REIT subsidiaries are subject to full corporate income tax. Furthermore, the Company’s ability to continue to qualify as a REIT will depend upon its continuing satisfaction of various requirements, such as those related to the diversity of its stock ownership, the nature of its assets, the sources of its income and the distributions to its stockholders, including a requirement that the Company distribute to its stockholders at least 90% of its REIT taxable income on an annual basis (determined without regard to the dividends paid deduction and by excluding net capital gain).Proposed Merger with Ready Capital Corporation On November 7, 2018, the Company, Ready Capital Corporation, a Maryland corporation ("Ready Capital"), and ReadyCap Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of Ready Capital ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, subject to the terms and conditions therein, the Company will be merged with and into Merger Sub, with Merger Sub continuing as the surviving company (the "Merger").Under the terms of the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each share of the Company’s Common Stock issued and outstanding immediately prior to the Effective Time (excluding any cancelled shares) will be converted into the right to receive from Ready Capital 1.441 shares of common stock, par value $0.0001, of Ready Capital (the "Ready Capital Common Stock") (the "Exchange Ratio"). The Merger Agreement provides that the Company and Ready Capital will pay a special dividend in cash on the last business day prior to the closing of the Merger with a record date that is three business days before the payment date. Cash will be paid in lieu of fractional shares of Ready Capital Common Stock that would have been received as a result of the Merger.Completion of the proposed Merger is subject to the satisfaction of certain customary conditions, and is subject to the approval of the stockholders of both Ready Capital and the Company. The Company cannot provide any assurance that the proposed Merger will close in a timely manner or at all. |
Note 2 - Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation The consolidated financial statements include the accounts of the Company and its majority and wholly owned limited liability companies. All significant inter-company transactions and balances have been eliminated in consolidation. The Company also has a 50% ownership interest in a limited liability company accounted for under the equity method (see Note 4 ). The Company is in the business of providing mortgage lending services and manages its business as one operating segment. Due to foreclosure activity, the Company also owns and manages real estate assets.Certain reclassifications have been made to the 2016 and 2017 consolidated financial statements to conform to the 2018 presentation. None of the reclassifications had an impact on net income or equity.Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates are inherently imprecise and actual results could differ significantly from such estimates. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016 -13, “Financial Instruments – Credit Losses (Topic 326 ) – Measurement of Credit Losses on Financial Instruments”. The amendments in ASU 2016 -13 eliminate the probable and incurred credit loss recognition threshold in current GAAP and, instead, reflect an entity’s current estimate of all expected credit losses. The amendments in ASU 2016 -13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact that ASU 2016 -13 will have on its consolidated financial statements.In February 2016, the FASB issued ASU 2016 -02, “Leases (Topic 842 )”, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016 -02 amends existing guidance related to leases, primarily by requiring the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under the current accounting guidance. This standard became effective for interim and annual reporting periods beginning January 1, 2019. The Company does not currently have any lease obligations. The Company will account for its operating leases where it is the lessor on its balance sheet similar to its prior accounting with the underlying leased asset recognized as real estate. The Company will account for executory costs and certain other non-lease components separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014 -09, discussed below. The adoption of ASU 2016 -02 did not have a material impact on the Company’s consolidated financial statements since executory costs and certain other non-lease components are not significant.In July 2018, the FASB issued ASU 2018 -11, “Leases (Topic 842 ): Targeted Improvements” an amendment to ASU 2016 -02 discussed above, that will allow lessors to elect, as a practical expedient, not to allocate the total consideration to lease and nonlease components based on their relative standalone selling prices. This practical expedient will allow lessors to elect a combined single lease component presentation if: (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. Nonlease components that do not meet the criteria of this practical expedient will be accounted for under the new revenue recognition ASU 2014 -09. In August 2018, the FASB issued ASU 2018 -13, “Fair Value Measurement (Topic 820 ) – Disclosure Framework – Changes in the Disclosure Requirements for Fair Value Measurements”. The amendments in ASU 2018 -13 modify certain disclosure requirements on fair value measurements in Topic 820. In addition, certain disclosure requirements were removed and others were added. This standard is effective for interim and annual reporting periods beginning after December 15, 2019. The Company does not believe that adoption of ASU 2018 -13 will have a material impact on its consolidated financial statements or related disclosures.Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2017 -01, “Business Combinations (Topic 805 ) – Clarifying the Definition of a Business”. The amendments in ASU 2017 -01 clarify the definition of a business by more clearly outlining the requirements for an integrated set of assets and activities to be considered a business and by establishing a practical framework to determine when the integrated set of assets and activities is a business. The adoption of ASU 2017 -01 during the quarter ended March 31, 2018 did not have an impact on the Company’s consolidated financial statements.On January 1, 2018, the Company adopted ASU 2016 -18, “Statement of Cash Flows (Topic 230 ) – Restricted Cash”. The amendments in ASU 2016 -18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and cash equivalents together when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The adoption of ASU 2016 -18 during the quarter ended March 31, 2018 resulted in the Company including its restricted cash with cash and cash equivalents when reconciling the beginning and ending amounts shown on its consolidated statement of cash flows.On January 1, 2018, the Company adopted ASU 2016 -15, “Statement of Cash Flows (Topic 230 ) – Classification of Certain Cash Receipts and Cash Payments”. The amendments in ASU 2016 -15 reflect eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of ASU 2016 -15 during the quarter ended March 31, 2018 resulted in the Company reporting distributions it receives from its equity method investment in cash flows from operating activities rather than financing activities on its consolidated statement of cash flows. The Company elected the “Cumulative Earnings Approach” upon adoption of ASU 2016 -15. On January 1, 2018, the Company adopted ASU 2014 -09, “Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606” ), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revised when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as real estate held for sale. The majority of the Company’s revenues come from interest income and other sources, including loans and leases, that are outside the scope of ASC 606. The Company’s revenue from real estate properties is not significantly impacted by ASC 606, as rental income from leasing arrangements is specifically excluded from ASC 606, and will be evaluated with the adoption of the lease accounting standard, ASU 2016 -02, discussed above.The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP. The Company recorded a net increase in beginning retained earnings of $167,000 as of January 1, 2018 due to the cumulative effect of adopting ASC 606 for four past real estate sales transactions where the sale was financed by the Company. The transition adjustment resulted in the recognition of previously deferred gains on two sales in the total amount of approximately $303,000 and the recording of net discounts against two carryback loans in the total amount of approximately $136,000. On January 1, 2018, the Company adopted ASU 2016 -01, “Financial Instruments- Overall (Subtopic 825 -10 ) – Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016 -01 enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016 -01 contains several provisions, including but not limited to 1 ) requiring equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; 2 ) simplifying the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3 ) eliminating the requirement to disclose the method(s) and significant assumptions used to estimate fair value; and 4 ) requiring separate presentation of financial assets and liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016 -01 also changes certain financial statement disclosure requirements, including requiring disclosures of the fair value of financial instruments be made on the basis of exit price. The adoption of ASU 2016 -01 during the quarter ended March 31, 2018 resulted in the Company using an exit price methodology for disclosing the fair value of the Company’s financial instruments in Note 14. Cash , Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions. Restricted cash includes contingency reserves required pursuant to the Company’s charter and non-interest bearing deposits required pursuant to the Company’s line of credit of $3,500,000 (see Note 7 ).Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and loans. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation, or “FDIC”, insured limit. The Company has exposure to credit risk on its loans and other investments. The Company’s Manager, OFG, will seek to manage credit risk by performing analysis of underlying collateral assets.Loans and Allowance for Loan Losses Loans are generally stated at the principal amount outstanding, net of unamortized loan discounts and deferred loan fees which totaled $364,000 and $386,000 as of December 31, 2018, respectively. There were no loan discounts or deferred loan fees as of December 31, 2017. Advances under the terms of a loan to pay property taxes, insurance, legal and other costs are generally capitalized and reported as interest and other receivables. The Company’s portfolio consists primarily of real estate loans generally collateralized by first, second and third deeds of trust. Interest income on loans is accrued using the simple interest method. Loans are generally placed on nonaccrual status when the borrowers are past due greater than ninety days or when full payment of principal and interest is not expected. When a loan is classified as nonaccrual, interest accruals discontinue and all past due interest is included in the recorded investment in the impaired loan that is measured as described below. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. Cash receipts on nonaccrual loans are used to reduce any outstanding accrued interest, and then are recorded as interest income, except when such payments are specifically designated as principal reduction or when management does not believe the Company’s investment in the loan is fully recoverable. The Company does not incur origination costs. However, beginning April 1, 2018, the Company receives 30% of all fees (other than certain administrative fees) paid by borrowers in connection with the Company making loans, including 30% of all origination, modification and extension fees. Owens Financial Group, Inc. (“OFG” or the “Manager”) is entitled to the remaining 70% of all such fees (see Note 12 – “Transactions with Affiliates”). When collected, such loan fees are recorded as a credit to the applicable loan’s principal balance and are then amortized to interest income using the effective interest method over the life of the loan.Loans and the related accrued interest and advances are analyzed by management on a periodic basis for ultimate recovery. The allowance for loan losses is management’s estimate of probable credit losses inherent in the Company’s loan portfolio that have been incurred as of the balance sheet date. The allowance is established through a provision for loan losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is recorded as a recovery to the allowance. The overall allowance consists of two primary components: specific reserves related to impaired loans that are individually evaluated for impairment and general reserves for inherent losses related to loans that are not considered impaired and are collectively evaluated for impairment.Regardless of the loan type, a loan is considered impaired when, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. All loans determined to be impaired are individually evaluated for impairment. When a loan is considered impaired, management estimates impairment based on the present value of expected future cash flows discounted at the loan's effective interest rate, except that as a practical expedient, management may measure impairment based on a loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the underlying collateral. These valuations are generally updated during the fourth quarter but may be updated during interim periods if deemed appropriate by management.A restructuring of a debt constitutes a troubled debt restructuring (“TDR”) if the Company for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider. Restructured loans typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. Loans that are reported as TDRs are considered impaired and measured for impairment as described above.The determination of the general reserve for loans that are not considered impaired and are collectively evaluated for impairment is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, and qualitative factors to include economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the loan portfolio, and probable incurred losses inherent in the portfolio taken as a whole.The Company maintains a separate allowance for each portfolio segment (loan type). These portfolio segments include commercial real estate, residential real estate and land loans. The allowance for loan losses attributable to each portfolio segment, which includes both impaired loans that are individually evaluated for impairment and loans that are not considered impaired and are collectively evaluated for impairment, is combined to determine the Company’s overall allowance, which is included on the consolidated balance sheet. The allowance for loans that are not considered impaired consists of reserve factors that are based on management’s assessment of the following for each portfolio segment: (1 ) inherent credit risk, (2 ) historical losses, and (3 ) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below.Land Loans Commercial and Residential Real Estate Loans may result in troubled loans. Trends in vacancy rates of properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for properties to produce sufficient cash flow to service debt obligations.Management monitors the credit quality of the Company’s loan portfolio on an ongoing basis using certain credit quality indicators including a loan’s delinquency status and internal asset classification. A loan is considered classified when it meets the definition of impaired as described above. Other Assets Other assets primarily include deferred rent, capitalized lease commissions, prepaid expenses, deposits and inventory. Amortization of lease commissions is provided on the straight-line method over the lives of the related leases. Deferred Financing Costs Issuance and other costs related to the Company’s line of credit and certain notes payable are capitalized and amortized to interest expense under either the straight-line or effective interest methods over the terms of the respective debt instruments. Deferred financing costs related to the construction loan in Zalanta Resort