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Rialto Investments Segment (Tables) (Rialto Investments [Member])
6 Months Ended
May 31, 2014
Rialto Investments [Member]
 
Segment Reporting Information [Line Items]  
Schedule Of Assets and Liabilities By Segment
The assets and liabilities related to the Rialto segment were as follows:
(In thousands)
May 31,
2014
 
November 30,
2013
Assets:
 
 
 
Cash and cash equivalents
$
244,675

 
201,496

Restricted cash (1)
34,890

 
2,593

Receivables, net (2)
125,746

 
111,833

Loans receivable, net
203,190

 
278,392

Loans held-for-sale (3)
45,065

 
44,228

Real estate owned - held-for-sale
192,829

 
197,851

Real estate owned - held-and-used, net
379,069

 
428,989

Investments in unconsolidated entities
157,693

 
154,573

Investments held-to-maturity
16,658

 
16,070

Other (4)
73,601

 
43,288

 
$
1,473,416

 
1,479,313

Liabilities:
 
 
 
Notes and other debts payable (5)
$
577,916

 
441,883

Other (6)
80,868

 
55,125

 
$
658,784

 
497,008


(1)
Restricted cash primarily consists of cash held in escrow by the Company's loan servicer provider on behalf of customers and lenders and is disbursed in accordance with agreements between the transacting parties.
(2)
Receivables, net primarily relate to loans sold but not settled as of May 31, 2014 and November 30, 2013, respectively.
(3)
Loans held-for-sale relate to unsold loans originated by RMF carried at fair value.
(4)
Other assets include credit default swaps carried at fair value of $1.2 million and $0.8 million as of May 31, 2014 and November 30, 2013, respectively.
(5)
Notes and other debts payable include $352.1 million and $250.0 million related to the 7.00% Senior Notes due 2018 ("7.00% Senior Notes") as of May 31, 2014 and November 30, 2013, respectively, and also include $44.4 million and $76.0 million as of May 31, 2014 and November 30, 2013, respectively, related to the RMF warehouse repurchase financing agreements. As of May 31, 2014, notes and other debts payable also include $73.8 million related to notes issued through a structured note offering.
(6)
Other liabilities include interest rate swaps and swap futures carried at fair value of $0.4 million as of May 31, 2014 and credit default swaps carried at fair value of $0.6 million and $0.3 million as of May 31, 2014 and November 30, 2013, respectively.
Operating Earnings By Segment
Rialto’s operating earnings were as follows:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Revenues
$
54,393

 
25,684

 
101,348

 
51,306

Costs and expenses (1)
79,604

 
28,305

 
127,180

 
60,076

Rialto Investments equity in earnings from unconsolidated entities
17,939

 
4,505

 
23,293

 
10,678

Rialto Investments other income, net
3,595

 
6,646

 
2,366

 
7,973

Operating earnings (loss) (2)
$
(3,677
)
 
8,530

 
(173
)
 
9,881

(1)
Costs and expenses for the three and six months ended May 31, 2014 include loan impairments of $33.9 million and $40.6 million, respectively, primarily associated with the segment's FDIC loans portfolio (before noncontrolling interests). For the three and six months ended May 31, 2013 costs and expenses include loan impairments of $3.5 million and $10.6 million, respectively, primarily associated with the segment's FDIC loans portfolio (before noncontrolling interests).
(2)
Operating loss for the three and six months ended May 31, 2014 include net loss attributable to noncontrolling interests of $17.1 million and $16.1 million, respectively. Operating earnings for the three and six months ended May 31, 2013 include net earnings attributable to noncontrolling interests of $5.7 million and $5.4 million, respectively.
Other Income (Expense), Net Related By Segment
The following is a detail of Rialto Investments other income, net for the periods indicated:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Realized gains on REO sales, net
$
14,234

 
18,535

 
23,743

 
27,206

Unrealized losses on transfer of loans receivable to REO and impairments, net
(8,274
)
 
(6,980
)
 
(10,651
)
 
(6,310
)
REO and other expenses (1)
(12,411
)
 
(10,348
)
 
(30,950
)
 
(22,904
)
Rental and other income (1)
10,046

 
5,439

 
20,224

 
9,981

Rialto Investments other income, net
$
3,595

 
6,646

 
2,366

 
7,973

(1)
For the six months ended May 31, 2014, a $12.6 million allowance was reclassified from REO and other expenses to rental and other income, which did not impact Rialto Investments other income, net.
Loans Receivable By Aggregate Collateral Type
The following table displays the loans receivable by aggregate collateral type:
(In thousands)
May 31,
2014
 
