Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'STARWOOD PROPERTY TRUST, INC. | ' |
Entity Central Index Key | '0001465128 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 222,602,294 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Cash and cash equivalents | $518,627 | $317,627 |
Restricted cash | 44,561 | 69,052 |
Loans held-for-investment, net | 4,885,854 | 4,363,718 |
Loans held-for-sale, at fair value | 154,412 | 206,672 |
Loans transferred as secured borrowings | 142,867 | 180,414 |
Investment securities ($532,328 and $566,789 held at fair value) | 902,424 | 935,107 |
Intangible assets-servicing rights ($138,318 and $150,149 held at fair value) | 156,846 | 177,173 |
Residential real estate, net | ' | 749,214 |
Non-performing residential loans | ' | 215,371 |
Investment in unconsolidated entities | 118,621 | 122,954 |
Goodwill | 140,437 | 140,437 |
Derivative assets | 4,681 | 7,769 |
Accrued interest receivable | 37,483 | 37,630 |
Other assets | 165,532 | 95,813 |
Variable interest entity ("VIE") assets, at fair value | 114,091,158 | 103,151,624 |
Total Assets | 121,363,503 | 110,770,575 |
Liabilities: | ' | ' |
Accounts payable, accrued expenses and other liabilities | 140,809 | 225,374 |
Related-party payable | 24,475 | 17,793 |
Dividends payable | 108,012 | 90,171 |
Derivative liabilities | 26,294 | 24,192 |
Secured financing agreements, net | 2,561,267 | 2,257,560 |
Convertible senior notes, net | 1,003,847 | 997,851 |
Secured borrowings on transferred loans | 142,815 | 181,238 |
VIE liabilities, at fair value | 113,541,151 | 102,649,263 |
Total Liabilities | 117,548,670 | 106,443,442 |
Commitments and contingencies (Note 20) | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' |
Preferred stock, $0.01 per share, 100,000,000 shares authorized, no shares issued and outstanding | ' | ' |
"Common stock, $0.01 per share, 500,000,000 shares authorized, 223,224,144 issued and 222,598,294 outstanding as of June 30, 2014 and 196,139,045 issued and 195,513,195 outstanding as of December 31, 2013 " | 2,232 | 1,961 |
Additional paid-in capital | 3,784,575 | 4,300,479 |
Treasury stock (625,850 shares) | -10,642 | -10,642 |
Accumulated other comprehensive income | 74,962 | 75,449 |
Accumulated deficit | -49,686 | -84,719 |
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,801,441 | 4,282,528 |
Non-controlling interests in consolidated subsidiaries | 13,392 | 44,605 |
Total Equity | 3,814,833 | 4,327,133 |
Total Liabilities and Equity | $121,363,503 | $110,770,575 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ' | ' |
Investment securities, fair value | $532,328 | $566,789 |
Intangible assets - servicing rights at fair value | $138,318 | $150,149 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 223,224,144 | 196,139,045 |
Common stock, shares outstanding | 222,598,294 | 195,513,195 |
Treasury stock, shares | 625,850 | 625,850 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Interest income from loans | $105,455 | $74,936 | $210,365 | $142,626 |
Interest income from investment securities | 27,620 | 18,577 | 57,074 | 34,817 |
Servicing fees | 32,681 | 39,135 | 66,892 | 39,135 |
Other revenues | 4,994 | 1,795 | 8,398 | 1,874 |
Total revenues | 170,750 | 134,443 | 342,729 | 218,452 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 25,085 | 16,146 | 52,906 | 31,215 |
Interest expense | 37,695 | 22,648 | 75,526 | 40,074 |
General and administrative | 43,094 | 44,335 | 89,195 | 48,373 |
Business combination costs | ' | 13,420 | ' | 17,616 |
Acquisition and investment pursuit costs | 771 | 916 | 1,165 | 997 |
Depreciation and amortization | 5,154 | 2,228 | 9,790 | 2,228 |
Loan loss allowance | -139 | 725 | 358 | 755 |
Other expense | 6,026 | 196 | 7,715 | 229 |
Total costs and expenses | 117,686 | 100,614 | 236,655 | 141,487 |
Income before other income, income taxes and non-controlling interests | 53,064 | 33,829 | 106,074 | 76,965 |
Other income: | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,028 | 31,949 | 103,032 | 31,949 |
Change in fair value of servicing rights | -5,523 | 2,898 | -10,774 | 2,898 |
Change in fair value of investment securities, net | 4,959 | -1,392 | 13,320 | -987 |
Change in fair value of mortgage loans held-for-sale, net | 11,608 | 458 | 32,501 | 458 |
Earnings from unconsolidated entities | 9,563 | 3,770 | 9,627 | 4,511 |
Gain (loss) on sale of investments, net | 10,078 | -18 | 11,633 | 13,506 |
(Loss) gain on derivative financial instruments, net | -9,790 | 6,158 | -17,656 | 22,386 |
Foreign currency gain (loss), net | 3,777 | 1,580 | 5,254 | -6,085 |
Total other-than-temporary impairment ("OTTI") | -800 | -846 | -1,992 | -1,373 |
Noncredit portion of OTTI recognized in other comprehensive income | 3 | 487 | 982 | 972 |
Net impairment losses recognized in earnings | -797 | -359 | -1,010 | -401 |
Other income, net | 692 | 39 | 710 | 39 |
Total other income | 71,595 | 45,083 | 146,637 | 68,274 |
Income from continuing operations before income taxes | 124,659 | 78,912 | 252,711 | 145,239 |
Income tax provision | -4,277 | -11,343 | -9,897 | -11,958 |
Income from continuing operations | 120,382 | 67,569 | 242,814 | 133,281 |
Loss from discontinued operations, net of tax (Note 3) | ' | -6,058 | -1,551 | -8,346 |
Net income | 120,382 | 61,511 | 241,263 | 124,935 |
Net income attributable to non-controlling interests | -2,514 | -1,057 | -2,794 | -2,238 |
Net income attributable to Starwood Property Trust, Inc. | $117,868 | $60,454 | $238,469 | $122,697 |
Basic: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.53 | $0.41 | $1.14 | $0.87 |
Loss from discontinued operations (in dollars per share) | ' | ($0.04) | ($0.01) | ($0.05) |
Net income (in dollars per share) | $0.53 | $0.37 | $1.13 | $0.82 |
Diluted: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.52 | $0.41 | $1.12 | $0.87 |
Loss from discontinued operations (in dollars per share) | ' | ($0.04) | ($0.01) | ($0.05) |
Net income (in dollars per share) | $0.52 | $0.37 | $1.11 | $0.82 |
Dividends declared per common share (in dollars per share) | $0.48 | $0.46 | $0.96 | $0.90 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net income | $120,382 | $61,511 | $241,263 | $124,935 |
Other comprehensive loss (net change by component): | ' | ' | ' | ' |
Cash flow hedges | -93 | 1,501 | 29 | 1,780 |
Available-for-sale securities | -9,618 | -11,778 | -6,120 | -14,127 |
Foreign currency remeasurement | 4,558 | 18 | 5,604 | -7,043 |
Other comprehensive loss | -5,153 | -10,259 | -487 | -19,390 |
Comprehensive income | 115,229 | 51,252 | 240,776 | 105,545 |
Less: Comprehensive income attributable to non-controlling interests | -2,514 | -1,057 | -2,794 | -2,238 |
Comprehensive income attributable to Starwood Property Trust, Inc. | $112,715 | $50,195 | $237,982 | $103,307 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Equity (USD $) | Total | Total Starwood Property Trust, Inc. Stockholders' Equity | Common stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interests |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2012 | $2,797,205 | $2,719,346 | $1,361 | $2,721,353 | ($10,642) | ($72,401) | $79,675 | $77,859 |
Balance (in shares) at Dec. 31, 2012 | ' | ' | 136,125,356 | ' | 625,850 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from public offering of common stock | 822,368 | 822,368 | 305 | 822,063 | ' | ' | ' | ' |
Proceeds from public offering of common stock (in shares) | ' | ' | 30,475,000 | ' | ' | ' | ' | ' |
Equity offering costs | -617 | -617 | ' | -617 | ' | ' | ' | ' |
Convertible senior notes | 28,107 | 28,107 | ' | 28,107 | ' | ' | ' | ' |
Stock-based compensation | 8,829 | 8,829 | 4 | 8,825 | ' | ' | ' | ' |
Stock-based compensation (in shares) | ' | ' | 350,002 | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock | 365 | 365 | ' | 365 | ' | ' | ' | ' |
Manager incentive fee paid in stock (in shares) | ' | ' | 13,188 | ' | ' | ' | ' | ' |
Net income | 124,935 | 122,697 | ' | ' | ' | 122,697 | ' | 2,238 |
Dividends declared, $0.90 and $0.48 per share for period ended June 30, 2013 and 2014, respectively | -137,046 | -137,046 | ' | ' | ' | -137,046 | ' | ' |
Other comprehensive income (loss), net | -19,390 | -19,390 | ' | ' | ' | ' | -19,390 | ' |
Non-controlling interest assumed through LNR acquisition | 8,277 | ' | ' | ' | ' | ' | ' | 8,277 |
Contributions from non-controlling interests | 1,007 | ' | ' | ' | ' | ' | ' | 1,007 |
Distribution to non-controlling interests | -47,534 | ' | ' | ' | ' | ' | ' | -47,534 |
Balance at Jun. 30, 2013 | 3,586,506 | 3,544,659 | 1,670 | 3,580,096 | -10,642 | -86,750 | 60,285 | 41,847 |
Balance (in shares) at Jun. 30, 2013 | ' | ' | 166,963,546 | ' | 625,850 | ' | ' | ' |
Balance at Dec. 31, 2013 | 4,327,133 | 4,282,528 | 1,961 | 4,300,479 | -10,642 | -84,719 | 75,449 | 44,605 |
Balance (in shares) at Dec. 31, 2013 | 196,139,045 | ' | 196,139,045 | ' | 625,850 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from public offering of common stock | 564,695 | 564,695 | 253 | 564,442 | ' | ' | ' | ' |
Proceeds from public offering of common stock (in shares) | ' | ' | 25,300,000 | ' | ' | ' | ' | ' |
Proceeds from ATM Agreement | 18,346 | 18,346 | 8 | 18,338 | ' | ' | ' | ' |
Proceeds from ATM Agreement (in shares) | ' | ' | 759,000 | ' | ' | ' | ' | ' |
Proceeds from DRIP Plan | 12 | 12 | ' | 12 | ' | ' | ' | ' |
Proceeds from DRIP Plan (in shares) | ' | ' | 481 | ' | ' | ' | ' | ' |
Equity offering costs | -1,636 | -1,636 | ' | -1,636 | ' | ' | ' | ' |
Stock-based compensation | 14,731 | 14,731 | 7 | 14,724 | ' | ' | ' | ' |
Stock-based compensation (in shares) | ' | ' | 735,014 | ' | ' | ' | ' | ' |
Manager incentive fee paid in stock | 6,962 | 6,962 | 3 | 6,959 | ' | ' | ' | ' |
Manager incentive fee paid in stock (in shares) | ' | ' | 290,604 | ' | ' | ' | ' | ' |
Net income | 241,263 | 238,469 | ' | ' | ' | 238,469 | ' | 2,794 |
Dividends declared, $0.90 and $0.48 per share for period ended June 30, 2013 and 2014, respectively | -203,436 | -203,436 | ' | ' | ' | -203,436 | ' | ' |
Spin-off of SWAY | -1,120,337 | -1,118,743 | ' | -1,118,743 | ' | ' | ' | -1,594 |
Other comprehensive income (loss), net | -487 | -487 | ' | ' | ' | ' | -487 | ' |
VIE non-controlling interests | 996 | ' | ' | ' | ' | ' | ' | 996 |
Distribution to non-controlling interests | -33,409 | ' | ' | ' | ' | ' | ' | -33,409 |
Balance at Jun. 30, 2014 | $3,814,833 | $3,801,441 | $2,232 | $3,784,575 | ($10,642) | ($49,686) | $74,962 | $13,392 |
Balance (in shares) at Jun. 30, 2014 | 223,224,144 | ' | 223,224,144 | ' | 625,850 | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Equity (Parenthetical) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Condensed Consolidated Statements of Equity | ' | ' |
Dividends declared per share (in dollars per share) | $0.48 | $0.90 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash Flows from Operating Activities: | ' | ' |
Net income | $241,263 | $124,935 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization of deferred financing costs | 5,543 | 4,986 |
Amortization of convertible debt discount and deferred fees | 6,209 | 2,652 |
Accretion of net discount on investment securities | -11,680 | -16,568 |
Accretion of net deferred loan fees and discounts | -10,147 | -14,243 |
Amortization of premium from secured borrowings on transferred loans | -824 | -731 |
Share-based compensation | 14,731 | 8,829 |
Share-based component of incentive fees | 6,962 | 365 |
Change in fair value of fair value option investment securities | -13,320 | 988 |
Change in fair value of consolidated VIEs | -25,610 | -11,132 |
Change in fair value of servicing rights | 10,774 | -2,898 |
Change in fair value of loans held-for-sale | -32,501 | -458 |
Change in fair value of derivatives | 16,494 | -23,760 |
Foreign currency (gain) loss, net | -5,464 | 5,867 |