at the Village, LLC (“ZRV”) were amortized to the construction project under the straight-line method over the term of construction/renovation. Rental Income The Company leases multifamily rental units under operating leases with terms of generally one year or less. Rental revenue is recognized, net of rental concessions, on a straight-line method over the related lease term. Rental income on commercial property is recognized on a straight-line basis over the term of each operating lease.Real Estate Held for Sale Real estate held for sale includes real estate acquired in full or partial settlement of loan obligations, generally through foreclosure, that is being marketed for sale. Real estate held for sale is recorded at acquisition at the property’s estimated fair value less estimated costs to sell. Any excess of the recorded investment in the loan over the net realizable value is charged against the allowance for loan losses. Any excess of the net realizable value over the recorded investment in the loan is credited first to the allowance for loan losses as a recovery to the extent charge-offs had been recorded previously and, then to earnings as gain on foreclosure of loan.After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, real estate held for sale is analyzed periodically for changes in fair values and any subsequent write down is charged to impairment losses on real estate properties. Any recovery in the fair value subsequent to such a write down is recorded (not to exceed the net realizable value at acquisition) as an offset to impairment losses on real estate properties.The Company records a gain or loss from the sale of real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of real estate to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether the collectability of the transaction price is probable. Once these criteria are met, the real estate is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. This adjustment is based on management’s estimate of the fair value of the loan extended to the buyer to finance the sale. Real Estate Held for Investment Real estate held for investment includes real estate acquired in full or partial settlement of loan obligations, generally through foreclosure, that is not being marketed for sale and is either being operated, such as rental properties; is being managed through the development process, including obtaining appropriate and necessary entitlements, permits and construction; or are idle properties awaiting more favorable market conditions or properties the Company cannot sell without placing the Company’s REIT status at risk or becoming subject to prohibited transactions penalty tax. Real estate held for investment is recorded at acquisition at the property’s estimated fair value, less estimated costs to sell.After acquisition, costs incurred relating to the development and improvement of the property are capitalized, whereas costs relating to operating or holding the property are expensed. Subsequent to acquisition, management periodically compares the carrying value of real estate to expected undiscounted future cash flows for the purpose of assessing the recoverability of the recorded amounts. If the carrying value exceeds future undiscounted cash flows, the assets are reduced to estimated fair value through an impairment loss charged to earnings. Subsequent increases in the fair value of such properties are not recorded unless they are realized.Depreciation of real estate properties held for investment is provided on the straight-line method over the estimated remaining useful lives of buildings and improvements ( 5 -39 years). Depreciation of tenant improvements is provided on the straight-line method over the shorter of their estimated useful lives or the lease terms.The Company reclassifies real estate properties from held for investment to held for sale in the period in which all of the following criteria are met: 1 ) Management commits to a plan to sell the property; 2 ) The property is available for immediate sale in its present condition; 3 ) An active program to locate a buyer has been initiated; 4 ) The sale of the property is probable and the transfer of the property is expected to qualify for recognition as a completed sale, within one year; and 5 ) Actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Such real estate properties are recorded at the time of reclassification at their carrying amounts prior to reclassification or fair value, whichever is lower. This establishes the initial basis at which the properties are accounted for as held for sale, as described above.If circumstances arise that previously were considered unlikely, and, as a result, the Company decides not to sell a real estate property classified as held for sale, the property is reclassified to held for investment. The property is then measured individually at the lower of its carrying amount, adjusted for depreciation or amortization expense that would have been recognized had the property been continuously classified as held for investment, or its fair value at the date of the subsequent decision not to sell.Earnings per Common Share The Company calculates basic earnings per common share by dividing net income attributable to common stockholders for the period by the weighted-average shares of Common Stock outstanding for that period. Diluted earnings per common share take into effect any dilutive instruments, unless if when doing so such effect would be anti-dilutive. At the present time, the Company has not issued any restricted stock or restricted stock units and has no other dilutive instruments.Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities, if any. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount that is “more likely than not” to be realized.The Company has elected to be taxed as a REIT. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally expect to pay U.S. federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income, determined without regard to net capital gains, to the Company’s stockholders. If the Company has previously qualified as a REIT and fails to qualify as a REIT in any subsequent taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may be precluded from qualifying as a REIT for the Company’s four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income.The Company has elected or may elect to treat certain of its existing or newly created corporate subsidiaries as taxable REIT subsidiaries (each a “TRS”). In general, a TRS of a REIT may hold assets that the REIT cannot hold directly and, subject to certain exceptions related to hotels and healthcare properties, may engage in any real estate or non-real estate related business. A TRS is treated as a regular corporation and is subject to federal, state, local and foreign taxes on its income and property.Gains on sales of certain properties may be taxable to the Company if such properties were held primarily for sale to customers in the ordinary course of business, as contemplated by Internal Revenue Code Section 1221 (a)(1 ), or were identified as foreclosure property under the related REIT taxation rules.The accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. A tax position is recognized as a benefit only if it is “more likely than not” that the position would be sustained in a tax examination, with a tax examination being presumed to occur. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. There was no reserve for uncertain tax positions recorded as of December 31, 2018 and 2017. Interest and penalties related to income tax matters, if any, are recorded as part of income tax expense in the consolidated statement of income. See discussion of the tax issue related to the Company’s 2012 federal income tax return in Note 11. Certain entities included in the Company’s consolidated financial statements are subject to certain state and local taxes. These taxes are recorded as general and administrative expenses in the accompanying consolidated financial statements. |
Note 3 - Loans and Allowance for Loan Losses |
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Allowance for Credit Losses [Text Block] | NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSESThe following tables show the changes in the allowance for loan losses by portfolio segment for the years ended December 31, 2018, 2017 and 2016 and the allocation of the allowance for loan losses and loans as of December 31, 2018 and 2017 by portfolio segment and by impairment methodology:
The following tables show an aging analysis of the loan portfolio by the time monthly payments are past due at December 31, 2018 and 2017. All of the loans that were 90 days or more past due in payments as listed below were on non-accrual status as of December 31, 2018 and 2017.
The above table as of December 31, 2018 includes seven past maturity loans in the Current Loans category of approximately $19,515,000 (all Commercial of which $10,835,000 was less than 30 days past maturity, $3,000,000 was 30 -59 days past maturity, $1,505,000 was 60 -89 days past maturity and $4,175,000 was greater than 90 days past maturity). These loans were current in making monthly interest payments and in the process of being extended, paid off or refinanced. In addition, of the delinquent loans above, $2,359,000 of Residential loans and $4,917,000 of Commercial loans were past maturity.
The above table as of December 31, 2017 includes seven past maturity loans in the Current Loans category of approximately $7,585,000 ($4,585,000 Commercial of which $3,000,000 was 30 -59 days past maturity and $1,585,000 was greater than 90 days past maturity and $3,000,000 Residential of which all was less than 30 days past maturity). These loans were current in making monthly interest payments and in the process of being extended, paid off or refinanced. In addition, of the delinquent loans above, $7,107,000 of Residential loans were past maturity.The following tables show information related to impaired loans as of and for the years ended December 31, 2018, 2017 and 2016:
The recorded investment balances presented in the above tables include amounts advanced in addition to principal on impaired loans (such as property taxes, insurance and legal charges) that are reimbursable by borrowers and are included in interest and other receivables in the accompanying consolidated balance sheets. Interest income recognized on a cash basis for impaired loans approximates the interest income recognized as reflected in the tables above. The average recorded investment and interest income recognized on impaired loans for which no related allowance was recorded presented in the above tables are disclosed as such, even if these impaired loans may have had an allowance recorded at some point during the year. In addition, the calculations of average recorded investment and interest income recognized in the above tables include loans that had been outstanding for some period of time during the year, but for which there was no recorded investment at the end of the year.Troubled Debt Restructurings The Company had recorded specific loan loss allowances of approximately $0 and $187,000 on loans totaling $199,000 and $2,739,000 (recorded investments before allowance) to borrowers whose loan terms had been modified in troubled debt restructurings as of December 31, 2018 and 2017, respectively. The Company has not committed to lend additional amounts to any of these borrowers, other than discussed below.No loans were modified as troubled debt restructurings during the year ended December 31, 2018. During the year ended December 31, 2017, the terms of one impaired loan with a principal balance of $1,145,000 were modified as a troubled debt restructuring. The maturity date was extended by one year and the Company agreed to advance another $165,000 (of which $68,000 was advanced at the time of modification) to the borrower to cover past due and future interest payments. All other terms of the loan remained the same. The loan and related collateral were analyzed and it was determined that no specific loan loss allowance was required as of December 31, 2017. These loans were repaid in full during 2018. There were no loans modified as troubled debt restructurings during the year ended December 31, 2016. The following table shows information related to the loan modification made by the Company during the year ended December 31, 2017 that constituted a troubled debt restructuring:
There were no loans modified as troubled debt restructurings during the previous twelve months that defaulted during the years ended December 31, 2018, 2017 and 2016. Generally, the Company considers a loan as having defaulted if its payments are delinquent 90 days or more. |
Note 4 - Investment in Limited Liability Company |
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Equity Method Investments and Joint Ventures Disclosure [Text Block] | NOTE 4 – INVESTMENT IN LIMITED LIABILITY COMPANY During 2008, the Company entered into an Operating Agreement of 1850 De La Cruz LLC, a California limited liability company (“1850” ), with Nanook Ventures LLC (“Nanook”), an unrelated party. The purpose of the joint venture is to acquire, own and operate certain industrial land and buildings located in Santa Clara, California that were owned by the Company. At the time of closing in July 2008, the two properties were separately contributed to two new limited liability companies, Nanook Ventures One LLC and Nanook Ventures Two LLC, which are wholly owned by 1850. The Company and Nanook are the Members of 1850 and NV Manager, LLC is the Manager.During the years ended December 31, 2018, 2017 and 2016, the Company received capital distributions from 1850 in the total amount of $385,000, $185,000 and $180,000, respectively. The net income to the Company from its investment in 1850 was approximately $383,000, $185,000 and $179,000 for the years ended December 31, 2018, 2017 and 2016, respectively. |
Note 5 - Real Estate Held for Sale |
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Real Estate Owned [Text Block] | NOTE 5 - REAL ESTATE HELD FOR SALEReal estate properties held for sale as of December 31, 2018 and 2017 consisted of properties acquired through foreclosure classified by property type as follows:
Transfers During the year ended December 31, 2018, the Company transferred five properties with book values totaling approximately $6,725,000 from “Held for investment” to “Held for sale”. In addition, during the year ended December 31, 2018, the Company transferred one property with a book value of approximately $6,561,000 from “Held for sale” to “Held for investment” because the property is no longer listed for sale.During the year ended December 31, 2017, the Company transferred seven properties with carrying amounts totaling approximately $13,423,000 from “Held for Investment” to “Held for Sale” as the properties were listed for sale and sales were expected within a one year period. In addition, during the year ended December 31, 2017, the Company transferred one property of approximately $1,915,000 from “Held for Sale” to “Held for Investment” as it was not expected to be sold within one year. Impairment losses totaling $1,423,000 were recorded on four properties during 2017 as a result of the transfers or subsequent to the transfers.During the year ended December 31, 2016, the Company transferred four properties with carrying amounts totaling approximately $10,052,000 from “Held for Investment” to “Held for Sale” as the properties were listed for sale and sales were expected within a one year period.No losses were recorded as a result of transfers between “Held for sale” and “Held for investment” categories for the years ended December 31, 2018, 2017 and 2016. Impairment Losses During the year ended December 31, 2018, the Company recorded impairment losses totaling approximately $1,053,000 on the marina property located in Isleton, California (impairment of $938,000 ) due to a new appraisal obtained and a reduction in the listing price of the property and, thus, the net fair market value estimated by management, on the unimproved residential and commercial land located in Bethel Island, California (impairment of $54,000 ) as a result of the sale of the land in October 2018 and on the unimproved industrial land located in San Jose, California (impairment of $61,000 ) as a result of the sale of the land in January 2019 ( subsequent to year end).During the year ended December 31, 2017, the Company recorded impairment losses totaling $1,423,000 on the marina located in Bethel Island, California ($495,000 ), the marina located in Isleton, California ($315,000 ), the undeveloped land located in San Jose, California ($146,000 ) and the assisted care property located in Bensalem, Pennsylvania ($467,000 ) due to new appraisals obtained, reductions in the fair market value estimated by management and/or related to agreements signed by the Company to sell the properties at prices that were lower than the book values of the properties. See “Sales” below.During the year ended December 31, 2016, the Company recorded impairment losses totaling $3,228,000 on the unimproved residential and commercial land located in Gypsum, Colorado ($2,110,000 ), the medical office condominium property located in Gilbert, Arizona ($1,094,000 ) and the office condominium complex located in Oakdale, California ($24,000 ) due to reductions in the fair market value estimated by management and/or related to agreements signed by the Company to sell the properties at prices that were lower than the book values of the properties. See “Sales” below.Sales During the year ended December 31, 2018, the Company sold twenty-three real estate properties (including eleven condominiums at Zalanta) for aggregate net sales proceeds of approximately $21,287,000 and carryback notes totaling $8,679,000, resulting in net gain on sales of real estate totaling approximately $4,611,000. During the year ended December 31, 2017, the Company sold fifteen real estate properties (including seven condominiums at Zalanta) for aggregate net sales proceeds of approximately $55,879,000 and carryback notes totaling $450,000, resulting in net gain on sales of real estate totaling approximately $14,729,000. All but one of the gains from 2017 sales were accounted for using the full accrual method. One sale resulted in the recording of deferred gain of approximately $93,000. During the year ended December 31, 2016, the Company sold seven real estate properties for aggregate net sales proceeds of approximately $89,402,000 and a carryback note in the amount of $1,595,000, resulting in net gain on sales of real estate totaling approximately $24,498,000 ($20,782,000 to the Company after $3,716,000 gain attributable to non-controlling interest). All of the gains from 2016 sales were accounted for using the full accrual method.Foreclosure s During the year ended December 31, 2018, the Company foreclosed on two loans secured by two homes and 20 acres of residential land located in San Ramon, California with principal balances aggregating approximately $1,937,000 and obtained the property via the trustee’s sale. In addition, accrued interest and advances made on the loan (for items such as legal fees and delinquent property taxes) in the total amount of approximately $125,000 were capitalized to the basis of the property. The fair market value of the property acquired was estimated to approximate the Company’s recorded investment in the loans.There were no foreclosures during the year ended December 31, 2017. During the year ended December 31, 2016, the Company foreclosed on one loan secured by an office property located in Oakdale, California with a principal balance of approximately $1,079,000 and obtained the property via the trustee’s sale. In addition, accrued interest and advances made on the loan (for items such as legal fees and delinquent property taxes) in the total amount of approximately $70,000 were capitalized to the basis of the property. It was determined that the fair value of the property was lower than the Company’s investment in the loan and a specific loan allowance was previously established of approximately $495,000. This amount was then recorded as a charge-off against the allowance for loan losses at the time of foreclosure, after a reduction of the previously established allowance in the amount of approximately $47,000 as a result of an updated appraisal obtained (net charge-off of $448,000 ). The property, along with a unit in the building purchased by the Company in 2015, was contributed into a new taxable REIT subsidiary, East G, LLC, in June 2016. The property was sold during 2017. |
Note 6 - Real Estate Held for Investment |
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Real Estate Held for Investment Disclosure [Text Block] | NOTE 6 - REAL ESTATE HELD FOR INVESTMENTReal estate held for investment as of December 31, 2018 and 2017 consisted of properties acquired through foreclosure classified by property type as follows:
The balances of land and the major classes of depreciable property for real estate held for investment as of December 31, 2018 and 2017 are as follows:
It is the Company’s intent to sell its real estate properties held for investment, but expected sales are not probable to occur within the next year.Depreciation expense was approximately $721,000, $1,080,000 and $1,186,000 for the years ended December 31, 2018, 2017 and 2016, respectively.Foreclosures There was no real estate held for investment acquired through foreclosure during the years ended December 31, 2018, 2017 and 2016. |
Note 7 - Line of Credit Payable |
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Debt Disclosure [Text Block] | NOTE 7 – LINE OF CREDIT PAYABLEThe Company borrows funds under a restated secured revolving credit facility with California Bank & Trust and other lenders described below (the “CB&T Line of Credit”). As of December 31, 2018 and 2017, the outstanding balance and total commitment under the CB&T Line of Credit consisted of the following:
CB&T Line of Credit Effective September 4, 2018, the Company entered into a Second Amended and Restated Credit Agreement with ZB, N.A. dba California Bank & Trust ("CB&T") as administrative agent, swingline lender and a lender, and First Bank and Umpqua Bank as additional lenders (the "Restated Credit Agreement"). The Restated Credit Agreement and a new Security Agreement among the parties collectively amends and restates the prior Credit Agreement, Advance Formula Agreement, Security Agreement and related promissory notes among the Company and CB&T and the other lenders (the "Prior Credit Facility").The maximum borrowings available (total commitment) to the Company under the CB&T Line of Credit is the lesser of $75 million or the amount determined pursuant to a borrowing base calculation described in the Restated Credit Agreement (the “Total Current Commitment”). At the option of CB&T as the Agent, up to $10 million of the CB&T Line of Credit may be made available as swing line loans. The Restated Credit Agreement also includes a sublimit facility that permits the Company to borrow up to $25 million, subject to certain additional limitations while underlying collateral of the Company is being further evaluated by the lenders for transfer to the borrowing base. Borrowings under the CB&T Line of Credit mature on May 15, 2020, subject to early termination in the event of default or at the election of the Company, and advances can be made up to that date. The Company is required to keep $3,500,000 in total non-interest bearing accounts with CB&T, First Bank and Umpqua Bank that is reported in cash, cash equivalents and restricted cash in the accompanying consolidated balance sheets.As of December 31, 2018, the Company has borrowed $1,728,000 pursuant to the Restated Credit Agreement (including $0 borrowed against the sublimit facility), and the Company’s maximum borrowing availability pursuant to the borrowing base calculations is approximately $47,235,000 ($45,507,000 of additional borrowing available). Effective September 4, 2018, such borrowings under the Restated Credit Agreement bear interest payable at an annual rate equal to, at the Company's election, either (1 ) the prime rate published in the Wall Street Journal plus, depending on the amount of the facility utilization, a margin of either (x ) 0.25% or 0.0% for revolving and swing line loans or (y) 1.0% or 0.75% for sublimit loans, or (2 ) the LIBOR Rate (as defined in the Restated Credit Agreement) plus, depending on the amount of the facility utilization, a margin of either (x ) 3.00% or 2.75% for revolving and swing line loans or (y) 3.75% or 3.50% for sublimit loans. The interest rate under the Prior Credit Facility was the prime rate plus one quarter percent (0.25% ) per annum or the prime rate plus one percent (1.00% ) per annum on any borrowings on the sublimit facility. The applicable interest rate (based on the prime rate selection) was 5.75% as of December 31, 2018. Upon a default under the Restated Credit Agreement the applicable interest rate increases by 2.00% and an additional fee of 5.0% of the payment amount applies to any late payments. The Company is also required to pay quarterly and at maturity (or upon earlier termination of the facility) an unused commitment fee, if the average amounts borrowed are less than 50% of the total commitment amount, equal to 0.20% per annum applied to the un-utilized borrowing capacity under the Restated Credit Agreement.Amounts owing under the CB&T Line of Credit may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a LIBOR Rate election is in effect. The restated CB&T Line of Credit also required the payment of an origination fee of $412,500 and other issuance costs for a total of approximately $434,000 and is subject to certain ongoing administrative fees. Interest expense on the CB&T Line of Credit (including the Prior Credit Facility) was approximately $919,000, $312,000 and $881,000 during the years ended December 31, 2018, 2017 and 2016, respectively (including $89,000, $158,000 and $131,000, respectively, in amortization of deferred financing costs and $44,000 in unused commitment fees in 2018 ).Borrowings are secured by certain assets of the Company. These collateral assets will include the grant to the lenders of first -priority deeds of trust on certain real property assets and trust deeds of the Company to be identified by the parties from time-to-time and all personal property of the Company, which collateral includes the assets described in the new Security Agreement and in other customary collateral agreements that will be entered into and/or modified by the parties from time-to-time. As of December 31, 2018, the carrying amount and classification of loans securing the CB&T Line of Credit (including loans securing the sublimit facility) were as follows:
The CB&T Line of Credit agreements contain financial covenants which are customary for a loan of this type. Management is not aware of any breach of these covenants as of December 31, 2018. |
Note 8 - Notes and Loans Payable on Real Estate |
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Mortgage Notes Payable Disclosure [Text Block] | NOTE 8 - NOTES AND LOANS PAYABLE ON REAL ESTATEThe Company had the following notes and loans payable outstanding as of December 31, 2018 and 2017:
The following table shows maturities by year on these notes and loans payable as of December 31, 2018:
Tahoe Stateline Venture , LLC Loan Payable In December 2014, Tahoe Stateline Ventures, LLC (“TSV”) entered into a Credit Agreement (the “Credit Agreement”) and related documents with RaboBank, N.A. as the lender (“Lender”) providing TSV with a loan (the “TSV Loan”) of up to $14,500,000. TSV borrowed $10,445,000 at the first closing under the TSV Loan and an additional $3,830,000 was borrowed in September 2015. The maturity date of the TSV Loan is January 1, 2021 ( the “Maturity Date”). All outstanding borrowings under the TSV Loan documents bear interest initially at a rate of 3.47% per annum (the “Long Term Adjustable Rate”), and on January 1, 2018 the Long Term Adjustable Rate was reset to Lender’s then current market rate for three year fixed rate loans from comparable commercial real estate secured transactions, as determined by Lender in its sole discretion (4.22% ). Upon a default under the TSV Loan documents, the interest rate on the outstanding principal balance increases by an additional five percent (5.00% ) per annum, and the rate on any other outstanding obligations thereunder increases to ten percent (10.00% ) per annum. Prepayments under the TSV Loan documents are subject to certain prepayment fees; provided that during the 90 day period immediately prior to the Maturity Date, TSV may prepay the entire unpaid balance of the Loan in full, without any Prepayment Fee or penalty.During the term of the TSV Loan, TSV will make equal combined payments of principal and accrued interest on the first day of each month in an amount calculated to fully amortize the original principal amount over a period of 300 months, subject to certain adjustments and the balance of the TSV Loan is due on the Maturity Date.The Credit Agreement required the payment of a closing fee of $108,750 and certain administrative fees totaling approximately $218,000. December 31, 2018, 2017 and 2016, approximately $586,000, $502,000 and $515,000, respectively, of interest expense was incurred (including approximately $36,000, $36,000 and $36,000, respectively, of deferred financing costs amortized to interest expense).The TSV Loan documents contain financial covenants which are customary for loans of this type. Management is not aware of any breach of these covenants as of December 31, 2018. Zalanta Construction Loan Payable In August 2016, ZRV and Zalanta Resort at the Village - Phase II, LLC (“ZRV II” and, together with ZRV, the “Borrowers”) entered into a Construction Loan Agreement (the “Loan Agreement”) and related documents with Western Alliance Bank as the lender (“Lender”) that provided the Borrowers with a loan (the “ZRV Loan”) of up to $31,000,000, subject to the terms and conditions of the ZRV Loan documents, for the purpose of financing the construction of a mixed-use retail and residential condominium building (the “Project”) on land (the “Premises”) owned by ZRV in South Lake Tahoe. The ZRV Loan was repaid in full in October 2018. Borrowings under the ZRV Loan documents were for payment or reimbursement of approved Project costs. All borrowings under the ZRV Loan bore interest at the Wall Street Journal Prime Rate plus 1.50% (calculated on a floating daily basis) (the “Note Rate”). The Note Rate as of December 31, 2017 was 6.00%. Interest only payments were payable monthly from an established interest reserve. In addition, commencing on August 18, 2017 and continuing on the last day of each quarter thereafter during the term of the ZRV Loan, Borrowers were required to make a quarterly repayment of $6 million of principal (the “Curtailment Requirement”). On July 27, 2018, the maturity of the ZRV Loan was extended to November 1, 2018 and the Curtailment Requirement was waived.Borrowings were secured by: (i) a first mortgage lien on the Premises and certain additional property (the “Additional Premises”) held by ZRV II and all improvements, amenities and appurtenances to the Premises and the Additional Premises, (ii) an assignment of all personal property, sales contracts, rents, leases, and ground leases associated with the Premises, and (iii) all design, development, service, management, leasing and construction contracts associated with the Premises. In addition, ZRV established a deposit account with Lender of $3,000,000 to be held as additional collateral for the ZRV Loan that was reported as restricted cash in the accompanying consolidated balance sheets. The deposit was released during 2017 and the $3,000,000 applied as a repayment of the loan payable.The Loan Agreement required the payment of an origination fee of $310,000 and other issuance costs totaling approximately $400,000 plus an extension fee of approximately $6,000 paid in 2018. The majority of these costs were paid out of the loan proceeds and capitalized to deferred financing costs and are being amortized to the Project using the straight-line method through the maturity date. During the years ended December 31, 2017 and 2016, approximately $76,000 and $83,000, respectively, of deferred financing costs was amortized to the Project. During the years ended December 31, 2017 and 2016, approximately $472,000 and $272,000, respectively, of interest was incurred which was capitalized to the Project. During the years ended December 31, 2018 and 2017, approximately $608,000 and $774,000 of interest was expensed (including approximately $122,000 and $124,000 of deferred financing costs amortized to interest expense). |
Note 9 - Stockholders' Equity |
