Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ARBOR REALTY TRUST INC | |
Entity Central Index Key | 1,253,986 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 61,702,628 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Cash and cash equivalents | $ 84,751,397 | $ 138,645,430 |
Restricted cash | 137,138,389 | 29,314,929 |
Loans and investments, net | 1,997,555,985 | 1,695,732,351 |
Loans held-for-sale, net | 333,267,976 | 673,367,304 |
Capitalized mortgage servicing rights, net | 247,875,659 | 227,742,986 |
Available-for-sale securities, at fair value | 4,707,085 | 5,403,463 |
Securities held-to-maturity, net | 18,851,089 | |
Investments in equity affiliates | 31,330,740 | 33,948,853 |
Real estate owned, net | 17,354,720 | 19,491,805 |
Due from related party | 12,613,313 | 1,464,732 |
Goodwill and other intangible assets | 123,166,816 | 97,489,884 |
Other assets | 49,564,693 | 48,184,509 |
Total assets | 3,058,177,862 | 2,970,786,246 |
Liabilities and Equity: | ||
Credit facilities and repurchase agreements | 562,326,537 | 906,636,790 |
Collateralized loan obligations | 1,066,230,488 | 728,441,109 |
Senior unsecured notes | 95,088,379 | 94,521,566 |
Convertible senior unsecured notes, net | 95,381,121 | 80,660,038 |
Junior subordinated notes to subsidiary trust issuing preferred securities | 139,418,416 | 157,858,555 |
Related party financing | 50,000,000 | 50,000,000 |
Due to related party | 6,038,707 | |
Due to borrowers | 69,357,152 | 81,019,386 |
Allowance for loss-sharing obligations | 30,158,464 | 32,407,554 |
Other liabilities | 104,474,096 | 86,164,613 |
Total liabilities | 2,212,434,653 | 2,223,748,318 |
Commitments and contingencies (Note 15) | ||
Arbor Realty Trust, Inc. stockholders' equity: | ||
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized; special voting preferred shares; 21,230,769 shares issued and outstanding; 8.25% Series A, $38,787,500 aggregate liquidation preference; 1,551,500 shares issued and outstanding; 7.75% Series B, $31,500,000 aggregate liquidation preference; 1,260,000 shares issued and outstanding; 8.50% Series C, $22,500,000 aggregate liquidation preference; 900,000 shares issued and outstanding | 89,508,213 | 89,508,213 |
Common stock, $0.01 par value: 500,000,000 shares authorized; 61,702,628 and 51,401,295 shares issued and outstanding, respectively | 617,026 | 514,013 |
Additional paid-in capital | 702,240,622 | 621,931,995 |
Accumulated deficit | (112,069,714) | (125,134,403) |
Accumulated other comprehensive income | 205,761 | 320,917 |
Total Arbor Realty Trust, Inc. stockholders' equity | 680,501,908 | 587,140,735 |
Noncontrolling interest | 165,241,301 | 159,897,193 |
Total equity | 845,743,209 | 747,037,928 |
Total liabilities and equity | $ 3,058,177,862 | $ 2,970,786,246 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 61,702,628 | 51,401,295 |
Common stock, shares outstanding (in shares) | 61,702,628 | 51,401,295 |
Special voting preferred shares | ||
Preferred stock, shares issued (in shares) | 21,230,769 | 21,230,769 |
Preferred stock, shares outstanding (in shares) | 21,230,769 | 21,230,769 |
8.25% Series A preferred stock | ||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% |
Preferred stock, aggregate liquidation preference | $ 38,787,500 | $ 38,787,500 |
Preferred stock, shares issued (in shares) | 1,551,500 | 1,551,500 |
Preferred stock, shares outstanding (in shares) | 1,551,500 | 1,551,500 |
7.75% Series B preferred stock | ||
Preferred stock, dividend rate (as a percent) | 7.75% | 7.75% |
Preferred stock, aggregate liquidation preference | $ 31,500,000 | $ 31,500,000 |
Preferred stock, shares issued (in shares) | 1,260,000 | 1,260,000 |
Preferred stock, shares outstanding (in shares) | 1,260,000 | 1,260,000 |
8.50% Series C preferred stock | ||
Preferred stock, dividend rate (as a percent) | 8.50% | 8.50% |
Preferred stock, aggregate liquidation preference | $ 22,500,000 | $ 22,500,000 |
Preferred stock, shares issued (in shares) | 900,000 | 900,000 |
Preferred stock, shares outstanding (in shares) | 900,000 | 900,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||
Interest income | $ 42,139,576 | $ 29,636,227 | $ 110,132,866 | $ 83,424,190 |
Other interest income, net | 2,539,274 | |||
Interest expense | 23,849,417 | 16,966,228 | 63,697,641 | 42,958,329 |
Net interest income | 18,290,159 | 12,669,999 | 46,435,225 | 43,005,135 |
Other revenue: | ||||
Gain on sales, including fee-based services, net | 17,126,106 | 9,693,822 | 55,127,004 | 9,693,822 |
Mortgage servicing rights | 18,897,239 | 15,968,067 | 56,181,638 | 15,968,067 |
Servicing revenue, net | 8,520,111 | 5,885,884 | 19,922,901 | 5,885,884 |
Property operating income | 2,668,055 | 2,960,940 | 8,754,518 | 12,719,027 |
Other income, net | 777,656 | 359,546 | (929,893) | 663,977 |
Total other revenue | 47,989,167 | 34,868,259 | 139,056,168 | 44,930,777 |
Other expenses: | ||||
Employee compensation and benefits | 25,194,433 | 14,216,679 | 66,860,581 | 22,856,433 |
Selling and administrative | 7,606,936 | 5,903,031 | 23,135,750 | 10,277,844 |
Acquisition costs | 6,406,258 | 10,261,902 | ||
Property operating expenses | 2,582,745 | 2,819,004 | 7,842,571 | 10,991,823 |
Depreciation and amortization | 1,829,016 | 1,808,765 | 5,541,991 | 3,129,410 |
Impairment loss on real estate owned | 2,700,000 | 11,200,000 | ||
Provision for loss sharing (net of recoveries) | (2,617,064) | 1,316,862 | (405,494) | 1,316,862 |
Provision for loan losses (net of recoveries) | 2,000,000 | (54,000) | (455,653) | (24,995) |
Management fee - related party | 3,325,000 | 6,673,260 | 8,875,000 | |
Total other expenses | 36,596,066 | 35,741,599 | 111,893,006 | 78,884,279 |
Income before gain on extinguishment of debt, gain on sale of real estate, income from equity affiliates and provision for income taxes | 29,683,260 | 11,796,659 | 73,598,387 | 9,051,633 |
Gain on extinguishment of debt | 7,116,243 | |||
Gain on sale of real estate | 11,630,687 | |||
Income from equity affiliates | 995,312 | 4,929,375 | 1,755,145 | 11,193,918 |
Provision for income taxes | (6,708,000) | (300,000) | (16,244,000) | (300,000) |
Net income | 23,970,572 | 16,426,034 | 66,225,775 | 31,576,238 |
Preferred stock dividends | 1,888,430 | 1,888,430 | 5,665,290 | 5,665,290 |
Net income attributable to noncontrolling interest | 5,661,184 | 3,649,432 | 16,596,415 | 3,649,432 |
Net income attributable to common stockholders | $ 16,420,958 | $ 10,888,172 | $ 43,964,070 | $ 22,261,516 |
Basic earnings per common share (in dollars per share) | $ 0.27 | $ 0.21 | $ 0.78 | $ 0.43 |
Diluted earnings per common share (in dollars per share) | $ 0.26 | $ 0.21 | $ 0.77 | $ 0.43 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 61,582,796 | 51,390,467 | 56,602,504 | 51,272,795 |
Diluted (in shares) | 83,918,117 | 70,271,796 | 78,942,919 | 51,627,550 |
Dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.16 | $ 0.53 | $ 0.46 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | ||||
Net income | $ 23,970,572 | $ 16,426,034 | $ 66,225,775 | $ 31,576,238 |
Unrealized loss on securities available-for-sale, at fair value | (235,158) | (88,184) | (352,735) | (117,579) |
Unrealized gain (loss) on derivative financial instruments, net | 66,254 | 202 | (195,981) | |
Reclassification of net realized loss on derivatives designated as cash flow hedges into earnings | 1,316,157 | 237,377 | 4,012,457 | |
Comprehensive income | 23,735,414 | 17,720,261 | 66,110,619 | 35,275,135 |
Less: | ||||
Comprehensive income attributable to noncontrolling interest | 5,601,567 | 3,974,327 | 16,574,284 | 3,974,327 |
Preferred stock dividends | 1,888,430 | 1,888,430 | 5,665,290 | 5,665,290 |
Comprehensive income attributable to common stockholders | $ 16,245,417 | $ 11,857,504 | $ 43,871,045 | $ 25,635,518 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated DeficitPreferred stock of private REIT | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Arbor Realty Trust, Inc. Stockholders' EquityPreferred stock of private REIT | Total Arbor Realty Trust, Inc. Stockholders' Equity | Noncontrolling Interest | Preferred stock of private REIT | Total |
Balance at Dec. 31, 2016 | $ 89,508,213 | $ 514,013 | $ 621,931,995 | $ (125,134,403) | $ 320,917 | $ 587,140,735 | $ 159,897,193 | $ 747,037,928 | |||
Balance (in shares) at Dec. 31, 2016 | 24,942,269 | 51,401,295 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Issuance of common stock | $ 95,000 | 76,130,000 | 76,225,000 | 76,225,000 | |||||||
Issuance of common stock (in shares) | 9,500,000 | ||||||||||
Stock-based compensation | $ 8,065 | 3,825,296 | 3,833,361 | 3,833,361 | |||||||
Stock-based compensation (in shares) | 806,524 | ||||||||||
Forfeiture of unvested restricted stock | $ (52) | 52 | |||||||||
Forfeiture of unvested restricted stock (in shares) | (5,191) | ||||||||||
Issuance of convertible senior unsecured notes, net | 353,279 | 353,279 | 353,279 | ||||||||
Distributions - common stock | (30,888,612) | (30,888,612) | (30,888,612) | ||||||||
Distributions - preferred stock | $ (10,769) | (5,665,290) | $ (10,769) | (5,665,290) | $ (10,769) | (5,665,290) | |||||
Distributions - noncontrolling interest | (11,252,307) | (11,252,307) | |||||||||
Net income | 49,629,360 | 49,629,360 | 16,596,415 | 66,225,775 | |||||||
Unrealized loss on securities available-for-sale | (352,735) | (352,735) | (352,735) | ||||||||
Unrealized gain on derivative financial instruments, net | 202 | 202 | 202 | ||||||||
Reclassification of net realized loss on derivatives designated as cash flow hedges into earnings | 237,377 | 237,377 | 237,377 | ||||||||
Balance at Sep. 30, 2017 | $ 89,508,213 | $ 617,026 | $ 702,240,622 | $ (112,069,714) | $ 205,761 | $ 680,501,908 | $ 165,241,301 | $ 845,743,209 | |||
Balance (in shares) at Sep. 30, 2017 | 24,942,269 | 61,702,628 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net income | $ 66,225,775 | $ 31,576,238 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,541,991 | 3,129,410 |
Stock-based compensation | 3,833,361 | 2,940,174 |
Amortization and accretion of interest and fees, net | 3,296,464 | 2,539,980 |
Amortization of capitalized mortgage servicing rights | 35,427,217 | 7,586,524 |
Originations of loans held-for-sale | (3,287,578,091) | (853,935,531) |
Proceeds from sales of loans held-for-sale, net of gain on sale | 3,621,276,437 | 975,969,372 |
Payoffs and paydowns of loans held-for-sale | 116,174 | |
Mortgage servicing rights | (56,181,638) | (15,968,067) |
Write-off of capitalized mortgage servicing rights from payoffs | 10,713,274 | 1,669,081 |
Impairment loss on real estate owned | 2,700,000 | 11,200,000 |
Provision for loan losses (net of recoveries) | (455,653) | (24,995) |
Provision for loss sharing (net of recoveries) | (405,494) | 1,316,862 |
Net charge-offs for loss sharing obligations | (1,843,596) | (2,131,178) |
Gain on extinguishment of debt | (7,116,243) | |
Gain on sale of real estate | (11,630,687) | |
Gain on sale of securities | (15,491) | |
Deferred tax provision | 15,000 | |
Income from equity affiliates | (1,755,145) | (11,193,918) |
Change in fair value of available-for-sale securities | 343,642 | 46,021 |
Changes in operating assets and liabilities | (6,252,023) | 5,894,972 |
Net cash provided by operating activities | 387,901,452 | 148,968,767 |
Investing Activities: | ||
Loans and investments funded, originated, net | (1,051,445,805) | (725,025,857) |
Payoffs and paydowns of loans and investments | 758,138,665 | 531,874,076 |
Internalization of management team | (25,000,000) | |
Deferred fees | 7,213,824 | 7,412,018 |
Investments in real estate, net | (562,025) | (611,497) |
Contributions to equity affiliates | (692,536) | (4,641,973) |
Distributions from equity affiliates | 2,340,710 | 731,942 |
Acquisition of the Agency Business, net of cash acquired | (68,356,323) | |
Proceeds from sale of real estate, net | 49,029,780 | |
Proceeds from sale of available-for-sale securities | 1,567,207 | |
Purchase of securities held-to-maturity, net | (18,339,271) | |
Payoffs and paydowns of securities held-to-maturity | 76,300 | |
Due to borrowers and reserves | (22,571,250) | 128,492 |
Net cash used in investing activities | (350,841,388) | (207,892,135) |
Financing activities: | ||
Proceeds from repurchase agreements, loan participations, credit facilities and notes payable | 6,073,385,393 | 1,681,492,236 |
Payoffs and Paydowns of repurchase agreements, loan participations and credit facilities | (6,417,833,725) | (1,807,884,108) |
Payoffs of junior subordinated notes to subsidiary trust issuing preferred securities | (12,691,086) | |
Paydowns and payoffs of mortgage note payable - real estate owned | (27,155,000) | |
Proceeds from collateralized loan obligations | 561,874,000 | 250,250,000 |
Payoffs and paydowns of collateralized loan obligations | (219,000,000) | |
Proceeds from convertible senior unsecured notes | 13,750,000 | |
Change in restricted cash | (107,793,983) | (123,982,753) |
Receipts on swaps and returns of margin calls from counterparties | 429,539 | 3,440,049 |
Distributions paid on common stock | (30,888,612) | (23,573,786) |
Distributions paid on noncontrolling interest | (11,252,307) | |
Distributions paid on preferred stock | (5,665,290) | (5,665,290) |
Distributions paid on preferred stock of private REIT | (10,769) | (10,849) |
Payment of deferred financing costs | (11,482,257) | (5,081,844) |
Proceeds from issuance of common stock | 76,225,000 | |
Net cash used in financing activities | (90,954,097) | (58,171,345) |
Net decrease in cash and cash equivalents | (53,894,033) | (117,094,713) |
Cash and cash equivalents at beginning of period | 138,645,430 | 188,708,687 |
Cash and cash equivalents at end of period | 84,751,397 | 71,613,974 |
Supplemental cash flow information: | ||
Cash used to pay interest | 53,150,362 | 36,287,261 |
Cash used to pay taxes | 14,653,499 | 298,654 |
Supplemental schedule of non-cash investing and financing activities: | ||
Related party financing | 50,000,000 | |
Payment due on the acquisition of the Agency Business | 11,416,610 | |
Working capital adjustment on the acquisition of the Agency Business | 7,982,584 | |
Issuance of special voting preferred shares and operating partnership units in connection with the Acquisition | 154,772,306 | |
8.25% Series A preferred stock | ||
Supplemental schedule of non-cash investing and financing activities: | ||
Distributions accrued on preferred stock | 266,664 | 266,664 |
7.75% Series B preferred stock | ||
Supplemental schedule of non-cash investing and financing activities: | ||
Distributions accrued on preferred stock | 203,438 | 203,438 |
8.50% Series C preferred stock | ||
Supplemental schedule of non-cash investing and financing activities: | ||
Distributions accrued on preferred stock | $ 159,375 | 159,375 |
Special voting preferred shares | ||
Supplemental schedule of non-cash investing and financing activities: | ||
Distributions accrued on preferred stock | $ 3,396,923 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
8.25% Series A preferred stock | |||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | 8.25% |
7.75% Series B preferred stock | |||
Preferred stock, dividend rate (as a percent) | 7.75% | 7.75% | 7.75% |
8.50% Series C preferred stock | |||
Preferred stock, dividend rate (as a percent) | 8.50% | 8.50% | 8.50% |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Description of Business | |
Description of Business | Note 1 — Description of Business Arbor Realty Trust, Inc. (the “Company,” “we,” “us,” or “our”) is a Maryland corporation formed in 2003. Through our Structured Loan Origination and Investment Business, or “Structured Business,” we invest in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. We may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. Through our Agency Loan Origination and Servicing Business, or “Agency Business,” which was formed as a result of the acquisition of the agency platform of Arbor Commercial Mortgage, LLC (“ACM” or our “Former Manager”) in the third quarter of 2016 (the “Acquisition”), we originate, sell and service a range of multifamily finance products through the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the government-sponsored enterprises, or the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), Federal Housing Authority (“FHA”) and the U.S. Department of Housing and Urban Development (together with Ginnie Mae and FHA, “HUD”) and the conduit/commercial mortgage-backed securities (“CMBS”) programs. We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. Prior to May 31, 2017, we were externally managed and advised by ACM. Effective May 31, 2017, we exercised our option to fully internalize our management team and terminate the existing management agreement. See Note 3 — Acquisition of Our Former Manager’s Agency Platform for details. Substantially all of our operations are conducted through our operating partnership, Arbor Realty Limited Partnership (“ARLP”), for which we serve as the general partner, and ARLP’s subsidiaries. We are organized to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Certain of our assets that produce non-qualifying income, primarily within the Agency Business, are operated through taxable REIT subsidiaries (“TRS”), which is part of our TRS consolidated group (the “TRS Consolidated Group”) and is subject to U.S. federal, state and local income taxes. See Note 18 — Income Taxes for details. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | Note 2 — Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2016 Annual Report. During the third quarter of 2017, we determined that the purchase price allocation related to the Acquisition in 2016 incorrectly omitted a deferred tax liability related to the book-to-tax difference in the value assigned to certain assets acquired. The impact of this omission to our 2016 consolidated financial statements was a $4.9 million understatement of goodwill and a corresponding understatement of other liabilities in our consolidated balance sheets. This omission had no impact on our results of operations and was corrected in the third quarter of 2017, resulting in a $4.9 million increase to goodwill and a corresponding increase in other liabilities. Principles of Consolidation The accompanying unaudited consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. See Note 16 — Variable Interest Entities for information about our VIEs. All significant intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant Accounting Policies We describe our significant accounting policies in our 2016 Annual Report. There have been no significant changes in our significant accounting policies since December 31, 2016. Recently Adopted Accounting Pronouncements Description Adoption Date Effect on Financial Statements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-17, Consolidation: Interests Held through Related Parties That Are under Common Control. This ASU alters how a decision maker needs to consider indirect interests in a VIE held through an entity under common control and requires consideration of only an entity’s proportionate indirect interest in a VIE held through a common control party. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU is intended to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. This ASU, among other things, eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods the investment was held. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements The following table is not intended to represent all recently issued accounting pronouncements that are not yet effective and which have not yet been adopted by us. This table should be read in conjunction with the recently issued accounting pronouncements section included in our 2016 Annual Report. Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. This ASU eliminates step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value with the carrying amount of goodwill. First quarter of 2020 with early adoption permitted beginning in the first quarter of 2017. We are evaluating the timing of our adoption and the impact this guidance may have on our consolidated financial statements. Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. This ASU provides a more robust framework to use in determining when a set of assets and activities constitutes a business. It also provides more consistency in applying the guidance, reduces the costs of application and makes the definition of a business more operable. First quarter of 2018. The potential impact of this new guidance will be assessed for future acquisitions, but it is not expected to have a material impact on our consolidated financial statements. Since 2014, the FASB has issued several amendments to its guidance on revenue recognition. The amended guidance, among other things, introduces a new framework for a single comprehensive model that can be used when accounting for revenue and supersedes most current revenue recognition guidance, including that which pertains to specific industries. The core principle states that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services. It also requires expanded quantitative and qualitative disclosures that will enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Most revenue associated with financial instruments, including interest and loan origination fees, along with gains and losses on investment securities, derivatives and sales of financial instruments are excluded from the scope of the guidance. First quarter of 2018 and permits the use of either the full retrospective or modified retrospective method. We have evaluated the new standard and determined that substantially all of our revenue, including interest income, loan origination fees, servicing income and gains on sales of loans and investment securities, are not impacted. This standard may impact the timing of gains on certain sales of real estate, however, we have determined that this standard will not materially impact our total revenues or footnote disclosures. We will adopt this standard in the first quarter of 2018 using the modified retrospective method for any contracts that are not complete as of the adoption date. |
Acquisition of Our Former Manag
Acquisition of Our Former Manager's Agency Platform | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition of Our Former Manager's Agency Platform | |
Acquisition of Our Former Manager's Agency Platform | Note 3 — Acquisition of Our Former Manager’s Agency Platform On July 14, 2016, we completed the previously announced Acquisition of the agency platform of our Former Manager pursuant to an asset purchase agreement dated February 25, 2016 (“Purchase Agreement”). The aggregate purchase price was $275.8 million, which was paid with $138.0 million in stock, $87.8 million in cash and with the issuance of a $50.0 million seller financing instrument. The equity component of the purchase price was paid with 21,230,769 operating partnership units (“OP Units”), which was based on a stock price of $6.50 per share. The closing price of our common stock on the Acquisition date was $7.29 per share; therefore, the estimated fair value of the total consideration was $292.5 million. See Note 11 — Debt Obligations for details about the seller financing and Note 17 — Equity for details about the OP Units. We finalized the purchase price allocation during the first quarter of 2017 based on the estimated fair values of the assets acquired and liabilities assumed as of the Acquisition date. See Note 2 — Basis of Presentation and Significant Accounting Policies for details of an adjustment made to the purchase price allocation in the third quarter of 2017. Internalization of Management Team In connection with the Acquisition, we had the option to fully internalize our management team and terminate the existing management agreement with our Former Manager for $25.0 million. On May 31, 2017, we exercised that option and fully internalized our management team, which included approximately 100 employees. We incurred expenses of less than $0.1 million in connection with this transaction. We accounted for this transaction as a business combination with the settlement of a preexisting relationship. The total purchase price of $25.0 million was assigned to goodwill since the asset transferred represented an assembled workforce. Goodwill was allocated $12.5 million each to our two reporting segments and is expected to be deductible for tax purposes. Accounting guidance requires the settlement of preexisting relationships to be accounted for separately from the business combination, with the recognition of any corresponding gain or loss through the statement of income upon settlement. Any potential gain or loss is measured based on the favorable or unfavorable terms of the management agreement from the prospective of the acquirer, when compared to current market rates for similar services. Based on this guidance, we performed an analysis and determined that the terminated management agreement contained terms similar to those of arrangements with comparable companies, and therefore no such gain or loss was recorded. |
Loans and Investments
Loans and Investments | 9 Months Ended |
Sep. 30, 2017 | |
Loans and Investments | |
Loans and Investments | Note 4 — Loans and Investments The following tables set forth the composition of our structured loan and investment portfolio: September 30, 2017 Percent of Total Loan Count Wtd. Avg. Pay Rate (1) Wtd. Avg. Remaining Months to Maturity Wtd. Avg. First Dollar LTV Ratio (2) Wtd. Avg. Last Dollar LTV Ratio (3) Bridge loans $ % % % % Preferred equity investments % % % % Mezzanine loans % % % % Junior participation loan (4) % — — % % % % % % Allowance for loan losses ) Unearned revenue ) Loans and investments, net $ December 31, 2016 Bridge loans $ % % % % Preferred equity investments % % % % Mezzanine loans % % % % Junior participation loans % % % % % % % % Allowance for loan losses ) Unearned revenue ) Loans and investments, net $ (1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate that is required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table. (2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position. (3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss. (4) This loan is currently past its maturity and is fully reserved. Concentration of Credit Risk We are subject to concentration risk in that, at September 30, 2017, the UPB related to 32 loans with five different borrowers represented 15% of total assets. At December 31, 2016, the UPB related to 35 loans with five different borrowers represented 16% of total assets. During both the nine months ended September 30, 2017 and the year ended December 31, 2016, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. Effective January 1, 2017, we revised our methodology used to assign a credit risk rating to each loan and investment to be consistent with the method used by our Agency Business. We now assign ratings of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, instead of a one to five rating. Similar to our previous methodology, there are five ratings, each generally consistent with our prior ratings (i.e., pass is equivalent to a one rating, pass/watch is equivalent to a two rating, etc.), with a pass rating being the lowest risk and a doubtful rating being the highest. The benchmark guidelines and other factors used in our revised methodology are substantially the same as our previous methodology. Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves. Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan. This metric provides a helpful snapshot of portfolio quality and credit risk. Given our asset management approach, however, the risk rating process does not result in differing levels of diligence contingent upon credit rating. That is because all portfolio assets are subject to the level of scrutiny and ongoing analysis consistent with that of a “high-risk” loan. Assets are subject to, at minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are reviewed. Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement, and is not considered impaired. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix. As a result of the loan review process at September 30, 2017 and December 31, 2016, we identified loans and investments that we consider higher-risk loans that had a carrying value, before loan loss reserves, of $147.5 million and $150.5 million, respectively, and a weighted average last dollar LTV ratio of 94% and 95%, respectively. A summary of the loan portfolio’s weighted average internal risk ratings and LTV ratios by asset class is presented below. The internal risk ratings as of December 31, 2016 have been converted to reflect the revised methodology described above. September 30, 2017 Asset Class Unpaid Principal Balance Percentage of Portfolio Wtd. Avg. Internal Risk Rating Wtd. Avg. First Dollar LTV Ratio Wtd. Avg. Last Dollar LTV Ratio Multifamily $ % pass/watch % % Land % substandard % % Commercial % pass % % Office % pass/watch % % Hotel % special mention % % Retail % pass/watch % % Healthcare <1 % special mention % % Total $ % pass/watch % % December 31, 2016 Multifamily $ % special mention % % Land % substandard % % Commercial <1 % special mention % % Office % pass/watch % % Hotel % special mention % % Retail <1 % special mention % % Healthcare <1 % special mention % % Total $ % special mention % % Geographic Concentration Risk As of September 30, 2017, 20%, 16%, 11% and 8% of the outstanding balance of our loan and investment portfolio had underlying properties in New York, Texas, California and Georgia, respectively. As of December 31, 2016, 25%, 15%, 14% and 13% of the outstanding balance of our loan and investment portfolio had underlying properties in New York, California, Florida and Texas, respectively. Impaired Loans and Allowance for Loan Losses We evaluate each loan in our portfolio quarterly to assess the performance of our loans and whether a reserve for impairment should be recorded. We measure our relative loss position for our mezzanine loans, junior participation loans and preferred equity investments by determining the point where we will be exposed to losses based on our position in the capital stack as compared to the fair value of the underlying collateral. We determine our loss position on both a first dollar LTV and a last dollar LTV basis, as defined above. A summary of the changes in the allowance for loan losses is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Allowance at beginning of period $ $ $ $ Provision for loan losses — Charge-offs — — — ) Recoveries of reserves — ) ) ) Allowance at end of period $ $ $ $ During the three and nine months ended September 30, 2017, we determined that the fair value of the underlying collateral securing a preferred equity investment with an aggregate carrying value of $34.8 million was less than the net carrying value of the investment, resulting in a $2.0 million provision for loan losses. In addition, during the nine months ended September 30, 2017, a fully reserved mezzanine loan with a UPB of $1.8 million paid off in full, which resulted in a $1.8 million reserve recovery, and we recorded a reserve recovery of $0.7 million on a multifamily bridge loan. During the nine months ended September 30, 2016, we received a $1.8 million discounted payoff on an impaired bridge loan with an aggregate carrying value before reserves of $4.8 million, resulting in the recognition of an additional provision for loan losses of $0.1 million and a charge-off of $3.0 million. The recoveries of reserves for all periods presented were related to multifamily loans and the ratio of net recoveries to the average loans and investments outstanding during the nine months ended September 30, 2017 was 0.1%. The ratio of net charge-offs to the average loans and investments outstanding during the three and nine months ended September 30, 2016 were de minimis and (0.2)%, respectively. There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for loan loss as of September 30, 2017 and 2016. We have six loans with a carrying value totaling $120.5 million at September 30, 2017 that are collateralized by a land development project. These loans were scheduled to mature in September 2017 and were extended to September 2018. The loans do not carry a current pay rate of interest, but five of the loans with a carrying value totaling $111.2 million entitle us to a weighted average accrual rate of interest of 8.50%. In 2008, we suspended the recording of the accrual rate of interest on these loans, as they were impaired and we deemed the collection of this interest to be doubtful. As of September 30, 2017, we have cumulative allowances for loan losses of $49.1 million related to these loans. The loans are subject to certain risks associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development’s outputs upon completion of the project, and litigation risk. Additionally, these loans were not classified as non-performing as the borrower is in compliance with all of the terms and conditions of the loans. A summary of our impaired loans by asset class is as follows: September 30, 2017 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Asset Class Unpaid Carrying Value (1) Allowance for Average Recorded Interest Income Average Recorded Interest Income Land $ $ $ $ $ — $ $ — Hotel — Office Commercial — — Multifamily — — — — — Total $ $ $ $ $ $ $ December 31, 2016 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Land $ $ $ $ $ — $ $ — Hotel Office Commercial — — Multifamily Total $ $ $ $ $ $ $ (1) Represents the UPB of six and eight impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2017 and December 31, 2016, respectively. (2) Represents an average of the beginning and ending UPB of each asset class. At September 30, 2017, five loans with an aggregate net carrying value of $32.6 million, net of related loan loss reserves of $27.9 million, were classified as non-performing. At December 31, 2016, three fully reserved loans with an aggregate carrying value of $22.9 million were classified as non-performing. Income from non-performing loans is generally recognized on a cash basis when it is received. Full income recognition will resume when the loan becomes contractually current and performance has recommenced. A summary of our non-performing loans by asset class is as follows: September 30, 2017 December 31, 2016 Asset Class Carrying Value Less Than 90 Greater Than Carrying Less Than 90 Greater Than Hotel $ $ — $ $ — $ — $ — Office — — Multifamily — — Commercial — — Retail — — — — Total $ $ — $ $ $ — $ At September 30, 2017 and December 31, 2016, we did not have any loans contractually past due 90 days or more that were still accruing interest. A summary of loan modifications, refinancings and/or extensions by asset class that we considered to be troubled debt restructurings were as follows: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Asset Class Number Original Original Modified Modified Number Original Original Modified Modified Hotel — $ — — $ — — $ % $ % Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Multifamily $ % $ % $ % $ % Office % % % % $ % $ % $ % $ % The loan which was modified during the nine months ended September 30, 2017 was considered a troubled debt restructuring as a result of a forbearance agreement entered into with the borrower in the second quarter of 2017 and was classified as non-performing as of September 30, 2017. There were no other loans in which we considered the modifications to be troubled debt restructurings that were subsequently considered non-performing as of September 30, 2017 and 2016 and no additional loans were considered to be impaired due to our troubled debt restructuring analysis for the three and nine months ended September 30, 2017 and 2016. These loans were modified to increase the total recovery of the combined principal and interest from the loan. Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs. As of September 30, 2017, we had total interest reserves of $30.1 million on 70 loans with an aggregate UPB of $1.09 billion. As of December 31, 2016, we had total interest reserves of $20.4 million on 75 loans with an aggregate UPB of $1.01 billion. |