Gain on non-performing loans and sale of investments | -12,575 | -15,666 |
Other-than-temporary impairment | 1,010 | 859 |
Loan loss allowance, net | 358 | 755 |
Depreciation and amortization | 10,550 | 3,366 |
Earnings from unconsolidated entities | -9,627 | -1,919 |
Distributions of earnings from unconsolidated entities | 6,016 | 787 |
Changes in operating assets and liabilities: | ' | ' |
Related-party payable, net | 6,682 | 22,093 |
Accrued interest receivable, less purchased interest | -18,840 | -4,985 |
Other assets | -10,535 | -4,969 |
Accounts payable, accrued expenses and other liabilities | -29,787 | 30,393 |
Originations of loans held-for-sale, net of principal collections | -582,033 | -390,669 |
Proceeds from sale of loans held-for-sale | 666,793 | 476,453 |
Net cash provided by operating activities | 230,442 | 195,330 |
Cash Flows from Investing Activities: | ' | ' |
Spin-off of Starwood Waypoint Residential Trust | -111,960 | ' |
Purchase of LNR, net of cash acquired | ' | -586,383 |
Purchase of investment securities | -53,453 | -59,476 |
Proceeds from sales of investment securities | 50,219 | 235,904 |
Proceeds from principal collections on investment securities | 19,114 | 40,124 |
Origination and purchase of loans held-for-investment | -1,277,636 | -651,897 |
Proceeds from principal collections on loans | 587,018 | 140,478 |
Proceeds from loans sold | 202,514 | 97,490 |
Acquisition and improvement of single family homes | -61,901 | -262,315 |
Proceeds from sale of single family homes | 1,784 | 4,095 |
Purchase of other assets | -15,502 | -136 |
Purchase of non-performing loans | ' | -132,957 |
Proceeds from sale of non-performing loans | 1,153 | 10,742 |
Investment in unconsolidated entities | -21,973 | -5,000 |
Distribution of capital from unconsolidated entities | 30,544 | 1,569 |
Payments for purchase or termination of derivatives | -14,253 | -39 |
Proceeds from termination of derivatives | 2,092 | 3,544 |
Return of investment basis in purchased derivative asset | 798 | 1,028 |
Increase in restricted cash, net | -5,941 | -41,797 |
Net cash used in investing activities | -667,383 | -1,205,026 |
Cash Flows from Financing Activities: | ' | ' |
Borrowings under financing agreements | 1,807,229 | 1,614,133 |
Proceeds from issuance of convertible senior notes | ' | 587,700 |
Principal repayments on borrowings | -1,510,052 | -1,650,974 |
Payment of deferred financing costs | -7,881 | -8,529 |
Proceeds from secured borrowings | ' | 95,000 |
Proceeds from common stock issuances | 583,053 | 822,368 |
Payment of equity offering costs | -1,636 | -617 |
Payment of dividends | -185,594 | -133,944 |
Contributions from non-controlling interests | ' | 1,007 |
Distributions to non-controlling interests | -33,409 | -47,534 |
Issuance of debt of consolidated VIEs | 71,756 | ' |
Repayment of debt of consolidated VIEs | -99,763 | -81,870 |
Distributions of cash from consolidated VIEs | 13,413 | 2,124 |
Net cash provided by financing activities | 637,116 | 1,198,864 |
Net increase in cash and cash equivalents | 200,175 | 189,168 |
Cash and cash equivalents, beginning of period | 317,627 | 177,671 |
Effect of exchange rate changes on cash | 825 | -52 |
Cash and cash equivalents, end of period | 518,627 | 366,787 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest | 65,229 | 22,580 |
Income taxes paid | 14,792 | 2,214 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Net assets distributed in spin-off of Starwood Waypoint Residential Trust | 1,008,377 | ' |
Dividends declared, but not yet paid | 108,012 | 76,900 |
Consolidation of VIEs (VIE asset/liability additions) | 23,991,532 | 10,674,125 |
Deconsolidation of VIEs (VIE asset/liability reductions) | 6,038,375 | 584,460 |
Fair value of assets acquired | ' | 1,152,360 |
Fair value of liabilities assumed | ' | 562,279 |
Unsettled trades and loans receivable | $52,815 | ' |
Business_and_Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2014 | |
Business and Organization | ' |
Business and Organization | ' |
1. Business and Organization | |
Starwood Property Trust, Inc. (“STWD” together with its subsidiaries, “we” or the “Company”) is a Maryland corporation that commenced operations in August 2009, upon the completion of our initial public offering (“IPO”). We are focused primarily on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities (“CMBS”), and other commercial real estate-related debt investments in both the U.S. and Europe. We refer to the following as our target assets: | |
· commercial real estate mortgage loans, including preferred equity interests; | |
· CMBS; and | |
· other commercial real estate-related debt investments. | |
We may also invest in residential mortgage-backed securities (“RMBS”), certain residential mortgage loans, distressed or non-performing commercial loans, commercial properties subject to net leases and commercial real estate owned. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions. | |
We have two reportable business segments as of June 30, 2014: | |
· Real estate investment lending (the “Lending Segment”)—includes all business activities of the Company, excluding the LNR business, which generally represents investments in real estate-related loans and securities that are held-for-investment. | |
· LNR—includes all business activities of the acquired LNR Property LLC (“LNR”) business excluding the consolidation of securitization VIEs. | |
On April 19, 2013, we acquired the equity of LNR and certain of its subsidiaries for an initial agreed upon purchase price of approximately $859 million, which was reduced for transaction expenses and distributions occurring after September 30, 2012, resulting in cash consideration of approximately $730 million. Immediately prior to the acquisition, an affiliate of the Company acquired the remaining equity comprising LNR’s commercial property division for a purchase price of $194 million. The portion of the LNR business acquired by us includes the following: (i) servicing businesses in both the U.S. and Europe that manage and work out problem assets, (ii) a finance business that is focused on selectively acquiring and managing real estate finance investments, including unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, and high yielding real estate loans; and (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions. | |
On January 31, 2014, we completed the spin-off of our former single family residential (“SFR”) segment to our stockholders. The newly-formed real estate investment trust, Starwood Waypoint Residential Trust (“SWAY”), is listed on the New York Stock Exchange (“NYSE”) and trades under the ticker symbol “SWAY.” Our stockholders received one common share of SWAY for every five shares of our common stock held at the close of business on January 24, 2014. As part of the spin-off, we contributed $100 million to the unlevered balance sheet of SWAY to fund its growth and operations. As of January 31, 2014, SWAY held net assets of $1.1 billion. The net assets of SWAY consisted of approximately 7,200 units of single-family homes and residential non-performing mortgage loans as of January 31, 2014. In connection with the spin-off, 40.1 million shares of SWAY were issued. Refer to Note 3 herein for additional information regarding SFR segment financial information, which has been presented within discontinued operations in the condensed consolidated statements of operations included herein. | |
We are organized and conduct our operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As such, we will generally not be subject to U.S. federal corporate income tax on that portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements. | |
In connection with the LNR acquisition, we established additional taxable REIT subsidiaries (“TRSs”). TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain our qualification as a REIT. | |
These TRSs engage in various real estate related operations, including special servicing of commercial real estate, originating and securitizing commercial mortgage loans, and investing in entities which engage in real estate related operations. As of June 30, 2014, $854.5 million of the LNR assets were owned by TRS entities. Our TRSs are not consolidated for federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by us with respect to our interest in TRSs. | |
We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries. We are externally managed and advised by SPT Management, LLC (our “Manager”) pursuant to the terms of a management agreement. Our Manager is controlled by Barry Sternlicht, our Chairman and Chief Executive Officer. Our Manager is an affiliate of Starwood Capital Group, a privately-held private equity firm founded and controlled by Mr. Sternlicht. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
Balance Sheet Presentation of LNR Variable Interest Entities | |
The acquisition of LNR substantially changed the presentation of our financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). As noted above, LNR operates a finance business that acquires unrated, investment grade and non-investment grade rated CMBS. These securities represent interests in securitization structures (commonly referred to as special purpose entities, or “SPEs”). These SPEs are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. Under GAAP, SPEs typically qualify as variable interest entities (“VIEs”). These are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. | |
Because LNR often serves as the special servicer of the trusts in which it invests, consolidation of these structures is required pursuant to GAAP as outlined in detail below. This results in a consolidated balance sheet which presents the gross assets and liabilities of the SPEs. The assets and other instruments held by these SPEs are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the SPEs do not have any recourse to the general credit of any other consolidated entities, nor to us as the consolidator of these SPEs. | |
The SPE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities are eliminated, as is the interest income related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | |
Please refer to the segment data in Note 21 herein for a presentation of the LNR business without consolidation of these VIEs. | |
Basis of Accounting and Principles of Consolidation | |
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries and VIEs. Intercompany amounts have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | |
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the operating results for the full year. | |
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that (i) are required to be disclosed quarterly, (ii) we view as critical, or (iii) became significant since December 31, 2013 due to a corporate action or increase in the significance of the underlying business activity. | |
Variable Interest Entities | |
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. ASC 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | |
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. | |
To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by us. | |
Our purchased investment securities include CMBS, which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | |
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset, are also eliminated in consolidation. | |
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | |
We have elected the fair value option in measuring the assets and liabilities of any VIEs we consolidate. Fluctuations in the fair values of the VIE assets and liabilities, along with trust interest income and trust interest and administrative expenses, are presented net in income of consolidated VIEs in our consolidated statements of operations. | |
Discontinued Operations | |