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Stockholders' Equity Note Disclosure [Text Block] | NOTE 9 – STOCKHOLDERS’ EQUITY Dividends The following table presents the tax treatment for dividends paid by the Company on its Common Stock for the years ended December 31, 2018, 2017 and 2016:
Stock Repurchase s and Repurchase Programs On December 11, 2015, the Board of Directors authorized a Rule 10b5 -1 stock repurchase plan (the “2016 Repurchase Plan”) which authorized the Company to purchase up to $7.5 million of its Common Stock, subject to certain price, volume and timing constraints specified in the brokerage agreement. No shares were repurchased under the 2016 Repurchase Plan and it expired on March 31, 2017. On June 9, 2017, the Board of Directors authorized a Rule 10b5 -1 stock repurchase plan (the “2017 Repurchase Plan”) which authorized the Company to purchase up to $10 million of its Common Stock. Under the 2017 Repurchase Plan, repurchases were to be funded from available working capital, and the repurchased shares returned to the status of authorized but unissued shares of Common Stock. The 2017 Repurchase Plan provided for stock repurchases to commence on July 13, 2017 and was subject to certain price, volume and timing constraints specified in the brokerage agreement. During the year ended December 31, 2017, the Company repurchased 341,086 shares of its Common Stock under the 2017 Repurchase Plan for a total cost of approximately $5,820,000 (including commissions) and an average cost of $17.06 per share and repurchased another 4,000 shares prior to December 29, 2017 that settled in January 2018 ( subsequent to year end) for a total cost of approximately $65,000 (including commissions) and an average cost of $16.18 per share. The 2017 Repurchase Plan was terminated effective December 29, 2017. On March 12, 2018, the Board of Directors authorized a Rule 10b5 -1 stock repurchase plan (the “2018 Repurchase Plan”) which authorized the Company to purchase up to $10 million of its Common Stock. Under the 2018 Repurchase Plan, repurchases were to be funded from available working capital, and the repurchased shares returned to the status of authorized but unissued shares of Common Stock. The 2018 Repurchase Plan provided for stock repurchases to commence on March 19, 2018 and was subject to certain price, volume and timing constraints specified in the brokerage agreement. During the year ended December 31, 2018, the Company repurchased 608,574 shares under the 2018 Repurchase Plan at a total cost of approximately $10,033,000 (including commissions) and an average cost of $16.49 per share. The 2018 Repurchase Plan was terminated effective September 17, 2018 as the funds authorized pursuant to the Plan were fully utilized to purchase Common Stock.On December 29, 2017, the Company entered into a settlement agreement (the "Settlement Agreement") with Freestone Capital Management, LLC and certain of its affiliates (collectively, "Freestone"), pursuant to which the Company purchased the 669,058 shares of Common Stock held by Freestone (the “Freestone Shares”) in December 2017 and another 141,879 in January 2018 ( for a total of 810,937 shares) in a privately negotiated transaction for $19.25 per share, resulting in an aggregate purchase price of approximately $15.6 million. Approximately $4.1 million of the purchase price paid for the Freestone Shares was made with the remaining balance of the Company's 2017 Repurchase Plan following its termination. Pursuant to the terms of the Settlement Agreement, for a period of five years following the date of the Settlement Agreement, Freestone agreed to customary standstill restrictions relating to share purchases, support of proxy contests and other activist campaigns, calling of special meetings, and related matters. For a period of two years following the date of the Settlement Agreement, the Company and Freestone also agreed to abide by customary covenants not to sue and non-disparagement provisions. In addition, the Company and Freestone each released the other from all claims that the releasing party has, had or may have against the released party that relate to the investment by Freestone in the Company. The Company recorded as treasury stock the purchase of 810,937 Freestone Shares at the December 29, 2017 market price of $16.01 per share (approximately $12,983,000 total) and recorded as settlement expense the premium paid over the market price for those shares of $3.24 per share (approximately $2,627,000 total) in the accompanying consolidated financial statements. The purchase of 141,879 of the Freestone Shares settled in January 2018, and the Company recorded a forward contract liability for those repurchased shares of $2,731,000 as of December 31, 2017. |
Note 10 - Contingency Reserves |
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Notes to Financial Statements | |
Contingencies Disclosure [Text Block] | NOTE 10 – CONTINGENCY RESERVESIn accordance with its charter, the Company is required to maintain cash, cash equivalents and marketable securities as contingency reserves in an aggregate amount of 1.50% of Capital as defined in the charter. Although the Manager believes the contingency reserves are adequate, it could become necessary for the Company to sell or otherwise liquidate certain of its investments or other assets to cover such contingencies on terms which might not be favorable to the Company, which could lead to unanticipated losses upon sale of such assets.The contingency reserves required per the charter as of December 31, 2018 and 2017 were approximately $3,253,000 and $3,464,000 and are reported as restricted cash and/or cash and cash equivalents in the accompanying consolidated balance sheets. |
Note 11 - Income Taxes |
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Income Tax Disclosure [Text Block] | NOTE 11 - INCOME TAXESThe Company operates in such a manner as to qualify as a REIT, under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"); therefore, applicable REIT taxable income is included in the taxable income of its shareholders, to the extent distributed by the Company. To maintain REIT status for federal income tax purposes, the Company is generally required to distribute at least 90% of its REIT taxable income to its shareholders as well as comply, generally, with certain other qualification requirements as defined under the Code. As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year. During 2018, 2017 and 2016, the Company distributed at or in excess of 100% of its REIT taxable income to its stockholders. During 2018, 2017 and 2016, the Company had net capital gains from the sales of real estate properties totaling approximately $458,000, $2,297,000 and $4,451,000, respectively. All of the 2018 capital gains were distributed in the form of dividends to shareholders during 2018. Management decided to retain all or a portion of the capital gains in 2017 and 2016 within the Company and not distribute them as is permitted for REITs. However, the retention of capital gains required the Company to make a payment to the U.S. Treasury Department on behalf of shareholders at the highest corporate tax rate (35% ) in the total amount of approximately $640,000 and $583,000 in January 2018 and 2017, respectively. This tax payment was accrued as dividends payable in the Company’s financial statements as of December 31, 2017 and 2016. Shareholders’ pro-rata portion of the amount paid is to be reflected as tax payments on the individual shareholders’ tax returns.The Company recently discovered that its 2012 federal income tax return was erroneously prepared and filed on IRS Form 1120 -REIT, instead of on IRS Form 1120, resulting in the Company’s REIT election technically being made beginning with its 2012 tax year instead of beginning with its 2013 tax year as was intended. Consequently, the Company was in technical violation of certain REIT qualification requirements in 2012 and 2013. Under the REIT provisions of the federal income tax laws, there are “savings clauses” available for use by REITs to cure the types of technical violations that occurred. These available savings clauses were designed to assist public REITs in curing inadvertent failures and are self-executing provided that the REIT has “reasonable cause” for the technical violations and complies with certain other procedural requirements, including, in the case of the Company, the payment of a $50,000 penalty to the IRS. Upon discovery of the error, the Company sought advice of experienced REIT tax counsel and has obtained an opinion of such counsel to the effect that the Company will have reasonable cause for the technical violations and thereby will be able to avail itself of the savings clauses. Consequently, the Company intends to fulfill the relevant procedural requirements of the savings clauses, including payment of the $50,000 penalty. In the event that the Company was not able to satisfy the requirements of the savings clauses, the Company potentially could have been prevented from qualifying as a REIT through its 2017 taxable year (but in such case would re-elect REIT status for its 2018 taxable year). The potential tax liability to the Company if it is not successful in using the savings clauses are estimated to be in the range of $3,000,000 to $9,000,000, not including interest and penalties. Based on the advice and opinion of counsel and its own review and analysis of the relevant facts, the Company has concluded at a more-likely-than-not level that it will be able to benefit from the savings clause provisions to maintain uninterrupted REIT status during its existence and thus has not accrued any potential income tax liability related to this matter, other than the $50,000 penalty discussed above, which has been accrued and recorded in income tax expense for the year ended December 31, 2018. The Company’s total tax expense for the year ended December 31, 2018 was $559,842 which included the $50,000 penalty accrued at the REIT level (as discussed above) and $509,842 incurred for the TRS entities as more fully detailed below.Taxable income from non-REIT activities managed through the Company's taxable REIT subsidiaries (“TRS”) (currently Lone Star Golf, Inc. and ZRV) is subject to federal, state and local income taxes. The Company did not record a provision for current income taxes related to Lone Star for the years ended December 31, 2018, 2017 and 2016 as it was in a net loss position. In addition, deferred taxes related to temporary differences in book and taxable income as well as net operating losses (“NOLs”) of Lone Star would likely not be realizable due to Lone Star’s loss history (full amount of deferred tax assets offset by a valuation allowance). The NOLs totaled approximately $1,189,000 for Federal and California as of December 31, 2018. All of the NOLs expire between 2033 and 2038 except for the 2018 Federal NOL of approximately $405,000 which does not expire. The Company sold the Lone Star golf course in September 2018 for cash and two notes receivable (one of which was repaid in November 2018). Thus, it is expected that the Lone Star TRS will continue in existence until the remaining loan is repaid in full, at which time the TRS will be dissolved.During 2016, the Company converted ZRV into a TRS and contributed two additional real estate assets into ZRV. These properties included 75 improved, residential lots previously held within Baldwin Ranch Subdivision, LLC and a medical office condominium complex previously held within AMFU, LLC. The conversion of ZRV into a TRS and contribution of the additional real estate assets resulted in the Company recording a deferred tax asset and income tax benefit in the amount of approximately $7,249,000 primarily due to a $15,450,000 aggregate remaining difference between the book and tax basis of the subject real estate assets as of December 31, 2016. During 2017, ZRV recorded income tax expense of $4,041,655 that was primarily the result of an increase in the valuation allowance recorded against deferred tax assets as a result of higher construction costs and lower expected gains from the sales of ZRV assets in the future and due to a decrease in the Federal corporate tax rate from 34% to 21% in 2018 and beyond as a result of the Tax Cuts and Jobs Act signed into law by President Trump on December 22, 2017, which required ZRV to remeasure its net deferred tax asset at the lower rate. During 2018, ZRV recorded income tax expense of $509,842 that was primarily a result of an increase in the valuation allowance recorded against deferred tax assets as a result of lower expected gains from the sales of ZRV assets in the future.The components of the income tax expense (benefit) as it relates to the Company’s taxable income (loss) from domestic TRSs during the years ended December 31, 2018, 2017 and 2016 were as follows:
A reconciliation of the income tax provision (benefit) based upon the statutory tax rates to the effective rates of our taxable REIT subsidiaries is as follows for the year ended December 31, 2018 and 2017:
Significant components of the Company’s deferred tax assets (liabilities) for its TRS entities are as follows as of December 31, 2018 and 2017:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses and tax planning strategies available.Management has estimated future taxable gains and losses on sale of ZRV real estate assets to determine how much of the deferred tax assets are realizable. This realizability analysis is inherently subjective and actual results could differ from these estimates. Based on an assessment of all factors, it was determined that a valuation allowance of $2,946,000 and $2,428,000 related to Federal and State NOLs and differences in the book and tax basis of assets in ZRV was required as of December 31, 2018 and 2017, respectively, as management does not expect that ZRV will generate enough taxable income in the future to realize all of the NOL and basis benefits. The Company’s Federal and California NOLs within ZRV totaled $6,671,000 and $1,404,000, respectively, as of December 31, 2018. ZRV has Arizona NOLs of $3,511,000 as of December 31, 2018; however, ZRV did not record a deferred tax asset related to the Arizona NOLs as it does not expect to file another Arizona tax return, and thus, the NOLs will not be used. All of the NOLs expire between 2036 and 2038, except for the 2018 Federal NOL of approximately $425,000 which does not expire.As of December 31, 2018 and 2017, the Company recorded a reserve in the amount of $50,000 and $0, respectively, for uncertain income tax positions (see discussion of penalty above). There has been no interest incurred to date.As of December 31, 2018, income tax returns for the calendar years ended 2015 through 2018 remain subject to examination by the IRS and/or any state or local taxing jurisdiction. |
Note 12 - Transactions With Affiliates |