Loans Held-for-Sale, Net
Loans Held-for-Sale, Net | 9 Months Ended |
Sep. 30, 2017 | |
Loans Held-for-Sale, Net | |
Loans Held-for-Sale, Net | Note 5 — Loans Held-for-Sale, Net Loans held-for-sale, net consists of the following: September 30, 2017 December 31, 2016 Fannie Mae $ $ Freddie Mac FHA Fair value of future MSR Unearned discount ) ) Loans held-for-sale, net $ $ Our loans held-for-sale, net are typically sold within 60 days of loan origination and the gain on sales are included in gain on sales, including fee-based services, net in the consolidated statements of income. During the three and nine months ended September 30, 2017, we sold $1.05 billion and $3.62 billion, respectively, of loans held-for-sale and recorded gain on sales of $16.3 million and $52.1 million, respectively. During both the three and nine months ended September 30, 2016, we sold $551.8 million of loans held-for-sale, excluding $418.2 million of sales related to loans that were acquired on July 14, 2016 as part of the Acquisition, and recorded gain on sales of $9.0 million. At September 30, 2017 and December 31, 2016, there were no loans held-for-sale that were 90 days or more past due, and there were no loans held-for-sale that were placed on a non-accrual status. |
Capitalized Mortgage Servicing
Capitalized Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2017 | |
Capitalized Mortgage Servicing Rights | |
Capitalized Mortgage Servicing Rights | Note 6 — Capitalized Mortgage Servicing Rights Our capitalized mortgage servicing rights (“MSRs”) reflect commercial real estate MSRs derived from loans sold in our Agency Business. The discount rates used to determine the present value of our MSRs throughout the periods presented for all MSRs were between 8-15% (representing a weighted average discount rate of 13%) based on our best estimate of market discount rates. The weighted average estimated life remaining of our MSRs was 7.1 years and 6.9 years at September 30, 2017 and December 31, 2016, respectively. A summary of our capitalized MSR activity is as follows: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Acquired Originated Total Acquired Originated Total Balance at beginning of period $ $ $ $ $ $ Additions — — Amortization ) ) ) ) ) ) Write-offs ) ) ) ) ) ) Balance at end of period $ $ $ $ $ $ Three and Nine Months Ended September 30, 2016 Balance at beginning of period $ — $ — $ — Additions Amortization ) ) ) Write-offs ) — ) Balance at end of period $ $ $ We recorded write-offs relating to specific MSRs, primarily due to prepayments of certain loans, of $4.2 million and $10.7 million during the three and nine months ended September 30, 2017, respectively, and $1.7 million during both the three and nine months ended September 30, 2016. We collected prepayment fees of $3.8 million and $7.9 million during the three and nine months ended September 30, 2017, respectively, and $1.5 million during both the three and nine months ended September 30, 2016, which are included as a component of servicing revenue, net on the consolidated statements of income. As of September 30, 2017 and December 31, 2016, we had no valuation allowance recorded on any of our MSRs. The expected amortization of capitalized MSRs recorded as of September 30, 2017 is shown in the table below. Actual amortization may vary from these estimates. Year Amortization 2017 (three months ended 12/31/2017) $ 2018 2019 2020 2021 2022 Thereafter Total $ |
Mortgage Servicing
Mortgage Servicing | 9 Months Ended |
Sep. 30, 2017 | |
Mortgage Servicing | |
Mortgage Servicing | Note 7 — Mortgage Servicing An analysis of the product and geographic concentrations that impact our servicing revenue is shown in the following tables: September 30, 2017 Product Concentrations Geographic Concentrations Percent of Percent of Product UPB Total State Total Fannie Mae $ % Texas % Freddie Mac % North Carolina % FHA % California % Total $ % New York % Georgia % Florida % Other (1) % Total % December 31, 2016 Product Concentrations Geographic Concentrations Percent of Percent of Product UPB Total State Total Fannie Mae $ % Texas % Freddie Mac % North Carolina % FHA % California % Total $ % New York % Georgia % Other (1) % Total % (1) No other individual state represented 5% or more of the total. At September 30, 2017 and December 31, 2016, our weighted average servicing fee was 48.0 basis points and 47.8 basis points, respectively. We held cash in escrow for these loans totaling $506.6 million and $401.7 million at September 30, 2017 and December 31, 2016, respectively, which is not reflected in our consolidated balance sheets. These escrows are maintained in separate accounts at two federally insured depository institutions, which may exceed FDIC insured limits. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2017 | |
Securities | |
Securities | Note 8 — Securities Available-for-Sale Our available-for-sale securities consist of equity securities and Agency Business commercial mortgage interest-only securities (“Agency IOs”) from loans sold and securitized under the Freddie Mac Small Balance Loan Program (“SBL Program”). Equity Securities. We own common stock of CV Holdings, Inc., formerly Realty Finance Corporation, which is a commercial real estate specialty finance company. These securities are carried at their estimated fair value with unrealized gains (losses) reported in accumulated other comprehensive income. The following is a summary of the equity securities classified as available-for-sale: September 30, 2017 Amortized Cummulative Carrying Value / 2,939,465 common shares of CV Holdings, Inc. $ $ $ December 31, 2016 2,939,465 common shares of CV Holdings, Inc. $ $ $ Agency IOs. Through our Agency Business, we originate and sell loans to Freddie Mac under the SBL Program, which are then pooled and securitized. Prior to the Acquisition and upon securitization of SBL Program loans, our Former Manager received Agency IOs under the SBL Program, which we acquired in the Acquisition. We elected the fair value option for the Agency IOs, which requires changes in fair value to be recognized through earnings. We record such gains and losses to gain on sales, including fee-based services, net in the consolidated statements of income. As a result of changes in the Freddie Mac SBL Program in 2016, we do not expect to receive Agency IOs from future securitizations. A summary of our Agency IOs activity is as follows: Three Months Ended Nine Months Ended Balance at beginning of period $ $ Changes in fair value ) ) Balance at end of period $ $ Three and Nine Months Balance at beginning of period $ — Additions from the Acquisition Changes in fair value ) Balance at end of period $ The UPB of loans associated with our Agency IOs was $839.2 million and $904.4 million at September 30, 2017 and December 31, 2016, respectively, which mature between 2035 and 2036. During the three and nine months ended September 30, 2017, we recognized interest income related to these Agency IOs of $0.3 million and $0.9 million, respectively, and $0.3 million during both the three and nine months ended September 30, 2016. Held-to-Maturity As part of the SBL Program securitizations described above, we are required to purchase the bottom tranche bond, generally referred to as the “B Piece,” that represents the bottom 10%, or highest risk of the securitization. During the nine months ended September 30, 2017, we retained 49%, or $28.1 million initial face value of two B Piece bonds, at a discount, for $18.3 million and sold the remaining 51% to the third party at par. Prior to 2017, a third party investor agreed to purchase the entire B Piece of each SBL Program securitization at par. These held-to-maturity securities are carried at cost, net of unamortized discounts and are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.55% and have an estimated weighted average maturity of 6.1 years. The weighted average effective interest rate was 13.38% at September 30, 2017, including the accretion of discount. Approximately $3.4 million is estimated to mature within one year, $11.3 million is estimated to mature after one year through five years, $8.1 million is estimated to mature after five years through ten years and $5.2 million is estimated to mature after ten years. The following is a summary of the held-to-maturity securities we held at September 30, 2017: Face Value Carrying Value Unrealized Estimated Fair B Piece bonds $ $ $ $ We do not intend to sell these investments and it is not more-likely-than-not that we will be required to sell these investments before recovering the cost basis, which may be at maturity. These securities are evaluated periodically to determine whether a decline in their value is other-than-temporary, though such a determination is not intended to indicate a permanent decline in value. As of September 30, 2017, no impairment was recorded on these held-to-maturity securities. During the three and nine months ended September 30, 2017, we recorded interest income of $0.5 million and $0.9 million, respectively, related to these investments. |
Investments in Equity Affiliate
Investments in Equity Affiliates | 9 Months Ended |
Sep. 30, 2017 | |
Investments in Equity Affiliates | |
Investments in Equity Affiliates | Note 9 — Investments in Equity Affiliates We account for all investments in equity affiliates under the equity method. The following is a summary of our investments in equity affiliates: Investments in Equity Affiliates at UPB of Loans to Equity Affiliates September 30, 2017 December 31, 2016 September 30, 2017 Arbor Residential Investor LLC $ $ $ — West Shore Café Lightstone Value Plus REIT L.P. — JT Prime — East River Portfolio Lexford Portfolio — Issuers of Junior Subordinated Notes — — Total $ $ $ Arbor Residential Investor LLC (“ARI”) . During the three and nine months ended September 30, 2017, we recorded a loss of $1.3 million and $1.9 million, respectively, and during the three and nine months ended September 30, 2016, we recorded income of $3.9 million and $8.5 million, respectively, to income from equity affiliates in our consolidated statements of income related to our investment in this residential mortgage banking business. During the nine months ended September 30, 2017, we funded $0.6 million of additional mortgage purchases in connection with a joint venture that invests in non-qualified residential mortgages purchased from ARI’s origination platform. During the nine months ended September 30, 2017, we received cash distributions from this joint venture totaling $0.9 million (which were classified as a return of capital). During the three and nine months ended September 30, 2017 we recorded income of less than $0.1 million and $0.1 million, respectively, and during the three and nine months ended September 30, 2016, we recorded income of $0.3 million and $0.4 million, respectively, to income from equity affiliates in our consolidated statements of income related to this investment. The summarized statements of operations for our investment in ARI are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Statements of Operations: Total revenues $ $ $ $ Total expenses Net (loss) income $ ) $ $ ) $ Arbor’s share of (loss) income $ ) $ $ ) $ Lexford Portfolio. In the three and nine months ended September 30, 2017, we received distributions of $0.7 million and $2.0 million, respectively, and in the three and nine months ended September 30, 2016, we received distributions of $0.7 million and $2.1 million, respectively, from this equity investment which was recognized as income. See Note 19 — Agreements and Transactions with Related Parties for details. Issuers of Junior Subordinated Notes. In the first quarter of 2017, we purchased, at a discount, a portion of our junior subordinated notes. In connection with this extinguishment of debt, we settled our investment in these affiliated entities. See Note 11 — Debt Obligations for details. Equity Participation Interest. In the third quarter of 2017, we received $1.5 million from the redemption of a 25% equity participation interest we held in a multifamily property, which is included in income from equity affiliates on the consolidated statements of income. Prior to this transaction, our basis in this investment was zero. |
Real Estate Owned and Held-For-
Real Estate Owned and Held-For-Sale | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Owned and Held-For-Sale | |
Real Estate Owned and Held-For-Sale | Note 10 — Real Estate Owned and Held-For-Sale Our real estate assets at both September 30, 2017 and December 31, 2016 were comprised of a hotel property and an office building. Real Estate Owned September 30, 2017 December 31, 2016 Hotel Property Office Total Hotel Property Office Total Land $ $ $ $ $ $ Building and intangible assets Less: Impairment loss ) — ) ) — ) Less: Accumulated depreciation and amortization ) ) ) ) ) ) Real estate owned, net $ $ $ $ $ $ For the nine months ended September 30, 2017 and 2016, our remaining hotel property had a weighted average occupancy rate of 55% and 58%, respectively, a weighted average daily rate of $113 and $108, respectively, and weighted average revenue per available room of $62 and $63, respectively. The operation of a hotel property is seasonal with the majority of revenues earned in the first two quarters of the calendar year. During the second quarter of 2016, through site visits and discussion with market participants, we determined that the hotel property exhibited indicators of impairment and performed an impairment analysis. As a result of this impairment analysis, we recorded an impairment loss of $11.2 million. During the first half of 2017, we received additional market analyses, including discussions with market participants, which resulted in further impairments totaling $2.7 million. Our office building was fully occupied by a single tenant until April 2017 when the lease expired. The building is currently vacant. Our real estate assets had restricted cash balances due to escrow requirements totaling $0.7 million at both September 30, 2017 and December 31, 2016. Real Estate Held-For-Sale In 2016, we sold our three remaining multifamily properties and a hotel property for a total of $50.7 million and recognized a gain of $11.6 million. A portion of the sales proceeds were used to payoff the outstanding debt on the multifamily properties of $27.1 million. The results of operations for properties classified as held-for-sale are summarized as follows: Nine Months Ended Revenue: Property operating income $ Expenses: Property operating expenses Depreciation Net income $ There were no properties classified as held-for-sale during the nine months ended September 30, 2017. |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Debt Obligations | |
Debt Obligations | Note 11 — Debt Obligations Credit Facilities and Repurchase Agreements The following table outlines borrowings under our credit facilities and repurchase agreements: September 30, 2017 December 31, 2016 Current Extended Note Rate Debt Carrying Collateral Wtd. Debt Carrying Collateral Wtd. Avg. Structured Business $150 million repurchase facility Oct. 2018 Oct. 2019 L + 2.25% to 3.50% $ $ % $ $ % $100 million repurchase facility June 2019 N/A L + 2.00% % % $75 million credit facility Dec. 2017 N/A L + 2.125% to 2.50% % % $75 million credit facility June 2018 N/A L + 2.00% % % $50 million credit facility Feb. 2018 Feb. 2019 L + 2.00% % % $50 million credit facility Sept. 2019 Sept. 2021 L + 2.50% to 3.25% % % $25.5 million credit facility Oct. 2019 N/A L + 2.50% % — — — $10 million credit facility Mar. 2018 N/A L + 2.50% — % — — — $3 million master security agreement Oct. 2020 N/A 2.96% to 3.42% — % — % Total $ $ % $ $ % Agency Business $500 million ASAP agreement N/A N/A L + 1.05% $ $ % $ $ % $150 million credit facility (2) Jan. 2018 N/A L + 1.40% % % $150 million credit facility (3) July 2018 N/A L + 1.35% % % $100 million credit facility (4) June 2018 N/A L + 1.30% % % $100 million repurchase facility Aug. 2018 N/A L + 1.35% % — — — Total $ $ % $ $ % Consolidated total $ $ % $ $ % (1) The debt carrying value for the Structured Business at September 30, 2017 and December 31, 2016 was net of unamortized deferred finance costs of $1.6 million and $1.9 million, respectively. The debt carrying value for the Agency Business at both September 30, 2017 and December 31, 2016 was net of unamortized deferred finance costs of $0.3 million. (2) The committed amount under the facility was temporarily increased to $200.0 million, which expired in April 2017, and again to $225.0 million, which expired in August 2017. (3) The committed amount under the facility was temporarily increased to $350.0 million, which expired in February 2017. (4) The committed amount under the facility was temporarily increased to $250.0 million, which expires in January 2018. Structured Business At September 30, 2017 and December 31, 2016, the weighted average interest rate for the credit facilities and repurchase agreements of our Structured Business, noted in the above table, was 3.58% and 3.02%, respectively. Including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, the weighted average interest rate was 4.06% and 3.42% at September 30, 2017 and December 31, 2016, respectively. The leverage on our loans and investment portfolio financed through our credit facilities and repurchase agreements, excluding the $10.0 million working capital line of credit and the $3.0 million master security agreement used to finance leasehold improvements at our corporate office, was 58% and 64% at September 30, 2017 and December 31, 2016, respectively. In October 2017, we amended our $150.0 million repurchase facility increasing the committed amount by $75.0 million to $225.0 million. In September 2017, we entered into a $25.5 million credit facility to finance a multifamily bridge loan. The facility bears interest at a rate of 250 basis points over LIBOR and matures in October 2019. In June 2017, we replaced a $100.0 million credit facility with a $100.0 million repurchase facility with the same financial institution which matures in June 2019 and bears interest at 200 basis points over LIBOR, representing a 15 basis point rate decrease. The facility has a maximum advance rate of 75%. In June 2017, we extended the maturity date of our $75.0 million credit facility that bears interest at a rate of 200 basis points over LIBOR to June 2018. In March 2017, we entered into a $10.0 million unsecured working capital line of credit that bears interest at a rate of 250 basis points over LIBOR. This line of credit is scheduled to mature in March 2018 and is renewable annually. Agency Business In July 2017, we amended one of our $150.0 million credit facilities to provide a short term extension to the maturity date and reduce the interest rate 5 basis points to 135 basis points over LIBOR. In September 2017, we extended the maturity date to July 2018. In August 2017, we entered into a $100.0 million repurchase facility that bears interest at a rate of 135 basis points over LIBOR and matures in August 2018. The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility. In June 2017, we amended our $100.0 million credit facility to extend the maturity date to June 2018 and reduced the interest rate 5 basis points to 130 basis points over LIBOR. The amended agreement also provided us with the option of temporarily increasing the committed amount to $250.0 million subject to prior written notice. In July 2017, we exercised our option and increased the committed amount to $250.0 million, which expires in January 2018. We have a $500.0 million Multifamily As Soon as Pooled ® Plus (“ASAP”) agreement with Fannie Mae, which, in March 2017, was increased from $400.0 million. The ASAP agreement is not a committed line, has no expiration date and bears interest at a rate of 105 basis points over LIBOR (with a LIBOR Floor of 0.35%). ASAP provides us with a warehousing credit facility for mortgage loans that are to be sold to Fannie Mae and serviced under the Fannie Mae DUS program. In September 2017, we simultaneously terminated our then existing $30.0 million letter of credit facility and entered into a new $50.0 million letter of credit facility with a different financial institution. The new facility bears interest at a fixed rate of 2.875%, representing a 12.5 basis point decrease from the prior facility, matures in September 2020 and is primarily collateralized by our servicing revenue as approved by Fannie Mae and Freddie Mac. The letter of credit facility includes a $5.0 million sublimit for an obligation under the Freddie Mac SBL Program. At September 30, 2017, the letters of credit outstanding include $42.0 million for the Fannie Mae DUS program and $5.0 million for the Freddie Mac SBL Program. Collateralized Loan Obligations (“CLOs”) The following table outlines borrowings and the corresponding collateral under our CLOs: Collateral (3) Debt Loans Cash September 30, 2017 Face Value Carrying Value Wtd. Avg. Unpaid Carrying Value Restricted CLO VIII $ $ % $ $ $ CLO VII % CLO VI % CLO V % Total CLOs $ $ % $ $ $ December 31, 2016 Face Value Carrying Value Wtd. Avg. Unpaid Carrying Value Restricted CLO VI $ $ % $ $ $ CLO V % CLO IV % Total CLOs $ $ % $ $ $ (1) Debt carrying value is net of $13.6 million and $8.6 million of deferred financing fees at September 30, 2017 and December 31, 2016, respectively. (2) At September 30, 2017 and December 31, 2016, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 3.88% and 3.71%, respectively. (3) As of September 30, 2017 and December 31, 2016, there was no collateral at risk of default or deemed to be a “credit risk” as defined by the CLO indenture. (4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs. Does not include restricted cash related to interest payments, delayed fundings and expenses. CLO VIII — In August 2017, we completed a collateralized securitization vehicle (“CLO VIII”), issuing six tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $312.1 million. Of the total CLO notes issued, $282.9 million were investment grade notes issued to third party investors and $29.2 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $293.7 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has a three-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $71.3 million for the purpose of acquiring additional loan obligations for a period of up to 120 days from the CLO closing date. Subsequently, the issuer will own loan obligations with a face value of $365.0 million. We retained a residual interest in the portfolio with a notional amount of $82.1 million, including the $29.2 million below investment grade notes. The notes had an initial weighted average interest rate of 1.31% plus one-month LIBOR and interest payments on the notes are payable monthly. CLO VII — In April 2017, we completed CLO VII, issuing to third party investors three tranches of investment grade CLOs through two newly-formed wholly-owned subsidiaries totaling $279.0 million. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $296.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has a three-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $63.8 million for the purpose of acquiring additional loan obligations for a period of up to 120 days from the CLO closing date, which were subsequently utilized prior to the end of the second quarter of 2017 resulting in the issuer owning loan obligations with a face value of $360.0 million. We retained a residual interest in the portfolio with a notional amount of $81.0 million. The notes had an initial weighted average interest rate of 1.99% plus one-month LIBOR and interest payments on the notes are payable monthly. CLO IV — In September 2017, we completed the unwind of CLO IV, redeeming $219.0 million of our outstanding notes which were repaid primarily from the refinancing of the remaining assets within our existing financing facilities (including CLO VIII), as well as with cash held by CLO IV, and expensed $1.1 million of deferred financing fees into interest expense on the consolidated statements of income. We account for our CLO transactions on our consolidated balance sheet as financing facilities. Our CLOs are VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade tranches are treated as secured financings, and are non-recourse to us. Senior Unsecured Notes The debt carrying value of our senior unsecured notes at September 30, 2017 and December 31, 2016 were $95.1 million and $94.5 million, respectively, which were net of $2.8 million and $3.3 million, respectively, of deferred financing fees. The notes are due in 2021; however, they became eligible for redemption by us on May 16, 2017. Including certain fees and costs, the weighted average note rate was 8.16% and 8.15% at September 30, 2017 and December 31, 2016, respectively. Convertible Senior Unsecured Notes In October 2016, we issued $86.3 million aggregate principal amount of 6.50% convertible senior unsecured notes, including the underwriter’s over-allotment option of $11.3 million, and, in January 2017, we issued an additional $13.8 million, which brought the aggregate outstanding principal amount of the notes to $100.0 million. The additional issuance in January 2017 is fully fungible with, and ranks equally in right of payment with, the initial issuance. The notes pay interest semiannually in arrears. We received total proceeds of $95.8 million from the offerings, net of deferred financing fees, which are being amortized through interest expense over the life of the notes. The notes mature on October 1, 2019, unless earlier converted or repurchased by the holders pursuant to their terms, and are not redeemable by us prior to maturity. The notes are convertible into, at our election, cash, shares of our common stock or a combination of both, subject to the satisfaction of certain conditions and during specified periods. The conversion rate is subject to adjustment upon the occurrence of certain specified events and the holders may require us to repurchase all or any portion of their notes for cash equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, if we undergo a fundamental change as specified in the agreement. The initial conversion rate was 119.3033 shares of common stock per $1,000 principal amount of notes and represented a conversion price of $8.38 per share of common stock. At September 30, 3017, the notes had a conversion rate of 120.0428 shares of common stock per $1,000 principal amount of notes, which represented a conversion price of $8.33 per share of common stock. Accounting guidance requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately. The initial value of the liability component reflects the present value of the discounted cash flows using the nonconvertible debt borrowing rate of 7.50% at the time of issuance. The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is being accreted back to the notes principal amount through interest expense over the term of the notes, which was 2.00 years and 2.75 years at September 30, 2017 and December 31, 2016, respectively. The principal balance, unamortized discount and net carrying value of the liability and equity components of the notes were as follows: Liability Equity Component Component Period Principal Unamortized Debt Unamortized Deferred Net Carrying Net Carrying September 30, 2017 $ $ $ $ $ December 31, 2016 $ $ $ $ $ During the three months ended September 30, 2017, we incurred total interest expense on the notes of $2.2 million, of which $1.6 million, $0.4 million and $0.2 million related to the 6.50% cash coupon, accretion of the deferred financing fees and of the debt discount, respectively. During the nine months ended September 30, 2017, we incurred total interest expense on the notes of $6.6 million, of which $4.8 million, $1.1 million and $0.7 million related to the 6.50% cash coupon, accretion of the deferred financing fees and of the debt discount, respectively. Including the amortization of the deferred financing fees and debt discount, our total cost of the notes is 8.68% per annum. The average price of our common stock during the second quarter of 2017 exceeded the conversion price, as calculated in accordance with the terms of the indenture. Therefore, the notes impacted our diluted earnings per share for the nine months ended September 30, 2017. Diluted earnings per share was not impacted for any other period presented. See Note 18 — Equity for details. Junior Subordinated Notes In the first quarter of 2017, we purchased, at a discount, $20.9 million of our junior subordinated notes with a carrying value of $19.8 million and recorded a gain on extinguishment of debt of $7.1 million. As a result, we settled our related equity investment and extinguished $21.5 million of notes. The carrying value of borrowings under our junior subordinated notes was $139.4 million and $157.9 million at September 30, 2017 and December 31, 2016, respectively, which is net of a deferred amount of $12.7 million and $14.9 million, respectively, (which is being amortized into interest expense over the life of the notes) and $2.2 million and $3.1 million, respectively, of deferred financing fees. These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a fixed or floating rate of interest based on three-month LIBOR. The current weighted average note rate was 4.17% and 3.82% at September 30, 2017 and December 31, 2016, respectively. Including certain fees and costs, the weighted average note rate was 4.27% and 3.94% at September 30, 2017 and December 31, 2016, respectively. Related Party Financing In connection with the Acquisition, we entered into a $50.0 million preferred equity interest financing agreement with ACM to finance a portion of the aggregate purchase price. The debt has a five year term with a preferred return of 7% through December 31, 2016, increasing by 1% per annum thereafter, with a maximum rate of 12%. In addition, after eighteen months, the principal balance due is scheduled to increase over time with $62.5 million due if the debt remained outstanding until the end of the five-year term. Interest expense associated with this financing is recorded using the effective yield method. At both September 30, 2017 and December 31, 2016, the outstanding principal balance was $50.0 million. During the three and nine months ended September 30, 2017, we recorded interest expense related to this financing of $1.0 million and $2.9 million, respectively, and $0.8 million during both the three and nine months ended September 30, 2016. Debt Covenants Credit Facilities and Repurchase Agreements. The credit facilities and repurchase agreements contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests. We were in compliance with all financial covenants and restrictions at September 30, 2017. CLOs. Our CLO vehicles contain interest coverage and asset overcollateralization covenants that must be met as of the waterfall distribution date in order for us to receive such payments. If we fail these covenants in any CLO, all cash flows from such CLO would be diverted to repay principal and interest on the outstanding CLO bonds and we would not receive any residual payments until that CLO regained compliance with such tests. Our CLOs were in compliance with all such covenants as of September 30, 2017, as well as on the most recent determination dates in October 2017. In the event of a breach of the CLO covenants that could not be cured in the near-term, we would be required to fund our non-CLO expenses, including employee costs, distributions required to maintain our REIT status, debt costs, and other expenses with (i) cash on hand, (ii) income from any CLO not in breach of a covenant test, (iii) income from real property and loan assets, (iv) sale of assets, or (v) accessing the equity or debt capital markets, if available. We have the right to cure covenant breaches which would resume normal residual payments to us by purchasing non-performing loans out of the CLOs. However, we may not have sufficient liquidity available to do so at such time. A summary of our CLO compliance tests as of the most recent determination dates in October 2017 is as follows: Cash Flow Triggers CLO V CLO VI CLO VII CLO VIII Overcollateralization (1) Current 130.72% 129.87% 129.03% 129.03% Limit 129.72% 128.87% 128.03% 128.03% Pass / Fail Pass Pass Pass Pass Interest Coverage (2) Current 211.97% 240.15% 287.79% 360.90% Limit 120.00% 120.00% 120.00% 120.00% Pass / Fail Pass Pass Pass Pass (1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g. CCC-) as defined in each CLO vehicle. (2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us. A summary of our CLO overcollateralization ratios as of the determination dates subsequent to each quarter is as follows: Determination (1) CLO V CLO VI CLO VII CLO VIII October 2017 % % % % July 2017 % % % — April 2017 % % — — January 2017 % % — — October 2016 % % — — (1) The table above represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented. The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs. No payment due under the junior subordinated indentures may be paid if there is a default under any senior debt and the senior lender has sent notice to the trustee. The junior subordinated indentures are also cross-defaulted with each other. |
Allowance for Loss-Sharing Obli
Allowance for Loss-Sharing Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Allowance for Loss-Sharing Obligations | |