On January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders as discussed in Note 1. In accordance with Accounting Standards Codification (“ASC”) Topic 205, Presentation of Financial Statements, the results of the SFR segment are presented within discontinued operations in our condensed consolidated statements of operations for the six months ended June 30, 2014 and the three and six months ended June 30, 2013. | |
Fair Value Option | |
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | |
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by LNR’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by LNR’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | |
Loans Receivable and Provision for Loan Losses | |
In our Lending Segment we purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Actual losses, if any, could ultimately differ from these estimates. | |
We perform a quarterly review of our portfolio of loans. In connection with this review, we assess the performance of each loan and assign a risk rating based on several factors including risk of loss, loan-to-value ratio (“LTV”), collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” through “5”, from less risk to greater risk, in connection with this review. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our loans, investment securities and intangible assets, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial assets and liabilities that are estimated using a discounted cash flows method is significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | |
Reclassifications and Measurement Period Adjustments | |
As a result of the spin-off, the results from our SFR segment have been reclassified as discontinued operations in our condensed consolidated statements of operations for the three and six months ended June 30, 2013. In addition, certain prior period amounts have been reclassified to conform to the current period presentation, which had no effect on our previously reported net income. In that regard, we reclassified $177.0 million of proceeds from sales of loans held-for-sale by LNR to cash flows from operating activities in the condensed consolidated statement of cash flows for the six months ended June 30, 2013 in order to conform to the current period presentation, which is also consistent with the presentation in our Form 10-K. These proceeds were previously reported as a non-cash financing activity and reflected net against principal repayments on borrowings for the related repurchase agreements that were settled net with those proceeds. | |
The prior period financial statements included herein reflect the retrospective measurement period adjustment related to the LNR acquisition as described in Note 3 to the consolidated financial statements included in our Form 10-K. Such adjustment reduced earnings from unconsolidated entities and net income by $1.8 million in the three and six months ended June 30, 2013. | |
Recent Accounting Developments | |
On April 10, 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires only those disposals which represent a strategic shift that has or will have a major impact on an entity’s operations or financial results be presented as discontinued operations. The ASU is effective for annual periods beginning on or after December 15, 2014, and interim periods within those annual periods, and requires prospective application. Early adoption is permitted for disposals not already reported in previously issued financial statements. We do not expect the application of this ASU to materially impact the Company. | |
On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which establishes key principles by which an entity determines the amount and timing of revenue recognized from customer contracts. The ASU is effective for the first interim or annual period beginning after December 15, 2016. Early application is not permitted. We do not expect the application of this ASU to materially impact the Company. | |
On June 12, 2014 the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, which requires entities to account for repurchase-to-maturity transactions as secured borrowings rather than as sales and expands disclosure requirements related to certain transfers of financial assets. The ASU is effective for the first interim or annual period beginning after December 15, 2014. Early application is not permitted. We do not expect the application of this ASU to materially impact the Company. | |
On July 16, 2014, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 12-G, Measuring the Financial Liabilities of a Consolidated Collateralized Financing Entity. Final issuance of the ASU is pending. At its June 2014 meeting, the EITF reached a consensus which enables the application of a measurement alternative for collateralized financing entities (“CFEs”). This measurement alternative allows qualifying entities to measure both the CFE’s financial assets and financial liabilities based on the fair value of the financial assets or financial liabilities, whichever is more observable. The measurement alternative is only available upon initial consolidation of the CFE or adoption of 12-G and can be applied on a CFE-by-CFE basis. We expect to be eligible to apply the measurement alternative and will elect to do so. Application of this alternative is consistent with our current accounting treatment for consolidated CFEs. |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Acquisitions and Divestitures | ' | |||||||||||||
Acquisitions and Divestitures | ' | |||||||||||||
3. Acquisitions and Divestitures | ||||||||||||||
SFR Spin-off | ||||||||||||||
As described in Note 1, on January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders. The results of operations for the SFR segment are presented within discontinued operations in our condensed consolidated statements of operations for all periods presented. We have no continuing involvement with the SFR segment following the spin-off. Subsequent to the spin-off, SWAY entered into a management agreement with an affiliate of our Manager. The following table presents the summarized consolidated results of operations for the SFR segment prior to the spin-off, excluding segment allocations during the six months ended June 30, 2014 (in thousands): | ||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Total revenues | $ | — | $ | 2,594 | $ | 3,876 | $ | 3,758 | ||||||
Total costs and expenses | — | 9,870 | 6,369 | 13,495 | ||||||||||
Loss before other income and income taxes | — | (7,276 | ) | (2,493 | ) | (9,737 | ) | |||||||
Total other income | — | 1,068 | 942 | 1,403 | ||||||||||
Loss before income taxes | — | (6,208 | ) | (1,551 | ) | (8,334 | ) | |||||||
Income tax benefit (provision) | — | 150 | — | (12 | ) | |||||||||
Net loss | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
The following table presents the summarized consolidated balance sheet of the SFR segment as of January 31, 2014, the date of the spin-off (in thousands): | ||||||||||||||
January 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 111,960 | ||||||||||||
Restricted cash | 189 | |||||||||||||
Residential real estate, net | 812,017 | |||||||||||||
Non-performing residential loans | 211,019 | |||||||||||||
Other assets | 9,498 | |||||||||||||
Total Assets | $ | 1,144,683 | ||||||||||||
Liabilities and Equity | ||||||||||||||
Liabilities: | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 24,346 | ||||||||||||
Equity: | ||||||||||||||
Additional paid-in capital | 1,130,405 | |||||||||||||
Accumulated deficit | (11,662 | ) | ||||||||||||
Total Stockholders’ Equity | 1,118,743 | |||||||||||||
Non-controlling interests in consolidated subsidiaries | 1,594 | |||||||||||||
Total Equity | 1,120,337 | |||||||||||||
Total Liabilities and Equity | $ | 1,144,683 | ||||||||||||
LNR Acquisition | ||||||||||||||
As described in Note 1, on April 19, 2013, we acquired the equity of LNR for an initial agreed upon purchase price of $859 million, which was reduced for transaction expenses and distributions occurring after September 30, 2012, resulting in cash consideration of approximately $730 million. We applied the provisions of ASC 805 in accounting for our acquisition of LNR. Refer to Note 3 to the consolidated financial statements included in our Form 10-K for further discussion of the LNR acquisition including the final purchase price allocation and retrospective measurement period adjustments. |
Loans
Loans | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
4. Loans | |||||||||||||||||||||||
Our loans held-for-investment are accounted for at amortized cost and our loans held-for-sale are accounted for at the lower of cost or fair value, unless we have elected the fair value option. The following tables summarize our investments in mortgages and loans by subordination class as of June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||||||||||||
Carrying | Face | Weighted | Weighted | ||||||||||||||||||||
Value | Amount | Average | Average Life | ||||||||||||||||||||
Coupon | (“WAL”) | ||||||||||||||||||||||
(years)(2) | |||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||
First mortgages | $ | 3,259,428 | $ | 3,317,358 | 5.4 | % | 3.9 | ||||||||||||||||
Subordinated mortgages(1) | 355,561 | 388,449 | 8.6 | % | 4.1 | ||||||||||||||||||
Mezzanine loans | 1,275,207 | 1,281,518 | 10.6 | % | 3.3 | ||||||||||||||||||
Total loans held-for-investment | 4,890,196 | 4,987,325 | |||||||||||||||||||||
Loans held-for-sale, fair value option elected | 154,412 | 153,724 | 4.7 | % | 9.8 | ||||||||||||||||||
Loans transferred as secured borrowings | 142,867 | 142,883 | 5.5 | % | 2.8 | ||||||||||||||||||
Total gross loans | 5,187,475 | 5,283,932 | |||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | (4,342 | ) | — | ||||||||||||||||||||
Total net loans | $ | 5,183,133 | $ | 5,283,932 | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
First mortgages | $ | 2,714,512 | $ | 2,766,217 | 5.5 | % | 4.3 | ||||||||||||||||
Subordinated mortgages(1) | 407,462 | 442,475 | 9.7 | % | 4.2 | ||||||||||||||||||
Mezzanine loans | 1,245,728 | 1,246,841 | 11.7 | % | 3.5 | ||||||||||||||||||
Total loans held-for-investment | 4,367,702 | 4,455,533 | |||||||||||||||||||||
Loans held-for-sale, fair value option elected | 206,672 | 209,099 | 5.3 | % | 9.6 | ||||||||||||||||||
Loans transferred as secured borrowings | 180,414 | 180,483 | 5.4 | % | 2.9 | ||||||||||||||||||
Total gross loans | 4,754,788 | 4,845,115 | |||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | (3,984 | ) | — | ||||||||||||||||||||
Total net loans | $ | 4,750,804 | $ | 4,845,115 | |||||||||||||||||||
(1) Subordinated mortgages include B-notes and junior participations in first mortgages where we do not own the senior A-note or senior participation. If we own both the A-note and B-note we categorize the loan as a first mortgage loan. | |||||||||||||||||||||||
(2) Represents the WAL of each respective group of loans as of the respective balance sheet date. The WAL of each individual loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the loan. | |||||||||||||||||||||||
As of June 30, 2014, approximately $3.9 billion, or 74.8%, of the loans were variable rate and paid interest principally at LIBOR plus a weighted-average spread of 5.65%. The following table summarizes our investments in floating rate loans (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Index | Base Rate | Carrying | Base Rate | Carrying | |||||||||||||||||||
Value | Value | ||||||||||||||||||||||
1 Month LIBOR | 0.16% | $ | 137,092 | 0.17% | $ | 150,076 | |||||||||||||||||
3 Month LIBOR | 0.55% | 406,392 | 0.53% | 392,950 | |||||||||||||||||||
LIBOR Floor | 0.15% - 3.00%(1) | 3,333,849 | 0.19% - 3.00%(1) | 2,688,308 | |||||||||||||||||||
Total | $ | 3,877,333 | $ | 3,231,334 | |||||||||||||||||||