November 30,
2013
Land
$
105,202

 
166,950

Single family homes
49,808

 
59,647

Commercial properties
32,501

 
38,060

Other
15,679

 
13,735

Loans receivable, net
$
203,190

 
278,392

Outstanding Balance And Carrying Value Of Loans
The outstanding balance and carrying value of loans accounted for under ASC 310-30 were as follows:
(In thousands)
May 31,
2014
 
November 30,
2013
Outstanding principal balance
$
496,641

 
586,901

Carrying value
$
197,992

 
270,075

Accretable Yield For The FDIC Portfolios And Bank Portfolios
The activity in the accretable yield for the FDIC Portfolios and Bank Portfolios during the six months ended May 31, 2014 and 2013 was as follows:
 
May 31,
(In thousands)
2014
 
2013
Accretable yield, beginning of period
$
73,144

 
112,899

Additions
6,431

 
40,879

Deletions
(22,078
)
 
(22,463
)
Accretions
(18,927
)
 
(26,596
)
Accretable yield, end of period
$
38,570

 
104,719

Nonaccrual Loans
The following tables represent nonaccrual loans in the FDIC Portfolios and Bank Portfolios accounted for under ASC 310-10 aggregated by collateral type:
May 31, 2014
 
 
 
Recorded Investment
 
 
(In thousands)
Unpaid
Principal Balance
 
With
Allowance
 
Without
Allowance
 
Total  Recorded
Investment
Land
$
5,218

 

 
2,106

 
2,106

Single family homes
9,166

 
502

 
1,983

 
2,485

Commercial properties
1,500

 

 
607

 
607

Loans receivable
$
15,884

 
502

 
4,696

 
5,198

November 30, 2013
 
 
 
Recorded Investment
 
 
(In thousands)
Unpaid
Principal  Balance
 
With
Allowance
 
Without
Allowance
 
Total  Recorded
Investment
Land
$
6,791

 
249

 
2,304

 
2,553

Single family homes
15,125

 
519

 
4,119

 
4,638

Commercial properties
3,400

 
498

 
628

 
1,126

Loans receivable
$
25,316

 
1,266

 
7,051

 
8,317

Allowance for Credit Losses on Financing Receivables [Table Text Block]
The activity in the Company's allowance rollforward related to accrual loans was as follows:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Allowance on accrual loans, beginning of period
$
24,922

 
16,851

 
$
18,952

 
$
12,178

Provision for loan losses, net of recoveries
33,851

 
3,453

 
40,488

 
9,530

Charge-offs
(3,115
)
 
(1,588
)
 
(3,782
)
 
(2,992
)
Allowance on accrual loans, end of period
$
55,658

 
18,716

 
55,658

 
18,716

Nonaccrual — Loans in which forecasted principal and interest could not be reasonably estimated at the date of acquisition. The risk of nonaccrual loans relates to a decline in the value of the collateral securing the outstanding obligation and the recognition of an impairment through an allowance for loan losses if the recorded investment in the loan exceeds the fair value of the collateral less estimated cost to sell. The activity in the Company's allowance rollforward related to nonaccrual loans was as follows:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Allowance on nonaccrual loans, beginning of period
$
424

 
1,710

 
$
1,213

 
$
3,722

Provision for loan losses
15

 
67

 
94

 
1,080

Charge-offs
(153
)
 
(5
)
 
(1,021
)
 
(3,030
)
Allowance on nonaccrual loans, end of period
$
286

 
1,772

 
286

 
1,772

Risk Indicators
Accrual and nonaccrual loans receivable by risk categories were as follows:
May 31, 2014
(In thousands)
Accrual
 
Nonaccrual
 
Total
Land
$
103,096

 
2,106

 
105,202

Single family homes
47,323

 
2,485

 
49,808

Commercial properties
31,894

 
607

 
32,501

Other
15,679

 

 
15,679

Loans receivable
$
197,992

 
5,198

 
203,190

November 30, 2013
(In thousands)
Accrual
 
Nonaccrual
 
Total
Land
$
164,397

 
2,553

 
166,950

Single family homes
55,009

 
4,638

 
59,647

Commercial properties
36,934

 
1,126

 
38,060

Other
13,735

 

 
13,735

Loans receivable
$
270,075

 
8,317

 
278,392

Changes In Real Estate Owned
The following tables represent the activity in REO:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
REO - held-for-sale, beginning of period
$
186,234

 
178,678

 
197,851

 
134,161

Additions

 
739

 

 
1,333

Improvements
1,130

 
1,501

 
2,723

 
2,517

Sales
(47,433
)
 
(51,496
)
 