Allowance for Loss-Sharing Obligations | Note 12 — Allowance for Loss-Sharing Obligations A summary of our allowance for loss-sharing obligations related to the Fannie Mae DUS program is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Beginning balance $ $ — $ $ — Allowance for loss-sharing obligations assumed in the Acquisition — — Provisions for loss sharing (net of recoveries) ) ) Charge-offs, net ) ) ) ) Ending balance $ $ $ $ When we settle a loss under the DUS loss-sharing model, the net loss is charged-off against the previously recorded loss-sharing obligation. The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses. At both September 30, 2017 and December 31, 2016, we had outstanding advances of $0.3 million, which were netted against the allowance for loss-sharing obligations. At September 30, 2017 and December 31, 2016, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $2.23 billion and $2.04 billion, respectively. The maximum quantifiable liability is not representative of the actual loss we would incur. We would be liable for this amount only if all of the loans we service for Fannie Mae, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 13 — Derivative Financial Instruments Structured Business. During the first quarter of 2017, our remaining two qualifying LIBOR cap hedges, with a notional value of $55.6 million, and our remaining two qualifying interest rate swap cash flow hedges, with a notional value of $41.5 million, matured. We entered into the LIBOR cap hedges due to certain CLO agreements requiring a LIBOR cap of 2% and 3% and we entered into the interest rate swaps to hedge the variable cash flows associated with existing variable-rate debt. As of September 30, 2017, the Structured Business did not have any derivative financial instruments. At December 31, 2016, the fair value of our LIBOR cap hedges and interest rate swaps was less than $0.1 million and $(0.2) million, respectively. The following table presents the effect of our qualifying derivative financial instruments on the statements of income (dollars in thousands): Loss Recognized In Other Loss Reclassified from Accumulated Derivative 2017 2016 2017 2016 Interest Rate Swaps/Cap $ — $ $ ) $ ) As of December 31, 2016, the cumulative amount of other comprehensive income (loss) related to net unrealized losses on derivatives designated as qualifying hedges were de minimis. Agency Business. The following is a summary of our non-qualifying derivative financial instruments: September 30, 2017 Fair Value Derivative Count Notional Value Balance Sheet Derivative Derivative Rate Lock Commitments 7 $ Other Assets/ Other Liabilities $ $ ) Forward Sale Commitments 81 Other Assets/ Other Liabilities ) $ $ $ ) December 31, 2016 Rate Lock Commitments 12 $ Other Assets/ Other Liabilities $ $ ) Forward Sale Commitments 105 Other Assets/ Other Liabilities ) $ $ $ ) We enter into contractual commitments to originate and sell mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrower “rate locks” a specified interest rate within time frames established by us. All potential borrowers are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, we enter into a forward sale commitment with the investor simultaneous with the rate lock commitment with the borrower. The forward sale contract locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment. These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of other income, net in the consolidated statements of income. The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of income. During the three and nine months ended September 30, 2017, we recorded net gains of $0.2 million and net losses of $2.3 million, respectively, from changes in the fair value of these derivatives in other income, net and $18.9 million and $56.2 million, respectively, of income from MSRs. During both the three and nine months ended September 30, 2016, we recorded $0.2 million of net gains from changes in the fair value of these derivatives in other income, net and $16.0 million of income from MSRs. See Note 14 — Fair Value for details. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value | |
Fair Value | Note 14 — Fair Value Fair value estimates are dependent upon subjective assumptions and involve significant uncertainties resulting in variability in estimates with changes in assumptions. The following table summarizes the principal amounts, carrying values and the estimated fair values of our financial instruments: September 30, 2017 December 31, 2016 Principal / Carrying Value Estimated Principal / Carrying Value Estimated Financial assets: Loans and investments, net $ $ $ $ $ $ Loans held-for-sale, net Capitalized mortgage servicing rights, net n/a n/a Available-for-sale securities Securities held-to-maturity, net — — — Derivative financial instuments Financial liabilities: Credit and repurchase facilities $ $ $ $ $ $ Collateralized loan obligations Senior unsecured notes Convertible senior unsecured notes, net Junior subordinated notes Related party financing Derivative financial instruments Assets and liabilities disclosed at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities are as follows: Level 1 — Inputs are unadjusted and quoted prices exist in active markets for identical assets or liabilities, such as government, agency and equity securities. Level 2 — Inputs (other than quoted prices included in Level 1) are observable for the asset or liability through correlation with market data. Level 2 inputs may include quoted market prices for a similar asset or liability, interest rates and credit risk. Examples include non-government securities, certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments. Level 3 — Inputs reflect our best estimate of what market participants would use in pricing the asset or liability and are based on significant unobservable inputs that require a considerable amount of judgment and assumptions. Examples include certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments. Determining which category an asset or liability falls within the hierarchy requires significant judgment and we evaluate our hierarchy disclosures each quarter. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Loans and investments, net. Fair values of loans and investments that are not impaired are estimated using Level 3 inputs based on direct capitalization rate and discounted cash flow methodologies using discount rates, which, in our opinion, best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Fair values of impaired loans and investments are estimated using Level 3 inputs that require significant judgments, which include assumptions regarding discount rates, capitalization rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors. Loans held-for-sale, net. Consists of originated loans that are generally transferred or sold within 60 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2). Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3). Capitalized mortgage servicing rights, net . Fair values are estimated using Level 3 inputs based on discounted future net cash flow methodology. The fair value of MSRs carried at amortized cost are estimated using a process that involves the use of independent third-party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data. The key inputs used in estimating fair value include the contractually specified servicing fees, prepayment speed of the underlying loans, discount rate, annual per loan cost to service loans, delinquency rates, late charges and other economic factors. Available-for-sale securities. Fair values are estimated based on current market quotes received from active markets or financial sources that trade such securities. The fair values of available-for-sale equity securities traded in active markets are estimated using Level 1 inputs. The fair values of available-for-sale debt securities are estimated using the recent purchase price and subsequent sales price of the securities, which are deemed Level 2 inputs. The fair value of our Agency IOs were estimated using Level 3 inputs and are derived from third party proprietary models using discounted cash flows based on the underlying contractual cash flows and require significant judgements, including assumptions on discount rates and constant prepayment rates. Securities held-to-maturity, net. Fair values are approximated using Level 3 inputs based on current market quotes received from financial sources that trade such securities and are based on prevailing market data and, in some cases, are derived from third party proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions. Derivative financial instruments. The fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S. Treasury rate and other observable market data (Level 2). The fair value of rate lock commitments includes the fair value of the expected net cash flows associated with the servicing of the loans, see capitalized mortgage servicing rights, net above for details on the applicable valuation technique (Level 3). We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives. Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and our historical experience, the risk of nonperformance by our counterparties is not significant. Credit facilities and repurchase agreements. Fair values for the Structured Business are estimated at Level 3 using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality. The majority of our credit facilities for the Agency Business bear interest at rates that are similar to those available in the market currently and the fair values are estimated using Level 2 inputs. For these facilities, the fair values approximate their carrying values. Collateralized loan obligations, junior subordinated notes and related party financing. Fair values are estimated at Level 3 based on broker quotations, representing the discounted expected future cash flows at a yield that reflects current market interest rates and credit spreads. Senior unsecured notes. Fair values are estimated at Level 1 based on current market quotes received from active markets. Convertible senior unsecured notes, net. Fair values are estimated at Level 2 based on current market quotes received from inactive markets. We measure certain financial assets and financial liabilities at fair value on a recurring basis. The fair value of these financial assets and liabilities was determined using the following input levels as of September 30, 2017: Carrying Fair Value Measurements Using Fair Value Fair Value Level 1 Level 2 Level 3 Financial assets: Available-for-sale securities $ $ $ $ — $ Derivative financial instruments — Financial liabilities: Derivative financial instruments $ $ $ — $ $ — See Note 8 — Securities for a roll-forward of our available-for-sale securities fair valued using Level 3 inputs. We measure certain financial and non-financial assets at fair value on a nonrecurring basis. The fair values of these financial and non-financial assets were determined using the following input levels as of September 30, 2017: Net Carrying Fair Value Measurements Using Fair Value Fair Value Level 1 Level 2 Level 3 Financial assets: Impaired loans, net (1) $ $ $ — $ — $ Non-financial assets: Long-lived assets (2) $ $ $ — $ — $ (1) We had an allowance for loan losses of $83.3 million relating to six loans with an aggregate carrying value, before loan loss reserves, of $184.5 million at September 30, 2017. (2) During the second quarter of 2016, we determined that a real estate owned hotel property exhibited indicators of impairment and an impairment analysis was performed, which resulted in an impairment loss of $11.2 million. During the first half of 2017, we received additional market analyses which resulted in a further impairment loss of $2.7 million. Loan impairment assessments . Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for loan losses, when such loan or investment is deemed to be impaired. We consider a loan impaired when, based upon current information, it is probable that we will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement. We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance and corresponding charge to the provision for loan losses. These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors. The table above and below includes all impaired loans, regardless of the period in which the impairment was recognized. Long-lived assets: We review our real estate owned assets when events or circumstances change, indicating that the carrying amount of an asset may not be recoverable. In the evaluation of a real estate owned asset for impairment, many factors are considered, including estimated current and expected operating cash flows from the asset during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of the asset in the ordinary course of business. We first compare the undiscounted cash flows to be generated by the asset to the carrying value of such asset. If the undiscounted cash flows are less than the carrying value, we recognize impairment based on discounted cash flows. Quantitative information about Level 3 fair value measurements at September 30, 2017 were as follows: Valuation Fair Value Techniques Significant Unobservable Inputs Financial assets: Impaired loans (1): Discount rate Office $ Discounted cash flows Capitalization rate Revenue growth rate Discount rate Land Discounted cash flows Capitalization rate Revenue growth rate Discount rate Hotel Discounted cash flows Capitalization rate Revenue growth rate Derivative financial instruments: Rate lock commitments Discounted cash flows W/A discount rate Non-financial assets: Long-lived assets: Discount rate Hotel Discounted cash flows Capitalization rate Revenue growth rate Hold period 3 years (1) Includes all impaired loans regardless of the period in which a loan loss provision was recorded. The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days). A roll-forward of Level 3 derivative instruments were as follows: Fair Value Measurements Using Significant Unobservable Inputs Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Derivative assets and liabilities, net Balance at beginning of period $ $ — $ $ — Additions from the Acquisition — — Settlements ) ) ) ) Realized gains recorded in earnings Unrealized gains recorded in earnings Balance at end of period $ $ $ $ The following table presents the components of fair value and other relevant information associated with our rate lock commitments, forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale. Notional/ Fair Value of Interest Rate Total Fair Value September 30, 2017 Rate lock commitments $ $ $ ) $ Forward sale commitments — Loans held-for-sale, net (1) — Total $ $ — $ (1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from mortgage servicing rights. We measure certain assets and liabilities for which fair value is only disclosed. The fair value of these assets and liabilities was determined using the following input levels as of September 30, 2017: Fair Value Measurements Using Fair Value Hierarchy Carrying Value Fair Value Level 1 Level 2 Level 3 Financial assets: Loans and investments, net $ $ $ — $ — $ Loans held-for-sale, net — Capitalized mortgage servicing rights, net — — Securities held-to-maturity, net — — Financial liabilities: Credit and repurchase facilities $ $ $ — $ $ Collateralized loan obligations — — Senior unsecured notes — — Convertible senior unsecured notes, net — — Junior subordinated notes — — Related party financing — — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 15 — Commitments and Contingencies Debt Obligations. Our debt obligations have maturities of $400.9 million for the remainder of 2017, $484.5 million in 2018, $355.5 million in 2019, $427.1 million in 2020, $236.4 million in 2021 and $154.3 million thereafter. Agency Business Commitments. The Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, and compliance with reporting requirements. Our adjusted net worth and liquidity required by the agencies for all periods presented exceeded these requirements. As of September 30, 2017, we were required to maintain at least $12.1 million of liquid assets in one of our subsidiaries to meet our operational liquidity requirements for Fannie Mae and we had operational liquidity in excess of this requirement. We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program and are required to secure this obligation by assigning restricted cash balances and/or a letter of credit to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level by a Fannie Mae assigned tier which considers the loan balance, risk level of the loan, age of the loan and level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, 15 basis points for Tier 3 loans and 5 basis points for Tier 4 loans, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. A significant portion of our Fannie Mae DUS serviced loans for which we have risk sharing are Tier 2 loans. As of September 30, 2017, we met the restricted liquidity requirement with a $42.0 million letter of credit. As of September 30, 2017, reserve requirements for the Fannie Mae DUS loan portfolio will require us to fund $27.4 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae periodically reassesses these collateral requirements and may make changes to these requirements in the future. We generate sufficient cash flow from our operations to meet these capital standards and do not expect any changes to have a material impact on our future operations; however, future changes to collateral requirements may adversely impact our available cash. We are subject to various capital requirements in connection with seller/servicer agreements that we have entered into with secondary market investors. Failure to maintain minimum capital requirements could result in our inability to originate and service loans for the respective investor and, therefore, could have a direct material effect on our consolidated financial statements. As of September 30, 2017, we met all of Fannie Mae’s quarterly capital requirements and our Fannie Mae adjusted net worth was in excess of the required net worth. We are not subject to capital requirements on a quarterly basis for Ginnie Mae or FHA, as such requirements for these investors are only required on an annual basis. As an approved designated seller/servicer under Freddie Mac’s SBL Program, we are required to post collateral equal to $5.0 million to ensure that we are able to meet certain purchase and loss obligations required by this program. At September 30, 2017, we had an outstanding letter of credit of $5.0 million in satisfaction of our requirements under this program. See Note 11 — Debt Obligations for details about the $50.0 million letter of credit agreement we entered into for our restricted cash requirements for the Fannie Mae DUS and Freddie Mac SBL Programs. We enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in Note 13 — Derivative Financial Instruments and Note 14 — Fair Value. Unfunded Commitments. In accordance with certain structured loans and investments, we have outstanding unfunded commitments of $68.1 million as of September 30, 2017 that we are obligated to fund as borrowers meet certain requirements. Specific requirements include, but are not limited to, property renovations, building construction and conversions based on criteria met by the borrower in accordance with the loan agreements. Litigation. We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation other than the following: In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the “Trust”), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc. and the Homestead Village L.L.C. family of companies (together “ESI”) (formerly Chapter 11 debtors, together the “Debtors”) that have emerged from bankruptcy. Two of the lawsuits were filed in the U.S. Bankruptcy Court for the Southern District of New York, and the third in the Supreme Court of the State of New York, New York County. There were 73 defendants in the three lawsuits, including 55 corporate and partnership entities and 18 individuals. A subsidiary of ours and certain other entities that are affiliates of ours are included as defendants. The New York State Court action has been removed to the Bankruptcy Court. Our affiliates filed a motion to dismiss the three lawsuits. The lawsuits all allege, as a factual basis and background certain facts surrounding the June 2007 leveraged buyout of ESI from affiliates of Blackstone Capital. Our subsidiary, Arbor ESH II, LLC, had a $115.0 million investment in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. The New York State Court action and one of the two federal court actions name as defendants, Arbor ESH II, LLC, ACM and ABT-ESI LLC, an entity in which we have a membership interest, among the broad group of defendants. These two actions were commenced by substantially identical complaints. The defendants are alleged in these complaints, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent. These two complaints also allege that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment (“Fiduciary Duty Claims”) and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time. We are defending these two defendants and paying the costs of such defense. On the basis of the foregoing allegations, the Trust has asserted claims under a number of common law theories, seeking the return of assets transferred by the Debtors prior to the Debtors’ bankruptcy filing. In the third action, filed in Bankruptcy Court, the same plaintiff, the Trust, has named ACM and ABT-ESI LLC, together with a number of other defendants and asserts claims, including constructive and fraudulent conveyance claims under state and federal statutes, as well as a claim under the Federal Debt Collection Procedure Act. In June 2013, the Trust filed a motion to amend the lawsuits, to, among other things, (i) consolidate the lawsuits into one lawsuit, (ii) remove 47 defendants, none of whom are related to us, from the lawsuits so that there are 26 remaining defendants, including 16 corporate and partnership entities and 10 individuals, and (iii) reduce the counts within the lawsuits from over 100 down to 17. The remaining counts in the amended complaint against our affiliates are principally state law claims for breach of fiduciary duties, waste, unlawful dividends and unjust enrichment, and claims under the Bankruptcy Code for avoidance and recovery actions, among others. The bankruptcy court granted the motion and the amended complaint has been filed. The amended complaint seeks approximately $139.0 million in the aggregate, plus interest from the date of the alleged unlawful transfers, from director designees, portions of which are also sought from our affiliates as well as from unaffiliated defendants. We have moved to dismiss the referenced actions and intend to vigorously defend against the claims asserted therein. During a status conference held in March 2014, the Court heard oral argument on the motion to dismiss and adjourned the case pending a ruling. Subsequent to that hearing, a new judge was assigned to the case and, in November 2016, the new judge entered an order directing the parties to file supplemental briefs addressing new cases decided since the last round of briefing. Oral arguments regarding the motion to dismiss were heard at a hearing held in January 2017. The Court reserved decision at that hearing. We have not made a loss accrual for this litigation because we believe that it is not probable that a loss has been incurred and an amount cannot be reasonably estimated. Due to Borrowers. Due to borrowers represents borrowers’ funds held by us to fund certain expenditures or to be released at our discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for borrowers’ loans. While retained, these balances earn interest in accordance with the specific loan terms they are associated with. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities | |
Variable Interest Entities | Note 16 — Variable Interest Entities Our involvement with VIEs primarily affects our financial performance and cash flows through amounts recorded in interest income, interest expense, provision for loan losses and through activity associated with our derivative instruments. Consolidated VIEs. We have determined that our operating partnership, ARLP, and our CLO subsidiaries, which are owned by ARLP, are VIEs. ARLP is already consolidated in our financial statements, therefore, the identification of this entity as a VIE had no impact on our consolidated financial statements. Our CLO subsidiaries invest in real estate and real estate-related securities and are financed by the issuance of CLO debt securities. We, or one of our affiliates, are named collateral manager, servicer, and special servicer for all CLO collateral assets which we believe gives us the power to direct the most significant economic activities of the entity. We also have exposure to CLO losses to the extent of our equity interests and also have rights to waterfall payments in excess of required payments to CLO bond investors. As a result of consolidation, equity interests in these CLOs have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued by the CLOs to third parties. Our operating results and cash flows include the gross amounts related to CLO assets and liabilities as opposed to our net economic interests in the CLO entities. The assets and liabilities related to these consolidated CLOs are as follows: September 30, 2017 December 31, 2016 Assets: Restricted cash $ $ Loans and investments, net Due from related party — Other assets Total assets $ $ Liabilities: Collateralized loan obligations $ $ Other liabilities Total liabilities $ $ Assets held by the CLOs are restricted and can be used only to settle obligations of the CLOs. The liabilities of the CLOs are non-recourse to us and can only be satisfied from each CLOs respective asset pool. See Note 11 — Debt Obligations for details. We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the consolidated CLOs. Unconsolidated VIEs . We determined that we are not the primary beneficiary of 20 VIEs in which we have a variable interest as of September 30, 2017 because we do not have the ability to direct the activities of the VIEs that most significantly impact each entity’s economic performance. The following is a summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, as of September 30, 2017: Type Carrying Amount (1) Loans $ B Piece bonds Agency IOs Equity investments Total $ (1) Represents the carrying amount of loans and investments before reserves. At September 30, 2017, $182.8 million of loans to VIEs had corresponding loan loss reserves of $81.6 million. See Note 4 — Loans and Investments for details. In addition, the maximum loss exposure as of September 30, 2017 would not exceed the carrying amount of our investment. These unconsolidated VIEs have exposure to real estate debt of approximately $2.07 billion at September 30, 2017. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Equity | Note 17 — Equity Preferred Stock. The Series A, B and C preferred stock may not be redeemed by us before February 2018, May 2018 and February 2019, respectively. Common Stock. In May 2017, we completed a public offering in which we sold 9,500,000 shares of our common stock for $8.05 per share, and received net proceeds of $76.2 million after deducting the underwriting discount and other offering expenses. We used $25.0 million of the proceeds to exercise our option to fully internalize our management team and terminate the existing management agreement with our Former Manager and the remaining amount was used to make investments and for general corporate purposes. As of September 30, 2017, there were 7,500,000 common shares available under an “At-The-Market” equity offering with JMP Securities LLC. As of September 30, 2017, we had $323.5 million available under our $500.0 million shelf registration statement that was declared effective by the SEC in July 2016. Accumulated Other Comprehensive Income. At September 30, 2017, accumulated other comprehensive income was $0.2 million and represents an unrealized gain related to available-for-sale securities. At December 31, 2016, accumulated other comprehensive income was $0.3 million and consisted of a $0.6 million unrealized gain related to available-for-sale securities, partially offset by $0.2 million of net unrealized losses on derivatives designated as cash flow hedges and less than $0.1 million of net deferred losses on terminated interest swaps. See Note 13 — Derivative Financial Instruments for the reclassifications out of accumulated other comprehensive income and into earnings. Noncontrolling Interest. Noncontrolling interest relates to the 21,230,769 OP Units issued to ACM to satisfy a portion of the Acquisition purchase price. The value of these OP units at the Acquisition date was $154.8 million. Each of these OP Units are paired with one share of our Special Voting Preferred Shares having a par value of $0.01 per share and is entitled to one vote each on any matter submitted for stockholder approval, which represents approximately 25.6% of the voting power of our outstanding stock at September 30, 2017. The OP Units are entitled to receive distributions if and when our Board of Directors authorizes and declares common stock distributions. The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one-for-one basis. Distributions. The following table presents dividends declared (on a per share basis) during the nine months ended September 30, 2017: Common Stock Preferred Stock Dividend (1) Declaration Date Dividend Declaration Date Series A Series B Series C August 2, 2017 $ August 2, 2017 $ $ $ May 3, 2017 $ May 3, 2017 $ $ $ March 1, 2017 $ February 3, 2017 $ $ $ (1) The dividend declared on August 2, 2017 was for June 1, 2017 through August 31, 2017, the dividend declared on May 3, 2017 was for March 1, 2017 through May 31, 2017 and the dividend declared on February 3, 2017 was for December 1, 2016 through February 28, 2017. Common Stock — On November 1, 2017, the Board of Directors declared a cash dividend of $0.19 per share of common stock. The dividend is payable on November 30, 2017 to common stockholders of record as of the close of business on November 15, 2017. Preferred Stock — On November 1, 2017, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A preferred stock; a cash dividend of $0.484375 per share of 7.75% Series B preferred stock; and a cash dividend of $0.53125 per share of 8.50% Series C preferred stock. These amounts reflect dividends from September 1, 2017 through November 30, 2017 and are payable on November 30, 2017 to preferred stockholders of record on November 15, 2017. Deferred Compensation. In March 2017, we issued 299,750 shares of restricted common stock under the 2014 Omnibus Stock Incentive Plan (the “2014 Plan”) to certain employees of ours and our Former Manager with a total grant date fair value of $2.4 million and recorded $0.4 million to employee compensation and benefits and $0.5 million to selling and administrative expense in our consolidated statements of income. One third of the shares vested as of the date of grant, one third will vest in March 2018, and the remaining third will vest in March 2019. In connection with the full integration of our management team and termination of the existing management contract, effective May 31, 2017, all stock compensation previously granted to employees that transferred from our Former Manager (non-employees prior to May 31, 2017) will be recorded to employee compensation and benefits based on the remeasured fair value on May 31, 2017 over the remaining requisite service period. In March 2017, we also issued 74,375 shares of fully vested common stock to the independent members of the Board of Directors under the 2014 Plan and recorded $0.6 million to selling and administrative expense in our consolidated statements of income. We entered into an amended and restated annual incentive agreement (the “2017 annual incentive agreement”) with our chief executive officer, effective January 1, 2017. The chief executive officer’s annual cash bonus and value of his annual long-term equity awards under the 2017 annual incentive agreement each increased 10% as a result of the Company meeting the equity capitalization growth goals in his previous incentive agreement. In addition, the chief executive officer is also eligible to receive a $3.0 million performance-based award of restricted stock annually for five years subject to meeting certain goals related to the integration of the Acquisition. Each $3.0 million award vests in full three years after the grant date and are subject to the chief executive officer’s continued employment. In August 2017, we granted our chief executive officer 357,569 shares of performance-based restricted stock as a result of the Company meeting the goals related to the integration of the Acquisition. The awards had a grant date fair value of $2.7 million and we recorded $0.1 million to employee compensation and benefits in our consolidated statements of income. All other terms of the 2017 incentive agreement are consistent with the chief executive officer’s previous incentive agreement. During the first quarter of 2017, we issued 74,830 shares of restricted common stock to our chief executive officer under his 2017 annual incentive agreement with a grant date fair value of $0.6 million and recorded $0.1 million to employee compensation and benefits in our consolidated statements of income. One quarter of the shares vested as of the date of grant and one quarter will vest on each of the first, second and third anniversaries of the date of grant. Our chief executive officer was also granted up to 448,980 performance-based restricted stock units that vest at the end of a four-year performance period based on our achievement of certain total stockholder return objectives. The restricted stock units had a grant date fair value of $1.0 million and we recorded $0.1 million to employee compensation and benefits in our consolidated statements of income. Earnings Per Share (“EPS”). Basic EPS is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights. Diluted EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method. Our common stock equivalents include the weighted average dilutive effect of performance-based restricted stock units granted to our chief executive officer, OP Units issued in connection with the Acquisition and convertible senior unsecured notes. The following tables reconcile the numerator and denominator of our basic and diluted EPS computations: Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Basic Diluted Basic Diluted Net income attributable to common stockholders (1) $ $ $ $ Net income attributable to noncontrolling interest (2) — — Net income attributable to common stockholders and nocontrolling interest $ $ $ $ Weighted average shares outstanding Dilutive effect of OP Units (2) — — Dilutive effect of restricted stock units (3) — — Weighted average shares outstanding Net income per common share (1) $ $ $ $ Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Basic Diluted Basic Diluted Net income attributable to common stockholders (1) $ $ $ $ Net income attributable to noncontrolling interest (2) — — — Net income attributable to common stockholders and nocontrolling interest $ $ $ $ Weighted average shares outstanding Dilutive effect of OP Units (2) — — — Dilutive effect of restricted stock units (3) — — Dilutive effect of convertible senior unsecurred notes (4) — — — Weighted average shares outstanding Net income per common share (1) $ $ $ $ (1) Net of preferred stock dividends. (2) We consider OP Units to be common stock equivalents as the holder has voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election. For the nine months ended September 30, 2016, the OP Units were considered anti-dilutive and excluded from diluted EPS. (3) Mr. Kaufman was granted restricted stock units in 2017, 2016 and 2015 which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives. (4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes | |
Income Taxes | Note 18 — Income Taxes As a REIT, we are generally not subject to U.S. federal income tax to the extent of our distributions to stockholders and as long as certain asset, income, distribution, ownership and administrative tests are met. To maintain our qualification as a REIT, we must annually distribute at least 90% of our REIT-taxable income to our stockholders and meet certain other requirements. We may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. If we were to fail to meet these requirements, we would be subject to U.S. federal income tax, which could have a material adverse impact on our results of operations and amounts available for distributions to our stockholders. We believe that all of the criteria to maintain our REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. The Agency Business is operated through our TRS Consolidated Group and is subject to U.S. federal, state and local income taxes. In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business. In the three and nine months ended September 30, 2017, we recorded a tax provision of $6.7 million and $16.2 million, respectively. The provision recorded in the three months ended September 30, 2017 consisted of a current provision of $7.6 million, partially offset by a deferred benefit of $0.9 million, and the provision recorded in the nine months ended September 30, 2017 consisted of a current provision of $16.2 million. In both the three and nine months ended September 30, 2016, we recorded a tax provision of $0.3 million related to state income tax liability. The significant increase in the tax provision in the 2017 periods compared to the same periods in 2016 is due to the utilization of available net operating loss carryforwards during 2016 as well as the growth of our Agency Business during 2017. Current and deferred taxes are recorded on the portion of earnings (losses) recognized by us with respect to our interest in the TRS’s. Deferred income tax assets and liabilities are calculated based on temporary differences between our U.S. GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets. |
Agreements and Transactions wit
Agreements and Transactions with Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Agreements and Transactions with Related Parties | |
Agreements and Transactions with Related Parties | Note 19 — Agreements and Transactions with Related Parties Management Agreement. Prior to May 31, 2017, we, ARLP and Arbor Realty SR, Inc. had a management agreement with ACM, pursuant to which ACM provided us with a variety of professional and advisory services vital to our operations, including underwriting, accounting and treasury, compliance, marketing, information technology and human resources. Pursuant to the terms of the management agreement, we reimbursed ACM for its actual costs incurred in connection with managing our business through a base management fee, and, under certain circumstances, an annual incentive fee. In May 2017, we exercised our option to fully internalize our management team and terminate the existing management agreement. See Note 3 — Acquisition of Our Former Manager’s Agency Platform for details. The following table sets forth our base management fees and incentive fees incurred prior to the full internalization of our management team and termination of the existing management agreement: Three Months Ended Nine Months Ended September 30, September 30, Management Fees: 2017 2016 2017 2016 Base $ — $ $ $ Incentive — — — — Total management fee $ — $ $ $ We have entered into a shared services agreement with our Former Manager where we will provide limited support services to our Former Manager and our Former Manager will reimburse us for the costs of performing such services. During the three and nine months ended September 30, 2017, we have incurred $0.3 million and $0.4 million, respectively, of costs for services provided to our Former Manager which are included in due from related party on the consolidated balance sheet. Other Related Party Transactions. Due from related party was $12.6 million and $1.5 million at September 30, 2017 and December 31, 2016, respectively, and consisted primarily of payoffs to be remitted and escrows held by our affiliated servicing operations related to real estate transactions. Due to related party was $6.0 million at December 31, 2016 and consisted primarily of base management fees due to our Former Manager that we remitted in the following quarter. Related party financing was $50.0 million at both September 30, 2017 and December 31, 2016 and represents a preferred equity interest financing agreement we entered into with ACM to finance a portion of the Acquisition purchase price. We incurred interest expense related to this financing of $1.0 million and $2.9 million in the three and nine months ended September 30, 2017, respectively, and $0.8 million during both the three and nine months ended September 30, 2016. See Note 11 — Debt Obligations for details. In January 2017, we modified a $5.0 million preferred equity investment, increasing our balance to $15.0 million, with a commitment to fund an additional $5.0 million. This investment has a fixed interest rate of 11% and matures in January 2020. In July 2017, we entered into an agreement with a consortium of investors consisting of certain of our officers, including Mr. Kaufman, which admitted them as a member to fund the remaining $5.0 million preferred equity investment, which is generally subordinate to our investment. Interest income recorded from our investment totaled $0.2 million and $0.5 million for the three and nine months ended September 30, 2017, respectively. In July 2017, we originated a $36.0 million bridge loan on a multifamily property owned by a consortium of investors. The consortium of investors includes certain of our officers, including Mr. Kaufman, who own an interest of approximately 41% in the borrowing entity. The loan has an interest rate of one-month LIBOR plus 4.5% with a LIBOR floor of 1% and matures in July 2020. Interest income recorded from this loan totaled $0.4 million for both the three and nine months ended September 30, 2017. In May 2017, we originated a $46.9 million Fannie Mae loan on a multifamily property owned by a consortium of investors, including an immediate family member of Mr. Kaufman, who owns an interest of approximately 17.2% in the borrowing entity. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 40% of the original UPB. In March 2017, a consortium of investors, including Mr. Kaufman and our Former Manager, invested $2.0 million for a 26.1% ownership interest in two portfolios of multifamily properties which has two bridge loans totaling $14.8 million originated by us in November 2016. The outstanding loans have an interest rate of LIBOR plus 5.25% with a LIBOR floor of 0.5% and mature in November 2018. Interest income recorded from these loans totaled $0.3 million and $0.8 million for the three and nine months ended September 30, 2017, respectively. In January 2017, Ginkgo Investment Company LLC (“Ginkgo”), of which one of our directors is a 33% managing member, purchased a multifamily apartment complex which assumed an existing $8.3 million Fannie Mae loan that we service. Ginkgo subsequently sold the majority of its interest in this property and owned a 3.6% interest at September 30, 2017. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 20% of the original UPB. Upon the sale, we received a 1% loan assumption fee which was governed by existing loan agreements that were in place when the loan was originated in 2015, prior to such purchase. In September 2016, we originated $48.0 million of bridge loans on six multifamily properties owned by a consortium of investors consisting of certain of our officers, including Mr. Kaufman and our Former Manager, who together own interests ranging from approximately 7.8% to 9% in the borrowing entities. The loans have an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and mature in September 2019. In addition, in August 2017, a $6.8 million loan on one of the properties paid off in full. Interest income recorded from these loans totaled $0.7 million and $2.1 million for the three and nine months ended September 30, 2017, respectively, and $0.1 million for both the three and nine months ended September 30, 2016. In January 2016, we originated a $12.7 million bridge loan and a $5.2 million preferred equity investment on two multifamily properties owned by a consortium of investors consisting of certain of our officers, including Mr. Kaufman, who together own an interest of approximately 50% in the borrowing entity. The loan has an interest rate of one-month LIBOR plus 4.5% with a LIBOR floor of 0.25% and matures in January 2019. The preferred equity investment has a fixed interest rate of 10% and matures in November 2017. Interest income recorded from these loans totaled $0.3 million for both the three months ended September 30, 2017 and 2016 and $0.9 million for both the nine months ended September 30, 2017 and 2016. In January 2016, we originated a $19.0 million bridge loan on a multifamily property owned by a consortium of investors consisting of certain of our officers, including Mr. Kaufman, who together own an interest of approximately 7.5% in the borrowing entity. The loan has an interest rate of one-month LIBOR plus 4.5% with a LIBOR floor of 0.25% and matures in January 2019. Interest income recorded from this loan totaled $0.3 million and $0.8 million for the three and nine months ended September 30, 2017, respectively, and $0.3 million and $0.7 million for the three and nine months ended September 30, 2016, respectively. In 2015, we originated a $7.1 million bridge loan on a multifamily property owned by a consortium of investors consisting of certain of our officers, including Mr. Kaufman, who together own an interest of approximately 7.5% in the borrowing entity. In August 2017, this loan paid off in full. The loan had an interest rate of LIBOR plus 4.5%, with a LIBOR floor of 0.25%. Interest income recorded from this loan totaled $0.1 million for both the three months ended September 30, 2017 and 2016 and $0.3 million for both the nine months ended September 30, 2017 and 2016. In 2015, we originated two bridge loans totaling $16.7 million secured by multifamily properties acquired by a third party investor. The properties had been owned and were sold by a consortium of investors, consisting of certain of our officers, including Mr. Kaufman, certain other related parties and certain unaffiliated persons. The loans have an interest rate of LIBOR plus 5% with a LIBOR floor of 0.25% and were extended as of right to October 2018. Interest income recorded from these loans totaled $0.3 million for both the three months ended September 30, 2017 and 2016 and $0.8 million for both the nine months ended September 30, 2017 and 2016. In 2015, we originated a $3.0 million mezzanine loan on a multifamily property that has a $47.0 million first mortgage initially originated by our Former Manager. The loan bears interest at a fixed rate of 12.5% and matures in April 2025. Interest income recorded from this loan totaled $0.1 million for both the three months ended September 30, 2017 and 2016 and $0.3 million for both the nine months ended September 30, 2017 and 2016. In 2015, we originated a $6.3 million bridge loan on a multifamily property owned by a consortium of investors consisting of certain of our officers, including Mr. Kaufman and our Former Manager, who together own an interest of approximately 90% in the borrowing entity. The loan had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and was to mature in April 2018. The loan was repaid in full in the fourth quarter of 2016. Interest income recorded from this loan totaled $0.1 million and $0.2 million for the three and nine months ended September 30, 2016, respectively. In 2015, we modified an $18.0 million preferred equity investment, increasing our balance to $23.0 million with a fixed interest rate of 10% and a maturity date in February 2018. To accomplish the modification, we formed a joint venture with a consortium of investors consisting of certain of our officers, including Mr. Kaufman, and other related parties, to invest an additional $2.0 million preferred equity investment that is generally subordinate to ours. During the second quarter of 2016, the preferred equity investment was repaid in full and we received proceeds of $1.0 million, which was allocated to the consortium of investors. Interest income recorded from this investment totaled $1.0 million for the nine months ended September 30, 2016. In 2015, we invested $9.6 million for 50% of our Former Manager’s indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business. As a result of this transaction, we had an initial indirect interest of 22.5% in this entity. Since the initial investment, we invested an additional $16.1 million through this joint venture in non-qualified residential mortgages purchased from the mortgage banking business’s origination platform (which $0.6 million was funded in the nine months ended September 30, 2017) and we received cash distributions totaling $14.0 million (that were classified as returns of capital) as a result of the joint venture selling most of its mortgage assets (which $0.9 million was received in the nine months ended September 30, 2017). We recorded a loss from these investments of $1.2 million and $1.8 million during the three and nine months ended September 30, 2017, respectively, and income of $4.2 million and $8.9 million during the three and nine months ended September 30, 2016, respectively. In 2014, we invested $0.1 million for a 5% interest in a joint venture that owns two multifamily properties. The joint venture is comprised of a consortium of investors consisting of certain of our officers, including Mr. Kaufman, and other related parties, who together own an interest of 95%. In 2014, we originated two bridge loans totaling $5.0 million to the joint venture with an interest rate of 5.5% over one-month LIBOR and a maturity date extended as of right to September 2016. During the third quarter of 2016, one of the loans was repaid in full and we received proceeds of $3.3 million, which was allocated to the consortium of investors. The remaining loan was extended to December 2017. Interest income recorded from these loans was less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2017, respectively, and $0.1 million and $0.2 million for the three and nine months ended September 30, 2016, respectively. In 2014, we originated a $30.4 million bridge loan for an office property owned by a consortium of investors, including Mr. Kaufman and his affiliates, who together own an interest of approximately 24% in the borrowing entity. The loan matured in August 2017 and was refinanced with a $43.2 million bridge loan that has an interest rate of 4% over one-month LIBOR with a LIBOR floor of 1.23% and an August 2020 maturity date. We also originated a $4.6 million mezzanine loan in January 2016 to this entity that had a fixed interest rate of 12% and paid off at maturity in August 2017. Interest income recorded from these loans totaled $0.8 million and $2.4 million for the three and nine months ended September 30, 2017, respectively, and $0.9 million and $2.6 million for the three and nine months ended September 30, 2016, respectively. In 2014, our Former Manager purchased a property subject to two loans originated by us, a first mortgage of $14.6 million and a second mortgage of $5.1 million, both with maturity dates of April 2016 and an interest rate of 4.8% over LIBOR. In the first quarter of 2016, the $5.1 million second mortgage was repaid in full by our Former Manager and the $14.6 million first mortgage was extended to March 2018. Interest income recorded from these loans totaled $0.2 million and $0.7 million for the three and nine months ended September 30, 2017, respectively, and $0.2 million and $0.7 million for the three and nine months ended September 30, 2016, respectively. In 2011, we restructured a preferred equity investment on the Lexford Portfolio (“Lexford”), which is a portfolio of multifamily assets. In connection with this restructuring, we, along with an executive officer of ours and a consortium of independent outside investors, made an additional preferred and direct equity investment. Both of our preferred equity investments and our direct equity investment were repaid in full in the third quarter of 2015. As a result of the direct equity investment, we received distributions totaling $0.7 million and $2.0 million during the three and nine months ended September 30, 2017, respectively, and $0.7 million and $2.1 million during the three and nine months ended September 30, 2016, respectively, which were recorded as income from equity affiliates. In addition, under the terms of the restructuring, Lexford’s first mortgage lender required a change of property manager for the underlying assets. The new management company is owned primarily by a consortium of affiliated investors including Mr. Kaufman and an executive officer of ours, and has a contract with the new entity for 7.5 years and is entitled to 4.75% of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or refinancing of the debt should the management company remain engaged by the new entity at the time of such capital event. We have provided limited (“bad boy”) guarantees for certain debt controlled by Lexford. The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us. At September 30, 2017, this debt had an aggregate outstanding balance of $845.8 million and is scheduled to mature between 2017 and 2025. Several of our executives, including our chief financial officer, general counsel and Mr. Kaufman, our chairman, chief executive officer and president, hold similar positions for our Former Manager. Mr. Kaufman and his affiliated entities (“the Kaufman Entities”) together beneficially own approximately 70% of the outstanding membership interests of our Former Manager and certain of our employees and directors also hold an ownership interest in our Former Manager. Furthermore, one of our directors serves as the trustee of one of the Kaufman Entities that holds a majority of the outstanding membership interests in our Former Manager and co-trustee of another Kaufman Entity that owns an equity interest in our Former Manager. Our Former Manager holds 5,349,053 shares of our common stock, and upon the closing of the Acquisition in July 2016, was issued 21,230,769 OP Units, each paired with one share of our Special Voting Preferred Shares, which, in total, represents approximately 32% of the voting power of our outstanding stock. Our Board of Directors approved a resolution under our charter allowing Mr. Kaufman and our Former Manager, (which Mr. Kaufman has a controlling equity interest in), to own more than the 5% ownership interest limit of our common stock as stated in our amended charter. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Segment Information | Note 20 — Segment Information As a result of the Acquisition, we evaluate our results from operations from two business segments — our Structured Business and our Agency Business. See Note 1 — Description of Business for a description of each segment. The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables. Specifically identifiable costs are recorded directly to each business segment. For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment). Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses, management fees (through May 31, 2017 — effective date of the full internalization of our management team and termination of the existing management agreement with our Former Manager) and stock-based compensation. The Agency Business information for the three and nine months ended September 30, 2016 in the following tables includes only the operating results of the Acquisition from July 14, 2016 (Acquisition closing date) to September 30, 2016. Three Months Ended September 30, 2017 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Property operating expenses — — Depreciation and amortization — Provision for loss sharing (net of recoveries) — ) — ) Provision for loan losses (net of recoveries) — — Total other expenses — Income before income from equity affiliates and provision for income taxes ) Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Three Months Ended September 30, 2016 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Acquisition costs — — Property operating expenses — — Depreciation and amortization — Provision for loss sharing — — Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses Income before income from equity affiliates and provision for income taxes ) Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Nine Months Ended September 30, 2017 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net ) — ) Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Property operating expenses — — Depreciation and amortization — Impairment loss on real estate owned — — Provision for loss sharing (net of recoveries) — ) — ) Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses — Income before gain on extinguishment of debt, income from equity affiliates and provision for income taxes ) Gain on extinguishment of debt — — Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Nine Months Ended September 30, 2016 Structured Agency Other / Consolidated Interest income $ $ $ — $ Other interest income, net — — Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Acquisition costs — — Property operating expenses — — Depreciation and amortization — Impairment loss on real estate owned — — Provision for loss sharing — — Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses Income before gain on sale of real estate, income from equity affiliates and provision for income taxes ) Gain on sale of real estate — — Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ (1) Includes certain corporate expenses not allocated to the two reportable segments, such as financing costs associated with the Acquisition, as well as income allocated to the noncontrolling interest holder. September 30, 2017 Structured Business Agency Business Other / Eliminations Consolidated Assets: Cash and cash equivalents $ $ $ — $ Restricted cash — Loans and investments, net — — Loans held-for-sale, net — — Capitalized mortgage servicing rights, net — — Securities held to maturity — — Investments in equity affiliates — — Goodwill and other intangible assets — Other assets — Total assets $ $ $ — $ Liabilities: Debt obligations $ $ $ $ Allowance for loss-sharing obligations — — Other liabilities Total liabilities $ $ $ $ December 31, 2016 Structured Business Agency Business Other / Eliminations Consolidated Assets: Cash and cash equivalents $ $ $ — $ Restricted cash — Loans and investments, net — — Loans held-for-sale, net — — Capitalized mortgage servicing rights, net — — Investments in equity affiliates — — Goodwill and other intangible assets — — Other assets — Total assets $ $ $ — $ Liabilities: Debt obligations $ $ $ $ Allowance for loss-sharing obligations — — Other liabilities Total liabilities $ $ $ $ Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Origination Data: Structured Business New loan originations $ $ $ $ Loan payoffs / paydowns Agency Business Origination Volumes by Investor: Fannie Mae $ $ $ $ Freddie Mac FHA CMBS/Conduit — — — Total $ $ $ $ Total loan commitment volume $ $ $ $ Loan Sales Data: Agency Business Fannie Mae $ $ $ $ Freddie Mac FHA CMBS/Conduit — — — Total $ $ * $ $ * Sales margin (fee-based services as a % of loan sales) % % % % MSR rate (MSR income as a % of loan commitments) % % % % * Loan sales were $970.0 million for the three and nine months ended September 30, 2016, including loans that were acquired as part of the Acquisition. September 30, 2017 Key Servicing Metrics for Agency Business: UPB of Servicing Wtd. Avg. Servicing Wtd. Avg. Life of Fannie Mae $ Freddie Mac FHA Total $ December 31, 2016 Fannie Mae $ Freddie Mac FHA Total $ |
Basis of Presentation and Sig29
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2016 Annual Report. During the third quarter of 2017, we determined that the purchase price allocation related to the Acquisition in 2016 incorrectly omitted a deferred tax liability related to the book-to-tax difference in the value assigned to certain assets acquired. The impact of this omission to our 2016 consolidated financial statements was a $4.9 million understatement of goodwill and a corresponding understatement of other liabilities in our consolidated balance sheets. This omission had no impact on our results of operations and was corrected in the third quarter of 2017, resulting in a $4.9 million increase to goodwill and a corresponding increase in other liabilities. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. See Note 16 — Variable Interest Entities for information about our VIEs. All significant intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Description Adoption Date Effect on Financial Statements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-17, Consolidation: Interests Held through Related Parties That Are under Common Control. This ASU alters how a decision maker needs to consider indirect interests in a VIE held through an entity under common control and requires consideration of only an entity’s proportionate indirect interest in a VIE held through a common control party. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU is intended to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. This ASU, among other things, eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods the investment was held. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements The following table is not intended to represent all recently issued accounting pronouncements that are not yet effective and which have not yet been adopted by us. This table should be read in conjunction with the recently issued accounting pronouncements section included in our 2016 Annual Report. Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. This ASU eliminates step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value with the carrying amount of goodwill. First quarter of 2020 with early adoption permitted beginning in the first quarter of 2017. We are evaluating the timing of our adoption and the impact this guidance may have on our consolidated financial statements. Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. This ASU provides a more robust framework to use in determining when a set of assets and activities constitutes a business. It also provides more consistency in applying the guidance, reduces the costs of application and makes the definition of a business more operable. First quarter of 2018. The potential impact of this new guidance will be assessed for future acquisitions, but it is not expected to have a material impact on our consolidated financial statements. Since 2014, the FASB has issued several amendments to its guidance on revenue recognition. The amended guidance, among other things, introduces a new framework for a single comprehensive model that can be used when accounting for revenue and supersedes most current revenue recognition guidance, including that which pertains to specific industries. The core principle states that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services. It also requires expanded quantitative and qualitative disclosures that will enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Most revenue associated with financial instruments, including interest and loan origination fees, along with gains and losses on investment securities, derivatives and sales of financial instruments are excluded from the scope of the guidance. First quarter of 2018 and permits the use of either the full retrospective or modified retrospective method. We have evaluated the new standard and determined that substantially all of our revenue, including interest income, loan origination fees, servicing income and gains on sales of loans and investment securities, are not impacted. This standard may impact the timing of gains on certain sales of real estate, however, we have determined that this standard will not materially impact our total revenues or footnote disclosures. We will adopt this standard in the first quarter of 2018 using the modified retrospective method for any contracts that are not complete as of the adoption date. |
Basis of Presentation and Sig30
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation and Significant Accounting Policies | |
Schedules of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Description Adoption Date Effect on Financial Statements In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-17, Consolidation: Interests Held through Related Parties That Are under Common Control. This ASU alters how a decision maker needs to consider indirect interests in a VIE held through an entity under common control and requires consideration of only an entity’s proportionate indirect interest in a VIE held through a common control party. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This ASU is intended to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. This ASU, among other things, eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods the investment was held. First quarter of 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. This ASU eliminates step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value with the carrying amount of goodwill. First quarter of 2020 with early adoption permitted beginning in the first quarter of 2017. We are evaluating the timing of our adoption and the impact this guidance may have on our consolidated financial statements. Description Effective Date Effect on Financial Statements In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. This ASU provides a more robust framework to use in determining when a set of assets and activities constitutes a business. It also provides more consistency in applying the guidance, reduces the costs of application and makes the definition of a business more operable. First quarter of 2018. The potential impact of this new guidance will be assessed for future acquisitions, but it is not expected to have a material impact on our consolidated financial statements. Since 2014, the FASB has issued several amendments to its guidance on revenue recognition. The amended guidance, among other things, introduces a new framework for a single comprehensive model that can be used when accounting for revenue and supersedes most current revenue recognition guidance, including that which pertains to specific industries. The core principle states that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services. It also requires expanded quantitative and qualitative disclosures that will enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Most revenue associated with financial instruments, including interest and loan origination fees, along with gains and losses on investment securities, derivatives and sales of financial instruments are excluded from the scope of the guidance. First quarter of 2018 and permits the use of either the full retrospective or modified retrospective method. We have evaluated the new standard and determined that substantially all of our revenue, including interest income, loan origination fees, servicing income and gains on sales of loans and investment securities, are not impacted. This standard may impact the timing of gains on certain sales of real estate, however, we have determined that this standard will not materially impact our total revenues or footnote disclosures. We will adopt this standard in the first quarter of 2018 using the modified retrospective method for any contracts that are not complete as of the adoption date. |
Loans and Investments (Tables)
Loans and Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Loans and Investments | |
Schedule of composition of structured loan and investment portfolio | September 30, 2017 Percent of Total Loan Count Wtd. Avg. Pay Rate (1) Wtd. Avg. Remaining Months to Maturity Wtd. Avg. First Dollar LTV Ratio (2) Wtd. Avg. Last Dollar LTV Ratio (3) Bridge loans $ % % % % Preferred equity investments % % % % Mezzanine loans % % % % Junior participation loan (4) % — — % % % % % % Allowance for loan losses ) Unearned revenue ) Loans and investments, net $ December 31, 2016 Bridge loans $ % % % % Preferred equity investments % % % % Mezzanine loans % % % % Junior participation loans % % % % % % % % Allowance for loan losses ) Unearned revenue ) Loans and investments, net $ (1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate that is required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table. (2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position. (3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss. (4) This loan is currently past its maturity and is fully reserved. |
Summary of the loan portfolio's weighted average internal risk ratings and LTV ratios by asset class | September 30, 2017 Asset Class Unpaid Principal Balance Percentage of Portfolio Wtd. Avg. Internal Risk Rating Wtd. Avg. First Dollar LTV Ratio Wtd. Avg. Last Dollar LTV Ratio Multifamily $ % pass/watch % % Land % substandard % % Commercial % pass % % Office % pass/watch % % Hotel % special mention % % Retail % pass/watch % % Healthcare <1 % special mention % % Total $ % pass/watch % % December 31, 2016 Multifamily $ % special mention % % Land % substandard % % Commercial <1 % special mention % % Office % pass/watch % % Hotel % special mention % % Retail <1 % special mention % % Healthcare <1 % special mention % % Total $ % special mention % % |
Summary of the changes in the allowance for loan losses | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Allowance at beginning of period $ $ $ $ Provision for loan losses — Charge-offs — — — ) Recoveries of reserves — ) ) ) Allowance at end of period $ $ $ $ |
Summary of the company's impaired loans by asset class | September 30, 2017 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Asset Class Unpaid Carrying Value (1) Allowance for Average Recorded Interest Income Average Recorded Interest Income Land $ $ $ $ $ — $ $ — Hotel — Office Commercial — — Multifamily — — — — — Total $ $ $ $ $ $ $ December 31, 2016 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Land $ $ $ $ $ — $ $ — Hotel Office Commercial — — Multifamily Total $ $ $ $ $ $ $ (1) Represents the UPB of six and eight impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2017 and December 31, 2016, respectively. (2) Represents an average of the beginning and ending UPB of each asset class. |