(1) The weighted-average LIBOR Floor was 0.36% and 0.49% as of June 30, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||
As of June 30, 2014, the risk ratings for loans subject to our rating system, which are described in our Form 10-K and excludes loans on the cost recovery method and loans for which the fair value option has been elected, by class of loan were as follows (amounts in thousands): | |||||||||||||||||||||||
Balance Sheet Classification | |||||||||||||||||||||||
Loans Held-For-Investment | Loans | ||||||||||||||||||||||
Risk | First | Subordinated | Mezzanine | Cost | Loans Held- | Transferred | Total | ||||||||||||||||
Rating | Mortgages | Mortgages | Loans | Recovery | For-Sale | As Secured | |||||||||||||||||
Category | Loans | Borrowings | |||||||||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
2 | 101,875 | 104,821 | 209,690 | — | — | 12,971 | 429,357 | ||||||||||||||||
3 | 3,010,516 | 218,685 | 950,268 | — | — | 129,896 | 4,309,365 | ||||||||||||||||
4 | 142,166 | 32,055 | 115,249 | — | — | — | 289,470 | ||||||||||||||||
5 | — | — | — | — | — | — | — | ||||||||||||||||
N/A | 455 | — | — | 4,416 | 154,412 | — | 159,283 | ||||||||||||||||
$ | 3,255,012 | $ | 355,561 | $ | 1,275,207 | $ | 4,416 | $ | 154,412 | $ | 142,867 | $ | 5,187,475 | ||||||||||
As of December 31, 2013, the risk ratings for loans subject to our rating system by class of loan were as follows (amounts in thousands): | |||||||||||||||||||||||
Balance Sheet Classification | |||||||||||||||||||||||
Loans Held-For-Investment | Loans | ||||||||||||||||||||||
Risk | First | Subordinated | Mezzanine | Cost | Loans Held- | Transferred | Total | ||||||||||||||||
Rating | Mortgages | Mortgages | Loans | Recovery | For-Sale | As Secured | |||||||||||||||||
Category | Loans | Borrowings | |||||||||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
2 | 94,981 | 103,369 | 153,119 | — | — | 13,022 | 364,491 | ||||||||||||||||
3 | 2,452,763 | 272,375 | 1,012,674 | — | — | 167,392 | 3,905,204 | ||||||||||||||||
4 | 153,987 | 31,718 | 79,935 | — | — | — | 265,640 | ||||||||||||||||
5 | — | — | — | — | — | — | — | ||||||||||||||||
N/A | — | — | — | 12,781 | 206,672 | — | 219,453 | ||||||||||||||||
$ | 2,701,731 | $ | 407,462 | $ | 1,245,728 | $ | 12,781 | $ | 206,672 | $ | 180,414 | $ | 4,754,788 | ||||||||||
After completing our impairment evaluation process as described in our Form 10-K, we concluded that no impairment charges were required on any individual loans held-for-investment as of June 30, 2014 or December 31, 2013. As of June 30, 2014, approximately $4.4 million of our loans held-for-investment were in default, all of which are within the LNR Segment and were acquired as non-performing loans prior to the April 19, 2013 acquisition. | |||||||||||||||||||||||
In accordance with our policies, we record an allowance for loan losses equal to (i) 1.5% of the aggregate carrying amount of loans rated as a “4,” plus (ii) 5% of the aggregate carrying amount of loans rated as a “5.” These groups accounted for 5.6% of our loan portfolios as of both June 30, 2014 and December 31, 2013. The following table presents the activity in our allowance for loan losses (amounts in thousands): | |||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||
June 30, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Allowance for loan losses at January 1 | $ | 3,984 | $ | 2,061 | |||||||||||||||||||
Provision for loan losses | 577 | 755 | |||||||||||||||||||||
Charge-offs | — | — | |||||||||||||||||||||
Recoveries | (219 | ) | — | ||||||||||||||||||||
Allowance for loan losses at June 30 | $ | 4,342 | $ | 2,816 | |||||||||||||||||||
Recorded investment in loans related to the allowance for loan loss | $ | 289,470 | $ | 160,893 | |||||||||||||||||||
The activity in our loan portfolio was as follows (amounts in thousands): | |||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||
June 30, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Balance at January 1 | $ | 4,750,804 | $ | 3,000,335 | |||||||||||||||||||
Acquisitions/originations/additional funding | 1,860,026 | 1,308,602 | |||||||||||||||||||||
Capitalized interest(1) | 19,022 | 5,279 | |||||||||||||||||||||
Basis of loans sold(2) | (868,804 | ) | (573,825 | ) | |||||||||||||||||||
Loan maturities/principal repayments | (633,425 | ) | (140,596 | ) | |||||||||||||||||||
Discount accretion/premium amortization | 10,147 | 14,243 | |||||||||||||||||||||
Changes in fair value | 32,501 | 458 | |||||||||||||||||||||
Unrealized foreign currency remeasurement gain (loss) | 16,462 | (4,572 | ) | ||||||||||||||||||||
Capitalized costs written off | — | (1,517 | ) | ||||||||||||||||||||
Loan loss allowance, net | (358 | ) | (755 | ) | |||||||||||||||||||
Transfer to other assets | (3,242 | ) | — | ||||||||||||||||||||
Balance at June 30 | $ | 5,183,133 | $ | 3,607,652 | |||||||||||||||||||
(1) Represents accrued interest income on loans whose terms do not require current payment of interest. | |||||||||||||||||||||||
(2) See Note 10 for additional disclosure on these transactions. |
Investment_Securities
Investment Securities | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
5. Investment Securities | ||||||||||||||||||||||||||
Investment securities were comprised of the following as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Carrying Value as of | ||||||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
RMBS, available-for-sale | $ | 231,605 | $ | 296,236 | ||||||||||||||||||||||
Single-borrower CMBS, available-for-sale | 116,071 | 114,346 | ||||||||||||||||||||||||
CMBS, fair value option (1) | 638,069 | 550,282 | ||||||||||||||||||||||||
Held-to-maturity (“HTM”) securities | 370,096 | 368,318 | ||||||||||||||||||||||||
Equity security, fair value option | 16,104 | 15,247 | ||||||||||||||||||||||||
Subtotal - Investment securities | 1,371,945 | 1,344,429 | ||||||||||||||||||||||||
VIE eliminations (1) | (469,521 | ) | (409,322 | ) | ||||||||||||||||||||||
Total investment securities | $ | 902,424 | $ | 935,107 | ||||||||||||||||||||||
(1) Certain fair value option CMBS are eliminated in consolidation against VIE liabilities pursuant to ASC 810. | ||||||||||||||||||||||||||
Purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three Months ended | Available-for-sale | CMBS, fair | HTM | Equity | ||||||||||||||||||||||
June 30, 2014 | RMBS | CMBS | value option | Securities | Security | Total | ||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 43,563 | $ | — | $ | — | $ | 43,563 | ||||||||||||||
Sales | 53,236 | — | 13,548 | — | — | 66,784 | ||||||||||||||||||||
Principal collections | 10,466 | 421 | — | — | — | 10,887 | ||||||||||||||||||||
June 30, 2013 | ||||||||||||||||||||||||||
Purchases | 20,090 | — | 1,618 | — | — | 21,708 | ||||||||||||||||||||
Sales | — | — | 10,072 | — | — | 10,072 | ||||||||||||||||||||
Principal collections | 15,771 | 2,627 | — | — | — | 18,398 | ||||||||||||||||||||
Six Months ended | ||||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 53,453 | $ | — | $ | — | $ | 53,453 | ||||||||||||||
Sales | 62,546 | -1 | — | 32,032 | — | — | 94,578 | |||||||||||||||||||
Principal collections | 18,285 | 829 | — | — | — | 19,114 | ||||||||||||||||||||
June 30, 2013 | ||||||||||||||||||||||||||
Purchases | 20,090 | — | 1,618 | 37,190 | — | 58,898 | ||||||||||||||||||||
Sales | 12,712 | 206,608 | 10,072 | — | 6,769 | 236,161 | ||||||||||||||||||||
Principal collections | 32,638 | 7,484 | — | — | — | 40,122 | ||||||||||||||||||||
(1) Settlement of $44.4 million occurred subsequent to June 30, 2014. We account for all investment securities transactions on a trade-date basis. | ||||||||||||||||||||||||||
RMBS and Single-borrower CMBS, Available-for-Sale | ||||||||||||||||||||||||||
With the exception of one CMBS classified as HTM, the Company classified all of its RMBS and CMBS investments where the fair value option has not been elected as available-for-sale as of June 30, 2014 and December 31, 2013. These RMBS and CMBS are reported at fair value in the balance sheet with changes in fair value recorded in accumulated other comprehensive income (“AOCI”). | ||||||||||||||||||||||||||
The tables below summarize various attributes of our investments in available-for-sale RMBS and single-borrower CMBS where the fair value option has not been elected as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) | ||||||||||||||||||||||||||
Recognized in AOCI | ||||||||||||||||||||||||||
Purchase | Credit | Recorded | Non-Credit | Gross | Gross | Net | Fair Value | |||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Unrealized | Unrealized | Fair Value | ||||||||||||||||||||
Cost | Cost | Gains | Losses | Adjustment | ||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
RMBS | $ | 193,084 | $ | (10,322 | ) | $ | 182,762 | $ | (3 | ) | $ | 49,529 | $ | (683 | ) | $ | 48,843 | $ | 231,605 | |||||||
Single-borrower CMBS | 103,498 | — | 103,498 | — | 12,573 | — | 12,573 | 116,071 | ||||||||||||||||||
Total | $ | 296,582 | $ | (10,322 | ) | $ | 286,260 | $ | (3 | ) | $ | 62,102 | $ | (683 | ) | $ | 61,416 | $ | 347,676 | |||||||
December 31, 2013 | ||||||||||||||||||||||||||
RMBS | $ | 253,912 | $ | (11,134 | ) | $ | 242,778 | $ | (55 | ) | $ | 55,154 | $ | (1,641 | ) | $ | 53,458 | $ | 296,236 | |||||||
Single-borrower CMBS | 100,687 | — | 100,687 | — | 13,659 | — | 13,659 | 114,346 | ||||||||||||||||||
Total | $ | 354,599 | $ | (11,134 | ) | $ | 343,465 | $ | (55 | ) | $ | 68,813 | $ | (1,641 | ) | $ | 67,117 | $ | 410,582 | |||||||
Weighted Average | Weighted Average | WAL (Years)(3) | ||||||||||||||||||||||||
Coupon(1) | Rating | |||||||||||||||||||||||||
(Standard & Poor’s) | ||||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
RMBS | 1 | % | B- | 7.4 | ||||||||||||||||||||||
Single-borrower CMBS | 11.6 | % | BB+ | -2 | 3.7 | |||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
RMBS | 1 | % | B- | 6.8 | ||||||||||||||||||||||
Single-borrower CMBS | 11.5 | % | BB+ | -2 | 5.9 | |||||||||||||||||||||
(1) Calculated using the June 30, 2014 and December 31, 2013 one-month LIBOR rate of 0.155% and 0.168%, respectively, for floating rate securities. | ||||||||||||||||||||||||||
(2) As of June 30, 2014 and December 31, 2013, approximately 99.3% and 98.8%, respectively, of the CMBS securities were rated BB+. | ||||||||||||||||||||||||||
(3) Represents the WAL of each respective group of securities calculated as of the respective balance sheet date. The WAL of each individual security or loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
As of June 30, 2014, $0.9 million, or 0.7%, of the single-borrower CMBS were variable rate. As of December 31, 2013, $1.3 million, or 1.2%, of the single-borrower CMBS were variable rate. As of June 30, 2014, approximately $195.4 million, or 84.3%, of RMBS were variable rate and paid interest at LIBOR plus a weighted average spread of 0.44%. As of December 31, 2013, approximately $256.1 million, or 86.5%, of RMBS were variable rate and paid interest at LIBOR plus a weighted average spread of 0.37%. We purchased all of the RMBS at a discount that will be accreted into income over the expected remaining life of the security. The majority of the income from this strategy is earned from the accretion of these discounts. | ||||||||||||||||||||||||||
The following table contains a reconciliation of aggregate principal balance to amortized cost for our RMBS and single-borrower CMBS as of June 30, 2014 and December 31, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
RMBS | CMBS | RMBS | CMBS | |||||||||||||||||||||||
Principal balance | $ | 312,280 | $ | 103,498 | $ | 414,020 | $ | 100,687 | ||||||||||||||||||
Accretable yield | (90,876 | ) | — | (101,046 | ) | — | ||||||||||||||||||||
Non-accretable difference | (38,642 | ) | — | (70,196 | ) | — | ||||||||||||||||||||