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Related Party Transactions Disclosure [Text Block] | NOTE 12 - TRANSACTIONS WITH AFFILIATESThe Company is managed by OFG pursuant to the terms of our charter and the Management Agreement, as amended, between the Company and the Manager. Until July 1, 2017, the management fees paid monthly by the Company to the Manager were not to exceed 2.75% annually of the average unpaid balance of our loans at the end of each of the 12 months in the calendar year (the “Prior Management Fee”). During the period from July 1, 2017 through March 31, 2018, the Manager agreed to take a reduced management fee equal to the Interim Management Fee (the “Interim Management Fee”), which was a monthly management fee equal to 1/12th of 1.50% of the Company’s Stockholders’ Equity, as defined. Effective April 1, 2018, the Board of Directors and the Manager amended the Management Agreement to adopt the Interim Management Fee and make certain additional changes to reduce the management fee payable as described below in “Amendment to Management Agreement” All of the Company’s loans are serviced by OFG, and until April 1, 2018, OFG received a monthly servicing fee, which, when added to all other fees paid in connection with the servicing of a particular loan, could not exceed the lesser of the customary, competitive fee paid in the community where the loan is placed for the provision of such mortgage services on that type of loan, or up to 0.25% per annum of the unpaid principal balance of the loans. Servicing fees were eliminated effective April 1, 2018, as described below in “Amendment to Management Agreement” .Management fees amounted to approximately $2,906,000, $3,546,000 and $3,286,000 for the years ended December 31, 2018 2017, and 2016, respectively, and are included in the accompanying consolidated statements of income. Servicing fees amounted to approximately $95,000, $362,000 and $299,000 for the years ended December 31, 2018, 2017 and 2016, respectively, are included in the accompanying consolidated statements of income. As of December 31, 2018 and 2017, the Company owed management and/or servicing fees to OFG in the amount of approximately $242,000 and $245,000, respectively.Until April 1, 2018, OFG received all late payment charges from borrowers on loans owned by the Company. Beginning April 1, 2018, the Company receives 30% of all late payment charges and OFG receives 70% of such charges, as described below in “Amendment to Management Agreement” . The Company collected/earned approximately $57,000 in late payment charges during the year ended December 31, 2018. The amounts paid to or collected by OFG for late charges totaled approximately $139,000, $83,000 and $83,000 for the years ended December 31, 2018, 2017 and 2016, respectively.The Company remits other miscellaneous fees to OFG, which are collected from loan payments, loan payoffs or advances from loan principal (i.e. funding, demand and partial release fees). The amounts paid to or collected by OFG for such fees totaled approximately $19,000, $23,000 and $20,000, respectively, during the years ended December 31, 2018, 2017 and 2016. OFG originates all loans the Company invests in and, until April 1, 2018, received all loan origination and extension fees from borrowers. Beginning April 1, 2018, the Company receives 30% of all loan origination and extension fees and OFG receives 70% of such fees, as described below in “Amendment to Management Agreement” . The Company collected approximately $508,000 in loan origination and extension fees during the year ended December 31, 2018 and recognized revenue of approximately $123,000 from the amortization of such fees to interest income. During the years ended December 31, 2018, 2017 and 2016, OFG earned approximately $1,972,000, $2,492,000 and $2,514,000, respectively, on loans originated or extended of approximately $139,725,000, $122,240,000 and $101,594,000, respectively.OFG is reimbursed by the Company for the actual cost of goods, services and materials used for or by the Company and paid by OFG. Until April 1, 2018, when the parties agreed to certain changes in the expenses paid to the Manager as described below in “Amendment to Management Agreement” , OFG was also reimbursed for the salary and related salary expense of OFG’s non-management and non-supervisory personnel performing services for the Company which could be performed by independent parties (subject to certain limitations in the Management Agreement). The amounts reimbursed to OFG by the Company for such services were $105,000, $381,000 and $440,000 during the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018 and 2017, there was $0 and $32,000 payable to OFG for such services. The Company also reimbursed certain of OFG’s officers for allowed expenses in the total amount of approximately $3,000, $2,000 and $0 during the years ended December 31, 2018, 2017 and 2016, respectively.The Company paid Investor’s Yield, Inc. (a wholly owned subsidiary of OFG) approximately $1,000, $1,000 and $9,000 in trustee’s fees related to certain foreclosure proceedings and other miscellaneous fees on Company loans during the years ended December 31, 2018, 2017 and 2016, respectively.Amendment to Management Agreement - Effective April 1, 2018, the Management Agreement was amended by Amendment No. 1 (the “Amendment”) to implement the following changes to the Manager’s compensation structure:
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Note 13 - Rental Income |
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Leases of Lessor Disclosure [Text Block] | NOTE 13 - RENTAL INCOMEThe Company’s real estate properties held for sale and investment are leased to tenants under noncancellable leases with remaining terms ranging from one to ten years. Certain of the leases require the tenant to pay all or some operating expenses of the properties. The future minimum rental income from noncancellable operating leases due within the five years subsequent to December 31, 2018, and thereafter is as follows:
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Note 14 - Fair Value |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | NOTE 14 - FAIR VALUEThe Company measures its financial and nonfinancial assets and liabilities pursuant to ASC 820 – Fair Value Measurements and Disclosures . ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.Fair value is defined in ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:Level Quoted prices in active markets for identical assets or liabilities1 Level Observable inputs other than Level 2 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilitiesLevel Unobservable inputs that are supported by little or 3 no market activity, such as the Company’s own data or assumptionsLevel 3 inputs include unobservable inputs that are used when there is little, if any, market activity for the asset or liability measured at fair value. In certain cases, the inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, the level in which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured.Management monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period.Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities or total earnings. The following is a description of the Company’s valuation methodologies used to measure and disclose the fair values of its financial and nonfinancial assets and liabilities on a recurring and nonrecurring basis. Impaired Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when monthly payments are delinquent greater than ninety days. Once a loan is identified as impaired, management measures impairment in accordance with ASC 310 -10 -35. Impairment is estimated by either the present value of expected cash flows discounted at the note rate or, as a practical expedient, the loan’s observable market price (if available) or the fair value of the underlying collateral, if collateral dependent. The fair value of the loan’s collateral is determined by third party appraisals, broker price opinions, comparable property sales or other indications of value. Those impaired loans not requiring an allowance represent loans for which the fair value of the collateral exceed the recorded investments in such loans. At December 31, 2018 and 2017, the majority of the total impaired loans were evaluated based on the fair value of the collateral by obtaining third party appraisals that valued the collateral primarily by utilizing an income or market approach or some combination of the two. In accordance with ASC 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data, the Company records the impaired loan as nonrecurring Level 2. When an appraised value is not available, when an appraisal includes significant unobservable inputs and assumptions or when management determines an adjustment to the appraised value is necessary in order to reflect management’s estimate of the fair value of the collateral, the Company records the impaired loan as nonrecurring Level 3. Unobservable market data included in appraisals often includes adjustments to comparable property sales for such items as location, size and quality to estimate fair values using a sales comparison approach. Unobservable market data also includes cash flow assumptions and capitalization rates used to estimate fair values under an income approach.Real Estate Held for Sale and Investment Real estate held for sale and investment includes properties acquired through foreclosure of the related loans. When property is acquired, any excess of the Company’s recorded investment in the loan and accrued interest income over the estimated fair market value of the property, net of estimated selling costs, is charged against the allowance for loan losses. Subsequently, real estate properties held for sale are carried at the lower of carrying value or fair value less costs to sell. The Company periodically compares the carrying value of real estate held for investment to expected future cash flows as determined by internally or third party generated valuations (including third party appraisals that primarily utilize an income or market approach or some combination of the two ) for the purpose of assessing the recoverability of the recorded amounts. If the carrying value exceeds future undiscounted cash flows, the assets are reduced to fair value. As fair value is generally based upon an appraisal that may include observable data, unobservable data, or a combination thereof, the Company records these assets as nonrecurring Level 2 or Level 3 based on the same factors discussed in the impaired loans section above.The following table presents information about the Company’s assets measured at fair value on a nonrecurring basis as of December 31, 2018 and 2017:
There was no provision for loan losses or other gain or loss recorded based on the fair value of loan collateral less estimated selling costs for the impaired loans above during the years ended December 31, 2018 and 2017, respectively. There were charge-offs against the loan loss allowance totaling $187,000 and $546,000 during 2018 and 2017, respectively, for the 2017 impaired loan above. Impairment losses of approximately $1,053,000 and $1,423,000 were recorded on real estate properties during the years ended December 31, 2018 and 2017, respectively. The impairment losses recorded for the years ended December 31, 2018 and 2017 included $115,000 and $145,000, respectively, in the Land class and $938,000 and $1,278,000, respectively, in the Commercial class.There were no assets or liabilities measured at fair value on a recurring basis, nor were there any liabilities measured at fair value on a nonrecurring bases at December 31, 2018 and 2017. During the year ended December 31, 2018, two properties with an aggregate book value of approximately $4,253,000 were transferred into Level 2 fair value measurements and an aggregate impairment loss of approximately $115,000 was recorded. One of the properties was sold in October 2018 and the other one in January 2019. During the year ended December 31, 2017, there were no transfers into or out of Levels 1 and 2. The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2018 and 2017: December 31, 2018:
December 31, 2017:
Where only one percentage is presented in the above table there was only one unobservable input of that type for one loan or property. Adjustments to comparable sales included items such as market conditions, location, size, condition, access/frontage and intended use. A weighted average of an unobservable input is presented in the table above only to the extent there were multiple impaired loans or real estate properties within that class measured at fair value on a nonrecurring basis.The approximate carrying amounts and estimated fair values of financial instruments at December 31, 2018 and 2017 are as follows:
The fair values of financial instruments in the above table as of December 31, 2018 were determined using an exit price methodology, whereas as of December 31, 2017 the fair values of certain financial instruments were determined using an entrance price methodology (see discussion of adoption of ASU 2016 -01 in Note 2 ). |
Note 15 - Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Text Block] | NOTE 15 - COMMITMENTS AND CONTINGENCIES Contractual Obligations As of December 31, 2018, the Company has commitments to advance additional funds to borrowers of construction, rehabilitation and other loans in the total amount of approximately $29,301,000 (including approximately $2,348,000 in interest reserves).Legal Proceedings The Company is involved in various legal actions arising in the normal course of business. In the opinion of management, such matters will not have a material effect upon the financial position of the Company. See Note 16 below “Litigation Relating to the Merger” . |
Note 16 - Subsequent Events |
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Dec. 31, 2018 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | NOTE 16 – SUBSEQUENT EVENTS The Company sold two real estate properties in January 2019 for net sales proceeds totaling $2,706,000 and gain totaling $466,000. The Company extended the maturity dates on five loans that were past maturity as of December 31, 2018 with principal balances totaling $15,010,000 in January and February 2019. Special Meeting of Stockholders On February 15, 2019, the Company announced that it has set March 21, 2019 as the new date for the special meeting of its stockholders to, among other things, consider and vote on a proposal to approve the previously announced Merger Agreement and to terminate the Management Agreement. The Company had previously announced that it expected the special meeting to occur on February 28, 2019, and that the impact of the government shutdown could affect the timing of the special meeting.As announced on January 4, 2019, stockholders of record as of the close of business on January 14, 2019 will be entitled to vote at the special meeting on March 21, 2019. The Merger is subject to certain customary closing conditions and the receipt of approvals of stockholders of the Company and Ready Capital.Determination of Exchange Ratio On February 22, 2019, Ready Capital and the Company announced that they have determined the final exchange ratio in accordance with the terms of Merger Agreement. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company’s Common Stock will be converted into the right to receive from Ready Capital 1.441 shares of Ready Capital Common Stock. Cash will be paid in lieu of fractional shares of Ready Capital Common Stock that would have been received as a result of the Merger. There is no change to the final exchange ratio based on the determination date of January 31, 2019 from the base exchange ratio of 1.441 that was set out in the joint proxy statement/prospectus, dated February 15, 2019, that was filed by Ready Capital with the SEC and distributed to the parties’ respective stockholders.Litigation Relating to the Merger A purported class action lawsuit has been filed by an individual who claims to be a stockholder of ORM. The lawsuit, Richard Scaranti no v. Owens Realty Mortgage, Inc., et al. , was filed in the Circuit Court for Baltimore City, Maryland on February 8, 2019. It names the Company, its directors and Ready Capital as defendants. The plaintiff alleges that the Company’s directors breached their fiduciary duties because, according to the plaintiff, the consideration to be received by the Company’s stockholders in the Merger “appears inadequate,” some financial and other disclosures to the Company’s stockholders regarding the Merger are deficient, and the terms of the Merger Agreement have precluded other bidders from making competing offers for the Company. The plaintiff seeks, among other things: injunctive relief preventing the defendants from proceeding with, consummating, or closing the Merger; rescission of the Merger or rescissory damages if the Merger is consummated prior to entry of final judgment by the court; an accounting of any damages suffered as a result of the wrongdoing alleged; and litigation costs (including attorneys’ and expert fees and expenses). The Company believes the claims asserted in the Scarantino Lawsuit are without merit. On March 12, 2019, the plaintiff moved for a preliminary injunction seeking to prevent the March 21, 2019 meeting of the Company’s stockholders to approve the merger from proceeding until further public disclosures about the transaction are filed by the Company. The court has not yet ruled on the motion. |
Note 17 - Summary Quarterly Consolidated Financial Information (Unaudited) |
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Quarterly Financial Information [Text Block] | NOTE 17 – SUMMARY QUARTERLY CONSOLIDATED FINANCIAL INFORMATION ( UNAUDITED ) The following tables represent unaudited summarized quarterly financial data of the Company for the years ended December 31, 2018, 2017 and 2016 which, in the opinion of management, reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company's results of operations.