Summary of the company's non-performing loans by asset class | September 30, 2017 December 31, 2016 Asset Class Carrying Value Less Than 90 Greater Than Carrying Less Than 90 Greater Than Hotel $ $ — $ $ — $ — $ — Office — — Multifamily — — Commercial — — Retail — — — — Total $ $ — $ $ $ — $ |
Summary of loan modifications, refinancings and/or extensions by asset class that the entity considered to be troubled debt restructurings by asset class | Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Asset Class Number Original Original Modified Modified Number Original Original Modified Modified Hotel — $ — — $ — — $ % $ % Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Multifamily $ % $ % $ % $ % Office % % % % $ % $ % $ % $ % |
Loans Held-for-Sale, Net (Table
Loans Held-for-Sale, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Loans Held-for-Sale, Net | |
Summary of loans held-for-sale, net | September 30, 2017 December 31, 2016 Fannie Mae $ $ Freddie Mac FHA Fair value of future MSR Unearned discount ) ) Loans held-for-sale, net $ $ |
Capitalized Mortgage Servicin33
Capitalized Mortgage Servicing Rights (Tables) - MSRs | 9 Months Ended |
Sep. 30, 2017 | |
Capitalized Mortgage Servicing Rights | |
Summary of capitalized MSR activity | Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Acquired Originated Total Acquired Originated Total Balance at beginning of period $ $ $ $ $ $ Additions — — Amortization ) ) ) ) ) ) Write-offs ) ) ) ) ) ) Balance at end of period $ $ $ $ $ $ Three and Nine Months Ended September 30, 2016 Balance at beginning of period $ — $ — $ — Additions Amortization ) ) ) Write-offs ) — ) Balance at end of period $ $ $ |
Schedule of expected amortization of capitalized MSRs recorded | Year Amortization 2017 (three months ended 12/31/2017) $ 2018 2019 2020 2021 2022 Thereafter Total $ |
Mortgage Servicing (Tables)
Mortgage Servicing (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
MSRs | |
Mortgage Servicing | |
Schedule of product and geographic concentrations in servicing revenue | September 30, 2017 Product Concentrations Geographic Concentrations Percent of Percent of Product UPB Total State Total Fannie Mae $ % Texas % Freddie Mac % North Carolina % FHA % California % Total $ % New York % Georgia % Florida % Other (1) % Total % December 31, 2016 Product Concentrations Geographic Concentrations Percent of Percent of Product UPB Total State Total Fannie Mae $ % Texas % Freddie Mac % North Carolina % FHA % California % Total $ % New York % Georgia % Other (1) % Total % (1) No other individual state represented 5% or more of the total. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Securities | |
Summary of the equity securities classified as available-for-sale | September 30, 2017 Amortized Cummulative Carrying Value / 2,939,465 common shares of CV Holdings, Inc. $ $ $ December 31, 2016 2,939,465 common shares of CV Holdings, Inc. $ $ $ |
Summary of Agency IOs activity | Three Months Ended Nine Months Ended Balance at beginning of period $ $ Changes in fair value ) ) Balance at end of period $ $ Three and Nine Months Balance at beginning of period $ — Additions from the Acquisition Changes in fair value ) Balance at end of period $ |
Summary of the held-to-maturity securities | The following is a summary of the held-to-maturity securities we held at September 30, 2017: Face Value Carrying Value Unrealized Estimated Fair B Piece bonds $ $ $ $ |
Investments in Equity Affilia36
Investments in Equity Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments in Equity Affiliates | |
Summary of the company's investments in equity affiliates | Investments in Equity Affiliates at UPB of Loans to Equity Affiliates September 30, 2017 December 31, 2016 September 30, 2017 Arbor Residential Investor LLC $ $ $ — West Shore Café Lightstone Value Plus REIT L.P. — JT Prime — East River Portfolio Lexford Portfolio — Issuers of Junior Subordinated Notes — — Total $ $ $ |
Summary of statements of operations for the Company's investments in ARI | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Statements of Operations: Total revenues $ $ $ $ Total expenses Net (loss) income $ ) $ $ ) $ Arbor’s share of (loss) income $ ) $ $ ) $ |
Real Estate Owned and Held-Fo37
Real Estate Owned and Held-For-Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Owned and Held-For-Sale | |
Schedule of real estate owned | September 30, 2017 December 31, 2016 Hotel Property Office Total Hotel Property Office Total Land $ $ $ $ $ $ Building and intangible assets Less: Impairment loss ) — ) ) — ) Less: Accumulated depreciation and amortization ) ) ) ) ) ) Real estate owned, net $ $ $ $ $ $ |
Schedule of results of operations for properties classified as held-for-sale | Nine Months Ended Revenue: Property operating income $ Expenses: Property operating expenses Depreciation Net income $ |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Obligations | |
Schedule of principal balance, unamortized discount and net carrying value of the liability and equity components | Liability Equity Component Component Period Principal Unamortized Debt Unamortized Deferred Net Carrying Net Carrying September 30, 2017 $ $ $ $ $ December 31, 2016 $ $ $ $ $ |
Credit Facilities and Repurchase Agreements | |
Debt Obligations | |
Schedule of borrowings | September 30, 2017 December 31, 2016 Current Extended Note Rate Debt Carrying Collateral Wtd. Debt Carrying Collateral Wtd. Avg. Structured Business $150 million repurchase facility Oct. 2018 Oct. 2019 L + 2.25% to 3.50% $ $ % $ $ % $100 million repurchase facility June 2019 N/A L + 2.00% % % $75 million credit facility Dec. 2017 N/A L + 2.125% to 2.50% % % $75 million credit facility June 2018 N/A L + 2.00% % % $50 million credit facility Feb. 2018 Feb. 2019 L + 2.00% % % $50 million credit facility Sept. 2019 Sept. 2021 L + 2.50% to 3.25% % % $25.5 million credit facility Oct. 2019 N/A L + 2.50% % — — — $10 million credit facility Mar. 2018 N/A L + 2.50% — % — — — $3 million master security agreement Oct. 2020 N/A 2.96% to 3.42% — % — % Total $ $ % $ $ % Agency Business $500 million ASAP agreement N/A N/A L + 1.05% $ $ % $ $ % $150 million credit facility (2) Jan. 2018 N/A L + 1.40% % % $150 million credit facility (3) July 2018 N/A L + 1.35% % % $100 million credit facility (4) June 2018 N/A L + 1.30% % % $100 million repurchase facility Aug. 2018 N/A L + 1.35% % — — — Total $ $ % $ $ % Consolidated total $ $ % $ $ % (1) The debt carrying value for the Structured Business at September 30, 2017 and December 31, 2016 was net of unamortized deferred finance costs of $1.6 million and $1.9 million, respectively. The debt carrying value for the Agency Business at both September 30, 2017 and December 31, 2016 was net of unamortized deferred finance costs of $0.3 million. (2) The committed amount under the facility was temporarily increased to $200.0 million, which expired in April 2017, and again to $225.0 million, which expired in August 2017. (3) The committed amount under the facility was temporarily increased to $350.0 million, which expired in February 2017. (4) The committed amount under the facility was temporarily increased to $250.0 million, which expires in January 2018. |
CLOs | |
Debt Obligations | |
Schedule of borrowings | Collateral (3) Debt Loans Cash September 30, 2017 Face Value Carrying Value Wtd. Avg. Unpaid Carrying Value Restricted CLO VIII $ $ % $ $ $ CLO VII % CLO VI % CLO V % Total CLOs $ $ % $ $ $ December 31, 2016 Face Value Carrying Value Wtd. Avg. Unpaid Carrying Value Restricted CLO VI $ $ % $ $ $ CLO V % CLO IV % Total CLOs $ $ % $ $ $ (1) Debt carrying value is net of $13.6 million and $8.6 million of deferred financing fees at September 30, 2017 and December 31, 2016, respectively. (2) At September 30, 2017 and December 31, 2016, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 3.88% and 3.71%, respectively. (3) As of September 30, 2017 and December 31, 2016, there was no collateral at risk of default or deemed to be a “credit risk” as defined by the CLO indenture. (4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs. Does not include restricted cash related to interest payments, delayed fundings and expenses. |
Collateralized Debt Obligations and Collateralized Loan Obligations | |
Debt Obligations | |
Summary of the company's CLO compliance tests as of the most recent determination dates | A summary of our CLO compliance tests as of the most recent determination dates in October 2017 is as follows: Cash Flow Triggers CLO V CLO VI CLO VII CLO VIII Overcollateralization (1) Current 130.72% 129.87% 129.03% 129.03% Limit 129.72% 128.87% 128.03% 128.03% Pass / Fail Pass Pass Pass Pass Interest Coverage (2) Current 211.97% 240.15% 287.79% 360.90% Limit 120.00% 120.00% 120.00% 120.00% Pass / Fail Pass Pass Pass Pass (1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g. CCC-) as defined in each CLO vehicle. (2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us. |
Summary of the Company's CLO overcollateralization ratios | Determination (1) CLO V CLO VI CLO VII CLO VIII October 2017 % % % % July 2017 % % % — April 2017 % % — — January 2017 % % — — October 2016 % % — — (1) The table above represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented. |
Allowance for Loss-Sharing Ob39
Allowance for Loss-Sharing Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Allowance for Loss-Sharing Obligations | |
Summary of allowance for loss-sharing obligations related to Fannie Mae DUS program | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Beginning balance $ $ — $ $ — Allowance for loss-sharing obligations assumed in the Acquisition — — Provisions for loss sharing (net of recoveries) ) ) Charge-offs, net ) ) ) ) Ending balance $ $ $ $ |
Derivative Financial Instrume40
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of the effect of the company's qualifying derivative financial instruments on the statements of income | The following table presents the effect of our qualifying derivative financial instruments on the statements of income (dollars in thousands): Loss Recognized In Other Loss Reclassified from Accumulated Derivative 2017 2016 2017 2016 Interest Rate Swaps/Cap $ — $ $ ) $ ) |
Agency Business | |
Schedule of non-qualifying derivative financial instruments | September 30, 2017 Fair Value Derivative Count Notional Value Balance Sheet Derivative Derivative Rate Lock Commitments 7 $ Other Assets/ Other Liabilities $ $ ) Forward Sale Commitments 81 Other Assets/ Other Liabilities ) $ $ $ ) December 31, 2016 Rate Lock Commitments 12 $ Other Assets/ Other Liabilities $ $ ) Forward Sale Commitments 105 Other Assets/ Other Liabilities ) $ $ $ ) |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value | |
Summary of the principal amounts, carrying values and the estimated fair values of the Company's financial instruments | September 30, 2017 December 31, 2016 Principal / Carrying Value Estimated Principal / Carrying Value Estimated Financial assets: Loans and investments, net $ $ $ $ $ $ Loans held-for-sale, net Capitalized mortgage servicing rights, net n/a n/a Available-for-sale securities Securities held-to-maturity, net — — — Derivative financial instuments Financial liabilities: Credit and repurchase facilities $ $ $ $ $ $ Collateralized loan obligations Senior unsecured notes Convertible senior unsecured notes, net Junior subordinated notes Related party financing Derivative financial instruments |
Schedule of certain financial assets and financial liabilities measured at fair value on a recurring basis | The fair value of these financial assets and liabilities was determined using the following input levels as of September 30, 2017: Carrying Fair Value Measurements Using Fair Value Fair Value Level 1 Level 2 Level 3 Financial assets: Available-for-sale securities $ $ $ $ — $ Derivative financial instruments — Financial liabilities: Derivative financial instruments $ $ $ — $ $ — |
Schedule of certain financial assets and financial liabilities measured at fair value on a nonrecurring basis | The fair values of these financial and non-financial assets were determined using the following input levels as of September 30, 2017: Net Carrying Fair Value Measurements Using Fair Value Fair Value Level 1 Level 2 Level 3 Financial assets: Impaired loans, net (1) $ $ $ — $ — $ Non-financial assets: Long-lived assets (2) $ $ $ — $ — $ (1) We had an allowance for loan losses of $83.3 million relating to six loans with an aggregate carrying value, before loan loss reserves, of $184.5 million at September 30, 2017. (2) During the second quarter of 2016, we determined that a real estate owned hotel property exhibited indicators of impairment and an impairment analysis was performed, which resulted in an impairment loss of $11.2 million. During the first half of 2017, we received additional market analyses which resulted in a further impairment loss of $2.7 million. |
Schedule of quantitative information about Level 3 fair value measurements | Quantitative information about Level 3 fair value measurements at September 30, 2017 were as follows: Valuation Fair Value Techniques Significant Unobservable Inputs Financial assets: Impaired loans (1): Discount rate Office $ Discounted cash flows Capitalization rate Revenue growth rate Discount rate Land Discounted cash flows Capitalization rate Revenue growth rate Discount rate Hotel Discounted cash flows Capitalization rate Revenue growth rate Derivative financial instruments: Rate lock commitments Discounted cash flows W/A discount rate Non-financial assets: Long-lived assets: Discount rate Hotel Discounted cash flows Capitalization rate Revenue growth rate Hold period 3 years (1) Includes all impaired loans regardless of the period in which a loan loss provision was recorded. |
Schedule of roll forward of Level 3 derivative instruments | Fair Value Measurements Using Significant Unobservable Inputs Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Derivative assets and liabilities, net Balance at beginning of period $ $ — $ $ — Additions from the Acquisition — — Settlements ) ) ) ) Realized gains recorded in earnings Unrealized gains recorded in earnings Balance at end of period $ $ $ $ |
Schedule of components of fair value and other relevant information | Notional/ Fair Value of Interest Rate Total Fair Value September 30, 2017 Rate lock commitments $ $ $ ) $ Forward sale commitments — Loans held-for-sale, net (1) — Total $ $ — $ (1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from mortgage servicing rights. |
Schedule of fair value of assets and liabilities | The fair value of these assets and liabilities was determined using the following input levels as of September 30, 2017: Fair Value Measurements Using Fair Value Hierarchy Carrying Value Fair Value Level 1 Level 2 Level 3 Financial assets: Loans and investments, net $ $ $ — $ — $ Loans held-for-sale, net — Capitalized mortgage servicing rights, net — — Securities held-to-maturity, net — — Financial liabilities: Credit and repurchase facilities $ $ $ — $ $ Collateralized loan obligations — — Senior unsecured notes — — Convertible senior unsecured notes, net — — Junior subordinated notes — — Related party financing — — |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities | |
Schedule of the assets and liabilities related to the consolidated CLOs | September 30, 2017 December 31, 2016 Assets: Restricted cash $ $ Loans and investments, net Due from related party — Other assets Total assets $ $ Liabilities: Collateralized loan obligations $ $ Other liabilities Total liabilities $ $ |
Summary of the Company's variable interests in identified VIEs, of which the company is not the primary beneficiary | The following is a summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, as of September 30, 2017: Type Carrying Amount (1) Loans $ B Piece bonds Agency IOs Equity investments Total $ (1) Represents the carrying amount of loans and investments before reserves. At September 30, 2017, $182.8 million of loans to VIEs had corresponding loan loss reserves of $81.6 million. See Note 4 — Loans and Investments for details. In addition, the maximum loss exposure as of September 30, 2017 would not exceed the carrying amount of our investment. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Schedule of dividends declared by the Company (on a per share basis) | The following table presents dividends declared (on a per share basis) during the nine months ended September 30, 2017: Common Stock Preferred Stock Dividend (1) Declaration Date Dividend Declaration Date Series A Series B Series C August 2, 2017 $ August 2, 2017 $ $ $ May 3, 2017 $ May 3, 2017 $ $ $ March 1, 2017 $ February 3, 2017 $ $ $ (1) The dividend declared on August 2, 2017 was for June 1, 2017 through August 31, 2017, the dividend declared on May 3, 2017 was for March 1, 2017 through May 31, 2017 and the dividend declared on February 3, 2017 was for December 1, 2016 through February 28, 2017. |
Schedule of reconciliation of the numerator and denominator of the basic and diluted EPS computations | Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Basic Diluted Basic Diluted Net income attributable to common stockholders (1) $ $ $ $ Net income attributable to noncontrolling interest (2) — — Net income attributable to common stockholders and nocontrolling interest $ $ $ $ Weighted average shares outstanding Dilutive effect of OP Units (2) — — Dilutive effect of restricted stock units (3) — — Weighted average shares outstanding Net income per common share (1) $ $ $ $ Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Basic Diluted Basic Diluted Net income attributable to common stockholders (1) $ $ $ $ Net income attributable to noncontrolling interest (2) — — — Net income attributable to common stockholders and nocontrolling interest $ $ $ $ Weighted average shares outstanding Dilutive effect of OP Units (2) — — — Dilutive effect of restricted stock units (3) — — Dilutive effect of convertible senior unsecurred notes (4) — — — Weighted average shares outstanding Net income per common share (1) $ $ $ $ (1) Net of preferred stock dividends. (2) We consider OP Units to be common stock equivalents as the holder has voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election. For the nine months ended September 30, 2016, the OP Units were considered anti-dilutive and excluded from diluted EPS. (3) Mr. Kaufman was granted restricted stock units in 2017, 2016 and 2015 which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives. (4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture. |
Agreements and Transactions w44
Agreements and Transactions with Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Agreements and Transactions with Related Parties | |
Schedule of base management fees and incentive fees incurred prior to the full internalization of management team and termination of the existing management agreement | Three Months Ended Nine Months Ended September 30, September 30, Management Fees: 2017 2016 2017 2016 Base $ — $ $ $ Incentive — — — — Total management fee $ — $ $ $ |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Schedule of statement of income and balance sheet by segment | Three Months Ended September 30, 2017 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Property operating expenses — — Depreciation and amortization — Provision for loss sharing (net of recoveries) — ) — ) Provision for loan losses (net of recoveries) — — Total other expenses — Income before income from equity affiliates and provision for income taxes ) Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Three Months Ended September 30, 2016 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Acquisition costs — — Property operating expenses — — Depreciation and amortization — Provision for loss sharing — — Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses Income before income from equity affiliates and provision for income taxes ) Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Nine Months Ended September 30, 2017 Structured Agency Other / Consolidated Interest income $ $ $ — $ Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net ) — ) Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Property operating expenses — — Depreciation and amortization — Impairment loss on real estate owned — — Provision for loss sharing (net of recoveries) — ) — ) Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses — Income before gain on extinguishment of debt, income from equity affiliates and provision for income taxes ) Gain on extinguishment of debt — — Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ Nine Months Ended September 30, 2016 Structured Agency Other / Consolidated Interest income $ $ $ — $ Other interest income, net — — Interest expense Net interest income ) Other revenue: Gain on sales, including fee-based services, net — — Mortgage servicing rights — — Servicing revenue — — Amortization of MSRs — ) — ) Property operating income — — Other income, net — Total other revenue — Other expenses: Employee compensation and benefits — Selling and administrative — Acquisition costs — — Property operating expenses — — Depreciation and amortization — Impairment loss on real estate owned — — Provision for loss sharing — — Provision for loan losses (net of recoveries) ) — — ) Management fee - related party — Total other expenses Income before gain on sale of real estate, income from equity affiliates and provision for income taxes ) Gain on sale of real estate — — Income from equity affiliates — — Provision for income taxes — ) — ) Net income ) Preferred stock dividends — — Net income attributable to noncontrolling interest — — Net income attributable to common stockholders $ $ $ ) $ (1) Includes certain corporate expenses not allocated to the two reportable segments, such as financing costs associated with the Acquisition, as well as income allocated to the noncontrolling interest holder. September 30, 2017 Structured Business Agency Business Other / Eliminations Consolidated Assets: Cash and cash equivalents $ $ $ — $ Restricted cash — Loans and investments, net — — Loans held-for-sale, net — — Capitalized mortgage servicing rights, net — — Securities held to maturity — — Investments in equity affiliates — — Goodwill and other intangible assets — Other assets — Total assets $ $ $ — $ Liabilities: Debt obligations $ $ $ $ Allowance for loss-sharing obligations — — Other liabilities Total liabilities $ $ $ $ December 31, 2016 Structured Business Agency Business Other / Eliminations Consolidated Assets: Cash and cash equivalents $ $ $ — $ Restricted cash — Loans and investments, net — — Loans held-for-sale, net — — Capitalized mortgage servicing rights, net — — Investments in equity affiliates — — Goodwill and other intangible assets — — Other assets — Total assets $ $ $ — $ Liabilities: Debt obligations $ $ $ $ Allowance for loss-sharing obligations — — Other liabilities Total liabilities $ $ $ $ |
Schedule of origination data and loan sales data | Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Origination Data: Structured Business New loan originations $ $ $ $ Loan payoffs / paydowns Agency Business Origination Volumes by Investor: Fannie Mae $ $ $ $ Freddie Mac FHA CMBS/Conduit — — — Total $ $ $ $ Total loan commitment volume $ $ $ $ Loan Sales Data: Agency Business Fannie Mae $ $ $ $ Freddie Mac FHA CMBS/Conduit — — — Total $ $ * $ $ * Sales margin (fee-based services as a % of loan sales) % % % % MSR rate (MSR income as a % of loan commitments) % % % % * Loan sales were $970.0 million for the three and nine months ended September 30, 2016, including loans that were acquired as part of the Acquisition. |
Schedule of key servicing metrics for Agency Business | September 30, 2017 Key Servicing Metrics for Agency Business: UPB of Servicing Wtd. Avg. Servicing Wtd. Avg. Life of Fannie Mae $ Freddie Mac FHA Total $ December 31, 2016 Fannie Mae $ Freddie Mac FHA Total $ |
Basis of Presentation and Sig46
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Basis of Presentation and Significant Accounting Policies | ||
Other liabilities | $ 104,474,096 | $ 86,164,613 |
Reclassification adjustments | Adjustment in consolidated balance sheets for prior period deferred tax liability incorrectly omitted | ||
Basis of Presentation and Significant Accounting Policies | ||
Goodwill | 4,900,000 | |
Other liabilities | $ 4,900,000 |
Acquisition of Our Former Man47
Acquisition of Our Former Manager's Agency Platform (Details) $ / shares in Units, $ in Millions | May 31, 2017USD ($)employeesegment | Jul. 14, 2016USD ($)$ / sharesshares |
Acquisition of Our Former Manager's Agency Platform | ||
Number of reporting segments | segment | 2 | |
ACM Acquisition | ||
Acquisition of Our Former Manager's Agency Platform | ||
Total consideration | $ 292.5 | |
Acquisition share price per common share based on closing price on the day of the ACM Acquisition | $ / shares | $ 7.29 | |
Termination of existing management agreement | ACM Acquisition | ||
Acquisition of Our Former Manager's Agency Platform | ||
Number of employees to manage/advise our business | employee | 100 | |
Option to terminate the existing management agreement and purchase the services provided by Former Manager's employees | $ 25 | |
Price of fully internalize our management team and terminate the existing management agreement assigned to goodwill | $ 25 | |
Termination of existing management agreement | ACM Acquisition | Structured Business | ||
Acquisition of Our Former Manager's Agency Platform | ||
Goodwill | 12.5 | |
Termination of existing management agreement | ACM Acquisition | Agency Business | ||
Acquisition of Our Former Manager's Agency Platform | ||
Goodwill | 12.5 | |
Termination of existing management agreement | ACM Acquisition | Maximum | ||
Acquisition of Our Former Manager's Agency Platform | ||
Expenses incurred to fully internalize management team | $ 0.1 | |
Operating Partnership | ACM Acquisition | ||
Acquisition of Our Former Manager's Agency Platform | ||
Total consideration | 275.8 | |
Purchase price paid in stock | 138 | |
Purchase price paid in cash | 87.8 | |
Borrowings from seller financing - related party | $ 50 | |
OP units issued as part of acquisition | shares | 21,230,769 | |
Acquisition share price per common share based on closing price on the day of the ACM Acquisition | $ / shares | $ 6.50 |
Loans and Investments (Details)
Loans and Investments (Details) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($)itemborrowerloan | Dec. 31, 2016USD ($)borrowerloan | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loans and Investments | ||||||
Loans and investments, gross | $ 2,094,376,123 | $ 1,790,159,966 | ||||
Allowance for loan losses | (83,255,922) | (83,711,575) | $ (81,255,922) | $ (83,816,575) | $ (83,831,575) | $ (86,761,575) |
Unearned revenue | (13,564,216) | (10,716,040) | ||||
Loans and investments, net | $ 1,997,555,985 | $ 1,695,732,351 | ||||
Percent of Total | 100.00% | 100.00% | ||||
Loan Count | loan | 149 | 144 | ||||
Wtd. Avg. Pay Rate (as a percent) | 6.04% | 5.71% | ||||
Wtd. Avg. Remaining Months to Maturity | 22 months 21 days | 16 months 9 days | ||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 7.00% | 6.00% | ||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 74.00% | 75.00% | ||||
Credit risk individual ratings | item | 5 | |||||
Higher-risk | ||||||
Loans and Investments | ||||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 94.00% | 95.00% | ||||
Carrying value of loans before loan loss reserves | $ 147,500,000 | $ 150,500,000 | ||||
Credit risk concentration | Minimum | ||||||
Loans and Investments | ||||||
Credit risk individual ratings | item | 1 | |||||
Credit risk concentration | Maximum | ||||||
Loans and Investments | ||||||
Credit risk individual ratings | item | 5 | |||||
Credit risk concentration | Pass | ||||||
Loans and Investments | ||||||
Credit risk individual ratings | item | 1 | |||||
Credit risk concentration | Pass/watch | ||||||
Loans and Investments | ||||||
Percent of Total | 100.00% | |||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 7.00% | |||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 74.00% | |||||
Credit risk individual ratings | item | 2 | |||||
Credit risk concentration | Pass/watch | Multifamily | ||||||
Loans and Investments | ||||||
Percent of Total | 75.00% | |||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 5.00% | |||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 73.00% | |||||
Credit risk concentration | Special mention | ||||||
Loans and Investments | ||||||
Percent of Total | 100.00% | |||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 6.00% | |||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 75.00% | |||||
Credit risk individual ratings | item | 3 | |||||
Credit risk concentration | Special mention | Multifamily | ||||||
Loans and Investments | ||||||
Percent of Total | 79.00% | |||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 1.00% | |||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 73.00% | |||||
Credit risk concentration | Substandard | ||||||
Loans and Investments | ||||||
Credit risk individual ratings | item | 4 | |||||
Credit risk concentration | Doubtful | ||||||
Loans and Investments | ||||||
Credit risk individual ratings | item | 5 | |||||
Total assets | Credit risk concentration | ||||||
Loans and Investments | ||||||
Loan Count | loan | 32 | 35 | ||||
Number of different borrowers | borrower | 5 | 5 | ||||
Concentration risk, percentage | 15.00% | 16.00% | ||||
Bridge loans | ||||||
Loans and Investments | ||||||
Loans and investments, gross | $ 1,841,484,888 | $ 1,602,658,179 | ||||
Percent of Total | 88.00% | 90.00% | ||||
Loan Count | loan | 129 | 120 | ||||
Wtd. Avg. Pay Rate (as a percent) | 5.89% | 5.59% | ||||
Wtd. Avg. Remaining Months to Maturity | 19 months | 16 months 12 days | ||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 0.00% | 0.00% | ||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 72.00% | 73.00% | ||||
Carrying value of loans before loan loss reserves | $ 4,800,000 | $ 4,800,000 | ||||
Preferred equity investments | ||||||
Loans and Investments | ||||||
Loans and investments, gross | $ 155,306,620 | $ 68,120,639 | ||||
Percent of Total | 7.00% | 4.00% | ||||
Loan Count | loan | 11 | 10 | ||||
Wtd. Avg. Pay Rate (as a percent) | 6.92% | 6.83% | ||||
Wtd. Avg. Remaining Months to Maturity | 68 months 9 days | 23 months 24 days | ||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 62.00% | 42.00% | ||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 88.00% | 91.00% | ||||
Carrying value of loans before loan loss reserves | $ 34,800,000 | |||||
Mezzanine loans | ||||||
Loans and Investments | ||||||
Loans and investments, gross | $ 72,328,033 | $ 57,124,566 | ||||
Percent of Total | 4.00% | 3.00% | ||||
Loan Count | loan | 8 | 12 | ||||
Wtd. Avg. Pay Rate (as a percent) | 10.24% | 9.09% | ||||
Wtd. Avg. Remaining Months to Maturity | 26 months 27 days | 17 months 27 days | ||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 29.00% | 36.00% | ||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 69.00% | 75.00% | ||||
Junior participation loans | ||||||
Loans and Investments | ||||||
Loans and investments, gross | $ 25,256,582 | $ 62,256,582 | ||||
Percent of Total | 1.00% | 3.00% | ||||
Loan Count | loan | 1 | 2 | ||||
Wtd. Avg. Pay Rate (as a percent) | 4.50% | |||||
Wtd. Avg. Remaining Months to Maturity | 0 months | 4 months | ||||
Wtd. Avg. First Dollar LTV Ratio (as percent) | 100.00% | 83.00% | ||||
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 100.00% | 84.00% |
Loans and Investments, Risk Rat
Loans and Investments, Risk Ratings and LTV Ratios (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Loans and Investments | ||
Percentage of Portfolio | 100.00% | 100.00% |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 7.00% | 6.00% |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 74.00% | 75.00% |
Credit risk concentration | Pass/watch | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 2,094,376,123 | |
Percentage of Portfolio | 100.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 7.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 74.00% | |
Credit risk concentration | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 1,790,159,966 | |
Percentage of Portfolio | 100.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 6.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 75.00% | |
Credit risk concentration | Loans and investments portfolio | New York | ||
Loans and Investments | ||
Concentration risk, percentage | 20.00% | 25.00% |
Credit risk concentration | Loans and investments portfolio | Texas | ||
Loans and Investments | ||
Concentration risk, percentage | 16.00% | 13.00% |
Credit risk concentration | Loans and investments portfolio | California | ||
Loans and Investments | ||
Concentration risk, percentage | 11.00% | 15.00% |
Credit risk concentration | Loans and investments portfolio | Georgia | ||
Loans and Investments | ||
Concentration risk, percentage | 8.00% | |
Credit risk concentration | Loans and investments portfolio | Florida | ||
Loans and Investments | ||
Concentration risk, percentage | 14.00% | |
Credit risk concentration | Multifamily | Pass/watch | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 1,556,114,399 | |
Percentage of Portfolio | 75.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 5.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 73.00% | |
Credit risk concentration | Multifamily | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 1,421,731,108 | |
Percentage of Portfolio | 79.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 1.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 73.00% | |
Credit risk concentration | Land | Substandard | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 140,054,798 | $ 137,255,369 |
Percentage of Portfolio | 7.00% | 8.00% |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 0.00% | 2.00% |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 88.00% | 92.00% |
Credit risk concentration | Office | Pass/watch | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 133,143,446 | $ 141,710,156 |
Percentage of Portfolio | 6.00% | 8.00% |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 19.00% | 43.00% |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 71.00% | 73.00% |
Credit risk concentration | Hotel | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 90,725,147 | $ 70,750,000 |
Percentage of Portfolio | 4.00% | 4.00% |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 39.00% | 30.00% |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 83.00% | 74.00% |
Credit risk concentration | Retail | Pass/watch | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 36,483,333 | |
Percentage of Portfolio | 2.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 8.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 66.00% | |