Total discount | (129,518 | ) | — | (171,242 | ) | — | ||||||||||||||||||||
Amortized cost | $ | 182,762 | $ | 103,498 | $ | 242,778 | $ | 100,687 | ||||||||||||||||||
The principal balance of credit deteriorated RMBS was $240.8 million and $320.4 million as of June 30, 2014 and December 31, 2013, respectively. Accretable yield related to these securities totaled $73.5 million and $78.3 million as of June 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our RMBS and single-borrower CMBS during the three and six months ended June 30, 2014, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
RMBS | CMBS | RMBS | CMBS | |||||||||||||||||||||||
Three Months ended June 30, 2014 | ||||||||||||||||||||||||||
Balance as of April 1, 2014 | $ | 99,622 | $ | — | $ | 55,432 | $ | — | ||||||||||||||||||
Accretion of discount | (3,323 | ) | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | (509 | ) | — | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (10,276 | ) | — | (11,428 | ) | — | ||||||||||||||||||||
OTTI | — | — | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | 4,853 | — | (4,853 | ) | — | |||||||||||||||||||||
Balance as of June 30, 2014 | $ | 90,876 | $ | — | $ | 38,642 | $ | — | ||||||||||||||||||
Six Months ended June 30, 2014 | ||||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 101,046 | $ | — | $ | 70,196 | $ | — | ||||||||||||||||||
Accretion of discount | (9,887 | ) | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | (875 | ) | — | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (12,238 | ) | — | (18,937 | ) | — | ||||||||||||||||||||
OTTI | 213 | — | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | 11,742 | — | (11,742 | ) | — | |||||||||||||||||||||
Balance as of June 30, 2014 | $ | 90,876 | $ | — | $ | 38,642 | $ | — | ||||||||||||||||||
Subject to certain limitations on durations, we have allocated an amount to invest in RMBS that cannot exceed 10% of our total assets excluding LNR VIEs. We have engaged a third party manager who specializes in RMBS to execute the trading of RMBS, the cost of which was $0.5 million and $0.8 million for the three months ended June 30, 2014 and 2013, respectively, and $1.1 million and $1.4 million for the six months ended June 30, 2014 and 2013, respectively, which has been recorded as management fees in the accompanying condensed consolidated statements of operations. | ||||||||||||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of the available-for-sale securities (i) where we have not elected the fair value option, (ii) that were in an unrealized loss position as of June 30, 2014 and December 31, 2013, and (iii) for which OTTIs (full or partial) have not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
Securities with a | Securities with a | Securities with a | Securities with a | |||||||||||||||||||||||
loss less than | loss greater than | loss less than | loss greater than | |||||||||||||||||||||||
12 months | 12 months | 12 months | 12 months | |||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||||
RMBS | $ | 16,255 | $ | 1,552 | $ | (480 | ) | $ | (206 | ) | ||||||||||||||||
Single-borrower CMBS | — | — | — | — | ||||||||||||||||||||||
Total | $ | 16,255 | $ | 1,552 | $ | (480 | ) | $ | (206 | ) | ||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||||
RMBS | $ | 26,344 | $ | 1,809 | $ | (1,444 | ) | $ | (252 | ) | ||||||||||||||||
Single-borrower CMBS | — | — | — | — | ||||||||||||||||||||||
Total | $ | 26,344 | $ | 1,809 | $ | (1,444 | ) | $ | (252 | ) | ||||||||||||||||
As of June 30, 2014, there were three securities with unrealized losses reflected in the table above. After evaluating each security and recording adjustments, as necessary, for other-than-temporary impairments, the remaining unrealized losses reflected above were not considered to represent credit-related other-than-temporary impairments. We considered a number of factors in reaching this conclusion, including that we did not intend to sell any individual security, it was not considered more likely than not that we would be forced to sell any individual security prior to recovering our amortized cost, and there were no material credit events that would have caused us to otherwise conclude that we would not recover our cost. Credit losses, which represent most of the other-than-temporary impairments we record, are calculated by comparing (i) the estimated future cash flows of each security discounted at the yield determined as of the initial acquisition date or, if since revised, as of the last date previously revised, to (ii) our amortized cost basis. Significant judgment is used in projecting cash flows for our non-agency RMBS. As a result, actual income and/or impairments could be materially different from what is currently projected and/or reported. | ||||||||||||||||||||||||||
CMBS, Fair Value Option | ||||||||||||||||||||||||||
As discussed in the “Fair Value Option” section of Note 2 herein, we elect the fair value option for LNR’s CMBS in an effort to eliminate accounting mismatches resulting from the current or potential consolidation of securitization VIEs. As of June 30, 2014, the fair value and unpaid principal balance of CMBS where we have elected the fair value option, before consolidation of securitization VIEs, was $638.1 million and $4.1 billion, respectively. These balances represent our economic interests in these assets. However, as a result of our consolidation of securitization VIEs, the vast majority of this fair value ($469.5 million at June 30, 2014) is eliminated against VIE liabilities before arriving at our GAAP balance for fair value option CMBS. During the three and six months ended June 30, 2014, we purchased $107.1 million and $151.7 million of CMBS, respectively, for which we elected the fair value option. Due to our consolidation of securitization VIEs, $63.5 million and $98.3 million, respectively, of these amounts are reflected as repayment of debt of consolidated VIEs in our condensed consolidated statement of cash flows. | ||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, none of our CMBS where we have elected the fair value option were variable rate. The table below summarizes various attributes of our investment in fair value option CMBS as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Weighted | Weighted | WAL | ||||||||||||||||||||||||
Average | Average | (Years)(1) | ||||||||||||||||||||||||
Coupon | Rating | |||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
CMBS, fair value option | 5 | % | CCC | -2 | 5.3 | |||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
CMBS, fair value option | 5.4 | % | CC | -2 | 4.4 | |||||||||||||||||||||
(1) The WAL of each security is calculated based on the period of time over which we expect to receive principal cash flows. Expected principal cash flows are based on contractual payments net of expected losses. | ||||||||||||||||||||||||||
(2) As of June 30, 2014 and December 31, 2013, excludes $27.3 million and $55.5 million, respectively, in fair value option CMBS that are not rated. | ||||||||||||||||||||||||||
HTM Securities | ||||||||||||||||||||||||||
The table below summarizes various attributes of our investments in HTM securities as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Net Carrying | Gross | Gross | Fair Value | |||||||||||||||||||||||
Amount | Unrealized | Unrealized | ||||||||||||||||||||||||
(Amortized | Holding | Holding | ||||||||||||||||||||||||
Cost) | Gains | Losses | ||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
Preferred interests | $ | 285,946 | $ | 2,083 | $ | — | $ | 288,029 | ||||||||||||||||||
CMBS | 84,150 | — | (576 | ) | 83,574 | |||||||||||||||||||||
Total | $ | 370,096 | $ | 2,083 | $ | (576 | ) | $ | 371,603 | |||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Preferred interests | $ | 284,087 | $ | 135 | $ | — | $ | 284,222 | ||||||||||||||||||
CMBS | 84,231 | — | — | 84,231 | ||||||||||||||||||||||
Total | $ | 368,318 | $ | 135 | $ | — | $ | 368,453 | ||||||||||||||||||
During 2013, we originated two preferred equity interests of $246.1 million and $37.2 million, respectively, in limited liability companies that own commercial real estate. These preferred equity interests mature in December 2018 and October 2014, respectively. During 2013, we also purchased a CMBS security with a face value and purchase price of $84.1 million, which we expect to hold to maturity. The stated maturity of this security is November 2016. | ||||||||||||||||||||||||||
Equity Security, Fair Value Option | ||||||||||||||||||||||||||
During 2012, we acquired 9,140,000 ordinary shares from a related-party (approximately a 4% interest) in Starwood European Real Estate Finance Limited (“SEREF”), a debt fund that is externally managed by an affiliate of our Manager and is listed on the London Stock Exchange. We have elected to report the investment using the fair value option because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market, and also due to potential lags in reporting resulting from differences in the respective regulatory requirements. The fair value of the investment remeasured in U.S. dollars (“USD”) was $16.1 million and $15.2 million as of June 30, 2014 and December 31, 2013, respectively. |
Investment_in_Unconsolidated_E
Investment in Unconsolidated Entities | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Investment in Unconsolidated Entities | ' | ||||||||||||
Investment in Unconsolidated Entities | ' | ||||||||||||
6. Investment in Unconsolidated Entities | |||||||||||||
The below table summarizes our investments in unconsolidated entities as of June 30, 2014 and December 31, 2013 (dollar amounts in thousands): | |||||||||||||
Participation / | Carrying value as of | Carrying value over (under) | |||||||||||
equity in net assets as of | |||||||||||||
Ownership %(1) | June 30, 2014 | December 31, 2013 | June 30, 2014(2) | ||||||||||
Equity method: | |||||||||||||
Investor entity which owns equity interests in two real estate services providers | 50% | $ | 20,010 | $ | 19,371 | $ | — | ||||||
Small balance bridge loan financing venture | 50% | 26,445 | 26,121 | — | |||||||||
European investment fund | 50% | 7,974 | 23,779 | (4,235 | ) | ||||||||
Mezzanine loan venture | 49% | 23,335 | 23,676 | — | |||||||||
Healthcare bridge loan venture | various | 14,945 | 14,163 | — | |||||||||
Various | 25% - 50% | 5,118 | 4,371 | — | |||||||||
97,827 | 111,481 | $ | (4,235 | ) | |||||||||
Cost method: | |||||||||||||
Loan servicing venture | 4% - 6% | 9,225 | 8,014 | ||||||||||
Various | 2% - 10% | 11,569 | 3,459 | ||||||||||
20,794 | 11,473 | ||||||||||||
$ | 118,621 | $ | 122,954 | ||||||||||
(1) None of these investments are publicly traded and therefore quoted market prices are not available. | |||||||||||||
(2) Differences between the carrying value of our investment and the underlying equity in net assets of the investee are accounted for as if the investee were a consolidated entity in accordance with ASC 323, Investments—Equity Method and Joint Ventures. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Goodwill and Intangible Assets | ' | |||||||
7. Goodwill and Intangible Assets | ||||||||
Goodwill | ||||||||
Goodwill at June 30, 2014 and December 31, 2013 represents the excess of consideration transferred over the fair value of net assets of LNR acquired on April 19, 2013. The goodwill recognized is attributable to value embedded in LNR’s existing platform, which includes an international network of commercial real estate asset managers, work-out specialists, underwriters and administrative support professionals as well as proprietary historical performance data on commercial real estate assets. | ||||||||
Servicing Rights Intangibles | ||||||||