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Financial Statement Schedule III - Real Estate and Accumulated Depreciation |
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SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Text Block] | OWENS REALTY MORTGAGE, INC. FINANCIAL STATEMENT SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2018
NOTE 1: All real estate listed above was acquired through foreclosure or deed in lieu of foreclosure other than certain parcels of the commercial and residential land under development located in South Lake Tahoe, California that were purchased in 2012 and 2014 and one office condominium unit purchased in 2015. NOTE 2: Changes in real estate held for sale and investment were as follows:
NOTE 3: Changes in accumulated depreciation were as follows:
NOTE 4: During the year ended December 31, 2017 $518,960 book value of land and $2,571,536 of construction and related costs related to common areas in the ZRV project were transferred from ZRV to ZRV II pursuant to a cost sharing agreement between the two entities (reflected in capitalized costs column).NOTE 5: Write-downs totaling $9,904,826 were recorded on this property during 2009 through 2012 based on broker's opinions of value and third party appraisals.NOTE 6: Property was moved to Held for Sale during 2018 and accumulated depreciation up to that time of $332,183 is shown net with the Initial Cost above.NOTE 7: Write-downs totaling $1,253,331 were recorded on this property in 2017 and 2018 based on management’s estimate of value and third party appraisals. Property was moved to Held for Sale during 2017 and accumulated depreciation up to that time of $192,862 is shown net with the Initial Cost above.NOTE 8: Write-downs totaling $1,274,331 were recorded on this property in 2010 through 2012, 2017 and 2018 based on third party appraisals and other valuation information. This property was sold in January 2019. NOTE 9: The aggregate cost of the above real estate properties for Federal income tax purposes is approximately $78,429,000. |
Financial Statement Schedule IV - Mortgage Loans on Real Estate |
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SEC Schedule IV Mortgage Loans On Real Estate Disclosure [Text Block] | OWENS REALTY MORTGAGE, INC. FINANCIAL STATEMENT SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 2018
NOTE 1: All loans are arranged by or acquired from an affiliate of the Company, namely Owens Financial Group, Inc., the Manager.NOTE 2:
NOTE 3: Included in the above loans are the following loans which exceed 3% of the total loans as of December 31, 2018:
NOTE 4: The aggregate cost of the Company’s loans for Federal income tax purposes is approximately $143,046,000 as of December 31, 2018. |
Significant Accounting Policies (Policies) |
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Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The consolidated financial statements include the accounts of the Company and its majority and wholly owned limited liability companies. All significant inter-company transactions and balances have been eliminated in consolidation. The Company also has a 50% ownership interest in a limited liability company accounted for under the equity method (see Note 4 ). The Company is in the business of providing mortgage lending services and manages its business as one operating segment. Due to foreclosure activity, the Company also owns and manages real estate assets.Certain reclassifications have been made to the 2016 and 2017 consolidated financial statements to conform to the 2018 presentation. None of the reclassifications had an impact on net income or equity. |
Use of Estimates, Policy [Policy Text Block] | Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates are inherently imprecise and actual results could differ significantly from such estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016 -13, “Financial Instruments – Credit Losses (Topic 326 ) – Measurement of Credit Losses on Financial Instruments”. The amendments in ASU 2016 -13 eliminate the probable and incurred credit loss recognition threshold in current GAAP and, instead, reflect an entity’s current estimate of all expected credit losses. The amendments in ASU 2016 -13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact that ASU 2016 -13 will have on its consolidated financial statements.In February 2016, the FASB issued ASU 2016 -02, “Leases (Topic 842 )”, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU 2016 -02 amends existing guidance related to leases, primarily by requiring the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under the current accounting guidance. This standard became effective for interim and annual reporting periods beginning January 1, 2019. The Company does not currently have any lease obligations. The Company will account for its operating leases where it is the lessor on its balance sheet similar to its prior accounting with the underlying leased asset recognized as real estate. The Company will account for executory costs and certain other non-lease components separately from the lease component of the lease with the lease component continuing to be recognized on a straight-line basis over the lease term and the executory costs and certain other non-lease components being accounted for under the new revenue recognition guidance in ASU 2014 -09, discussed below. The adoption of ASU 2016 -02 did not have a material impact on the Company’s consolidated financial statements since executory costs and certain other non-lease components are not significant.In July 2018, the FASB issued ASU 2018 -11, “Leases (Topic 842 ): Targeted Improvements” an amendment to ASU 2016 -02 discussed above, that will allow lessors to elect, as a practical expedient, not to allocate the total consideration to lease and nonlease components based on their relative standalone selling prices. This practical expedient will allow lessors to elect a combined single lease component presentation if: (i) the timing and pattern of the revenue recognition of the combined single lease component is the same, and (ii) the related lease component and, the combined single lease component would be classified as an operating lease. Nonlease components that do not meet the criteria of this practical expedient will be accounted for under the new revenue recognition ASU 2014 -09. In August 2018, the FASB issued ASU 2018 -13, “Fair Value Measurement (Topic 820 ) – Disclosure Framework – Changes in the Disclosure Requirements for Fair Value Measurements”. The amendments in ASU 2018 -13 modify certain disclosure requirements on fair value measurements in Topic 820. In addition, certain disclosure requirements were removed and others were added. This standard is effective for interim and annual reporting periods beginning after December 15, 2019. The Company does not believe that adoption of ASU 2018 -13 will have a material impact on its consolidated financial statements or related disclosures.Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2017 -01, “Business Combinations (Topic 805 ) – Clarifying the Definition of a Business”. The amendments in ASU 2017 -01 clarify the definition of a business by more clearly outlining the requirements for an integrated set of assets and activities to be considered a business and by establishing a practical framework to determine when the integrated set of assets and activities is a business. The adoption of ASU 2017 -01 during the quarter ended March 31, 2018 did not have an impact on the Company’s consolidated financial statements.On January 1, 2018, the Company adopted ASU 2016 -18, “Statement of Cash Flows (Topic 230 ) – Restricted Cash”. The amendments in ASU 2016 -18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and cash equivalents together when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The adoption of ASU 2016 -18 during the quarter ended March 31, 2018 resulted in the Company including its restricted cash with cash and cash equivalents when reconciling the beginning and ending amounts shown on its consolidated statement of cash flows.On January 1, 2018, the Company adopted ASU 2016 -15, “Statement of Cash Flows (Topic 230 ) – Classification of Certain Cash Receipts and Cash Payments”. The amendments in ASU 2016 -15 reflect eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of ASU 2016 -15 during the quarter ended March 31, 2018 resulted in the Company reporting distributions it receives from its equity method investment in cash flows from operating activities rather than financing activities on its consolidated statement of cash flows. The Company elected the “Cumulative Earnings Approach” upon adoption of ASU 2016 -15. On January 1, 2018, the Company adopted ASU 2014 -09, “Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606” ), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revised when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as real estate held for sale. The majority of the Company’s revenues come from interest income and other sources, including loans and leases, that are outside the scope of ASC 606. The Company’s revenue from real estate properties is not significantly impacted by ASC 606, as rental income from leasing arrangements is specifically excluded from ASC 606, and will be evaluated with the adoption of the lease accounting standard, ASU 2016 -02, discussed above.The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP. The Company recorded a net increase in beginning retained earnings of $167,000 as of January 1, 2018 due to the cumulative effect of adopting ASC 606 for four past real estate sales transactions where the sale was financed by the Company. The transition adjustment resulted in the recognition of previously deferred gains on two sales in the total amount of approximately $303,000 and the recording of net discounts against two carryback loans in the total amount of approximately $136,000. On January 1, 2018, the Company adopted ASU 2016 -01, “Financial Instruments- Overall (Subtopic 825 -10 ) – Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016 -01 enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016 -01 contains several provisions, including but not limited to 1 ) requiring equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; 2 ) simplifying the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3 ) eliminating the requirement to disclose the method(s) and significant assumptions used to estimate fair value; and 4 ) requiring separate presentation of financial assets and liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016 -01 also changes certain financial statement disclosure requirements, including requiring disclosures of the fair value of financial instruments be made on the basis of exit price. The adoption of ASU 2016 -01 during the quarter ended March 31, 2018 resulted in the Company using an exit price methodology for disclosing the fair value of the Company’s financial instruments in Note 14. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash , Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions. Restricted cash includes contingency reserves required pursuant to the Company’s charter and non-interest bearing deposits required pursuant to the Company’s line of credit of $3,500,000 (see Note 7 ). |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and loans. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation, or “FDIC”, insured limit. The Company has exposure to credit risk on its loans and other investments. The Company’s Manager, OFG, will seek to manage credit risk by performing analysis of underlying collateral assets. |
Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block] | Loans and Allowance for Loan Losses Loans are generally stated at the principal amount outstanding, net of unamortized loan discounts and deferred loan fees which totaled $364,000 and $386,000 as of December 31, 2018, respectively. There were no loan discounts or deferred loan fees as of December 31, 2017. Advances under the terms of a loan to pay property taxes, insurance, legal and other costs are generally capitalized and reported as interest and other receivables. The Company’s portfolio consists primarily of real estate loans generally collateralized by first, second and third deeds of trust. Interest income on loans is accrued using the simple interest method. Loans are generally placed on nonaccrual status when the borrowers are past due greater than ninety days or when full payment of principal and interest is not expected. When a loan is classified as nonaccrual, interest accruals discontinue and all past due interest is included in the recorded investment in the impaired loan that is measured as described below. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. Cash receipts on nonaccrual loans are used to reduce any outstanding accrued interest, and then are recorded as interest income, except when such payments are specifically designated as principal reduction or when management does not believe the Company’s investment in the loan is fully recoverable. The Company does not incur origination costs. However, beginning April 1, 2018, the Company receives 30% of all fees (other than certain administrative fees) paid by borrowers in connection with the Company making loans, including 30% of all origination, modification and extension fees. Owens Financial Group, Inc. (“OFG” or the “Manager”) is entitled to the remaining 70% of all such fees (see Note 12 – “Transactions with Affiliates”). When collected, such loan fees are recorded as a credit to the applicable loan’s principal balance and are then amortized to interest income using the effective interest method over the life of the loan.Loans and the related accrued interest and advances are analyzed by management on a periodic basis for ultimate recovery. The allowance for loan losses is management’s estimate of probable credit losses inherent in the Company’s loan portfolio that have been incurred as of the balance sheet date. The allowance is established through a provision for loan losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is recorded as a recovery to the allowance. The overall allowance consists of two primary components: specific reserves related to impaired loans that are individually evaluated for impairment and general reserves for inherent losses related to loans that are not considered impaired and are collectively evaluated for impairment.Regardless of the loan type, a loan is considered impaired when, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. All loans determined to be impaired are individually evaluated for impairment. When a loan is considered impaired, management estimates impairment based on the present value of expected future cash flows discounted at the loan's effective interest rate, except that as a practical expedient, management may measure impairment based on a loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the underlying collateral. These valuations are generally updated during the fourth quarter but may be updated during interim periods if deemed appropriate by management.A restructuring of a debt constitutes a troubled debt restructuring (“TDR”) if the Company for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider. Restructured loans typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. Loans that are reported as TDRs are considered impaired and measured for impairment as described above.The determination of the general reserve for loans that are not considered impaired and are collectively evaluated for impairment is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, and qualitative factors to include economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the loan portfolio, and probable incurred losses inherent in the portfolio taken as a whole.The Company maintains a separate allowance for each portfolio segment (loan type). These portfolio segments include commercial real estate, residential real estate and land loans. The allowance for loan losses attributable to each portfolio segment, which includes both impaired loans that are individually evaluated for impairment and loans that are not considered impaired and are collectively evaluated for impairment, is combined to determine the Company’s overall allowance, which is included on the consolidated balance sheet. The allowance for loans that are not considered impaired consists of reserve factors that are based on management’s assessment of the following for each portfolio segment: (1 ) inherent credit risk, (2 ) historical losses, and (3 ) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below.Land Loans Commercial and Residential Real Estate Loans may result in troubled loans. Trends in vacancy rates of properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for properties to produce sufficient cash flow to service debt obligations.Management monitors the credit quality of the Company’s loan portfolio on an ongoing basis using certain credit quality indicators including a loan’s delinquency status and internal asset classification. A loan is considered classified when it meets the definition of impaired as described above. |