(88,666
)
 
(77,276
)
Impairments and unrealized losses
(1,032
)
 
(3,485
)
 
(2,823
)
 
(4,184
)
Transfers from held-and-used, net (1)
53,930

 
78,448

 
83,744

 
147,834

REO - held-for-sale, end of period
$
192,829

 
204,385

 
192,829

 
204,385

 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
REO - held-and-used, net, beginning of period
$
405,675

 
547,273

 
428,989

 
601,022

Additions
26,093

 
8,536

 
34,127

 
24,728

Improvements
2,708

 
2,179

 
3,471

 
2,879

Impairments
(599
)
 
(307
)
 
(1,503
)
 
(403
)
Depreciation
(878
)
 
(919
)
 
(2,271
)
 
(2,078
)
Transfers to held-for-sale (1)
(53,930
)
 
(78,448
)
 
(83,744
)
 
(147,834
)
REO - held-and-used, net, end of period
$
379,069

 
478,314

 
379,069

 
478,314

(1)
During the three and six months ended May 31, 2014 and 2013, the Rialto segment transferred certain properties from REO held-and-used, net to REO held-for-sale as a result of changes in the disposition strategy of the real estate assets.
Private Equity Funds Related to Rialto Segment
The following table reflects Rialto's investments in funds that invest in and manage real estate related assets and other investments:
 
 
 
 
 
 
 
 
 
May 31,
2014
 
May 31,
2014
 
November 30,
2013
(Dollars in thousands)
Inception Year
 
Equity Commitments
 
Equity Commitments Called
 
Commitment to fund by the Company
 
Funds contributed by the Company
 
Investment
Rialto Real Estate Fund, LP
2010
 
$
700,006

 
$
700,006

 
$
75,000

 
$
75,000

 
$
73,188

 
75,729

Rialto Real Estate Fund II, LP
2012
 
1,305,000

 
660,058

 
100,000

 
50,579

 
52,020

 
53,103

Rialto Mezzanine Partners Fund
2013
 
125,000

 
81,701

 
27,299

 
17,843

 
17,719

 
16,724

Other Investments
 
 
 
 
 
 
 
 
 
 
14,766

 
9,017

 
 
 
 
 
 
 
 
 
 
 
$
157,693

 
154,573

Equity in Earnings (Loss) on Investments Related to Rialto Segment [Table Text Block]
Rialto's share of earnings (loss) from unconsolidated entities was as follows:
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Rialto Real Estate Fund, LP

$
7,174

 
4,769

 
12,233

 
11,142

Rialto Real Estate Fund II, LP
2,402

 
(454
)
 
2,440

 
(454
)
Rialto Mezzanine Partners Fund
493

 

 
782

 

Other investments
7,870

 
190

 
7,838

 
(10
)
Rialto Investments equity in earnings from unconsolidated entities
$
17,939

 
4,505

 
23,293

 
10,678

Condensed Financial Information By Equity Method Investment, Balance Sheets
Balance Sheets
(In thousands)
May 31,
2014
 
November 30,
2013
Assets:
 
 
 
Cash and cash equivalents
$
262,145

 
332,968

Loans receivable
561,167

 
523,249

Real estate owned
318,846

 
285,565

Investment securities
455,634

 
149,350

Investments in partnerships
224,605

 
381,555

Other assets
37,231

 
191,624

 
$
1,859,628

 
1,864,311

Liabilities and equity:
 
 
 
Accounts payable and other liabilities
$
34,141

 
108,514

Notes payable
344,138

 
398,445

Partner loans

 
163,940

Equity
1,481,349

 
1,193,412

 
$
1,859,628

 
1,864,311

Condensed Financial Information By Equity Method Investment, Statements Of Operations

Statements of Operations
 
Three Months Ended
 
Six Months Ended
 
May 31,
 
May 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Revenues
$
33,177

 
65,956

 
64,604

 
119,299

Costs and expenses
23,304

 
65,595

 
49,413

 
124,709

Other income, net (1)
104,868

 
38,786

 
153,038

 
94,787

Net earnings of unconsolidated entities
$
114,741

 
39,147

 
168,229

 
89,377

Rialto Investments equity in earnings from unconsolidated entities
$
17,939

 
4,505

 
23,293

 
10,678


(1)
Other income, net, for the three and six months ended May 31, 2014 included Rialto Real Estate Fund, LP, Rialto Real Estate Fund II, LP and other investments realized and unrealized gains on investments. Other income, net, for the three and six months ended May 31, 2013 included Rialto Real Estate Fund, LP and Rialto Real Estate Fund II, LP realized and unrealized gains on investments.