In connection with the LNR acquisition, we identified domestic and European servicing rights that existed at the purchase date, based upon the expected future cash flows of the associated servicing contracts. All of our servicing fees are specified by these Pooling and Servicing Agreements. At June 30, 2014 and December 31, 2013, the balance of the domestic servicing intangible was net of $67.8 million and $80.6 million, respectively, that was eliminated in consolidation pursuant to ASC 810 against VIE assets in connection with our consolidation of securitization VIEs. Before VIE consolidation, as of June 30, 2014 and December 31, 2013, the domestic servicing intangible had a balance of $206.1 million and $230.7 million, respectively, which represents our economic interest in this asset. | ||||||||
The table below presents information about our GAAP servicing intangibles for the six months ended June 30, 2014 and 2013 (in thousands): | ||||||||
2014 | 2013 | |||||||
Domestic servicing rights, at fair value | ||||||||
Fair value at January 1 | $ | 150,149 | $ | — | ||||
Acquisition of LNR | — | 156,993 | ||||||
Changes in fair value due to changes in inputs and assumptions | (10,774 | ) | 2,898 | |||||
Other | (1,057 | ) | — | |||||
Fair value at June 30 | 138,318 | 159,891 | ||||||
European servicing rights | ||||||||
Net carrying amount at January 1 (fair value of $29.3 million) | 27,024 | — | ||||||
Acquisition of LNR | — | 32,649 | ||||||
Foreign exchange gain (loss) | 713 | (18 | ) | |||||
Amortization and OTTI | (9,209 | ) | (1,876 | ) | ||||
Net carrying value at June 30 (fair value of $18.5 million and $33.9 million) | 18,528 | 30,755 | ||||||
Total servicing rights at June 30 | $ | 156,846 | $ | 190,646 | ||||
Secured_Financing_Agreements
Secured Financing Agreements | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Secured Financing Agreements | ' | |||||||||||||||||||||||||
Secured Financing Agreements | ' | |||||||||||||||||||||||||
8. Secured Financing Agreements | ||||||||||||||||||||||||||
The following table is a summary of our secured financing agreements in place as of June 30, 2014 and December 31, 2013 (dollars in thousands): | ||||||||||||||||||||||||||
Pledged | Maximum | Carrying Value at | ||||||||||||||||||||||||
Asset | ||||||||||||||||||||||||||
Facility | Revolver | Eligible | Current | Extended | Pricing | Carrying | Facility | June 30, 2014 | December 31, | |||||||||||||||||
Type | Assets | Maturity | Maturity(a) | Value | Size | 2013 | ||||||||||||||||||||
Lender 1 Repo 1 | Repurchase | Yes | Identified Loans and CMBS | (b) | (b) | LIBOR + 1.85% to 5.25% | $ | 1,349,733 | $ | 1,000,000 | $ | 753,032 | $ | 449,323 | ||||||||||||
Lender 1 Repo 2 | Repurchase | Yes | Identified RMBS | (c) | N/A | LIBOR + 1.90% | 230,129 | 175,000 | 120,627 | 127,943 | ||||||||||||||||
Lender 1 Repo 3 | Repurchase | No | Identified Loans | Dec-14 | Dec-16 | LIBOR + 2.75% | 210,041 | 148,860 | 148,860 | 154,133 | ||||||||||||||||
Lender 2 Repo 1 | Repurchase | Yes | Identified Loans | Oct-15 | Oct-18 | LIBOR + 2.00% to 2.75% | 269,290 | 225,000 | (d) | 181,151 | 100,886 | |||||||||||||||
Lender 3 Repo 1 | Repurchase | No | Identified Loans | May 2017 | May 2019 | LIBOR + 2.85% | 135,132 | 93,836 | 93,836 | 50,871 | ||||||||||||||||
Conduit Repo 1 | Repurchase | Yes | Identified Loans | Sep-14 | Sep-14 | LIBOR + 2.20% | — | 250,000 | — | 129,843 | ||||||||||||||||
Conduit Repo 2 | Repurchase | Yes | Identified Loans | Nov-14 | Nov-14 | LIBOR + 2.10% | 128,083 | 150,000 | 95,568 | — | ||||||||||||||||
Lender 4 Repo 1 | Repurchase | No | Identified Loans | Oct-15 | Oct-17 | LIBOR + 2.60% | 456,758 | 359,226 | 359,226 | 347,697 | ||||||||||||||||
Lender 5 Repo 1 | Repurchase | No | Identified CMBS | Dec-14 | Dec-14 | LIBOR + 2.00% | 84,150 | 58,467 | 58,467 | 58,467 | ||||||||||||||||
Borrowing Base | Bank Credit Facility | Yes | Identified Loans | Sep-15 | Sep-17 | LIBOR + 3.25%(e) | 661,164 | 250,000 | 84,386 | 169,104 | ||||||||||||||||
Term Loan | Syndicated Facility | No | Specifically Identified Assets | Apr-20 | Apr-20 | LIBOR + 2.75%(e) | 2,936,771 | 668,423 | 666,114 | (f) | 669,293 | (f) | ||||||||||||||
$ | 6,461,251 | $ | 3,378,812 | $ | 2,561,267 | $ | 2,257,560 | |||||||||||||||||||
(a) Subject to certain conditions as defined in the respective facility agreement. | ||||||||||||||||||||||||||
(b) Maturity date for borrowings collateralized by loans of January 2017 before extension options and January 2019 assuming initial extension options. Maturity date for borrowings collateralized by CMBS of January 2015 before extension options and January 2016 assuming initial extension options. | ||||||||||||||||||||||||||
(c) The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 13, 2015. | ||||||||||||||||||||||||||
(d) On July 24, 2014, we amended the Lender 2 Repo 1 facility to upsize available borrowings from $225 million to $325 million and reduce pricing 25-50 basis points depending on the collateral type. | ||||||||||||||||||||||||||
(e) Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||||||||
(f) Term loan outstanding balance is net of $2.3 million and $2.5 million of unamortized discount as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||
In January 2014, we amended the Lender 1 Repo 1 facility to (i) upsize available borrowings to $1.0 billion from $550 million; (ii) extend the maturity date for loan collateral to January 2019 and for CMBS collateral to January 2016, each from August 2014, and each assuming initial extension options; (iii) allow for up to four additional one-year extension options with respect to any loan collateral that remains financed at maturity, in an effort to match the term of the maturity dates of these assets; (iv) reduce pricing and debt-yield thresholds for purchased assets; and (v) amend certain financial covenants to contemplate the spin-off of the SFR segment. STWD guarantees certain of the obligations of the consolidated subsidiary, which is the borrower under the repurchase agreement, up to a maximum liability of either 25% or 100% of the then-currently outstanding repurchase price of purchased assets, depending upon the type of asset being financed. | ||||||||||||||||||||||||||
In May 2014, we amended our Lender 3 Repo 1 facility to (i) increase additional borrowings by $42.7 million; (ii) extend the maturity date for loan collateral to May 2019, assuming the exercise of two one-year extension options; (iii) reduce pricing for all purchased assets; and (iv) increase advance rates for certain purchased assets. | ||||||||||||||||||||||||||
Our secured financing agreements contain certain financial tests and covenants. As of June 30, 2014, we were in compliance with all such covenants. | ||||||||||||||||||||||||||
The following table sets forth our five-year principal repayments schedule for the secured financings, assuming no defaults or expected extensions and excluding the loans transferred as secured borrowings. Our credit facilities generally require principal to be paid down prior to the facilities’ respective maturities if and when we receive principal payments on, or sell, the investment collateral that we have pledged. The amount reflected in each period includes principal repayments on our credit facilities that would be required if (i) we received the repayments that we expect to receive on the investments that have been pledged as collateral under the credit facilities, as applicable, and (ii) the credit facilities that are expected to have amounts outstanding at their current maturity dates are extended where extension options are available to us (amounts in thousands): | ||||||||||||||||||||||||||
2014 (remainder of) | $ | 194,472 | ||||||||||||||||||||||||
2015 | 155,464 | |||||||||||||||||||||||||
2016 | 296,329 | |||||||||||||||||||||||||
2017 | 568,760 | |||||||||||||||||||||||||
2018 | 223,683 | |||||||||||||||||||||||||
Thereafter(1) | 1,124,868 | |||||||||||||||||||||||||
Total | $ | 2,563,576 | ||||||||||||||||||||||||
(1) Principal paydown of the Term Loan through 2020 excludes $2.3 million of discount amortization. | ||||||||||||||||||||||||||
Secured financing maturities for 2014 primarily relate to $95.6 million on the Conduit Repo 2 facility, $58.5 million on the Lender 5 Repo 1 facility, and $26.2 million on the Lender 1 Repo 3 facility. | ||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, we had approximately $24.9 million and $22.5 million, respectively, of deferred financing costs from secured financing agreements, net of amortization, which is included in other assets on our condensed consolidated balance sheets. For the three and six months ended June 30, 2014, approximately $2.6 million, and $5.3 million, respectively, of amortization was included in interest expense on our condensed consolidated statements of operations. For the three and six months ended June 30, 2013, approximately $1.8 million, and $5.0 million, respectively, of amortization was included in interest expense on our condensed consolidated statements of operations. |
Convertible_Senior_Notes
Convertible Senior Notes | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
9. Convertible Senior Notes | |||||||||||||||
On February 15, 2013, we issued $600.0 million of 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”). On July 3, 2013, we issued $460.0 million of 4.00% Convertible Senior Notes due 2019 (the “2019 Notes”). The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of June 30, 2014 (amounts in thousands, except rates): | |||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Remaining | ||||||||||
Amount | Rate | Rate(1) | Rate(2) | Date | Period of | ||||||||||
Amortization | |||||||||||||||
2018 Notes | $ | 599,981 | 4.55 | % | 6.08 | % | 44.6455 | 3/1/18 | 3.7 years | ||||||
2019 Notes | $ | 459,997 | 4 | % | 5.37 | % | 47.5456 | 1/15/19 | 4.5 years | ||||||
As of | As of | ||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||
Total principal | $ | 1,059,978 | $ | 1,060,000 | |||||||||||
Net unamortized discount | (56,131 | ) | (62,149 | ) | |||||||||||
Carrying amount of debt components | $ | 1,003,847 | $ | 997,851 | |||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,502 | $ | 48,502 | |||||||||||
(1) Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
(2) The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the applicable indentures as a result of the spin-off of the SFR segment and cash dividend payments. The if-converted value of the 2018 Notes exceeded their principal amount by $36.7 million at June 30, 2014 since the closing market price of the Company’s common stock of $23.77 per share exceeded the implicit conversion price of $22.40 per share. The if-converted value of the 2019 Notes exceeded their principal amount by $59.9 million at June 30, 2014 since the closing market price of $23.77 per share exceeded the implicit conversion price of $21.03 per share for the 2019 Notes. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, conversion of this principal amount, totaling 44.6 million and 44.8 million shares for the three and six months ended June 30, 2014, respectively, was not included in the computation of diluted earnings per share (“EPS”). However, the conversion spread value, representing 4.1 million and 3.9 million shares for the three and six months ended June 30, 2014, respectively, was included in the computation of diluted EPS. See further discussion at Note 16. | |||||||||||||||
As of June 30, 2014 and December 31, 2013, we had approximately $1.5 million and $1.6 million, respectively, of deferred financing costs from our Convertible Notes, net of amortization, which is included in other assets on our condensed consolidated balance sheets. | |||||||||||||||
Conditions for Conversion | |||||||||||||||