Other Assets [Policy Text Block] | Other Assets Other assets primarily include deferred rent, capitalized lease commissions, prepaid expenses, deposits and inventory. Amortization of lease commissions is provided on the straight-line method over the lives of the related leases. |
Deferred Charges, Policy [Policy Text Block] | Deferred Financing Costs Issuance and other costs related to the Company’s line of credit and certain notes payable are capitalized and amortized to interest expense under either the straight-line or effective interest methods over the terms of the respective debt instruments. Deferred financing costs related to the construction loan in Zalanta Resort at the Village, LLC (“ZRV”) were amortized to the construction project under the straight-line method over the term of construction/renovation. |
Revenue Recognition, Policy [Policy Text Block] | Rental Income The Company leases multifamily rental units under operating leases with terms of generally one year or less. Rental revenue is recognized, net of rental concessions, on a straight-line method over the related lease term. Rental income on commercial property is recognized on a straight-line basis over the term of each operating lease. |
Real Estate Held for Development and Sale, Policy [Policy Text Block] | Real Estate Held for Sale Real estate held for sale includes real estate acquired in full or partial settlement of loan obligations, generally through foreclosure, that is being marketed for sale. Real estate held for sale is recorded at acquisition at the property’s estimated fair value less estimated costs to sell. Any excess of the recorded investment in the loan over the net realizable value is charged against the allowance for loan losses. Any excess of the net realizable value over the recorded investment in the loan is credited first to the allowance for loan losses as a recovery to the extent charge-offs had been recorded previously and, then to earnings as gain on foreclosure of loan.After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, real estate held for sale is analyzed periodically for changes in fair values and any subsequent write down is charged to impairment losses on real estate properties. Any recovery in the fair value subsequent to such a write down is recorded (not to exceed the net realizable value at acquisition) as an offset to impairment losses on real estate properties.The Company records a gain or loss from the sale of real estate when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of real estate to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether the collectability of the transaction price is probable. Once these criteria are met, the real estate is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. This adjustment is based on management’s estimate of the fair value of the loan extended to the buyer to finance the sale. |
Real Estate, Policy [Policy Text Block] | Real Estate Held for Investment Real estate held for investment includes real estate acquired in full or partial settlement of loan obligations, generally through foreclosure, that is not being marketed for sale and is either being operated, such as rental properties; is being managed through the development process, including obtaining appropriate and necessary entitlements, permits and construction; or are idle properties awaiting more favorable market conditions or properties the Company cannot sell without placing the Company’s REIT status at risk or becoming subject to prohibited transactions penalty tax. Real estate held for investment is recorded at acquisition at the property’s estimated fair value, less estimated costs to sell.After acquisition, costs incurred relating to the development and improvement of the property are capitalized, whereas costs relating to operating or holding the property are expensed. Subsequent to acquisition, management periodically compares the carrying value of real estate to expected undiscounted future cash flows for the purpose of assessing the recoverability of the recorded amounts. If the carrying value exceeds future undiscounted cash flows, the assets are reduced to estimated fair value through an impairment loss charged to earnings. Subsequent increases in the fair value of such properties are not recorded unless they are realized.Depreciation of real estate properties held for investment is provided on the straight-line method over the estimated remaining useful lives of buildings and improvements ( 5 -39 years). Depreciation of tenant improvements is provided on the straight-line method over the shorter of their estimated useful lives or the lease terms.The Company reclassifies real estate properties from held for investment to held for sale in the period in which all of the following criteria are met: 1 ) Management commits to a plan to sell the property; 2 ) The property is available for immediate sale in its present condition; 3 ) An active program to locate a buyer has been initiated; 4 ) The sale of the property is probable and the transfer of the property is expected to qualify for recognition as a completed sale, within one year; and 5 ) Actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Such real estate properties are recorded at the time of reclassification at their carrying amounts prior to reclassification or fair value, whichever is lower. This establishes the initial basis at which the properties are accounted for as held for sale, as described above.If circumstances arise that previously were considered unlikely, and, as a result, the Company decides not to sell a real estate property classified as held for sale, the property is reclassified to held for investment. The property is then measured individually at the lower of its carrying amount, adjusted for depreciation or amortization expense that would have been recognized had the property been continuously classified as held for investment, or its fair value at the date of the subsequent decision not to sell. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per Common Share The Company calculates basic earnings per common share by dividing net income attributable to common stockholders for the period by the weighted-average shares of Common Stock outstanding for that period. Diluted earnings per common share take into effect any dilutive instruments, unless if when doing so such effect would be anti-dilutive. At the present time, the Company has not issued any restricted stock or restricted stock units and has no other dilutive instruments. |
Income Tax, Policy [Policy Text Block] | Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities, if any. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount that is “more likely than not” to be realized.The Company has elected to be taxed as a REIT. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally expect to pay U.S. federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income, determined without regard to net capital gains, to the Company’s stockholders. If the Company has previously qualified as a REIT and fails to qualify as a REIT in any subsequent taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may be precluded from qualifying as a REIT for the Company’s four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income.The Company has elected or may elect to treat certain of its existing or newly created corporate subsidiaries as taxable REIT subsidiaries (each a “TRS”). In general, a TRS of a REIT may hold assets that the REIT cannot hold directly and, subject to certain exceptions related to hotels and healthcare properties, may engage in any real estate or non-real estate related business. A TRS is treated as a regular corporation and is subject to federal, state, local and foreign taxes on its income and property.Gains on sales of certain properties may be taxable to the Company if such properties were held primarily for sale to customers in the ordinary course of business, as contemplated by Internal Revenue Code Section 1221 (a)(1 ), or were identified as foreclosure property under the related REIT taxation rules.The accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. A tax position is recognized as a benefit only if it is “more likely than not” that the position would be sustained in a tax examination, with a tax examination being presumed to occur. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. There was no reserve for uncertain tax positions recorded as of December 31, 2018 and 2017. Interest and penalties related to income tax matters, if any, are recorded as part of income tax expense in the consolidated statement of income. See discussion of the tax issue related to the Company’s 2012 federal income tax return in Note 11. Certain entities included in the Company’s consolidated financial statements are subject to certain state and local taxes. These taxes are recorded as general and administrative expenses in the accompanying consolidated financial statements. |
Note 3 - Loans and Allowance for Loan Losses (Tables) |
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Impaired Financing Receivables [Table Text Block] |
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Troubled Debt Restructurings on Financing Receivables [Table Text Block] |
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Note 5 - Real Estate Held for Sale (Tables) |
12 Months Ended |
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Notes Tables | |
Properties Acquired Through Foreclosure [Table Text Block] | <div style="display: inline; font-family: times new roman; font-size: 10pt"><table border="0" cellpadding="0" cellspacing="0" style="margin-right: 2.5%; margin-left: 2.5%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom;"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">December,</div></div></div> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">2018</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td colspan="2" style="text-align: center; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">December 31,</div></div></div> <div style=" font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-weight: bold;">2017</div></div></div> </td> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 68%;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Residential</div> </td> <td style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 13%; border-bottom: 1px none rgb(0, 0, 0); text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,855,359</div></td> <td nowrap="nowrap" style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 13%; border-bottom: 1px none rgb(0, 0, 0); text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,627,710</div></td> <td nowrap="nowrap" style="width: 1%; border-bottom: 1px none rgb(0, 0, 0); font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Land</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,359,111</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,389,620</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Retail</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,737,181</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,632,893</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Golf course</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,999,449</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Marina</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,269,650</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,207,675</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Assisted care</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,253,125</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-bottom: 0pt; margin-top: 0pt;">Office</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">872,489</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">34,093,790</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td style="width: 13%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56,110,472</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt;"> </td> </tr> </table></div> |
Note 6 - Real Estate Held for Investment (Tables) |
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Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] |
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By Property [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] |
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Note 7 - Line of Credit Payable (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities [Table Text Block] |
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Schedule of Financial Instruments Owned and Pledged as Collateral [Table Text Block] |
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Note 8 - Notes and Loans Payable on Real Estate (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Debt [Table Text Block] |
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Schedule of Maturities of Long-term Debt [Table Text Block] |
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Note 9 - Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dividends Declared [Table Text Block] |
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Note 11 - Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Note 13 - Rental Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
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Note 14 - Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Measurements, Nonrecurring [Table Text Block] |
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Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] |
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Fair Value, by Balance Sheet Grouping [Table Text Block] |
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Note 17 - Summary Quarterly Consolidated Financial Information (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information [Table Text Block] |
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Financial Statement Schedule III - Real Estate and Accumulated Depreciation (Tables) |
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Schedule of Real Estate Properties [Table Text Block] |
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Changes in Accumulated Depreciation [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] |
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Changes in Real Estate Held-for-Sale and Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] |
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Financial Statement Schedule IV - Mortgage Loans on Real Estate (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participating Mortgage Loans [Table Text Block] |
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Loans Which Exceed Three Percent of the Total Loans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participating Mortgage Loans [Table Text Block] |
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Changes in Mortgage Loans on Real Estate [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participating Mortgage Loans [Table Text Block] |