Credit risk concentration | Retail | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 3,958,333 | |
Percentage of Portfolio | 1.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 81.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 91.00% | |
Credit risk concentration | Commercial | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 9,205,000 | |
Percentage of Portfolio | 1.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 12.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 69.00% | |
Credit risk concentration | Commercial | Pass | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 133,230,000 | |
Percentage of Portfolio | 6.00% | |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 1.00% | |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 71.00% | |
Credit risk concentration | Healthcare | Special mention | ||
Loans and Investments | ||
Unpaid Principal Balance | $ 4,625,000 | $ 5,550,000 |
Percentage of Portfolio | 1.00% | 1.00% |
Wtd. Avg. First Dollar LTV Ratio (as percent) | 0.00% | 0.00% |
Wtd. Avg. Last Dollar LTV Ratio (as percent) | 73.00% | 63.00% |
Loans and Investments, Impaired
Loans and Investments, Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in allowance for loan losses | ||||
Allowance at beginning of period | $ 81,255,922 | $ 83,831,575 | $ 83,711,575 | $ 86,761,575 |
Provision for loan losses | 2,000,000 | 2,000,000 | 59,005 | |
Charge-offs | (2,959,005) | |||
Recoveries of reserves | (15,000) | (2,455,653) | (45,000) | |
Allowance at end of period | $ 83,255,922 | $ 83,816,575 | $ 83,255,922 | $ 83,816,575 |
Ratio of net recoveries (in percentage) | 0.10% | 0.10% | ||
Ratio of net charge-offs (in percentage) | (0.20%) | (0.20%) | ||
Impaired bridge loans, paid off | $ 1,800,000 | $ 1,800,000 | ||
Preferred equity investments | ||||
Changes in allowance for loan losses | ||||
Carrying value of loans | 34,800,000 | $ 34,800,000 | ||
Bridge loans | ||||
Changes in allowance for loan losses | ||||
Recoveries of reserves | (700,000) | |||
Carrying value of loans | 4,800,000 | $ 4,800,000 | 4,800,000 | $ 4,800,000 |
Mezzanine loans | ||||
Changes in allowance for loan losses | ||||
Recoveries of reserves | (1,800,000) | (1,800,000) | ||
Paid off in full | $ 1,800,000 | $ 1,800,000 |
Loans and Investments, Charge-o
Loans and Investments, Charge-offs and Recoveries Narratives (Details) | 9 Months Ended | |||||
Sep. 30, 2017USD ($)loan | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($)loan | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loans and Investments | ||||||
Number of loans for which no provision for loan loss made | loan | 0 | 0 | ||||
Provision for loan losses | $ 83,255,922 | $ 81,255,922 | $ 83,711,575 | $ 83,816,575 | $ 83,831,575 | $ 86,761,575 |
Six loans collateralized by a land development project | Maturity Date September 2018 | ||||||
Loans and Investments | ||||||
Number of loans with unpaid principal balance | loan | 6 | |||||
Carrying value of impaired loan | $ 120,500,000 | |||||
Five loans collateralized by a land development project | Maturity Date September 2018 | ||||||
Loans and Investments | ||||||
Number of loans with unpaid principal balance | loan | 5 | |||||
Carrying value of impaired loan | $ 111,200,000 | |||||
Weighted average accrual rate of interest (as a percent) | 8.50% | |||||
Provision for loan losses | $ 49,100,000 |
Loans and Investments, Summary
Loans and Investments, Summary of impaired loans (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)loan | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)loan | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)loan | |
Loans and Investments | |||||
Unpaid Principal Balance | $ 195,085,030 | $ 195,085,030 | $ 197,640,645 | ||
Carrying Value | 184,540,050 | 184,540,050 | 187,351,035 | ||
Allowance for Loan Losses | 83,255,922 | 83,255,922 | $ 83,711,575 | ||
Average Recorded Investment | 195,087,280 | $ 196,686,516 | 196,362,838 | $ 197,769,065 | |
Interest Income Recognized | $ 27,728 | 338,080 | $ 472,005 | 1,061,364 | |
Number of impaired loans | loan | 6 | 6 | 8 | ||
Land | |||||
Loans and Investments | |||||
Unpaid Principal Balance | $ 131,085,948 | $ 131,085,948 | $ 131,085,948 | ||
Carrying Value | 125,325,106 | 125,325,106 | 125,925,677 | ||
Allowance for Loan Losses | 53,883,478 | 53,883,478 | 53,883,478 | ||
Average Recorded Investment | 131,085,948 | 130,012,569 | 131,085,948 | 128,740,618 | |
Hotel | |||||
Loans and Investments | |||||
Unpaid Principal Balance | 34,750,000 | 34,750,000 | 34,750,000 | ||
Carrying Value | 34,750,000 | 34,750,000 | 34,496,296 | ||
Allowance for Loan Losses | 5,700,000 | 5,700,000 | 3,700,000 | ||
Average Recorded Investment | 34,750,000 | 34,750,000 | 34,750,000 | 34,750,000 | |
Interest Income Recognized | 291,542 | 370,877 | 857,459 | ||
Office | |||||
Loans and Investments | |||||
Unpaid Principal Balance | 27,549,082 | 27,549,082 | 27,562,582 | ||
Carrying Value | 22,764,944 | 22,764,944 | 22,778,444 | ||
Allowance for Loan Losses | 21,972,444 | 21,972,444 | 21,972,444 | ||
Average Recorded Investment | 27,551,332 | 27,569,332 | 27,555,832 | 27,573,832 | |
Interest Income Recognized | 27,728 | 23,601 | 79,065 | 69,763 | |
Commercial | |||||
Loans and Investments | |||||
Unpaid Principal Balance | 1,700,000 | 1,700,000 | 1,700,000 | ||
Carrying Value | 1,700,000 | 1,700,000 | 1,700,000 | ||
Allowance for Loan Losses | 1,700,000 | 1,700,000 | 1,700,000 | ||
Average Recorded Investment | $ 1,700,000 | 1,700,000 | 1,700,000 | 1,700,000 | |
Multifamily | |||||
Loans and Investments | |||||
Unpaid Principal Balance | 2,542,115 | ||||
Carrying Value | 2,450,618 | ||||
Allowance for Loan Losses | $ 2,455,653 | ||||
Average Recorded Investment | 2,654,615 | 1,271,058 | 5,004,615 | ||
Interest Income Recognized | $ 22,937 | $ 22,063 | $ 134,142 |
Loans and Investments, Non-perf
Loans and Investments, Non-performing Loans (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Non-performing loans by asset class | ||
Number of loans | loan | 149 | 144 |
Carrying Value | $ 0 | $ 0 |
Non-performing loans | ||
Non-performing loans by asset class | ||
Number of loans | loan | 5 | 3 |
Carrying value of loans | $ 32,600,000 | $ 22,900,000 |
Loan loss reserves | 27,900,000 | |
Carrying Value | 60,514,639 | 22,853,097 |
Greater Than 90 Days Past Due | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 0 | 0 |
Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 60,514,639 | 22,853,097 |
Hotel | Non-performing loans | ||
Non-performing loans by asset class | ||
Carrying Value | 34,750,000 | |
Hotel | Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 34,750,000 | |
Office | Non-performing loans | ||
Non-performing loans by asset class | ||
Carrying Value | 20,472,444 | 20,472,444 |
Office | Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 20,472,444 | 20,472,444 |
Multifamily | Non-performing loans | ||
Non-performing loans by asset class | ||
Carrying Value | 2,601,528 | 680,653 |
Multifamily | Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 2,601,528 | 680,653 |
Commercial | Non-performing loans | ||
Non-performing loans by asset class | ||
Carrying Value | 1,700,000 | 1,700,000 |
Commercial | Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | 1,700,000 | $ 1,700,000 |
Retail | Non-performing loans | ||
Non-performing loans by asset class | ||
Carrying Value | 990,667 | |
Retail | Greater Than 90 Days Past Due | Non-performing loans | ||
Non-performing loans by asset class | ||
Past Due, Non-performing Loans | $ 990,667 |
Loans and Investments, Loan Mod
Loans and Investments, Loan Modifications, Refinancings and/or Extensions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017loan | Sep. 30, 2016USD ($)loan | Sep. 30, 2017USD ($)loan | Sep. 30, 2016USD ($)loan | |
Troubled debt restructurings by asset class | ||||
Number of Loans | loan | 2 | 2 | ||
Original Unpaid Principal Balance | $ 16,961,456 | $ 16,961,456 | ||
Original Wtd. Avg. Rate of Interest (as a percent) | 5.15% | 5.15% | ||
Modified Unpaid Principal Balance | $ 16,961,456 | $ 16,961,456 | ||
Modified Wtd. Avg. Rate of Interest (as a percent) | 5.15% | 5.15% | ||
Number of additional loans considered to be troubled debt restructurings | loan | 0 | 0 | 0 | 0 |
Hotel | ||||
Troubled debt restructurings by asset class | ||||
Number of Loans | loan | 1 | |||
Original Unpaid Principal Balance | $ 34,750,000 | |||
Original Wtd. Avg. Rate of Interest (as a percent) | 4.01% | |||
Modified Unpaid Principal Balance | $ 34,750,000 | |||
Modified Wtd. Avg. Rate of Interest (as a percent) | 4.01% | |||
Multifamily | ||||
Troubled debt restructurings by asset class | ||||
Number of Loans | loan | 1 | 1 | ||
Original Unpaid Principal Balance | $ 14,646,456 | $ 14,646,456 | ||
Original Wtd. Avg. Rate of Interest (as a percent) | 5.33% | 5.33% | ||
Modified Unpaid Principal Balance | $ 14,646,456 | $ 14,646,456 | ||
Modified Wtd. Avg. Rate of Interest (as a percent) | 5.33% | 5.33% | ||
Office | ||||
Troubled debt restructurings by asset class | ||||
Number of Loans | loan | 1 | 1 | ||
Original Unpaid Principal Balance | $ 2,315,000 | $ 2,315,000 | ||
Original Wtd. Avg. Rate of Interest (as a percent) | 4.03% | 4.03% | ||
Modified Unpaid Principal Balance | $ 2,315,000 | $ 2,315,000 | ||
Modified Wtd. Avg. Rate of Interest (as a percent) | 4.03% | 4.03% |
Loans and Investments, Interest
Loans and Investments, Interest Reserves (Details) $ in Millions | Sep. 30, 2017USD ($)loan | Dec. 31, 2016USD ($)loan |
Loans and Investments | ||
Total interest reserves | $ 30.1 | $ 20.4 |
Number of loans | loan | 70 | 75 |
Aggregate unpaid principal balance | $ 1,090 | $ 1,010 |
Loans Held-for-Sale, Net (Detai
Loans Held-for-Sale, Net (Details) - USD ($) | Jul. 14, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Loans Held-for-Sale, Net | ||||||
Loans held-for-sale | $ 328,533,203 | $ 328,533,203 | $ 662,347,722 | |||
Fair value of future MSR | 5,450,662 | 5,450,662 | 13,145,814 | |||
Unearned discount | (715,889) | (715,889) | (2,126,232) | |||
Loans held-for-sale, net | 333,267,976 | $ 333,267,976 | 673,367,304 | |||
Maximum number of days held-for-sale loans are typically sold | 60 days | |||||
Loans with non-accrual status | 0 | $ 0 | 0 | |||
Sale of loans held-for-sale excluding acquired loans | 1,050,000,000 | $ 551,800,000 | 3,620,000,000 | $ 418,200,000 | ||
Gain on sale of loans held-for-sale | $ 9,000,000 | 16,300,000 | 52,100,000 | |||
Greater Than 90 Days Past Due | ||||||
Loans Held-for-Sale, Net | ||||||
Loans past due | 0 | 0 | 0 | |||
Fannie Mae | ||||||
Loans Held-for-Sale, Net | ||||||
Loans held-for-sale, net | 185,188,000 | 185,188,000 | 538,189,475 | |||
Freddie Mac | ||||||
Loans Held-for-Sale, Net | ||||||
Loans held-for-sale, net | 142,312,000 | 142,312,000 | 124,102,000 | |||
FHA | ||||||
Loans Held-for-Sale, Net | ||||||
Loans held-for-sale, net | $ 1,033,203 | $ 1,033,203 | $ 56,247 |
Capitalized Mortgage Servicin57
Capitalized Mortgage Servicing Rights (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Capitalized Mortgage Servicing Rights | |||||
Balance at beginning of period | $ 227,742,986 | ||||
Balance at end of period | $ 247,875,659 | 247,875,659 | $ 227,742,986 | ||
Valuation allowance | 0 | 0 | 0 | ||
MSRs | |||||
Capitalized Mortgage Servicing Rights | |||||
Balance at beginning of period | 243,083,459 | 227,742,986 | |||
Additions | 20,719,529 | 66,273,164 | $ 233,552,815 | ||
Amortization | (11,711,378) | (35,427,217) | (7,586,524) | ||
Write-offs | (4,215,951) | (10,713,274) | (1,669,081) | ||
Balance at end of period | 247,875,659 | $ 224,297,210 | 247,875,659 | 224,297,210 | $ 227,742,986 |
Prepayment fees | 3,800,000 | 1,500,000 | 7,900,000 | 1,500,000 | |
Expected amortization of capitalized MSR balances | |||||
2017 (three months ended 12/31/2017) | 11,925,780 | 11,925,780 | |||
2,018 | 45,577,306 | 45,577,306 | |||
2,019 | 41,680,988 | 41,680,988 | |||
2,020 | 35,461,494 | 35,461,494 | |||
2,021 | 28,170,144 | 28,170,144 | |||
2,022 | 22,176,139 | 22,176,139 | |||
Thereafter | 62,883,808 | 62,883,808 | |||
Total | 247,875,659 | $ 247,875,659 | |||
MSRs | Minimum | |||||
Capitalized Mortgage Servicing Rights | |||||
Percentage of MSRs discount rate | 8.00% | ||||
MSRs | Maximum | |||||
Capitalized Mortgage Servicing Rights | |||||
Percentage of MSRs discount rate | 15.00% | ||||
MSRs | Weighted average | |||||
Capitalized Mortgage Servicing Rights | |||||
Percentage of MSRs discount rate | 13.00% | ||||
Estimated life remaining | 7 years 1 month 6 days | 6 years 10 months 24 days | |||
Acquired MSRs | |||||
Capitalized Mortgage Servicing Rights | |||||
Balance at beginning of period | 168,189,300 | $ 194,800,754 | |||
Additions | 221,647,421 | ||||
Amortization | (8,952,573) | (29,074,057) | (7,358,639) | ||
Write-offs | (4,193,665) | (10,683,635) | (1,669,081) | ||
Balance at end of period | 155,043,062 | 212,619,701 | 155,043,062 | 212,619,701 | $ 194,800,754 |
Originated MSRs | |||||
Capitalized Mortgage Servicing Rights | |||||
Balance at beginning of period | 74,894,159 | 32,942,232 | |||
Additions | 20,719,529 | 66,273,164 | 11,905,394 | ||
Amortization | (2,758,805) | (6,353,160) | (227,885) | ||
Write-offs | (22,286) | (29,639) | |||
Balance at end of period | $ 92,832,597 | $ 11,677,509 | $ 92,832,597 | $ 11,677,509 | $ 32,942,232 |
Mortgage Servicing (Details)
Mortgage Servicing (Details) - MSRs | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Institution | Dec. 31, 2016USD ($) | |
Mortgage Servicing | ||
Unpaid principal balance of loans serviced | $ 15,601,225,516 | $ 13,555,085,518 |
Weighted average servicing fee (as a percent) | 0.48% | 0.478% |
Number of federally insured depository institutions holding cash balance and related escrow liabilities for servicing mortgage | Institution | 2 | |
Fee-based servicing portfolio | ||
Mortgage Servicing | ||
Percentage of Total | 100.00% | 100.00% |
Escrow Deposit | $ 506,600,000 | $ 401,700,000 |
Fee-based servicing portfolio | Texas | ||
Mortgage Servicing | ||
Percentage of Total | 23.00% | 24.00% |
Fee-based servicing portfolio | North Carolina | ||
Mortgage Servicing | ||
Percentage of Total | 10.00% | 9.00% |
Fee-based servicing portfolio | California | ||
Mortgage Servicing | ||
Percentage of Total | 8.00% | 8.00% |
Fee-based servicing portfolio | New York | ||
Mortgage Servicing | ||
Percentage of Total | 8.00% | 8.00% |
Fee-based servicing portfolio | Georgia | ||
Mortgage Servicing | ||
Percentage of Total | 6.00% | 5.00% |
Fee-based servicing portfolio | Florida | ||
Mortgage Servicing | ||
Percentage of Total | 5.00% | |
Fee-based servicing portfolio | Other | ||
Mortgage Servicing | ||
Percentage of Total | 40.00% | 46.00% |
Fannie Mae | ||
Mortgage Servicing | ||
Unpaid principal balance of loans serviced | $ 12,331,135,405 | $ 11,181,152,400 |
Fannie Mae | Fee-based servicing portfolio | ||
Mortgage Servicing | ||
Percentage of Total | 79.00% | 83.00% |
Freddie Mac | ||
Mortgage Servicing | ||
Unpaid principal balance of loans serviced | $ 2,732,536,579 | $ 1,953,244,541 |
Freddie Mac | Fee-based servicing portfolio | ||
Mortgage Servicing | ||
Percentage of Total | 18.00% | 14.00% |
FHA | ||
Mortgage Servicing | ||
Unpaid principal balance of loans serviced | $ 537,553,532 | $ 420,688,577 |
FHA | Fee-based servicing portfolio | ||
Mortgage Servicing | ||
Percentage of Total | 3.00% | 3.00% |
Securities (Details)
Securities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale securities | ||
Amortized Cost | $ 58,789 | $ 58,789 |
Carrying Value / Estimated Fair Value | 4,707,085 | 5,403,463 |
Available-for-sale Securities | Common Shares of CV Holdings, Inc. | ||
Available-for-sale securities | ||
Amortized Cost | 58,789 | 58,789 |
Cumulative Unrealized Gain | 205,764 | 558,499 |
Carrying Value / Estimated Fair Value | $ 264,553 | $ 617,288 |
Number of shares of common stock purchased | 2,939,465 | 2,939,465 |
Securities, Agency IO (Details)
Securities, Agency IO (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Summary of our Agency IOs activity | |||||
Balance at beginning of period | $ 5,403,463 | ||||
Changes in fair value | (343,642) | $ (46,021) | |||
Balance at end of period | $ 4,707,085 | 4,707,085 | |||
Interest-only Securities (Agency IOs) under the SBL Program | |||||
Summary of our Agency IOs activity | |||||
Balance at beginning of period | 4,602,722 | 4,786,175 | |||
Additions from the Acquisition | 4,908,283 | ||||
Changes in fair value | (160,190) | (343,643) | (46,021) | ||
Balance at end of period | 4,442,532 | $ 4,862,262 | 4,442,532 | 4,862,262 | |
UPB | 839,200,000 | 839,200,000 | $ 904,400,000 | ||
Interest income | $ 300,000 | $ 300,000 | $ 900,000 | $ 300,000 |
Securities, Held-to-Maturity (D
Securities, Held-to-Maturity (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($)item | Sep. 30, 2017USD ($)item | |
Held-to-Maturity | ||
Carrying Value | $ 18,851,089 | $ 18,851,089 |
Held-to-Maturity | B Piece bonds | ||
Held-to-Maturity | ||
Remaining of B Piece bond sold to the third party at par | 51.00% | 51.00% |
B Piece retained percentage | 49.00% | |
Number of B Piece bonds retained | item | 2 | 2 |
Weighted average variable interest rate (as a percent) | 3.55% | 3.55% |
Weighted average stated maturity (in years) | 6 years 1 month 6 days | |
Weighted average effective interest rate (as a percent) | 13.38% | 13.38% |
Face Value | $ 28,035,293 | |
Carrying Value | $ 18,851,089 | 18,851,089 |
Unrealized Gain | 31,908 | 31,908 |
Estimated Fair Value | 18,882,997 | 18,882,997 |
Discount value | 18,300,000 | |
Impairment charges | 0 | |
Interest income | 500,000 | 900,000 |
Held-to-maturity securities, estimated fiscal year | ||
Within one year | 3,400,000 | 3,400,000 |
After one year through five years | 11,300,000 | 11,300,000 |
After five years through ten years | 8,100,000 | 8,100,000 |
After ten years | $ 5,200,000 | $ 5,200,000 |
Investments in Equity Affilia62
Investments in Equity Affiliates, Summary (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | $ 31,330,740 | $ 33,948,853 |
UPB of Loans to Equity Affiliates | 3,393,438 | |
Arbor Residential Investor LLC | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | 26,821,643 | 28,917,457 |
West Shore Cafe | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | 2,120,347 | 2,050,347 |
UPB of Loans to Equity Affiliates | 1,687,500 | |
Lightstone Value Plus REIT L.P. | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | 1,894,727 | 1,894,727 |
JT Prime | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | 425,000 | 425,000 |
East River Portfolio | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | 68,923 | 83,222 |
UPB of Loans to Equity Affiliates | 1,705,938 | |
Lexford Portfolio | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | $ 100 | 100 |
Issuers of Junior Subordinated Notes | ||
Investment in Equity Affiliates | ||
Investment in Equity Affiliates | $ 578,000 |
Investments in Equity Affilia63
Investments in Equity Affiliates, Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Investment in Equity Affiliates | |||||
(Loss) income from equity affiliates | $ 995,312 | $ 4,929,375 | $ 1,755,145 | $ 11,193,918 | |
Multifamily | |||||
Investment in Equity Affiliates | |||||
Basis of equity participation interest before redemption | $ 1,500,000 | 1,500,000 | $ 0 | ||
Percentage of equity participation redeemed | 25.00% | ||||
Arbor Residential Investor LLC | Non-qualified Residential Mortgages | |||||
Investment in Equity Affiliates | |||||
Amount funded | $ 600,000 | 600,000 | |||
Cash distributions classified as return of capital | 900,000 | ||||
Arbor Residential Investor LLC | Non Qualified and Additional Residential Mortgages | |||||
Investment in Equity Affiliates | |||||
(Loss) income from equity affiliates | 300,000 | 400,000 | |||
Arbor Residential Investor LLC | Non Qualified and Additional Residential Mortgages | Maximum | |||||
Investment in Equity Affiliates | |||||
(Loss) income from equity affiliates | 100,000 | 100,000 | |||
Arbor Residential Investor LLC | Residential Mortgage Banking Company | |||||
Investment in Equity Affiliates | |||||
(Loss) income from equity affiliates | (1,300,000) | 3,900,000 | 1,900,000 | 8,500,000 | |
Lexford Portfolio | |||||
Investment in Equity Affiliates | |||||
(Loss) income from equity affiliates | $ 700,000 | $ 700,000 | $ 2,000,000 | $ 2,100,000 |
Investments in Equity Affilia64
Investments in Equity Affiliates, Statements of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Total revenues | $ 32,429,382 | $ 71,040,665 | $ 108,195,846 | $ 172,929,878 |
Total expenses | 40,214,486 | 47,256,537 | 120,232,132 | 128,120,821 |
Net (loss) income | (7,785,104) | 23,784,128 | (12,036,286) | 44,809,057 |
Arbor's share of (loss) income | $ (1,230,905) | $ 4,167,233 | $ (1,844,144) | $ 8,885,528 |
Real Estate Owned and Held-Fo65
Real Estate Owned and Held-For-Sale, Portfolio (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)property | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Real Estate Owned | ||||||
Real estate owned, net | $ 17,354,720 | $ 19,491,805 | ||||
Impairment loss on real estate owned | 2,700,000 | $ 11,200,000 | ||||
Restricted cash due to escrow requirement | 137,138,389 | 29,314,929 | ||||
Real Estate Held-For-Sale | ||||||
Proceeds from sale of real estate, net | 49,029,780 | |||||
Pay off outstanding debt | $ 27,155,000 | |||||
Multifamily and Hotel | Disposed of by sale | ||||||
Real Estate Held-For-Sale | ||||||
Proceeds from sale of real estate, net | $ 50,700,000 | |||||
Gain on sale of property | $ 11,600,000 | |||||
Multifamily | Disposed of by sale | ||||||
Real Estate Held-For-Sale | ||||||
Number of properties sold | property | 3 | |||||
Pay off outstanding debt | $ 27,100,000 | |||||
Real Estate Owned | ||||||
Real Estate Owned | ||||||
Less: Impairment loss | (13,307,354) | (11,200,000) | ||||
Less: Accumulated depreciation and amortization | (9,739,753) | (9,147,998) | ||||
Real estate owned, net | 17,354,720 | 19,491,805 | ||||
Restricted cash due to escrow requirement | 700,000 | 700,000 | ||||
Real Estate Owned | Hotel | ||||||
Real Estate Owned | ||||||
Less: Impairment loss | (13,307,354) | (11,200,000) | ||||
Less: Accumulated depreciation and amortization | (9,089,355) | (8,658,737) | ||||
Real estate owned, net | $ 11,540,664 | 13,908,812 | ||||
Weighted average occupancy rate of properties (as a percent) | 58.00% | 55.00% | 58.00% | |||
Amount of weighted average daily rate of properties | $ 113 | $ 108 | ||||
Amount of weighted average daily revenue of properties | 62 | $ 63 | ||||
Impairment loss on real estate owned | $ 11,200,000 | $ 2,700,000 | ||||
Real Estate Owned | Office | ||||||
Real Estate Owned | ||||||
Less: Accumulated depreciation and amortization | (650,398) | (489,261) | ||||
Real estate owned, net | 5,814,056 | 5,582,993 | ||||
Real Estate Owned | Land | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | 7,802,651 | 7,802,651 | ||||
Real Estate Owned | Land | Hotel | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | 3,293,651 | 3,293,651 | ||||
Real Estate Owned | Land | Office | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | 4,509,000 | 4,509,000 | ||||
Real Estate Owned | Building and intangible assets | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | 32,599,176 | 32,037,152 | ||||
Real Estate Owned | Building and intangible assets | Hotel | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | 30,643,722 | 30,473,898 | ||||
Real Estate Owned | Building and intangible assets | Office | ||||||
Real Estate Owned | ||||||
Real estate owned, gross | $ 1,955,454 | $ 1,563,254 |
Real Estate Owned and Held-Fo66
Real Estate Owned and Held-For-Sale, Results for Held-For-Sale (Details) - Held-For-Sale | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Revenue: | |
Property operating income | $ 2,845,231 |
Expenses: | |
Property operating expenses | 1,994,346 |
Depreciation | 334,631 |
Net income | $ 516,254 |
Debt Obligations, Credit Facili
Debt Obligations, Credit Facilities and Repurchase Agreements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Jan. 31, 2018 | Oct. 31, 2017 | Apr. 30, 2017 | Feb. 28, 2017 | Dec. 31, 2016 | |
Debt Obligations | ||||||||||||
Debt Carrying Value | $ 562,326,537 | $ 562,326,537 | $ 562,326,537 | $ 906,636,790 | ||||||||
Collateral Carrying Value | $ 713,043,810 | $ 713,043,810 | $ 713,043,810 | $ 1,041,761,233 | ||||||||
Weighted Average Note Rate (as a percent) | 2.99% | 2.99% | 2.99% | 2.25% | ||||||||
Letter of credit | ||||||||||||
Debt Obligations | ||||||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | |||||||||
Structured Business | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 234,339,350 | 234,339,350 | 234,339,350 | $ 246,492,668 | ||||||||
Collateral Carrying Value | $ 384,766,864 | $ 384,766,864 | $ 384,766,864 | $ 381,446,074 | ||||||||
Weighted Average Note Rate (as a percent) | 3.58% | 3.58% | 3.58% | 3.02% | ||||||||
Weighted average note rate including certain fees and costs (as a percent) | 4.06% | 4.06% | 4.06% | 3.42% | ||||||||
Unamortized deferred finance costs | $ 1,600,000 | $ 1,600,000 | $ 1,600,000 | $ 1,900,000 | ||||||||
Leverage on loans and investment portfolio, excluding the $3.0 million master security agreement used to finance leasehold improvements to corporate office (as a percent) | 58.00% | 58.00% | 58.00% | 64.00% | ||||||||
Structured Business | $150 million repurchase facility | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | $ 149,157,816 | $ 149,157,816 | $ 149,157,816 | $ 106,051,080 | ||||||||
Collateral Carrying Value | $ 253,150,000 | $ 253,150,000 | $ 253,150,000 | $ 183,827,574 | ||||||||
Weighted Average Note Rate (as a percent) | 3.63% | 3.63% | 3.63% | 3.12% | ||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 | $ 225,000,000 | $ 150,000,000 | |||||||
Additional borrowing capacity | $ 75,000,000 | |||||||||||
Structured Business | $150 million repurchase facility | Minimum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.25% | |||||||||||
Structured Business | $150 million repurchase facility | Maximum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 3.50% | |||||||||||
Structured Business | $100 million repurchase facility | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 2,407,564 | 2,407,564 | $ 2,407,564 | 21,598,322 | ||||||||
Collateral Carrying Value | $ 6,600,000 | $ 6,600,000 | $ 6,600,000 | $ 34,850,000 | ||||||||
Weighted Average Note Rate (as a percent) | 3.28% | 3.28% | 3.28% | 2.96% | ||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||||||
Decrease in interest rate (as a percent) | (0.15%) | |||||||||||
Advance rate (as a percent) | 75.00% | |||||||||||
Structured Business | $100 million repurchase facility | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.00% | 2.00% | ||||||||||
Structured Business | $75 million credit facility - One | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 12,096,267 | 12,096,267 | $ 12,096,267 | 38,703,886 | ||||||||
Collateral Carrying Value | $ 28,088,500 | $ 28,088,500 | $ 28,088,500 | $ 63,158,500 | ||||||||
Weighted Average Note Rate (as a percent) | 3.40% | 3.40% | 3.40% | 2.94% | ||||||||
Maximum borrowing capacity | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | ||||||||
Structured Business | $75 million credit facility - One | Minimum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.125% | |||||||||||
Structured Business | $75 million credit facility - One | Maximum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.50% | |||||||||||
Structured Business | $75 million credit facility - two | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 16,206,619 | 16,206,619 | $ 16,206,619 | 23,276,773 | ||||||||
Collateral Carrying Value | $ 42,300,000 | $ 42,300,000 | $ 42,300,000 | $ 31,725,000 | ||||||||
Weighted Average Note Rate (as a percent) | 3.28% | 3.28% | 3.28% | 2.81% | ||||||||
Maximum borrowing capacity | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | ||||||||
Structured Business | $75 million credit facility - two | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.00% | |||||||||||
Structured Business | $50 million credit facility - one | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 25,000,000 | 25,000,000 | $ 25,000,000 | 46,373,641 | ||||||||
Collateral Carrying Value | $ 31,250,000 | $ 31,250,000 | $ 31,250,000 | $ 58,000,000 | ||||||||
Weighted Average Note Rate (as a percent) | 3.28% | 3.28% | 3.28% | 2.81% | ||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | ||||||||
Structured Business | $50 million credit facility - one | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.00% | |||||||||||
Structured Business | $50 million credit facility - two | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 3,563,565 | 3,563,565 | $ 3,563,565 | 7,956,000 | ||||||||
Collateral Carrying Value | $ 4,625,000 | $ 4,625,000 | $ 4,625,000 | $ 9,885,000 | ||||||||
Weighted Average Note Rate (as a percent) | 4.54% | 4.54% | 4.54% | 4.08% | ||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | ||||||||
Structured Business | $50 million credit facility - two | Minimum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.50% | |||||||||||
Structured Business | $50 million credit facility - two | Maximum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 3.25% | |||||||||||
Structured Business | $25.5 million credit facility | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 13,909,625 | 13,909,625 | $ 13,909,625 | |||||||||
Collateral Carrying Value | $ 18,753,364 | $ 18,753,364 | $ 18,753,364 | |||||||||
Weighted Average Note Rate (as a percent) | 3.78% | 3.78% | 3.78% | |||||||||
Maximum borrowing capacity | $ 25,500,000 | $ 25,500,000 | $ 25,500,000 | |||||||||
Structured Business | $25.5 million credit facility | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.50% | 2.50% | ||||||||||
Structured Business | $10 million credit facility | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||||||||
Weighted Average Note Rate (as a percent) | 3.78% | 3.78% | 3.78% | |||||||||
Maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | 10,000,000 | |||||||
Structured Business | $10 million credit facility | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.50% | 2.50% | ||||||||||
Structured Business | $3 million master security agreement | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | $ 1,997,894 | $ 1,997,894 | $ 1,997,894 | $ 2,532,966 | ||||||||
Weighted Average Note Rate (as a percent) | 3.21% | 3.21% | 3.21% | 3.21% | ||||||||
Maximum borrowing capacity | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | ||||||||
Structured Business | $3 million master security agreement | Minimum | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 2.96% | |||||||||||
Structured Business | $3 million master security agreement | Maximum | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 3.42% | |||||||||||
Agency Business | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 327,987,187 | 327,987,187 | $ 327,987,187 | 660,144,122 | ||||||||
Collateral Carrying Value | $ 328,276,946 | $ 328,276,946 | $ 328,276,946 | $ 660,315,159 | ||||||||
Weighted Average Note Rate (as a percent) | 2.56% | 2.56% | 2.56% | 1.96% | ||||||||
Unamortized deferred finance costs | $ 300,000 | $ 300,000 | $ 300,000 | $ 300,000 | ||||||||
Commitment amount expires in January 2018 | $ 250,000,000 | |||||||||||
Agency Business | $100 million repurchase facility | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 1,479,155 | 1,479,155 | 1,479,155 | |||||||||
Collateral Carrying Value | $ 1,542,000 | $ 1,542,000 | $ 1,542,000 | |||||||||
Weighted Average Note Rate (as a percent) | 2.58% | 2.58% | 2.58% | |||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||||||
Agency Business | $100 million repurchase facility | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 1.35% | 1.35% | ||||||||||
Agency Business | $100 million credit facility - two | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | $ 64,881,000 | $ 64,881,000 | $ 64,881,000 | 39,047,500 | ||||||||
Collateral Carrying Value | $ 64,881,000 | $ 64,881,000 | $ 64,881,000 | $ 39,047,500 | ||||||||
Weighted Average Note Rate (as a percent) | 2.53% | 2.53% | 2.53% | 1.95% | ||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 250,000,000 | $ 100,000,000 | ||||||
Commitment amount expires in January 2018 | $ 250,000,000 | |||||||||||
Decrease in interest rate (as a percent) | 0.05% | |||||||||||
Agency Business | $100 million credit facility - two | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 1.30% | 1.30% | ||||||||||
Agency Business | $150 million credit facility - one | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 80,709,289 | 80,709,289 | $ 80,709,289 | 268,530,211 | ||||||||
Collateral Carrying Value | $ 80,786,203 | $ 80,786,203 | $ 80,786,203 | $ 268,571,797 | ||||||||
Weighted Average Note Rate (as a percent) | 2.63% | 2.63% | 2.63% | 2.05% | ||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 225,000,000 | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 | $ 200,000,000 | $ 150,000,000 | |||||
Agency Business | $150 million credit facility - one | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 1.40% | |||||||||||
Agency Business | $150 million credit facility - two | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 131,409,000 | 131,409,000 | $ 131,409,000 | 210,009,449 | ||||||||
Collateral Carrying Value | $ 131,559,000 | $ 131,559,000 | $ 131,559,000 | $ 210,138,900 | ||||||||
Weighted Average Note Rate (as a percent) | 2.64% | 2.64% | 2.64% | 2.05% | ||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 | $ 350,000,000 | $ 150,000,000 | |||||||
Decrease in interest rate (as a percent) | 0.05% | |||||||||||
Agency Business | $150 million credit facility - two | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 1.35% | 1.35% | ||||||||||
Agency Business | $500 million multifamily ASAP agreement | ||||||||||||
Debt Obligations | ||||||||||||
Debt Carrying Value | 49,508,743 | 49,508,743 | $ 49,508,743 | 142,556,962 | ||||||||
Collateral Carrying Value | $ 49,508,743 | $ 49,508,743 | $ 49,508,743 | $ 142,556,962 | ||||||||
Weighted Average Note Rate (as a percent) | 2.28% | 2.28% | 2.28% | 1.65% | ||||||||
Maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | $ 400,000,000 | ||||||||
Agency Business | $500 million multifamily ASAP agreement | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 1.05% | |||||||||||
Agency Business | $500 million multifamily ASAP agreement | Minimum | LIBOR | ||||||||||||
Debt Obligations | ||||||||||||
Variable rate, spread (as a percent) | 0.35% | |||||||||||
Agency Business | $50 million credit facility - September 2020 | ||||||||||||
Debt Obligations | ||||||||||||
Maximum borrowing capacity | 50,000,000 | $ 50,000,000 | $ 50,000,000 | |||||||||
Decrease in interest rate (as a percent) | 0.125% | |||||||||||
Credit facility, sublimit to finance healthcare related loans | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||||||||
Fixed interest rate (as a percent) | 2.875% | 2.875% | 2.875% | |||||||||