Prior to September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, the Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 130% of the conversion price of the respective Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the Convertible Notes is less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10-day average closing market price of its common stock or the per-share value of certain distributions exceeds the market price of the Company’s common stock by more than 10% or (4) other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.) occur. | |||||||||||||||
On or after September 1, 2017 for the 2018 Notes and July 15, 2018 for the 2019 Notes, holders may convert each of their notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. | |||||||||||||||
Impact of Spin-off on Convertible Senior Notes | |||||||||||||||
As described in Note 1, on January 31, 2014, the Company distributed all of its interest in the SFR segment to the Company’s stockholders of record as of January 24, 2014. As the per-share value of the distribution was expected to exceed 10% of the last reported market price of the Company’s common stock on the trading day prior to the announcement for such distribution, holders of the Convertible Notes were eligible to surrender their notes for conversion at any time during the period beginning November 26, 2013 (the 45th trading day immediately prior to the scheduled ex-dividend date for the distribution) and ending on the close of the business day immediately preceding February 3, 2014, the ex-dividend date for such distribution. During this period, the Company received notices of conversion totaling $19 thousand and $3 thousand in principal for the 2018 Notes and 2019 Notes, respectively. The cash settlement of these conversions occurred in April 2014. | |||||||||||||||
Due to the distribution, the quarterly dividend threshold amounts for the Convertible Notes were adjusted to $0.3548 and $0.3710 (from $0.44 and $0.46) per share of common stock for the 2018 Notes and 2019 Notes, respectively, effective February 3, 2014. | |||||||||||||||
Refer to Note 11 to the consolidated financial statements included in our Form 10-K for further discussion regarding our accounting for the Convertible Notes. |
Loan_SecuritizationSale_Activi
Loan Securitization/Sale Activities | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Loan Securitization/Sale Activities | ' | |||||||||||||
Loan Securitization/Sale Activities | ' | |||||||||||||
10. Loan Securitization/Sale Activities | ||||||||||||||
As described below, we regularly sell loans and notes under various strategies. We evaluate such sales as to whether they meet the criteria for treatment as a sale—legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transfer of control. | ||||||||||||||
Within LNR, we originate commercial mortgage loans with the intent to sell these mortgage loans to SPEs for the purposes of securitization. These SPEs then issue CMBS that are collateralized in part by these assets, as well as other assets transferred to the SPE. In certain instances, we retain a subordinated interest in the SPE and serve as special servicer for the SPE. During the three and six months ended June 30, 2014, we sold $348.0 million and $637.4 million, respectively, par value of loans held-for-sale from our conduit platform for their fair values of $364.3 million and $666.8 million, respectively. During the three and six months ended June 30, 2014, the sale proceeds were used in part to repay $261.0 million and $478.1 million, respectively, of the outstanding balance of the repurchase agreements associated with these loans. | ||||||||||||||
Within the Lending Segment (refer to Note 21), we originate or acquire loans and then subsequently sell a senior portion, which can be represented in various forms including first mortgages, A-Notes and senior participations. Typically, our motivation for entering into these transactions is to effectively create leverage on the subordinated position that we will retain and hold for investment. The following table summarizes our loans sold and loans transferred as secured borrowings by the Lending Segment net of expenses (in thousands): | ||||||||||||||
Loan Transfers Accounted | Loan Transfers | |||||||||||||
for as Sales | Accounted for as Secured | |||||||||||||
Borrowings | ||||||||||||||
Face Amount | Proceeds | Face Amount | Proceeds | |||||||||||
For the three months ended June 30, | ||||||||||||||
2014 | $ | 56,975 | $ | 56,124 | $ | — | $ | — | ||||||
2013 | 52,849 | 52,859 | 95,000 | 95,000 | ||||||||||
For the six months ended June 30, | ||||||||||||||
2014 | $ | 204,859 | $ | 202,524 | $ | — | $ | — | ||||||
2013 | 97,380 | 97,490 | 95,000 | 95,000 | ||||||||||
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activity | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||
11. Derivatives and Hedging Activity | ||||||||||||||||
Risk Management Objective of Using Derivatives | ||||||||||||||||
We are exposed to certain risks arising from both our business operations and economic conditions. Refer to Note 13 to the consolidated financial statements included in our Form 10-K for further discussion of our risk management objectives and policies. | ||||||||||||||||
Designated Hedges | ||||||||||||||||
Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | ||||||||||||||||
In connection with our repurchase agreements, we have entered into seven outstanding interest rate swaps that have been designated as cash flow hedges of the interest rate risk associated with forecasted interest payments. As of June 30, 2014, the aggregate notional amount of our interest rate swaps designated as cash flow hedges of interest rate risk totaled $162.9 million. Under these agreements, we will pay fixed monthly coupons at fixed rates ranging from 0.56% to 2.23% of the notional amount to the counterparty and receive floating rate LIBOR. Our interest rate swaps designated as cash flow hedges of interest rate risk have maturities ranging from November 2015 to May 2021. | ||||||||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and six months ended June 30, 2014 and 2013 we did not recognize any hedge ineffectiveness in earnings. | ||||||||||||||||
Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the associated variable-rate debt. Over the next twelve months, we estimate that an additional $1.0 million will be reclassified as an increase to interest expense. We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 83 months. | ||||||||||||||||
Non-designated Hedges | ||||||||||||||||
Derivatives not designated as hedges are derivatives that do not meet the criteria for hedge accounting under GAAP or which we have not elected to designate as hedges. We do not use these derivatives for speculative purposes but instead they are used to manage our exposure to foreign exchange rates, interest rate changes, and certain credit spreads. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in gain (loss) on derivative financial instruments in our condensed consolidated statements of operations. The LNR conduit platform uses interest rate and credit index instruments to manage exposures related to commercial mortgage loans held-for-sale. | ||||||||||||||||
We have entered into a series of forward contracts whereby we agreed to sell an amount of foreign currency for an agreed upon amount of USD at various dates through January 2018. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. | ||||||||||||||||
As of June 30, 2014, we had 66 foreign exchange forward derivatives to sell pounds sterling (“GBP”) with a total notional amount of £226.2 million, 29 foreign exchange forward derivatives to sell Euros (“EUR”) with a total notional amount of €147.9 million, two foreign exchange forward derivatives to sell Swedish Krona (“SEK”) with a total notional of SEK 23.0 million, one foreign exchange forward derivative to sell Norwegian Krone (“NOK”) with a notional of NOK 1.3 million and one foreign exchange forward to sell Danish Krone (“DKK”) with a notional of DKK 3.2 million that were not designated as hedges in qualifying hedging relationships. We also had one foreign exchange forward contract to buy EUR with a total notional of €60.3 million. As of June 30, 2014, there were 34 interest rate swaps where the Company is paying fixed rates, with maturities ranging from 2 to 10 years and a total notional amount of $203.1 million, four interest rate swaps where the Company is receiving fixed rates with maturities ranging from 0 to 3 years and a total notional of $59.9 million and eight credit index instruments with a total notional amount of $50.0 million. The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||
Fair Value of Derivatives in an | Fair Value of Derivatives in a | |||||||||||||||
Asset Position(1) As of | Liability Position(2) As of | |||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | $ | 63 | $ | 125 | $ | 638 | $ | 729 | ||||||||
Total derivatives designated as hedging instruments | 63 | 125 | 638 | 729 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | 1,874 | 5,102 | 1,819 | 983 | ||||||||||||
Foreign exchange contracts | 502 | 269 | 23,837 | 22,480 | ||||||||||||
Credit index instruments | 2,242 | 2,273 | — | — | ||||||||||||
Total derivatives not designated as hedging instruments | 4,618 | 7,644 | 25,656 | 23,463 | ||||||||||||
Total derivatives | $ | 4,681 | $ | 7,769 | $ | 26,294 | $ | 24,192 | ||||||||
(1) Classified as derivative assets in our condensed consolidated balance sheets. | ||||||||||||||||
(2) Classified as derivative liabilities in our condensed consolidated balance sheets. | ||||||||||||||||
The tables below present the effect of our derivative financial instruments on the condensed consolidated statements of operations and of comprehensive income for the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
Derivatives Designated as Hedging Instruments | (Loss) Gain | (Loss) Gain | (Loss) Gain | Location of (Loss) Gain | ||||||||||||
For the Three Months Ended June 30, | Recognized | Reclassified | Recognized | Recognized in Income | ||||||||||||
in OCI | from AOCI | in Income | ||||||||||||||
(effective portion) | into Income | (ineffective portion) | ||||||||||||||
(effective portion) | ||||||||||||||||
2014 | $ | (457 | ) | $ | (364 | ) | $ | — | Interest expense | |||||||
2013 | $ | 1,094 | $ | (407 | ) | $ | — | Interest expense | ||||||||
For the Six Months Ended June 30, | ||||||||||||||||
2014 | $ | (708 | ) | $ | (737 | ) | $ | — | Interest expense | |||||||
2013 | $ | 926 | $ | (854 | ) | $ | — | Interest expense | ||||||||
Derivatives Not Designated as | Location of (Loss) Gain | Amount of (Loss) Gain | Amount of (Loss) Gain | |||||||||||||
Recognized in Income for the | Recognized in Income for the | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Hedging Instruments | Recognized in Income | 2014 | 2013 | 2014 | 2013 | |||||||||||
Interest rate swaps | (Loss) gain on derivative financial instruments | $ | (2,314 | ) | $ | 6,863 | $ | (6,511 | ) | $ | 7,013 | |||||
Foreign exchange contracts | (Loss) gain on derivative financial instruments | (6,965 | ) | (1,311 | ) | (10,012 | ) | 14,767 | ||||||||
Credit index instruments | (Loss) gain on derivative financial instruments | (511 | ) | 606 | (1,133 | ) | 606 | |||||||||
$ | (9,790 | ) | $ | 6,158 | $ | (17,656 | ) | $ | 22,386 | |||||||
Credit-risk-related Contingent Features | ||||||||||||||||
We have entered into agreements with certain of our derivative counterparties that contain provisions providing that if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. We also have certain agreements that contain provisions providing that if our ratio of principal amount of indebtedness to total assets at any time exceeds 75%, then we could be declared in default of our derivative obligations. | ||||||||||||||||