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Note 1 - Organization (Details Textual) |
Nov. 07, 2018
$ / shares
|
Dec. 31, 2018
$ / shares
shares
|
Sep. 30, 2018
$ / shares
shares
|
Dec. 31, 2017
$ / shares
shares
|
Jan. 01, 2013
shares
|
Aug. 09, 2012
$ / shares
shares
|
---|---|---|---|---|---|---|
Common Stock, Shares Authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Preferred Stock, Shares Authorized | shares | 5,000,000 | 5,000,000 | 5,000,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common Stock, Shares, Issued, Total | shares | 11,198,119 | 11,198,119 | 11,198,119 | |||
Potential Percentage Penalty Tax | 100.00% | |||||
REIT Minimum Percent Distribution of Taxable Income | 90.00% | |||||
Ready Capital [Member] | ||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | |||||
Ready Capital [Member] | ||||||
Business Combination, Exchange Ratio | 1.441 |
Note 3 - Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016 |
|
Number of contracts | 0 | 0 | |
Commercial Portfolio Segment [Member] | |||
Number of contracts | 1 | ||
Pre-modification outstanding investment | $ 1,173,625 | ||
Post-modification outstanding investment | $ 1,212,851 |
Note 4 - Investment in Limited Liability Company (Details Textual) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Jul. 31, 2008 |
|
Proceeds from Equity Method Investment, Distribution | $ 384,500 | $ 185,000 | $ 180,000 | |
Income (Loss) from Equity Method Investments, Total | 383,197 | 185,063 | 179,450 | |
1850 [Member] | ||||
Number of Real Estate Properties | 2 | |||
Number of Companies | 2 | |||
Proceeds from Equity Method Investment, Distribution | 385,000 | 185,000 | 180,000 | |
Income (Loss) from Equity Method Investments, Total | $ 383,000 | $ 185,000 | $ 179,000 |
Note 5 - Real Estate Held for Sale - Properties Acquired Through Foreclosure (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Real estate held for sale | $ 34,093,790 | $ 56,110,472 |
Residential [Member] | ||
Real estate held for sale | 16,855,359 | 24,627,710 |
Improved and Unimproved Land [Member] | ||
Real estate held for sale | 7,359,111 | 14,389,620 |
Retail Site [Member] | ||
Real estate held for sale | 7,737,181 | 7,632,893 |
Golf Course [Member] | ||
Real estate held for sale | 1,999,449 | |
Marinas [Member] | ||
Real estate held for sale | 1,269,650 | 2,207,675 |
Assisted Care Facility [Member] | ||
Real estate held for sale | 5,253,125 | |
Office Building [Member] | ||
Real estate held for sale | $ 872,489 |
Note 6 - Real Estate Held for Investment (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Depreciation, Total | $ 721,000 | $ 1,080,000 | $ 1,186,000 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Foreclosure | $ 0 | $ 0 | $ 0 |
Note 7 - Line of Credit Payable - Credit Facilities (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Line of credit payable | $ 1,728,000 | $ 1,555,000 |
CB & T Credit Facility [Member] | ||
Line of credit payable | 1,728,000 | 1,555,000 |
Line of Credit Facility, Current Borrowing Capacity | $ 47,235,245 | $ 27,259,000 |
Note 7 - Line of Credit Payable - Loans Securing Credit Facility (Details) - CB & T Credit Facility [Member] |
Dec. 31, 2018
USD ($)
|
---|---|
Carrying amount of loans securing CB&T Facility | $ 69,569,181 |
Commercial Loan [Member] | |
Carrying amount of loans securing CB&T Facility | 69,569,181 |
Residential Real Estate [Member] | |
Carrying amount of loans securing CB&T Facility |
Note 8 - Notes and Loans Payable on Real Estate - Notes and Loans Payable Outstanding (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt instrument, outstanding | $ 12,872,555 | $ 30,418,802 |
Less unamortized deferred financing costs | (73,652) | (226,369) |
Notes and loans payable, net | 12,798,903 | 30,192,433 |
Tahoe Stateline Venture, LLC [Member] | TSV Credit Agreement [Member] | ||
Debt instrument, outstanding | $ 12,872,555 | $ 13,242,514 |
Debt Instrument, Interest Rate, Stated Percentage | 4.22% | 4.22% |
Zalanta Resort at the Village, LLC [Member] | Loan Agreement [Member] | ||
Debt instrument, outstanding | $ 17,176,288 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% |
Note 8 - Notes and Loans Payable on Real Estate - Notes and Loans Payable Maturities (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
2019 | $ 387,135 | |
2020 | 403,792 | |
2021 | 12,081,628 | |
2022 | ||
2023 | ||
Thereafter | ||
Total | $ 12,872,555 | $ 30,418,802 |
Note 9 - Stockholders' Equity - Tax Treatment for Dividends Paid by the Company (Details) - USD ($) |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
||||||||||
Total Dividends Paid | $ 6,589,300 | $ 3,774,670 | $ 3,279,193 | |||||||||
Dividends Paid Per Share (in dollars per share) | $ 0.601 | [1] | $ 0.38 | [2] | $ 0.32 | [3] | ||||||
Dividend Paid [Member] | ||||||||||||
Total Dividends Paid | $ 5,237,571 | [1] | $ 3,789,108 | [2] | $ 3,279,193 | [3] | ||||||
Classified as Ordinary Income [Member] | ||||||||||||
Dividends Paid Per Share (in dollars per share) | $ 0.548 | [1] | $ 0.333 | [2] | $ 0.048 | [3] | ||||||
Dividends Classified as Ordinary Income Percent | 91.21% | [1] | 87.67% | [2] | 15.05% | [3] | ||||||
Sec 199A Dividends [Member] | ||||||||||||
Dividends Paid Per Share (in dollars per share) | $ 0.548 | [1] | $ 0 | [2] | $ 0 | [3] | ||||||
Capital Gain Distribution [Member] | ||||||||||||
Dividends Paid Per Share (in dollars per share) | $ 0.053 | [1] | $ 0.047 | [2] | $ 0.272 | [3] | ||||||
Dividends Classified as Ordinary Income Percent | 8.79% | [1] | 12.33% | [2] | 84.95% | [3] | ||||||
Dividends Classified as Return of Capital [Member] | ||||||||||||
Dividends Paid Per Share (in dollars per share) | $ 0 | [1] | $ 0 | [2] | $ 0 | [3] | ||||||
Dividends Classified as Ordinary Income Percent | [1] | [2] | [3] | |||||||||
|
Note 10 - Contingency Reserves (Details Textual) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Contingency Reserves as a Percent of Capital | 1.50% | |
Contingency Reserves [Member] | ||
Restricted Cash and Cash Equivalents, Total | $ 3,253,000 | $ 3,464,000 |
Note 11 - Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Change in valuation allowance, federal | $ 794,744 | ||||||||||||||
Change in valuation allowance, state and local | |||||||||||||||
Change in valuation allowance | 794,744 | ||||||||||||||
Income tax expense (benefit), federal | (5,861,030) | ||||||||||||||
Income tax expense (benefit), state and local | (1,387,947) | ||||||||||||||
Income Tax Expense (Benefit), Total | $ 243,122 | $ 150,910 | $ (17,635) | $ 183,445 | $ 1,951,828 | $ 1,275,700 | $ 824,163 | $ (10,036) | $ 380,706 | $ (260,848) | $ (7,368,835) | $ 559,842 | $ 4,041,655 | (7,248,977) | |
Deferred expense (benefit), federal | (6,655,774) | ||||||||||||||
Deferred expense (benefit), state and local | (1,387,947) | ||||||||||||||
Deferred expense (benefit) | $ (8,043,721) | ||||||||||||||
Taxable REIT Subsidiaries (TRS) [Member] | |||||||||||||||
Change in valuation allowance, federal | 388,408 | 2,602,441 | |||||||||||||
Change in valuation allowance, state and local | 129,166 | 418,020 | |||||||||||||
Change in valuation allowance | 517,574 | 3,020,461 | |||||||||||||
Other, federal | (39,625) | (293,814) | |||||||||||||
Other, state and local | 31,893 | (43,264) | |||||||||||||
Other | (7,732) | (337,078) | |||||||||||||
Income tax expense (benefit), federal | 348,783 | 3,666,899 | |||||||||||||
Income tax expense (benefit), state and local | 161,059 | 374,756 | |||||||||||||
Income Tax Expense (Benefit), Total | $ 509,842 | 4,041,655 | |||||||||||||
Reduction in Federal corporate tax rate | 1,358,272 | ||||||||||||||
Reduction in Federal corporate tax rate | $ 1,358,272 |
Note 11 - Income Taxes - Reconciliation of Income Tax (Benefit) Provision (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income tax expense (benefit) | $ 243,122 | $ 150,910 | $ (17,635) | $ 183,445 | $ 1,951,828 | $ 1,275,700 | $ 824,163 | $ (10,036) | $ 380,706 | $ (260,848) | $ (7,368,835) | $ 559,842 | $ 4,041,655 | $ (7,248,977) | |
Taxable REIT Subsidiaries (TRS) [Member] | |||||||||||||||
Tax (benefit) expense at Federal statutory rate | (5,867) | (149,766) | |||||||||||||
State income tax expense (benefit), net of Federal effect | 127,236 | 250,193 | |||||||||||||
Other | 65 | (19,485) | |||||||||||||
Change in Federal valuation allowance | 388,408 | 2,602,441 | |||||||||||||
Reduction in Federal corporate tax rate | 1,358,272 | ||||||||||||||
Income tax expense (benefit) | $ 509,842 | $ 4,041,655 |
Note 11 - Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Real estate basis differences | $ 4,144,365 | $ 4,255,681 |
Net operating losses | 1,499,186 | 1,380,138 |
Total deferred tax assets | 5,643,551 | 5,635,819 |
Valuation allowance | (2,946,071) | (2,428,497) |
Net deferred tax assets | $ 2,697,480 | $ 3,207,322 |
Note 13 - Rental Income (Details Textual) |
Dec. 31, 2018 |
---|---|
Minimum [Member] | |
Lessor, Operating Lease, Term of Contract | 1 year |
Maximum [Member] | |
Lessor, Operating Lease, Term of Contract | 10 years |
Note 13 - Rental Income - Future Minimum Rental Income (Details) |
Dec. 31, 2018
USD ($)
|
---|---|
2019 | $ 2,842,830 |
2020 | 2,163,672 |
2021 | 2,057,822 |
2022 | 1,837,332 |
2023 | 1,395,151 |
Thereafter (through 2028) | 2,071,519 |
Total | $ 12,368,326 |
Note 15 - Commitments and Contingencies (Details Textual) |
Dec. 31, 2018
USD ($)
|
---|---|
Contractual Obligation, Total | $ 29,301,000 |
Interest Reserves [Member] | |
Contractual Obligation, Total | $ 2,348,000 |
Note 16 - Subsequent Events (Details Textual) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 22, 2019 |
Nov. 07, 2018 |
Jan. 30, 2019
USD ($)
|
Feb. 28, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Number of Real Estate Properties Sold | 23 | 15 | 7 | ||||||||||||||||
Gain (Loss) on Sale of Properties | $ 2,126,084 | $ 1,372,925 | $ 957,239 | $ 154,577 | $ 268,891 | $ 582,496 | $ 13,877,715 | $ (181) | $ (536,419) | $ 20,195,367 | $ 4,838,815 | $ 4,610,824 | $ 14,728,921 | $ 24,497,763 | |||||
Financing Receivable, Modifications, Number of Contracts | 0 | 0 | |||||||||||||||||
Ready Capital [Member] | |||||||||||||||||||
Business Combination, Exchange Ratio | 1.441 | ||||||||||||||||||
Extended Maturity [Member] | |||||||||||||||||||
Financing Receivable, Modifications, Number of Contracts | 1 | ||||||||||||||||||
Financing Receivable, Modifications, Recorded Investment | $ 199,000 | $ 2,739,000 | $ 199,000 | $ 2,739,000 | |||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||
Number of Real Estate Properties Sold | 2 | ||||||||||||||||||
Proceeds from Sale of Other Real Estate | $ 2,706,000 | ||||||||||||||||||
Gain (Loss) on Sale of Properties | $ 466,000 | ||||||||||||||||||
Subsequent Event [Member] | Ready Capital [Member] | |||||||||||||||||||
Business Combination, Exchange Ratio | 1.441 | ||||||||||||||||||
Subsequent Event [Member] | Extended Maturity [Member] | |||||||||||||||||||
Financing Receivable, Modifications, Number of Contracts | 5 | ||||||||||||||||||
Financing Receivable, Modifications, Recorded Investment | $ 15,010,000 |
Note 17 - Summary Quarterly Consolidated Financial Information (Unaudited) - Quarterly Consolidated Financial Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Total revenues | $ 3,735,550 | $ 4,723,505 | $ 4,346,044 | $ 3,991,920 | $ 3,850,940 | $ 4,277,493 | $ 3,867,290 | $ 3,537,405 | $ 3,667,283 | $ 4,493,977 | $ 4,692,114 | $ 4,225,617 | $ 16,797,021 | $ 15,533,128 | $ 17,078,991 |
Total expenses | 3,790,374 | 3,696,281 | 2,978,230 | 3,493,586 | 3,964,664 | 3,427,969 | 4,164,895 | 3,355,582 | 3,942,004 | 5,587,213 | 6,999,063 | 4,316,678 | 13,958,472 | 14,913,110 | 20,844,958 |
Operating (loss) income | (54,824) | 1,027,224 | 1,367,814 | 498,334 | (113,724) | 849,524 | (297,605) | 181,823 | (274,721) | (1,093,236) | (2,306,949) | (91,061) | 2,838,549 | 620,018 | (3,765,967) |
Gain (Loss) on Sale of Properties | 2,126,084 | 1,372,925 | 957,239 | 154,577 | 268,891 | 582,496 | 13,877,715 | (181) | (536,419) | 20,195,367 | 4,838,815 | 4,610,824 | 14,728,921 | 24,497,763 | |
Net income before income taxes | 2,071,260 | 2,400,149 | 2,325,053 | 652,911 | (2,472,269) | 1,432,020 | 13,580,110 | 181,642 | (811,140) | 19,102,131 | (2,306,949) | 4,747,754 | |||
Income tax (expense) benefit | (243,122) | (150,910) | 17,635 | (183,445) | (1,951,828) | (1,275,700) | (824,163) | 10,036 | (380,706) | 260,848 | 7,368,835 | (559,842) | (4,041,655) | 7,248,977 | |
Net income attributable to common stockholders | $ 1,828,138 | $ 2,249,239 | $ 2,342,688 | $ 469,466 | $ (4,424,097) | $ 156,320 | $ 12,755,947 | $ 191,678 | $ (1,191,846) | $ 19,362,979 | $ 5,061,886 | $ 4,747,754 | $ 6,889,531 | $ 8,679,848 | $ 27,980,773 |
Earnings per common share (basic and diluted) (in dollars per share) | $ 0.22 | $ 0.26 | $ 0.26 | $ 0.05 | $ (0.44) | $ 0.02 | $ 1.24 | $ 0.02 | $ (0.11) | $ 1.54 | $ 0.50 | $ 0.46 | $ 0.79 | $ 0.85 | $ 2.38 |
Weighted average number of common shares outstanding (basic and diluted) (in shares) | 8,482,880 | 8,572,614 | 8,922,280 | 9,089,270 | 9,984,352 | 10,173,448 | 10,247,477 | 10,247,477 | 10,247,477 | 10,247,477 | 10,247,477 | 10,247,477 | 8,764,568 | 10,162,496 | 10,247,477 |
Dividends declared per share of Common Stock (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.16 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.76 | $ 0.38 | $ 0.32 |
Settlement expense | $ (2,627,436) | $ (2,627,436) | |||||||||||||
Less: Net loss (income) attributable to non-controlling interests | $ 15,960 | $ (3,630,318) | $ 56,847 | $ (13,492) | (3,571,003) | ||||||||||
Net (loss) income attributable to common stockholders | $ (1,175,886) | $ 15,732,661 | $ 5,118,733 | $ 4,734,262 | $ 6,889,531 | $ 8,679,848 | $ 24,409,770 |
Financial Statement Schedule III - Real Estate and Accumulated Depreciation - Changes in Real Estate Held for Sale and Investment (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Balance at beginning of period | $ 80,466,125 | $ 113,123,398 | $ 153,838,412 |
Acquisitions through foreclosure | 2,062,729 | 700,800 | |
Investments in real estate properties | 496,826 | 11,274,904 | 29,061,735 |
Amortization of deferred financing costs capitalized to construction project | 76,260 | 119,471 | |
Subtotal | 83,025,680 | 124,474,562 | 183,720,418 |
Cost of real estate properties sold | 24,609,167 | 41,505,148 | 66,183,589 |
Impairment of Real Estate | 1,053,161 | 1,423,286 | 3,227,807 |
Depreciation of properties held for investment | 720,842 | 1,080,003 | 1,185,624 |
Balance at end of period | $ 56,642,510 | $ 80,466,125 | $ 113,123,398 |
Financial Statement Schedule III - Real Estate and Accumulated Depreciation - Changes in Accumulated Depreciation (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Balance at beginning of period | $ 3,316,753 | $ 3,151,427 | $ 2,915,596 |
Depreciation of properties held for investment | 720,842 | 1,080,003 | 1,185,624 |
Subtotal | 4,037,595 | 4,231,430 | 4,101,220 |
Accumulated depreciation on real estate moved to held for sale | 1,357,772 | 914,677 | 949,793 |
Balance at end of period | $ 2,679,823 | $ 3,316,753 | $ 3,151,427 |
Financial Statement Schedule IV - Mortgage Loans on Real Estate (Details Textual) |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Percent of Total Loans | 3.00% |
Changes in Mortgage Loans on Real Estate [Member] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Federal Income Tax Basis | $ 143,046,000 |
Financial Statement Schedule IV - Mortgage Loans on Real Estate - Changes in Mortgage Loans on Real Estate (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Balance at beginning of period | $ 146,171,650 | $ 129,682,311 | $ 106,743,807 |
New loans, including from sale of real property | 77,471,539 | 86,274,680 | 79,867,140 |
Subtotal | 223,870,990 | 215,956,991 | 186,610,947 |
Collection of principal | 78,742,850 | 69,785,341 | 55,849,884 |
Foreclosures | 1,937,475 | 1,078,752 | |
Discount and loan fee amortization | 227,801 | ||
Loan fees collected | 508,422 | ||
Balance at end of period | $ 142,682,243 | $ 146,171,650 | $ 129,682,311 |
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