Fannie Mae | Agency Business | $50 million credit facility - September 2020 | ||||||||||||
Debt Obligations | ||||||||||||
Outstanding letters of credit | $ 42,000,000 | $ 42,000,000 | $ 42,000,000 | |||||||||
Freddie Mac | Agency Business | $50 million credit facility - September 2020 | ||||||||||||
Debt Obligations | ||||||||||||
Outstanding letters of credit | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 |
Debt Obligations, Collateralize
Debt Obligations, Collateralized Loan Obligations (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017USD ($)subsidiarytranche | Apr. 30, 2017USD ($)subsidiarytranche | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Obligations | |||||
Debt, Carrying Value | $ 1,066,230,488 | $ 1,066,230,488 | $ 728,441,109 | ||
Weighted average note rate (as a percent) | 2.99% | 2.99% | 2.25% | ||
Outstanding notes repaid | $ 219,000,000 | ||||
CLOs | |||||
Debt Obligations | |||||
Debt, Carrying Value | $ 1,066,230,488 | 1,066,230,488 | $ 728,441,109 | ||
Debt, Face Value | $ 1,079,874,000 | $ 1,079,874,000 | $ 737,000,000 | ||
Weighted average note rate (as a percent) | 3.32% | 3.32% | 3.21% | ||
Collateral Loans, Unpaid Principal | $ 1,254,803,220 | $ 1,254,803,220 | $ 960,567,514 | ||
Collateral Loans, Carrying Value | 1,249,875,599 | 1,249,875,599 | 957,527,517 | ||
Cash collateral | 134,196,781 | 134,196,781 | 14,432,488 | ||
Deferred financing fees | 13,600,000 | 13,600,000 | 8,600,000 | ||
Collateral at risk | $ 0 | $ 0 | $ 0 | ||
Weighted average note rate including certain fees and costs (as a percent) | 3.88% | 3.88% | 3.71% | ||
CLO VIII | |||||
Debt Obligations | |||||
Number of investment grade tranches issued | tranche | 6 | ||||
Number of newly-formed wholly-owned subsidiaries | subsidiary | 2 | ||||
Debt, Carrying Value | $ 312,100,000 | $ 278,296,193 | $ 278,296,193 | ||
Debt, Face Value | 365,000,000 | $ 282,874,000 | $ 282,874,000 | ||
Value of portfolio loans as collateral | $ 293,700,000 | ||||
Weighted average note rate (as a percent) | 2.58% | 2.58% | |||
Collateral Loans, Unpaid Principal | $ 324,190,963 | $ 324,190,963 | |||
Collateral Loans, Carrying Value | 322,527,190 | 322,527,190 | |||
Cash collateral | 40,809,037 | 40,809,037 | |||
Replacement period | 3 years | ||||
Proceeds from issuance of securities for the purpose of acquiring additional loan obligations | $ 71,300,000 | ||||
Notional amount of residual interest retained | $ 82,100,000 | ||||
CLO VIII | One-month LIBOR | |||||
Debt Obligations | |||||
Weighted average note rate (as a percent) | 1.31% | ||||
CLO VIII | Investment grade | |||||
Debt Obligations | |||||
Debt, Carrying Value | $ 282,900,000 | ||||
CLO VIII | Below investment grade | |||||
Debt Obligations | |||||
Debt, Carrying Value | $ 29,200,000 | ||||
CLO VII | |||||
Debt Obligations | |||||
Number of newly-formed wholly-owned subsidiaries | subsidiary | 2 | ||||
Debt, Carrying Value | $ 279,000,000 | 275,035,774 | 275,035,774 | ||
Debt, Face Value | $ 360,000,000 | $ 279,000,000 | $ 279,000,000 | ||
Weighted average note rate (as a percent) | 1.99% | 3.27% | 3.27% | ||
Collateral Loans, Unpaid Principal | $ 313,857,643 | $ 313,857,643 | |||
Collateral Loans, Carrying Value | 312,693,431 | 312,693,431 | |||
Cash collateral | 35,142,358 | 35,142,358 | |||
Replacement period | 3 years | ||||
Proceeds from issuance of securities for the purpose of acquiring additional loan obligations | $ 63,800,000 | ||||
Maximum period to acquire additional loan obligations | 120 days | ||||
Notional amount of residual interest retained | $ 81,000,000 | ||||
CLO VII | Investment grade | |||||
Debt Obligations | |||||
Number of investment grade tranches issued | tranche | 3 | ||||
CLO VII | Secured Debt | |||||
Debt Obligations | |||||
Value of portfolio loans as collateral | $ 296,200,000 | ||||
CLO VI | |||||
Debt Obligations | |||||
Debt, Carrying Value | 247,207,545 | 247,207,545 | $ 246,442,883 | ||
Debt, Face Value | $ 250,250,000 | $ 250,250,000 | $ 250,250,000 | ||
Weighted average note rate (as a percent) | 3.76% | 3.76% | 3.30% | ||
Collateral Loans, Unpaid Principal | $ 303,821,532 | $ 303,821,532 | $ 324,569,105 | ||
Collateral Loans, Carrying Value | 302,750,497 | 302,750,497 | 323,350,928 | ||
Cash collateral | 21,178,468 | 21,178,468 | 430,895 | ||
CLO V | |||||
Debt Obligations | |||||
Debt, Carrying Value | 265,690,976 | 265,690,976 | 264,864,114 | ||
Debt, Face Value | $ 267,750,000 | $ 267,750,000 | $ 267,750,000 | ||
Weighted average note rate (as a percent) | 3.72% | 3.72% | 3.26% | ||
Collateral Loans, Unpaid Principal | $ 312,933,082 | $ 312,933,082 | $ 344,679,286 | ||
Collateral Loans, Carrying Value | 311,904,481 | 311,904,481 | 343,747,570 | ||
Cash collateral | 37,066,918 | 37,066,918 | 5,320,715 | ||
CLO IV | |||||
Debt Obligations | |||||
Debt, Carrying Value | 217,134,112 | ||||
Debt, Face Value | $ 219,000,000 | ||||
Weighted average note rate (as a percent) | 3.06% | ||||
Collateral Loans, Unpaid Principal | $ 291,319,123 | ||||
Collateral Loans, Carrying Value | 290,429,019 | ||||
Cash collateral | $ 8,680,878 | ||||
Outstanding notes repaid | 219,000,000 | ||||
CLO IV | Interest expense | |||||
Debt Obligations | |||||
Deferred financing fees | $ 1,100,000 | $ 1,100,000 |
Debt Obligations, Senior Unsecu
Debt Obligations, Senior Unsecured Notes (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Obligations | ||
Debt, Carrying Value | $ 1,066,230,488 | $ 728,441,109 |
Senior Unsecured Notes | ||
Debt Obligations | ||
Debt, Carrying Value | 95,100,000 | 94,500,000 |
Deferred financing fees | $ 2,800,000 | $ 3,300,000 |
Weighted average note rate including certain fees and costs (as a percent) | 8.16% | 8.15% |
Debt Obligations, Convertible S
Debt Obligations, Convertible Senior Unsecured Notes (Details) - Convertible Senior Unsecured Notes - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Jan. 31, 2017 | |
Debt Obligations | |||||
Principal amount | $ 86,300,000 | $ 100,000,000 | $ 100,000,000 | $ 86,250,000 | $ 100,000,000 |
Additional principal amount | $ 13,800,000 | ||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||
Proceeds received, net of estimated issuance costs | $ 95,800,000 | ||||
Percentage of the Notes required to be repurchased if the agreement is fundamentally changed | 100.00% | ||||
Conversion rate of the notes to common stock, per $1,000 principal amount of notes | 119.3033 | 120.0428 | |||
Conversion price per share of common stock | $ 8.38 | $ 8.33 | $ 8.33 | ||
Nonconvertible debt borrowing rate at the time of issuance (as a percent) | 7.50% | ||||
Maturity period (in years) | 2 years | 2 years 9 months | |||
Unamortized Debt Discount | $ 1,809,470 | $ 1,809,470 | $ 2,119,436 | ||
Unamortized Deferred Financing Fees | 2,809,409 | 2,809,409 | 3,470,526 | ||
Net Carrying Value, Liability Component | 95,381,121 | 95,381,121 | 80,660,038 | ||
Net Carrying Value, Equity Component | 2,531,926 | $ 2,178,647 | |||
Total interest expense | 2,200,000 | 6,600,000 | |||
Interest expense related to cash coupon | 1,600,000 | 4,800,000 | |||
Deferred fees expensed as interest expense | 400,000 | 1,100,000 | |||
Debt discount | $ 200,000 | $ 700,000 | |||
Cost of the notes (as a percent) | 8.68% | 8.68% | |||
Over-Allotment Option | |||||
Debt Obligations | |||||
Principal amount | $ 11,300,000 |
Debt Obligations, Junior Subord
Debt Obligations, Junior Subordinated Notes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Obligations | |||
Gains (Losses) on Extinguishment of Debt | $ 7,116,243 | ||
Debt carrying value | $ 139,418,416 | $ 157,858,555 | |
Weighted average note rate (as a percent) | 2.99% | 2.25% | |
Junior subordinated notes | |||
Debt Obligations | |||
Debt, Face Value | $ 154,336,000 | $ 175,858,000 | |
Debt carrying value purchased | $ 19,800,000 | ||
Gains (Losses) on Extinguishment of Debt | 7,100,000 | ||
Extinguishment of notes | $ 21,500,000 | ||
Debt carrying value | 139,400,000 | 157,900,000 | |
Deferred amount Due at maturity | 12,700,000 | 14,900,000 | |
Deferred fees expensed as interest expense | $ 2,200,000 | $ 3,100,000 | |
Weighted average note rate (as a percent) | 4.17% | 3.82% | |
Weighted average note rate including certain fees and costs (as a percent) | 4.27% | 3.94% |
Debt Obligations, Related Party
Debt Obligations, Related Party Financing (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Obligations | |||||
Outstanding principal balance of related party financing | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | ||
Preferred equity interest financing agreement | ACM / Our "Former Manager" | |||||
Debt Obligations | |||||
Principal amount | $ 50,000,000 | $ 50,000,000 | |||
Maturity period (in years) | 5 years | ||||
Interest rate (as a percent) | 7.00% | 7.00% | |||
Increasing of interest rate per annum thereafter (as a percent) | 1.00% | ||||
Period after which principal balance scheduled to increase | 18 months | ||||
Principal balance due if debt remained outstanding after the end of the five-year term | $ 62,500,000 | $ 62,500,000 | |||
Outstanding principal balance of related party financing | 50,000,000 | 50,000,000 | $ 50,000,000 | ||
Interest expense | $ 1,000,000 | $ 800,000 | $ 2,900,000 | $ 800,000 | |
Preferred equity interest financing agreement | ACM / Our "Former Manager" | Maximum | |||||
Debt Obligations | |||||
Interest rate (as a percent) | 12.00% | 12.00% |
Debt Obligations, Debt Covenant
Debt Obligations, Debt Covenants (Details) - USD ($) | 1 Months Ended | |||||
Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Sep. 30, 2017 | |
CLO V | ||||||
Debt Covenants | ||||||
Current overcollateralization ratio for cash flow triggers (as a percent) | 130.72% | 130.72% | 130.72% | 130.72% | 130.72% | |
Limit overcollateralization ratio for cash flow triggers (as a percent) | 129.72% | |||||
Current interest coverage ratio for cash flow triggers (as a percent) | 211.97% | |||||
Limit interest coverage ratio for cash flow triggers (as a percent) | 120.00% | |||||
CLO VI | ||||||
Debt Covenants | ||||||
Current overcollateralization ratio for cash flow triggers (as a percent) | 129.87% | 129.87% | 129.87% | 129.87% | 129.87% | |
Limit overcollateralization ratio for cash flow triggers (as a percent) | 128.87% | |||||
Current interest coverage ratio for cash flow triggers (as a percent) | 240.15% | |||||
Limit interest coverage ratio for cash flow triggers (as a percent) | 120.00% | |||||
CLO VII | ||||||
Debt Covenants | ||||||
Current overcollateralization ratio for cash flow triggers (as a percent) | 129.03% | 129.03% | ||||
Limit overcollateralization ratio for cash flow triggers (as a percent) | 128.03% | |||||
Current interest coverage ratio for cash flow triggers (as a percent) | 287.79% | |||||
Limit interest coverage ratio for cash flow triggers (as a percent) | 120.00% | |||||
CLO VIII | ||||||
Debt Covenants | ||||||
Current overcollateralization ratio for cash flow triggers (as a percent) | 129.03% | |||||
Limit overcollateralization ratio for cash flow triggers (as a percent) | 128.03% | |||||
Current interest coverage ratio for cash flow triggers (as a percent) | 360.90% | |||||
Limit interest coverage ratio for cash flow triggers (as a percent) | 120.00% | |||||
Junior subordinated notes | ||||||
Debt Covenants | ||||||
Amount payable on default of senior debt | $ 0 |
Allowance for Loss-Sharing Ob74
Allowance for Loss-Sharing Obligations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Roll forward of loss contingency accrual | |||||
Charge-offs, net | $ (1,843,596) | $ (2,131,178) | |||
Loss-Sharing Obligation | |||||
Roll forward of loss contingency accrual | |||||
Outstanding advances under the Fannie Mae DUS program | $ 300,000 | 300,000 | $ 300,000 | ||
Loss-Sharing Obligation | Fannie Mae | |||||
Roll forward of loss contingency accrual | |||||
Beginning balance of the period | 32,797,406 | 32,407,554 | |||
Allowance for loss-sharing obligations assumed in the Acquisition | $ 32,616,821 | 32,616,821 | |||
Provisions for loss sharing (net of recoveries) | (2,617,064) | 1,316,862 | (405,494) | 1,316,862 | |
Charge-offs, net | (21,878) | (2,820,270) | (1,843,596) | (2,820,270) | |
Ending balance of the period | 30,158,464 | $ 31,113,413 | 30,158,464 | $ 31,113,413 | |
Maximum quantifiable liability | $ 2,230,000,000 | $ 2,230,000,000 | $ 2,040,000,000 |
Derivative Financial Instrume75
Derivative Financial Instruments, Summary (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Interest Rate Swaps | ||
Derivative Financial Instruments | ||
Fair Value, classified in Other Liabilities | $ (0.2) | |
Qualifying | LIBOR Caps | ||
Derivative Financial Instruments | ||
Count | item | 2 | |
Fair Value, classified in Other Assets | $ 0.1 | |
Notional value of matured instruments | $ 55.6 | |
Qualifying | LIBOR Cap, One | ||
Derivative Financial Instruments | ||
Cap rate (as a percent) | 2.00% | |
Qualifying | LIBOR Cap, Two | ||
Derivative Financial Instruments | ||
Cap rate (as a percent) | 3.00% | |
Qualifying | Interest Rate Swaps | ||
Derivative Financial Instruments | ||
Count | item | 2 | |
Notional value of matured instruments | $ 41.5 |
Derivative Financial Instrume76
Derivative Financial Instruments, Statements of Income (Details) - Qualifying - Interest Rate Swaps/Cap - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Financial Instruments | ||
Loss Recognized In Other Comprehensive Income (Effective Portion) | $ 196 | |
Loss Reclassified from Accumulated Other Comprehensive Income into Interest Expense (Effective Portion) | $ (237) | $ (4,012) |
Derivative Financial Instrume77
Derivative Financial Instruments, Agency Business (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)item | |
Derivative Financial Instruments | |||||
Notional Value, classified in Other Assets | $ 100,898,203 | $ 100,898,203 | $ 550,117,700 | ||
Notional Value, classified in Other Liabilities | 287,993,000 | 287,993,000 | 522,650,829 | ||
Net gains (losses) from changes in the fair value of derivatives | 200,000 | $ 200,000 | (2,300,000) | $ 200,000 | |
Income from mortgage servicing rights | 18,897,239 | $ 15,968,067 | 56,181,638 | $ 15,968,067 | |
Agency Business | |||||
Derivative Financial Instruments | |||||
Notional Value, classified in Other Assets | 388,891,203,000 | 388,891,203,000 | 975,718,529,000 | ||
Fair Value, classified in Other Assets | 488,747,000 | 488,747,000 | 5,614,990,000 | ||
Fair Value, classified in Other Liabilities | $ (1,881,450,000) | $ (1,881,450,000) | $ (2,299,579,000) | ||
Non-Qualifying | Rate Lock Commitments | Agency Business | |||||
Derivative Financial Instruments | |||||
Count | item | 7 | 7 | 12 | ||
Notional Value, classified in Other Assets | $ 30,179,000,000 | $ 30,179,000,000 | $ 156,685,400,000 | ||
Fair Value, classified in Other Assets | 419,758,000 | 419,758,000 | 2,816,132,000 | ||
Fair Value, classified in Other Liabilities | $ (64,378,000) | $ (64,378,000) | $ (764,429,000) | ||
Non-Qualifying | Forward Sale Commitments | Agency Business | |||||
Derivative Financial Instruments | |||||
Count | item | 81 | 81 | 105 | ||
Notional Value, classified in Other Assets | $ 819,033,129,000 | ||||
Notional Value, classified in Other Liabilities | $ 358,712,203,000 | $ 358,712,203,000 | |||
Fair Value, classified in Other Assets | 68,989,000 | 68,989,000 | 2,798,858,000 | ||
Fair Value, classified in Other Liabilities | $ (1,817,072,000) | $ (1,817,072,000) | $ (1,535,150,000) |
Fair Value, Carrying Value and
Fair Value, Carrying Value and Estimated Fair Value (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2016 | |
Financial assets: | ||||
Loans and investments, net - Principal/Notional Amount | $ 2,094,376,123 | $ 1,790,159,966 | ||
Loans and investments, net | 1,997,555,985 | 1,695,732,351 | ||
Loans held-for-sale, net - Principal/Notional Amount | 333,983,865 | 675,493,536 | ||
Available-for-sale securities - Principal/Notional Amount | 58,789 | 58,789 | ||
Available-for-sale securities | 4,707,085 | 5,403,463 | ||
Securities, held-to-maturity - Principal/Notional Amount | 28,035,293 | |||
Securities held-to-maturity | 18,851,089 | |||
Derivative financial instruments - Principal/Notional Amount | 100,898,203 | 550,117,700 | ||
Financial liabilities: | ||||
Credit and repurchase facilities, Principal/Notional Amount | 564,231,866 | 908,680,198 | ||
Credit and repurchase facilities | 562,326,537 | 906,636,790 | ||
Collateralized loan obligations | 1,066,230,488 | 728,441,109 | ||
Senior unsecured notes | 95,088,379 | 94,521,566 | ||
Convertible senior unsecured notes, net | 95,381,121 | 80,660,038 | ||
Junior subordinated notes | 139,418,416 | 157,858,555 | ||
Related party financing | 50,000,000 | 50,000,000 | ||
Derivative financial instruments - Principal/Notional Amount | $ 287,993,000 | 522,650,829 | ||
Loans held-for-sale, net | ||||
Maximum Period of Loans Held-for-Sale Sold | 60 days | |||
Carrying Value | ||||
Financial assets: | ||||
Loans and investments, net | $ 1,997,555,985 | 1,695,732,351 | ||
Loans held-for-sale, net | 333,267,976 | 673,367,304 | ||
Capitalized mortgage servicing rights, net | 247,875,659 | 227,742,986 | ||
Available-for-sale securities | 4,707,085 | 5,403,463 | ||
Securities held-to-maturity | 18,851,089 | |||
Derivative financial instruments | 488,747 | 5,614,990 | ||
Financial liabilities: | ||||
Credit and repurchase facilities | 562,326,537 | 906,636,790 | ||
Collateralized loan obligations | 1,066,230,488 | 728,441,109 | ||
Senior unsecured notes | 95,088,379 | 94,521,566 | ||
Convertible senior unsecured notes, net | 95,381,121 | 80,660,038 | ||
Junior subordinated notes | 139,418,416 | 157,858,555 | ||
Related party financing | 50,000,000 | 50,000,000 | ||
Derivative financial instruments | 1,881,450 | 2,451,422 | ||
Fair Value | ||||
Financial assets: | ||||
Loans and investments, net | 2,056,020,469 | 1,749,130,232 | ||
Loans held-for-sale, net | 338,766,761 | 683,833,449 | ||
Capitalized mortgage servicing rights, net | 293,807,076 | 245,455,881 | ||
Available-for-sale securities | 4,707,085 | 5,403,463 | ||
Securities held-to-maturity | 18,882,997 | |||
Derivative financial instruments | 488,747 | 5,614,990 | ||
Financial liabilities: | ||||
Credit and repurchase facilities | 563,366,477 | 907,882,886 | ||
Collateralized loan obligations | 1,080,228,695 | 728,642,500 | ||
Senior unsecured notes | 99,817,226 | 99,034,345 | ||
Convertible senior unsecured notes, net | 105,438,000 | 86,586,375 | ||
Junior subordinated notes | 93,833,687 | 105,649,537 | ||
Related party financing | 53,270,857 | 55,119,744 | ||
Derivative financial instruments | 1,881,450 | 2,451,422 | ||
CLOs | ||||
Financial liabilities: | ||||
Debt instrument - Principal/Notional Amount | 1,079,874,000 | 737,000,000 | ||
Collateralized loan obligations | 1,066,230,488 | 728,441,109 | ||
Senior Unsecured Notes | ||||
Financial liabilities: | ||||
Debt instrument - Principal/Notional Amount | 97,860,025 | 97,860,025 | ||
Collateralized loan obligations | 95,100,000 | 94,500,000 | ||
Convertible Senior Unsecured Notes | ||||
Financial liabilities: | ||||
Debt instrument - Principal/Notional Amount | 100,000,000 | $ 100,000,000 | 86,250,000 | $ 86,300,000 |
Junior subordinated notes | ||||
Financial liabilities: | ||||
Debt instrument - Principal/Notional Amount | 154,336,000 | 175,858,000 | ||
Junior subordinated notes | $ 139,400,000 | $ 157,900,000 |
Fair Value, Measurement on Recu
Fair Value, Measurement on Recurring and Nonrecurring Basis (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Financial assets: | ||||||
Available-for-sale securities | $ 4,707,085 | $ 5,403,463 | ||||
Allowance for loan losses | $ (83,831,575) | $ (81,255,922) | $ (83,255,922) | $ (83,816,575) | (83,711,575) | $ (86,761,575) |
Number of impaired loans | item | 6 | |||||
Impairment loss on real estate owned | $ 2,700,000 | $ 11,200,000 | ||||
Non-financial assets: | ||||||
Long-lived asset | 17,354,720 | 19,491,805 | ||||
Real Estate Owned | ||||||
Non-financial assets: | ||||||
Long-lived asset | 17,354,720 | 19,491,805 | ||||
Hotel | Real Estate Owned | ||||||
Financial assets: | ||||||
Impairment loss on real estate owned | $ 11,200,000 | $ 2,700,000 | ||||
Non-financial assets: | ||||||
Long-lived asset | 11,540,664 | 13,908,812 | ||||
Carrying Value | ||||||
Financial assets: | ||||||
Available-for-sale securities | 4,707,085 | 5,403,463 | ||||
Derivative financial instruments | 488,747 | 5,614,990 | ||||
Financial liabilities: | ||||||
Derivative financial instruments | 1,881,450 | 2,451,422 | ||||
Fair Value | ||||||
Financial assets: | ||||||
Available-for-sale securities | 4,707,085 | 5,403,463 | ||||
Derivative financial instruments | 488,747 | 5,614,990 | ||||
Financial liabilities: | ||||||
Derivative financial instruments | 1,881,450 | $ 2,451,422 | ||||
Recurring basis | Carrying Value | ||||||
Financial assets: | ||||||
Available-for-sale securities | 4,707,085 | |||||
Derivative financial instruments | 488,747 | |||||
Financial liabilities: | ||||||
Derivative financial instruments | 1,881,450 | |||||
Recurring basis | Fair Value | ||||||
Financial assets: | ||||||
Available-for-sale securities | 4,707,085 | |||||
Derivative financial instruments | 488,747 | |||||
Financial liabilities: | ||||||
Derivative financial instruments | 1,881,450 | |||||
Nonrecurring basis | Carrying Value | ||||||
Financial assets: | ||||||
Impaired loans, net | 101,284,128 | |||||
Non-financial assets: | ||||||
Long-lived asset | 11,540,664 | |||||
Nonrecurring basis | Fair Value | ||||||
Financial assets: | ||||||
Impaired loans, net | 101,284,128 | |||||
Non-financial assets: | ||||||
Long-lived asset | 11,540,664 | |||||
Level 1 | Recurring basis | ||||||
Financial assets: | ||||||
Available-for-sale securities | 264,553 | |||||
Level 2 | Recurring basis | ||||||
Financial assets: | ||||||
Derivative financial instruments | 68,989 | |||||
Financial liabilities: | ||||||
Derivative financial instruments | 1,881,450 | |||||
Level 3 | Recurring basis | ||||||
Financial assets: | ||||||
Available-for-sale securities | 4,442,532 | |||||
Derivative financial instruments | 419,758 | |||||
Level 3 | Nonrecurring basis | ||||||
Financial assets: | ||||||
Impaired loans, net | 101,284,128 | |||||
Non-financial assets: | ||||||
Long-lived asset | $ 11,540,664 |
Fair Value, Level 3 Inputs (Det
Fair Value, Level 3 Inputs (Details) - Level 3 - Discounted cash flows - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | |
Office | ||
Financial assets: | ||
Impaired loans | $ 792,500 | |
Discount rate (as a percent) | 11.00% | 11.00% |
Capitalization rate (as a percent) | 8.10% | 8.10% |
Revenue growth rate (as a percent) | 2.50% | 2.50% |
Land | ||
Financial assets: | ||
Impaired loans | $ 71,441,628 | |
Discount rate (as a percent) | 15.00% | |
Capitalization rate (as a percent) | 7.25% | |
Revenue growth rate (as a percent) | 3.00% | |
Hotel | ||
Financial assets: | ||
Impaired loans | $ 29,050,000 | |
Discount rate (as a percent) | 9.00% | |
Capitalization rate (as a percent) | 7.00% | |
Revenue growth rate (as a percent) | 3.30% | |
Non-financial assets: | ||
Non-financial impaired loans | $ 11,540,664 | |
Non-financial asset discount rate (as a percent) | 11.75% | |
Non-financial asset capitalization rate (as a percent) | 9.75% | |
Non-financial asset revenue growth rate (as a percent) | 3.50% | |
Non-financial assets hold period | 3 years | |
Commercial | Weighted average | ||
Financial assets: | ||
Discount rate (as a percent) | 10.22% | |
Commercial | Rate Lock Commitments | ||
Financial assets: | ||
Impaired loans | $ 419,758 |
Fair Value, Level 3 Derivative
Fair Value, Level 3 Derivative Instruments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative assets and liabilities, net | ||||
Balance at beginning of period | $ 1,419,530 | $ 2,816,132 | ||
Additions from the Acquisition | $ 4,528,640 | $ 4,528,640 | ||
Settlements | (18,897,011) | (15,286,185) | (57,578,012) | (15,286,185) |
Realized gains recorded in earnings | 17,477,481 | 10,757,545 | 54,761,880 | 10,757,545 |
Unrealized gains recorded in earnings | 419,758 | 681,882 | 419,758 | 681,882 |
Balance at end of period | $ 419,758 | $ 681,882 | $ 419,758 | $ 681,882 |
Fair Value, Components of fair
Fair Value, Components of fair value and other relevant information (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Fair Value of Servicing Rights | $ 5,870,420 |
Total Fair Value Adjustment | 5,870,420 |
Rate Lock Commitments | |
Notional/Principal Amount | 30,179,000 |
Fair Value of Servicing Rights | 419,758 |
Interest Rate Movement Effect | (64,378) |
Total Fair Value Adjustment | 355,380 |
Forward Sale Commitments | |
Notional/Principal Amount | 358,712,203 |
Interest Rate Movement Effect | 64,378 |
Total Fair Value Adjustment | 64,378 |
Loans held-for-sale, net | |
Notional/Principal Amount | 328,533,203 |
Fair Value of Servicing Rights | 5,450,662 |
Total Fair Value Adjustment | $ 5,450,662 |
Fair Value, Financial Assets an
Fair Value, Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Loans and investments, net | $ 1,997,555,985 | $ 1,695,732,351 |
Securities held-to-maturity, net | 18,851,089 | |
Financial liabilities: | ||
Credit and repurchase facilities | 562,326,537 | 906,636,790 |
Collateralized loan obligations | 1,066,230,488 | 728,441,109 |
Senior unsecured notes | 95,088,379 | 94,521,566 |
Convertible senior unsecured notes, net | 95,381,121 | 80,660,038 |
Junior subordinated notes | 139,418,416 | 157,858,555 |
Level 1 | ||
Financial liabilities: | ||
Senior unsecured notes | 99,817,226 | |
Level 2 | ||
Financial assets: | ||
Loans held-for-sale, net | 333,316,099 | |
Financial liabilities: | ||
Credit and repurchase facilities | 327,987,187 | |
Convertible senior unsecured notes, net | 105,438,000 | |
Level 3 | ||
Financial assets: | ||
Loans and investments, net | 2,056,020,469 | |
Loans held-for-sale, net | 5,450,662 | |
Capitalized mortgage servicing rights, net | 293,807,076 | |
Securities held-to-maturity, net | 18,882,997 | |
Financial liabilities: | ||
Credit and repurchase facilities | 235,379,290 | |
Collateralized loan obligations | 1,080,228,695 | |
Junior subordinated notes | 93,833,687 | |
Related party financing | 53,270,857 | |
Carrying Value | ||
Financial assets: | ||
Loans and investments, net | 1,997,555,985 | 1,695,732,351 |
Loans held-for-sale, net | 333,267,976 | 673,367,304 |
Capitalized mortgage servicing rights, net | 247,875,659 | |
Securities held-to-maturity, net | 18,851,089 | |
Financial liabilities: | ||
Credit and repurchase facilities | 562,326,537 | 906,636,790 |
Collateralized loan obligations | 1,066,230,488 | 728,441,109 |
Senior unsecured notes | 95,088,379 | 94,521,566 |
Convertible senior unsecured notes, net | 95,381,121 | 80,660,038 |
Junior subordinated notes | 139,418,416 | 157,858,555 |
Related party financing | 50,000,000 | |
Fair Value | ||
Financial assets: | ||
Loans and investments, net | 2,056,020,469 | 1,749,130,232 |
Loans held-for-sale, net | 338,766,761 | 683,833,449 |
Capitalized mortgage servicing rights, net | 293,807,076 | |
Securities held-to-maturity, net | 18,882,997 | |
Financial liabilities: | ||
Credit and repurchase facilities | 563,366,477 | 907,882,886 |
Collateralized loan obligations | 1,080,228,695 | 728,642,500 |
Senior unsecured notes | 99,817,226 | 99,034,345 |
Convertible senior unsecured notes, net | 105,438,000 | 86,586,375 |
Junior subordinated notes | 93,833,687 | $ 105,649,537 |
Related party financing | $ 53,270,857 |
Commitments and Contingencies,
Commitments and Contingencies, Contractual Commitments (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Obligations | |
Remainder of 2017 | $ 400.9 |
2,018 | 484.5 |
2,019 | 355.5 |
2,020 | 427.1 |
2,021 | 236.4 |
Thereafter | 154.3 |
Unfunded CLO Commitments | |
Unfunded commitments related to structured loans and investments | 68.1 |
Letter of credit | |
Agency Business Commitments | |
Letter of credit agreement entered into for restricted cash requirements for the Fannie Mae DUS and Freddie Mac SBL programs | 50 |
Cash collateral arrangement - purchase and loss obligations under Freddie Mac's SBL Program | |
Agency Business Commitments | |
Cash collateral per securitization | 5 |
Outstanding letters of credit | $ 5 |
Forward Contracts | |
Agency Business Commitments | |
Period of contractual commitment | 60 days |
Fannie Mae | |
Agency Business Commitments | |
Minimum liquid assets to be maintained to meet operational liquidity requirements | $ 12.1 |
Period of funding for collateral requirement | 48 months |
Fannie Mae | Restricted liquidity arrangement - loans sold under the Fannie Mae DUS program | |
Agency Business Commitments | |
Letter of credit assigned | $ 42 |
Reserve required to fund additional restricted liquidity over the next 48 months | $ 27.4 |
Period of additional funding for collateral requirement | 48 months |
Commitments and Contingencies85
Commitments and Contingencies, Litigation (Details) $ in Millions | Jun. 15, 2011USD ($)lawsuitdefendant | Jun. 30, 2013USD ($)lawsuitdefendant | Jun. 30, 2011lawsuitdefendant |
Arbor ESH II, LLC | |||
Litigation | |||
Investments in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. | $ | $ 115 | ||
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | |||
Litigation | |||
Number of lawsuits or complaints filed | lawsuit | 3 | ||
Number of lawsuits filed in United States Bankruptcy Court | lawsuit | 2 | ||
Number of defendants | 73 | ||
Number of defendants who are corporate and partnership entities | 55 | ||
Number of defendants named in a legal action who are individuals | 18 | ||
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | Fiduciary Duty Claims | |||
Litigation | |||
Number of lawsuits or complaints filed | lawsuit | 2 | ||
Number of defendants | 2 | ||
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | Motion to amend the lawsuits | |||
Litigation | |||
Number of lawsuits consolidated | lawsuit | 1 | ||
Number of defendants removed due to consolidation of lawsuits | 47 | ||
Number of defendants related to the entity | 0 | ||
Number of defendants remaining due to consolidation of lawsuits | 26 | ||
Number of defendants who are corporate and partnership entities | 16 | ||
Number of defendants named in a legal action who are individuals | 10 | ||
Number of lawsuits before amendment | lawsuit | 100 | ||
Number of lawsuits after amendment | lawsuit | 17 | ||
Aggregate amount which the Trust would be seeking from the affiliates of the entity | $ | $ 139 |
Variable Interest Entities (Det
Variable Interest Entities (Details) | 9 Months Ended | |||||
Sep. 30, 2017USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Variable Interest Entities | ||||||
Loan loss reserves related to VIEs | $ 83,255,922 | $ 81,255,922 | $ 83,711,575 | $ 83,816,575 | $ 83,831,575 | $ 86,761,575 |
Assets: | ||||||
Restricted cash | 137,138,389 | 29,314,929 | ||||
Loans and investments, net | 1,997,555,985 | 1,695,732,351 | ||||
Due from related party | 12,613,313 | 1,464,732 | ||||
Other assets | 49,564,693 | 48,184,509 | ||||
Total assets | 3,058,177,862 | 2,970,786,246 | ||||
Liabilities: | ||||||
Collateralized loan obligations | 1,066,230,488 | 728,441,109 | ||||
Other liabilities | 104,474,096 | 86,164,613 | ||||
Total liabilities | 2,212,434,653 | 2,223,748,318 | ||||
Consolidated VIEs | CLOs | ||||||
Assets: | ||||||
Restricted cash | 136,408,829 | 15,542,304 | ||||
Loans and investments, net | 1,249,875,600 | 957,527,492 | ||||
Due from related party | 11,397,903 | |||||
Other assets | 9,441,853 | 6,982,452 | ||||
Total assets | 1,407,124,185 | 980,052,248 | ||||
Liabilities: | ||||||
Collateralized loan obligations | 1,066,230,488 | 728,441,109 | ||||
Other liabilities | 2,185,528 | 1,645,426 | ||||
Total liabilities | $ 1,068,416,016 | $ 730,086,535 | ||||
Unconsolidated VIEs | ||||||
Variable Interest Entities | ||||||
Number of VIEs where the reporting entity is not VIE's primary beneficiary | item | 20 | |||||
Carrying Amount | $ 307,022,295 | |||||
Carrying value of loans before loan loss reserves | 182,800,000 | |||||
Loan loss reserves related to VIEs | 81,600,000 | |||||
Exposure to real estate debt | 2,070,000,000 | |||||
Unconsolidated VIEs | Loans | ||||||
Variable Interest Entities | ||||||
Carrying Amount | 281,608,227 | |||||
Unconsolidated VIEs | B Piece bonds | ||||||
Variable Interest Entities | ||||||
Carrying Amount | 18,851,089 | |||||
Unconsolidated VIEs | Interest-only Securities (Agency IOs) under the SBL Program | ||||||
Variable Interest Entities | ||||||
Carrying Amount | 4,442,532 | |||||
Unconsolidated VIEs | Equity investments | ||||||
Variable Interest Entities | ||||||
Carrying Amount | $ 2,120,447 |
Equity (Details)
Equity (Details) - USD ($) | Nov. 01, 2017 | Aug. 02, 2017 | May 03, 2017 | Mar. 01, 2017 | Feb. 03, 2017 | Jul. 14, 2016 | Aug. 31, 2017 | May 31, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock | ||||||||||||||||
Proceeds from issuance of shares under public offering | $ 76,225,000 | |||||||||||||||
Payment to internalize the management team and terminate the existing management agreement using the proceed from public offering | 25,000,000 | |||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 205,761 | 205,761 | $ 320,917 | |||||||||||||
Unrealized gain related to available-for-sale securities | $ 200,000 | $ 200,000 | 600,000 | |||||||||||||
Net unrealized losses on derivatives designated as cash flow hedges, net of deferred losses on terminated interest swaps | 200,000 | |||||||||||||||
Deferred losses on terminated interest swaps | $ 100,000 | |||||||||||||||
Noncontrolling Interest | ||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||
Distributions | ||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.18 | $ 0.16 | $ 0.53 | $ 0.46 | ||||||||||||
Performance | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting period (in years) | 3 years | |||||||||||||||
Restricted stock units eligible to receive annually | $ 3,000,000 | |||||||||||||||
Chief executive officer | Restricted common stock | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Number of fully vested shares issued | 74,830 | |||||||||||||||
Total grant date fair value | $ 600,000 | |||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Chief executive officer | Restricted common stock | First Anniversaries | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Chief executive officer | Restricted common stock | Second Anniversaries | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Chief executive officer | Restricted common stock | Third Anniversaries | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting percentage | 25.00% | |||||||||||||||
Chief executive officer | Performance | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Granted of restricted stock units that vest at the end of four-year performance period (in shares) | 357,569 | 448,980 | ||||||||||||||
Vesting period (in years) | 4 years | 4 years | 4 years | |||||||||||||
Total grant date fair value | $ 2,700,000 | $ 1,000,000 | ||||||||||||||
Percentage increased in long-term equity awards due to equity capitalization growth goals | 10.00% | |||||||||||||||
Restricted stock units eligible to receive annually | $ 3,000,000 | |||||||||||||||
Expiration period (in years) | 5 years | |||||||||||||||
Chief executive officer | Employee compensation and benefits | Restricted common stock | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | 100,000 | |||||||||||||||
Chief executive officer | Employee compensation and benefits | Performance | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | $ 100,000 | |||||||||||||||
Chief executive officer | Employee compensation and benefits | Performance | Maximum | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | $ 100,000 | |||||||||||||||
Employees of the company and a related party | Restricted common stock | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Number of fully vested shares issued | 299,750 | |||||||||||||||
Total grant date fair value | $ 2,400,000 | |||||||||||||||
Vesting percentage | 33.00% | |||||||||||||||
Employees of the company and a related party | Restricted common stock | March, 2018 | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting percentage | 33.00% | |||||||||||||||
Employees of the company and a related party | Restricted common stock | March, 2019 | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Vesting percentage | 33.00% | |||||||||||||||
Employees of the company and a related party | Employee compensation and benefits | Restricted common stock | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | $ 400,000 | |||||||||||||||
Employees of the company and a related party | Selling and administrative expense | Restricted common stock | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | $ 500,000 | |||||||||||||||
8.25% Series A preferred stock | ||||||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 8.25% | 8.25% | 8.25% | |||||||||||||
7.75% Series B preferred stock | ||||||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 7.75% | 7.75% | 7.75% | |||||||||||||
8.50% Series C preferred stock | ||||||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 8.50% | 8.50% | 8.50% | |||||||||||||
Common Stock | ||||||||||||||||
Common stock | ||||||||||||||||
Number of common stock sold under public offering (in shares) | 9,500,000 | 9,500,000 | ||||||||||||||
Issued price per share (in dollars per share) | $ 8.05 | |||||||||||||||
Proceeds from issuance of shares under public offering | $ 76,200,000 | |||||||||||||||
Payment to internalize the management team and terminate the existing management agreement using the proceed from public offering | $ 25,000,000 | |||||||||||||||
Number of shares available under an "At-The-Market" equity offering with JMP Securities LLC | 7,500,000 | 7,500,000 | ||||||||||||||
Value of common stock available under shelf registration statement | $ 323,500,000 | $ 323,500,000 | ||||||||||||||
Aggregate amount of securities filed under shelf registration statement | $ 500,000,000 | $ 500,000,000 | ||||||||||||||
Distributions | ||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.17 | ||||||||||||
Common Stock | Non-management members of the Board of Directors | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Number of fully vested shares issued | 74,375 | |||||||||||||||
Common Stock | Non-management members of the Board of Directors | Selling and administrative expense | ||||||||||||||||
Deferred Compensation | ||||||||||||||||
Share-based compensation expense | $ 600,000 | |||||||||||||||
Preferred Stock | 8.25% Series A preferred stock | ||||||||||||||||
Distributions | ||||||||||||||||
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ 0.515625 | 0.515625 | 0.515625 | $ 0.515625 | ||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 8.25% | |||||||||||||||
Preferred Stock | 7.75% Series B preferred stock | ||||||||||||||||
Distributions | ||||||||||||||||
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ 0.484375 | 0.484375 | 0.484375 | 0.484375 | ||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 7.75% | |||||||||||||||
Preferred Stock | 8.50% Series C preferred stock | ||||||||||||||||
Distributions | ||||||||||||||||
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ 0.53125 | $ 0.53125 | $ 0.53125 | $ 0.53125 | ||||||||||||
Preferred Stock | ||||||||||||||||
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent) | 8.50% | |||||||||||||||
ACM Acquisition | ACM / Our "Former Manager" | ||||||||||||||||
Noncontrolling Interest | ||||||||||||||||
Consideration in stock to be paid with operating partnership units (in shares) | 21,230,769 | |||||||||||||||
Number of preferred stock shares paired with each operating partnership units | 1 | |||||||||||||||
Operating Partnership | ||||||||||||||||
Noncontrolling Interest | ||||||||||||||||
Conversion ratio for operating partnership units to common stock shares | 1 | |||||||||||||||
Operating Partnership | Special voting preferred shares | ||||||||||||||||
Noncontrolling Interest | ||||||||||||||||
Number of preferred stock shares paired with each operating partnership units | 1 | |||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||||||||
Voting power of outstanding stock (as a percent) | 25.60% | |||||||||||||||
Operating Partnership | ACM Acquisition | ||||||||||||||||
Noncontrolling Interest | ||||||||||||||||
Consideration in stock to be paid with operating partnership units (in shares) | 21,230,769 | |||||||||||||||
Value of operating partnership units issues as consideration | $ 154,800,000 |
Equity, Earnings Per Share ("EP
Equity, Earnings Per Share ("EPS") (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic | ||||||
Net income attributable to common stockholders | $ 16,420,958 | $ 10,888,172 | $ 43,964,070 | $ 22,261,516 | ||
Weighted average shares outstanding (in shares) | 61,582,796 | 51,390,467 | 56,602,504 | 51,272,795 | ||
Net income per common share (in dollars per share) | $ 0.27 | $ 0.21 | $ 0.78 | $ 0.43 | ||
Diluted | ||||||
Net income attributable to noncontrolling interest | $ 5,661,184 | $ 3,649,432 | $ 16,596,415 | $ 3,649,432 | ||
Net income attributable to common stockholders and noncontrolling interest | $ 22,082,142 | $ 14,537,604 | $ 60,560,485 | $ 22,261,516 | ||
Weighted average shares outstanding (in shares) | 61,582,796 | 51,390,467 | 56,602,504 | 51,272,795 | ||
Dilutive effect of OP units (in shares) | 21,230,769 | 18,230,769 | 21,230,769 | |||
Dilutive effect of restricted stock units (in shares) | 1,104,552 | 650,560 | 1,077,178 | 354,755 | ||
Dilutive effect of convertible senior unsecured notes (in shares) | 32,468 | |||||
Weighted average shares outstanding ( in shares) | 83,918,117 | 70,271,796 | 78,942,919 | 51,627,550 | ||
Net income per common share (in dollars per share) | $ 0.26 | $ 0.21 | $ 0.77 | $ 0.43 | ||
Performance | ||||||
Diluted | ||||||
Vesting period (in years) | 3 years | |||||
Chief executive officer | Performance | ||||||
Diluted | ||||||
Vesting period (in years) | 4 years | 4 years | 4 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes | ||||
Total tax provision | $ 6,708,000 | $ 300,000 | $ 16,244,000 | $ 300,000 |
Current tax provision | 7,600,000 | 16,200,000 | ||
Deferred tax provision | $ 900,000 | $ 15,000 | ||
State tax provision | $ 300,000 | $ 300,000 |
Agreements and Transactions w90
Agreements and Transactions with Related Parties, Management Agreement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Management Fees: | ||||
Base | $ 3,325,000 | $ 6,673,260 | $ 8,875,000 | |
Total management fee | $ 3,325,000 | 6,673,260 | $ 8,875,000 | |
Former manager | Support Services | ||||
Agreements and transactions with related parties | ||||
Costs for services to related party | $ 300,000 | $ 400,000 |
Agreements and Transactions w91
Agreements and Transactions with Related Parties, Other (Details) | Sep. 30, 2017USD ($)shares | Jul. 14, 2016USD ($)shares | Aug. 31, 2017USD ($) | Jul. 31, 2017USD ($) | May 31, 2017USD ($) | Jan. 31, 2017USD ($) | Nov. 30, 2016USD ($)item | Sep. 30, 2016USD ($)property | Jan. 31, 2016USD ($)property | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)property | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)property | Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)itemloan | Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) |
Agreements and transactions with related parties | |||||||||||||||||||
Due from related party | $ 12,613,313 | $ 12,613,313 | $ 12,613,313 | $ 1,464,732 | |||||||||||||||
Due to related party | 6,038,707 | ||||||||||||||||||
Related party financing | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||
Income from equity affiliates | 995,312 | $ 4,929,375 | 1,755,145 | $ 11,193,918 | |||||||||||||||
Investments in equity affiliates | 31,330,740 | 31,330,740 | 31,330,740 | 33,948,853 | |||||||||||||||
ACM Acquisition | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Acquisition purchase price | $ 292,500,000 | ||||||||||||||||||
Preferred equity investments | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 15,000,000 | 5,000,000 | |||||||||||||||||
Commitment to fund additional investment | $ 5,000,000 | ||||||||||||||||||
Interest income recorded | 200,000 | 500,000 | |||||||||||||||||
Fixed rate of interest (as a percent) | 11.00% | ||||||||||||||||||
Mezzanine loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Interest income recorded | 100,000 | 100,000 | 300,000 | 300,000 | |||||||||||||||
Fixed rate of interest (as a percent) | 12.50% | ||||||||||||||||||
Amount of loan to related party | $ 3,000,000 | ||||||||||||||||||
Maturity Date of October 2018, extended from October 2017 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Base spread (as a percent) | 5.00% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | 300,000 | 300,000 | 800,000 | 800,000 | |||||||||||||||
Number of mortgage loans secured by property purchased from related party | loan | 2 | ||||||||||||||||||
Loan due from related party | $ 16,700,000 | ||||||||||||||||||
Maturity date of November 2018 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 14,800,000 | ||||||||||||||||||
Base spread (as a percent) | 5.25% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.50% | ||||||||||||||||||
Interest income recorded | 300,000 | 800,000 | |||||||||||||||||
Number of bridge loans originated | item | 2 | ||||||||||||||||||
ACM / Our "Former Manager" | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Due from related party | $ 12,600,000 | 12,600,000 | 12,600,000 | 1,500,000 | |||||||||||||||
Due to related party | 6,000,000 | ||||||||||||||||||
ACM / Our "Former Manager" | Residential Mortgage Banking Company | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Noncontrolling interest in equity method investment acquired (as a percent) | 50.00% | ||||||||||||||||||
Indirect ownership percentage | 22.5% | ||||||||||||||||||
Acquisition purchase price | $ 9,600,000 | ||||||||||||||||||
Income from equity affiliates | $ (1,200,000) | 4,200,000 | $ (1,800,000) | 8,900,000 | |||||||||||||||
ACM / Our "Former Manager" | ACM Acquisition | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Number of shares held by related party | shares | 5,349,053 | 5,349,053 | 5,349,053 | ||||||||||||||||
OP units issued as part of acquisition | shares | 21,230,769 | ||||||||||||||||||
Percentage of voting power held by related party | 32.00% | ||||||||||||||||||
ACM / Our "Former Manager" | Non-qualified Residential Mortgages | Residential Mortgage Banking Company | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Additional investment made by the company along with a consortium of independent outside investors | $ 600,000 | 16,100,000 | |||||||||||||||||
Distributions received | 900,000 | 14,000,000 | |||||||||||||||||
ACM / Our "Former Manager" | Mortgage loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 47,000,000 | ||||||||||||||||||
ACM / Our "Former Manager" | Preferred equity interest financing agreement | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Related party financing | $ 50,000,000 | $ 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||
Interest expense on related party loan | 1,000,000 | 800,000 | 2,900,000 | 800,000 | |||||||||||||||
ACM / Our "Former Manager" | Maturity date of April 2016 | Mortgage loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Base spread (as a percent) | 4.80% | ||||||||||||||||||
Interest income recorded | 200,000 | 200,000 | 700,000 | 700,000 | |||||||||||||||
Number of mortgage loans secured by property purchased from related party | loan | 2 | ||||||||||||||||||
ACM / Our "Former Manager" | Maturity date of April 2016 | Mortgage loans | First mortgage | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 14,600,000 | ||||||||||||||||||
ACM / Our "Former Manager" | Maturity date of April 2016 | Mortgage loans | Second mortgage | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Proceeds from repayment in full | $ 5,100,000 | ||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | 5,100,000 | ||||||||||||||||||
ACM / Our "Former Manager" | Maturity date of March 2017 | Mortgage loans | First mortgage | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 14,600,000 | ||||||||||||||||||
Consortium of investors including an immediate family member of Mr. Kaufman | Fannie Mae loan on a multifamily property | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of maximum loss-sharing obligation unpaid principal balance | 40.00% | ||||||||||||||||||
Principal amount | $ 46,900,000 | ||||||||||||||||||
Percentage of ownership interest of related party in the entity | 17.20% | ||||||||||||||||||
Certain officers, including Mr. Kaufman and our Former Manager | Maturity date of September 2019 | Bridge loan, six multifamily properties | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 48,000,000 | $ 48,000,000 | $ 48,000,000 | ||||||||||||||||
Number of properties owned | property | 6 | 6 | 6 | ||||||||||||||||
Base spread (as a percent) | 4.50% | 4.50% | 4.50% | ||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | 700,000 | $ 100,000 | 2,100,000 | $ 100,000 | |||||||||||||||
Proceeds from repayment in full | $ 6,800,000 | ||||||||||||||||||
Certain officers, including Mr. Kaufman and our Former Manager | Maturity date of September 2019 | Bridge loan, six multifamily properties | Minimum | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of ownership interest of related party in the entity | 7.80% | ||||||||||||||||||
Certain officers, including Mr. Kaufman and our Former Manager | Maturity date of September 2019 | Bridge loan, six multifamily properties | Maximum | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of ownership interest of related party in the entity | 9.00% | ||||||||||||||||||
Certain officers, including Mr. Kaufman and our Former Manager | Maturity date of April 2018 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of ownership interest of related party in the entity | 90.00% | ||||||||||||||||||
Base spread (as a percent) | 4.50% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | 100,000 | 200,000 | |||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 6,300,000 | ||||||||||||||||||
Certain Officers | Preferred equity investments | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Amount of ownership interest of related party in the entity | $ 5,000,000 | ||||||||||||||||||
Certain Officers | Maturity date of July 2020 | Bridge loan, one multifamily property | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 36,000,000 | ||||||||||||||||||
Percentage of ownership interest of related party in the entity | 41.00% | ||||||||||||||||||
Base spread (as a percent) | 4.50% | ||||||||||||||||||
LIBOR floor (as a percentage) | 1.00% | ||||||||||||||||||
Interest income recorded | 400,000 | 400,000 | |||||||||||||||||
Certain Officers | Maturity date of January 2019 | Bridge loan, two multifamily properties | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 12,700,000 | ||||||||||||||||||
Percentage of ownership interest of related party in the entity | 50.00% | ||||||||||||||||||
Base spread (as a percent) | 4.50% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | 300,000 | 300,000 | 900,000 | 900,000 | |||||||||||||||
Certain Officers | Maturity date of January 2019 | Bridge loan, one multifamily property | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 19,000,000 | ||||||||||||||||||
Percentage of ownership interest of related party in the entity | 7.50% | ||||||||||||||||||
Base spread (as a percent) | 4.50% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | 300,000 | 300,000 | 800,000 | 700,000 | |||||||||||||||
Certain Officers | Maturity date of November 2016, extended from April 2016 | Preferred equity investments | Multifamily | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Equity investment | $ 5,200,000 | ||||||||||||||||||
Fixed rate of interest (as a percent) | 10.00% | ||||||||||||||||||
Certain Officers | Maturity date of November 2016, extended from April 2016 | Bridge loan, two multifamily properties | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Number of properties owned | property | 2 | ||||||||||||||||||
Certain Officers | Maturity date of November 2018 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of ownership interest of related party in the entity | 7.50% | ||||||||||||||||||
Base spread (as a percent) | 4.50% | ||||||||||||||||||
LIBOR floor (as a percentage) | 0.25% | ||||||||||||||||||
Interest income recorded | $ 100,000 | 100,000 | $ 300,000 | 300,000 | |||||||||||||||
Loan due from related party | $ 7,100,000 | ||||||||||||||||||
Chief executive officer | Minimum | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Ownership interest allowed under company charter (as a percent) | 5.00% | 5.00% | 5.00% | ||||||||||||||||
Chief executive officer | Maturity date of February 2018 | Preferred equity investments | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Principal amount | $ 23,000,000 | $ 18,000,000 | |||||||||||||||||
Interest income recorded | 1,000,000 | ||||||||||||||||||
Fixed rate of interest (as a percent) | 10.00% | ||||||||||||||||||
Amount of ownership interest of related party in the entity | $ 2,000,000 | ||||||||||||||||||
Proceeds from repayment in full | $ 1,000,000 | ||||||||||||||||||
Chief executive officer | Maturity date of September 2016, extended from March 2016 | Bridge loan, two multifamily properties | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Number of properties owned | item | 2 | ||||||||||||||||||
Percentage of ownership interest of related party in the entity | 95.00% | ||||||||||||||||||
Base spread (as a percent) | 5.50% | ||||||||||||||||||
Interest income recorded | $ 100,000 | 100,000 | $ 100,000 | 200,000 | |||||||||||||||
Proceeds from repayment in full | 3,300,000 | ||||||||||||||||||
Investments in equity affiliates | $ 100,000 | ||||||||||||||||||
Ownership interest (as a percent) | 5.00% | ||||||||||||||||||
Number of bridge loans originated | item | 2 | ||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 5,000,000 | ||||||||||||||||||
Chief executive officer | Maturity date of August 2017 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of ownership interest of related party in the entity | 24.00% | ||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 30,400,000 | ||||||||||||||||||
Chief executive officer | Maturity date of August 2020 | Bridge loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Base spread (as a percent) | 4.00% | ||||||||||||||||||
LIBOR floor (as a percentage) | 1.23% | ||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 43,200,000 | ||||||||||||||||||
Mr. Ivan Kaufman and his affiliates | Maturity date of August 2017 | Mezzanine loans | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Interest income recorded | $ 800,000 | 900,000 | $ 2,400,000 | 2,600,000 | |||||||||||||||
Fixed rate of interest (as a percent) | 12.00% | ||||||||||||||||||
Amount of mortgage loan secured by property, purchased by related party | $ 4,600,000 | ||||||||||||||||||
Kaufman Entities | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of our Former Manager's outstanding membership interest of related party in another related party | 70.00% | 70.00% | 70.00% | ||||||||||||||||
Affiliate of Mr. Ivan Kaufman | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Contract period with the new entity | 7 years 6 months | ||||||||||||||||||
Fees as a percentage of gross revenues of the underlying properties | 4.75% | ||||||||||||||||||
Lexford Portfolio | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Aggregate outstanding balance of related party debt | $ 845,800,000 | $ 845,800,000 | $ 845,800,000 | ||||||||||||||||
Lexford Portfolio | Preferred equity investments | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Income from equity affiliates | 700,000 | 700,000 | 2,000,000 | 2,100,000 | |||||||||||||||
Ginkgo | Fannie Mae | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Loan purchased a multifamily apartment complex which assumed | $ 8,300,000 | ||||||||||||||||||
Percentage of maximum loss-sharing obligation unpaid principal balance | 20.00% | ||||||||||||||||||
Percentage of loan assumption fee | 1.00% | ||||||||||||||||||
Percentage of ownership after transaction | 3.60% | ||||||||||||||||||
Lexford Portfolio | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Income from equity affiliates | 700,000 | $ 700,000 | 2,000,000 | $ 2,100,000 | |||||||||||||||
Investments in equity affiliates | $ 100 | $ 100 | $ 100 | $ 100 | |||||||||||||||
Two portfolios of multifamily properties | Consortium of Investors, including Mr. Kaufman and our Former Manager | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Amount invested | $ 2,000,000 | ||||||||||||||||||
Ownership interest (as a percent) | 26.10% | ||||||||||||||||||
Number of portfolios of multifamily properties | item | 2 | ||||||||||||||||||
Ginkgo | Director | |||||||||||||||||||
Agreements and transactions with related parties | |||||||||||||||||||
Percentage of managing member | 33.00% |
Segment Information - General (
Segment Information - General (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Segment Information | |
Number of business segments | 2 |
Segment Information - Statement
Segment Information - Statements of Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Information | |||||
Interest income | $ 42,139,576 | $ 29,636,227 | $ 110,132,866 | $ 83,424,190 | |
Other interest income, net | 2,539,274 | ||||
Interest expense | 23,849,417 | 16,966,228 | 63,697,641 | 42,958,329 | |
Net interest income | 18,290,159 | 12,669,999 | 46,435,225 | 43,005,135 | |
Other revenue: | |||||
Gain on sales, including fee-based services, net | 17,126,106 | 9,693,822 | 55,127,004 | 9,693,822 | |
Mortgage servicing rights | 18,897,239 | 15,968,067 | 56,181,638 | 15,968,067 | |
Servicing revenue | 20,231,489 | 13,472,408 | 55,350,118 | 13,472,408 | |
Amortization of MSRs | (11,711,378) | (7,586,524) | (35,427,217) | (7,586,524) | |
Property operating income | 2,668,055 | 2,960,940 | 8,754,518 | 12,719,027 | |
Other income, net | 777,656 | 359,546 | (929,893) | 663,977 | |
Total other revenue | 47,989,167 | 34,868,259 | 139,056,168 | 44,930,777 | |
Other expenses: | |||||
Employee compensation and benefits | 25,194,433 | 14,216,679 | 66,860,581 | 22,856,433 | |
Selling and administrative | 7,606,936 | 5,903,031 | 23,135,750 | 10,277,844 | |
Acquisition costs | 6,406,258 | 10,261,902 | |||
Property operating expenses | 2,582,745 | 2,819,004 | 7,842,571 | 10,991,823 | |
Depreciation and amortization | 1,829,016 | 1,808,765 | 5,541,991 | 3,129,410 | |
Impairment loss on real estate owned | 2,700,000 | 11,200,000 | |||
Provision for loss sharing (net of recoveries) | (2,617,064) | 1,316,862 | (405,494) | 1,316,862 | |
Provision for loan losses (net of recoveries) | 2,000,000 | (54,000) | (455,653) | (24,995) | |
Management fee - related party | 3,325,000 | 6,673,260 | 8,875,000 | ||
Total other expenses | 36,596,066 | 35,741,599 | 111,893,006 | 78,884,279 | |
Income before (loss) gain on extinguishment of debt, income from equity affiliates and provision for income taxes | 29,683,260 | 11,796,659 | 73,598,387 | 9,051,633 | |
Gain on extinguishment of debt | 7,116,243 | ||||
Gain on sale of real estate | 11,630,687 | ||||
Income from equity affiliates | 995,312 | 4,929,375 | 1,755,145 | 11,193,918 | |
Provision for income taxes | (6,708,000) | (300,000) | (16,244,000) | (300,000) | |
Net income | 23,970,572 | 16,426,034 | 66,225,775 | 31,576,238 | |
Preferred stock dividends | 1,888,430 | 1,888,430 | 5,665,290 | 5,665,290 | |
Net income attributable to noncontrolling interest | 5,661,184 | 3,649,432 | 16,596,415 | 3,649,432 | |
Net income attributable to common stockholders | 16,420,958 | 10,888,172 | 43,964,070 | 22,261,516 | |
Operating segments | Structured Business | |||||
Segment Information | |||||
Interest income | 37,258,633 | 26,893,151 | 95,684,909 | 80,681,114 | |
Other interest income, net | 2,539,274 | ||||
Interest expense | 19,912,991 | 14,455,058 | 51,866,274 | 40,447,159 | |
Net interest income | 17,345,642 | 12,438,093 | 43,818,635 | 42,773,229 | |
Other revenue: | |||||
Property operating income | 2,668,055 | 2,960,940 | 8,754,518 | 12,719,027 | |
Other income, net | 540,241 | 111,036 | 1,381,847 | 415,467 | |
Total other revenue | 3,208,296 | 3,071,976 | 10,136,365 | 13,134,494 | |
Other expenses: | |||||
Employee compensation and benefits | 5,670,249 | 3,460,745 | 13,569,621 | 12,100,499 | |
Selling and administrative | 3,014,038 | 2,182,406 | 8,993,239 | 6,557,219 | |
Property operating expenses | 2,582,745 | 2,819,004 | 7,842,571 | 10,991,823 | |
Depreciation and amortization | 428,562 | 641,721 | 1,340,629 | 1,962,366 | |
Impairment loss on real estate owned | 2,700,000 | 11,200,000 | |||
Provision for loan losses (net of recoveries) | 2,000,000 | (54,000) | (455,653) | (24,995) | |
Management fee - related party | 1,712,307 | 3,258,772 | 7,262,307 | ||
Total other expenses | 13,695,594 | 10,762,183 | 37,249,179 | 50,049,219 | |
Income before (loss) gain on extinguishment of debt, income from equity affiliates and provision for income taxes | 6,858,344 | 4,747,886 | 16,705,821 | 5,858,504 | |
Gain on extinguishment of debt | 7,116,243 | ||||
Gain on sale of real estate | 11,630,687 | ||||
Income from equity affiliates | 995,312 | 4,929,375 | 1,755,145 | 11,193,918 | |
Net income | 7,853,656 | 9,677,261 | 25,577,209 | 28,683,109 | |
Preferred stock dividends | 1,888,430 | 1,888,430 | 5,665,290 | 5,665,290 | |
Net income attributable to common stockholders | 5,965,226 | 7,788,831 | 19,911,919 | 23,017,819 | |
Operating segments | Agency Business | |||||
Segment Information | |||||
Interest income | 4,880,943 | 2,743,076 | 14,447,957 | 2,743,076 | |
Interest expense | 2,974,603 | 1,680,561 | 8,945,898 | 1,680,561 | |
Net interest income | 1,906,340 | 1,062,515 | 5,502,059 | 1,062,515 | |
Other revenue: | |||||
Gain on sales, including fee-based services, net | 17,126,106 | 9,693,822 | 55,127,004 | 9,693,822 | |
Mortgage servicing rights | 18,897,239 | 15,968,067 | 56,181,638 | 15,968,067 | |
Servicing revenue | 20,231,489 | 13,472,408 | 55,350,118 | 13,472,408 | |
Amortization of MSRs | (11,711,378) | (7,586,524) | (35,427,217) | (7,586,524) | |
Other income, net | 237,415 | 248,510 | (2,311,740) | 248,510 | |
Total other revenue | 44,780,871 | 31,796,283 | 128,919,803 | 31,796,283 | |
Other expenses: | |||||
Employee compensation and benefits | 19,524,184 | 10,755,934 | 53,290,960 | 10,755,934 | |
Selling and administrative | 4,592,898 | 3,720,625 | 14,142,511 | 3,720,625 | |
Depreciation and amortization | 1,400,454 | 1,167,044 | 4,201,362 | 1,167,044 | |
Provision for loss sharing (net of recoveries) | (2,617,064) | 1,316,862 | (405,494) | 1,316,862 | |
Management fee - related party | 1,612,693 | 3,414,488 | 1,612,693 | ||
Total other expenses | 22,900,472 | 18,573,158 | 74,643,827 | 18,573,158 | |
Income before (loss) gain on extinguishment of debt, income from equity affiliates and provision for income taxes | 23,786,739 | 14,285,640 | 59,778,035 | 14,285,640 | |
Provision for income taxes | (6,708,000) | (300,000) | (16,244,000) | (300,000) | |
Net income | 17,078,739 | 13,985,640 | 43,534,035 | 13,985,640 | |
Net income attributable to common stockholders | 17,078,739 | 13,985,640 | 43,534,035 | 13,985,640 | |
Other / Eliminations | |||||
Segment Information | |||||
Interest expense | 961,823 | 830,609 | 2,885,469 | 830,609 | [1] |
Net interest income | (961,823) | (830,609) | (2,885,469) | (830,609) | [1] |
Other expenses: | |||||
Acquisition costs | 6,406,258 | 10,261,902 | [1] | ||
Total other expenses | 6,406,258 | 10,261,902 | [1] | ||
Income before (loss) gain on extinguishment of debt, income from equity affiliates and provision for income taxes | (961,823) | (7,236,867) | (2,885,469) | (11,092,511) | [1] |
Net income | (961,823) | (7,236,867) | (2,885,469) | (11,092,511) | [1] |
Net income attributable to noncontrolling interest | 5,661,184 | 3,649,432 | 16,596,415 | 3,649,432 | [1] |
Net income attributable to common stockholders | $ (6,623,007) | $ (10,886,299) | $ (19,481,884) | $ (14,741,943) | [1] |
[1] | Includes certain corporate expenses not allocated to the two reportable segments, such as financing costs associated with the Acquisition, as well as income allocated to the noncontrolling interest holder. |
Segment Information - Balance S
Segment Information - Balance Sheet (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||||
Cash and cash equivalents | $ 84,751,397 | $ 138,645,430 | $ 71,613,974 | $ 188,708,687 |
Restricted cash | 137,138,389 | 29,314,929 | ||
Loans and investments, net | 1,997,555,985 | 1,695,732,351 | ||
Loans held-for-sale, net | 333,267,976 | 673,367,304 | ||
Capitalized mortgage servicing rights, net | 247,875,659 | 227,742,986 | ||
Securities held-to-maturity | 18,851,089 | |||
Investments in equity affiliates | 31,330,740 | 33,948,853 | ||
Goodwill and other intangible assets | 123,166,816 | 97,489,884 | ||
Other assets | 84,239,811 | 74,544,509 | ||
Total assets | 3,058,177,862 | 2,970,786,246 | ||
Liabilities: | ||||
Debt obligations | 2,008,444,941 | 2,018,118,058 | ||
Allowance for loss-sharing obligations | 30,158,464 | 32,407,554 | ||
Other liabilities | 173,831,248 | 173,222,706 | ||
Total liabilities | 2,212,434,653 | 2,223,748,318 | ||
Other / Eliminations | ||||
Liabilities: | ||||
Debt obligations | 50,000,000 | 50,000,000 | ||
Other liabilities | 1,054,615 | 1,217,864 | ||
Total liabilities | 51,054,615 | 51,217,864 | ||
Structured Business | Operating segments | ||||
Assets: | ||||
Cash and cash equivalents | 28,874,347 | 103,156,034 | ||
Restricted cash | 137,126,053 | 16,230,051 | ||
Loans and investments, net | 1,997,555,985 | 1,695,732,351 | ||
Investments in equity affiliates | 31,330,740 | 33,948,853 | ||
Goodwill and other intangible assets | 12,500,000 | |||
Other assets | 71,864,641 | 63,350,947 | ||
Total assets | 2,279,251,766 | 1,912,418,236 | ||
Liabilities: | ||||
Debt obligations | 1,630,457,754 | 1,307,973,936 | ||
Other liabilities | 122,924,302 | 133,788,359 | ||
Total liabilities | 1,753,382,056 | 1,441,762,295 | ||
Agency Business | Operating segments | ||||
Assets: | ||||
Cash and cash equivalents | 55,877,050 | 35,489,396 | ||
Restricted cash | 12,336 | 13,084,878 | ||
Loans held-for-sale, net | 333,267,976 | 673,367,304 | ||
Capitalized mortgage servicing rights, net | 247,875,659 | 227,742,986 | ||
Securities held-to-maturity | 18,851,089 | |||
Goodwill and other intangible assets | 110,666,816 | 97,489,884 | ||
Other assets | 12,375,170 | 11,193,562 | ||
Total assets | 778,926,096 | 1,058,368,010 | ||
Liabilities: | ||||
Debt obligations | 327,987,187 | 660,144,122 | ||
Allowance for loss-sharing obligations | 30,158,464 | 32,407,554 | ||
Other liabilities | 49,852,331 | 38,216,483 | ||
Total liabilities | $ 407,997,982 | $ 730,768,159 |
Segment Information - Originati
Segment Information - Origination Data (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Segment Information | ||||||
Origination Volumes | $ 928,180,800 | $ 714,820,818 | $ 3,181,367,322 | $ 714,820,818 | ||
Loan Sales Data: | ||||||
Loan Sales | $ 970,000,000 | $ 970,000,000 | ||||
Sales margin (fee-based services as a % of loan sales) | 1.63% | 1.76% | 1.52% | 1.76% | ||
MSR rate (MSR income as a % of loan commitments) | 2.04% | 2.23% | 1.77% | 2.23% | ||
Structured Business | ||||||
Segment Information | ||||||
New loan originations | $ 473,171,000 | $ 266,599,500 | $ 1,057,003,885 | $ 654,967,500 | ||
Loan payoffs / paydowns | 270,010,000 | 118,346,618 | 723,976,741 | 418,433,132 | ||
Agency Business | ||||||
Segment Information | ||||||
Origination Volumes | 996,721,800 | 850,419,655 | 3,307,873,722 | 850,419,655 | ||
Loan Sales Data: | ||||||
Loan Sales | 1,052,073,409 | 551,834,215 | [1] | 3,621,276,437 | 551,834,215 | [1] |
Fannie Mae | Agency Business | ||||||
Segment Information | ||||||
Origination Volumes | 650,373,500 | 668,644,832 | 2,216,819,525 | 668,644,832 | ||
Loan Sales Data: | ||||||
Loan Sales | 665,959,500 | 430,371,100 | 2,569,821,000 | 430,371,100 | ||
Freddie Mac | Agency Business | ||||||
Segment Information | ||||||
Origination Volumes | 328,075,000 | 157,145,000 | 880,597,200 | 157,145,000 | ||
Loan Sales Data: | ||||||
Loan Sales | 342,629,800 | 104,448,000 | 862,376,636 | 104,448,000 | ||
FHA | Agency Business | ||||||
Segment Information | ||||||
Origination Volumes | 18,273,300 | 24,629,823 | 189,086,997 | 24,629,823 | ||
Loan Sales Data: | ||||||
Loan Sales | $ 43,484,109 | $ 17,015,115 | 167,708,801 | $ 17,015,115 | ||
CMBS/Conduit | Agency Business | ||||||
Segment Information | ||||||
Origination Volumes | 21,370,000 | |||||
Loan Sales Data: | ||||||
Loan Sales | $ 21,370,000 | |||||
[1] | Loan sales were $970.0 million for the three and nine months ended September 30, 2016, including loans that were acquired as part of the Acquisition. |
Segment Information - Key Servi
Segment Information - Key Servicing Metrics (Details) - Agency Business - MSRs - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Information | ||
UPB of Servicing Portfolio | $ 15,601,225,516 | $ 13,555,085,518 |
Wtd. Avg. Servicing Fee Rate (basis points) | 0.48% | 0.478% |
Wtd. Avg. Life of Servicing Portfolio (in years) | 8 years 3 months 18 days | 7 years 7 months 6 days |
Fannie Mae | ||
Segment Information | ||
UPB of Servicing Portfolio | $ 12,331,135,405 | $ 11,181,152,400 |
Wtd. Avg. Servicing Fee Rate (basis points) | 0.537% | 0.534% |
Wtd. Avg. Life of Servicing Portfolio (in years) | 7 years 2 months 12 days | 6 years 7 months 6 days |
Freddie Mac | ||
Segment Information | ||
UPB of Servicing Portfolio | $ 2,732,536,579 | $ 1,953,244,541 |
Wtd. Avg. Servicing Fee Rate (basis points) | 0.286% | 0.223% |
Wtd. Avg. Life of Servicing Portfolio (in years) | 10 years 10 months 24 days | 10 years 6 months |
FHA | ||
Segment Information | ||
UPB of Servicing Portfolio | $ 537,553,532 | $ 420,688,577 |
Wtd. Avg. Servicing Fee Rate (basis points) | 0.165% | 0.144% |
Wtd. Avg. Life of Servicing Portfolio (in years) | 20 years | 19 years 2 months 12 days |