As of June 30, 2014, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements, was $24.5 million. As of June 30, 2014, we had posted collateral of $19.1 million related to these agreements. If we had breached any of these provisions at June 30, 2014, we could have been required to settle our obligations under the agreements at their termination liability value of $24.5 million. |
Offsetting_Assets_and_Liabilit
Offsetting Assets and Liabilities | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
12. Offsetting Assets and Liabilities | ||||||||||||||||||||
The following tables present the potential effects of netting arrangements on our financial position for financial assets and liabilities within the scope of ASC 210-20, Balance Sheet—Offsetting, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | ||||||||||||||||||||
(ii) | (iii) =160;(i) - (ii) | (iv) | ||||||||||||||||||
Gross Amounts Not | ||||||||||||||||||||
Offset in the Statement | ||||||||||||||||||||
of Financial Position | ||||||||||||||||||||
(i) | Gross Amounts | Net Amounts | Financial | Cash | (v) =160;(iii) - (iv) | |||||||||||||||
Gross Amounts | Offset in the | Presented in | Instruments | Collateral | Net Amount | |||||||||||||||
Recognized | Statement of | the Statement of | Received / | |||||||||||||||||
Financial Position | Financial Position | Pledged | ||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||
Derivative assets | $ | 4,681 | $ | — | $ | 4,681 | $ | 606 | $ | 1,564 | $ | 2,511 | ||||||||
Derivative liabilities | $ | 26,294 | $ | — | $ | 26,294 | $ | 606 | $ | 18,412 | $ | 7,276 | ||||||||
Repurchase agreements | 1,810,767 | — | 1,810,767 | 1,810,767 | — | — | ||||||||||||||
$ | 1,837,061 | $ | — | $ | 1,837,061 | $ | 1,811,373 | $ | 18,412 | $ | 7,276 | |||||||||
As of December 31, 2013 | ||||||||||||||||||||
Derivative assets | $ | 7,769 | $ | — | $ | 7,769 | $ | 692 | $ | 1,916 | $ | 5,161 | ||||||||
Derivative liabilities | $ | 24,192 | $ | — | $ | 24,192 | $ | 692 | $ | 7,150 | $ | 16,350 | ||||||||
Repurchase agreements | 1,419,163 | — | 1,419,163 | 1,419,163 | — | — | ||||||||||||||
$ | 1,443,355 | $ | — | $ | 1,443,355 | $ | 1,419,855 | $ | 7,150 | $ | 16,350 | |||||||||
Variable_Interest_Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2014 | |
Variable Interest Entities | ' |
Variable Interest Entities | ' |
13. Variable Interest Entities | |
Investment Securities | |
As discussed in Note 2, we evaluate all of our investments and other interests in entities for consolidation, including our investments in CMBS and our retained interests in securitization transactions we initiated, all of which are generally considered to be variable interests in VIEs. | |
The VIEs consolidated in accordance with ASC 810 are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. The assets and other instruments held by these securitization entities are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the securitization entities do not have any recourse to the general credit of any other consolidated entities, nor to us as the primary beneficiary. The SPE liabilities initially represent investment securities on our balance sheet (pre-consolidation). Upon consolidation of these VIEs, our associated investment securities are eliminated, as is the interest income related to those securities. Similarly, the fees we earn in our roles as special servicer of the bonds issued by the consolidated VIEs or as collateral administrator of the consolidated VIEs are also eliminated. Finally, an allocable portion of the identified servicing intangible associated with the eliminated fee streams is eliminated in consolidation. | |
VIEs in which we are the Primary Beneficiary | |
The inclusion of the assets and liabilities of VIEs in which we are deemed the primary beneficiary has no economic effect on us. Our exposure to the obligations of VIEs is generally limited to our investment in these entities. We are not obligated to provide, nor have we provided, any financial support for any of these consolidated structures. | |
VIEs in which we are not the Primary Beneficiary | |
In certain instances, we hold a variable interest in a VIE in the form of CMBS, but either (i) we are not appointed, or do not serve as, special servicer or (ii) an unrelated third party has the rights to unilaterally remove us as special servicer. In these instances, we do not have the power to direct activities that most significantly impact the VIE’s economic performance. In other cases, the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant. For these structures, we are not deemed to be the primary beneficiary of the VIE, and we do not consolidate these VIEs. | |
As of June 30, 2014, one of our collateralized debt obligation (“CDO”) structures was in default, which pursuant to the underlying indentures, changes the rights of the variable interest holders. Upon default of a CDO, the trustee or senior note holders are allowed to exercise certain rights, including liquidation of the collateral, which at that time, is the activity which would most significantly impact the CDO’s economic performance. Further, when the CDO is in default, the collateral administrator no longer has the option to purchase securities from the CDO. In cases where the CDO is in default and we do not have the ability to exercise rights which would most significantly impact the CDO’s economic performance, we do not consolidate the VIE. As of June 30, 2014, this CDO structure was not consolidated. During the three months ended March 31, 2014, one of our CDOs, which was previously in default as of December 31, 2013, ceased to be in default. This event triggered the initial consolidation of CDO and its underlying assets during the three months ended March 31, 2014. | |
As noted above, we are not obligated to provide, nor have we provided, any financial support for any of our securitization SPEs, whether or not we are deemed to be the primary beneficiary. As such, the risk associated with our involvement in these VIEs is limited to the carrying value of our investment in the entity. As of June 30, 2014, our maximum risk of loss related to VIEs in which we were not the primary beneficiary was $168.5 million on a fair value basis. | |
As of June 30, 2014, the securitization SPEs which we do not consolidate had debt obligations to beneficial interest holders with unpaid principal balances of $106.4 billion. The corresponding assets are comprised primarily of commercial mortgage loans with unpaid principal balances corresponding to the amounts of the outstanding debt obligations. |
RelatedParty_Transactions
Related-Party Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related-Party Transactions | ' |
Related-Party Transactions | ' |
14. Related-Party Transactions | |
Management Agreement | |
We are party to a management agreement (the “Management Agreement”) with our Manager. Under the Management Agreement, our Manager, subject to the oversight of our board of directors, is required to manage our day-to-day activities, for which our Manager receives a base management fee and is eligible for an incentive fee and stock awards. Our Manager’s personnel perform certain due diligence, legal, management and other services that outside professionals or consultants would otherwise perform. As such, in accordance with the terms of our Management Agreement, our Manager is paid or reimbursed for the documented costs of performing such tasks, provided that such costs and reimbursements are in amounts no greater than those which would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s-length basis. Refer to Note 16 to the consolidated financial statements included in our Form 10-K for further discussion of this agreement. | |
Base Management Fee. For the three months ended June 30, 2014 and 2013, approximately $13.6 million and $12.7 million, respectively, was incurred for base management fees. For the six months ended June 30, 2014 and 2013, approximately $26.8 million and $22.4 million, respectively, was incurred for base management fees. As of June 30, 2014 and December 31, 2013, there were $13.5 million and $0, respectively, of unpaid base management fees included in related-party payable in our condensed consolidated balance sheets. | |
Incentive Fee. For the three months ended June 30, 2014 and 2013, approximately $4.1 million and $0, respectively, was incurred for incentive fees. For the six months ended June 30, 2014 and 2013, approximately $11.3 million and $0, respectively, was incurred for incentive fees. As of June 30, 2014 and December 31, 2013, approximately $4.1 million and $6.8 million, respectively, of unpaid incentive fees were included in related-party payable in our condensed consolidated balance sheets. | |
Expense Reimbursement. For the three months ended June 30, 2014 and 2013, approximately $2.0 million and $1.8 million, respectively, was incurred for executive compensation and other reimbursable expenses. For the six months ended June 30, 2014 and 2013, approximately $3.9 million and $4.3 million, respectively, was incurred for executive compensation and other reimbursable expenses. As of June 30, 2014 and December 31, 2013, approximately $2.4 million and $4.4 million, respectively, of unpaid reimbursable executive compensation and other expenses were included in related-party payable in our condensed consolidated balance sheets. | |
Manager Equity Plan | |
In January 2014, we granted 2,489,281 restricted stock units to our Manager under the Starwood Property Trust, Inc. Manager Equity Plan (“Manager Equity Plan”). In connection with these grants and prior similar grants, we recognized share-based compensation expense of $6.8 million and $4.0 million within management fees in our condensed consolidated statements of operations for the three months ended June 30, 2014 and 2013, respectively. In the six months ended June 30, 2014 and 2013, we recognized $13.6 million and $8.5 million, respectively, related to these awards. Refer to Note 15 herein for further discussion of these grants. | |
Investment in Loan | |
In October 2012, we co-originated $475.0 million in financing for the acquisition and redevelopment of a 10-story retail building located at 701 Seventh Avenue in the Times Square area of Manhattan through a joint venture with Starwood Distressed Opportunity Fund IX (“Fund IX”), an affiliate of our Manager. In January 2014, we refinanced the initial financing with an $815.0 million first mortgage and mezzanine financing to facilitate the further development of the property. Fund IX did not participate in the refinancing. As such, the joint venture distributed $31.6 million to Fund IX for the liquidation of Fund IX’s interest in the joint venture. | |
LNR Related-Party Arrangement | |
In connection with the LNR acquisition, we were required to cash collateralize certain obligations of LNR, including letters of credit and performance obligations. Fund IX funded $6.2 million of this obligation, but the account is within our name and is thus reflected within our restricted cash balance. We have recognized a corresponding payable to Fund IX of $4.4 million and $6.2 million within related-party payable in our condensed consolidated balance sheets as of June 30, 2014 and December 31, 2013, respectively. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Stockholders' Equity | ' | ||||||||||||
Stockholders' Equity | ' | ||||||||||||
15. Stockholders’ Equity | |||||||||||||
On February 24, 2014, our board of directors declared a dividend of $0.48 per share for the first quarter of 2014, which was paid on April 15, 2014 to common stockholders of record as of March 31, 2014. | |||||||||||||
On May 6, 2014, our board of directors declared a dividend of $0.48 per share for the second quarter of 2014, which was paid on July 15, 2014 to common stockholders of record as of June 30, 2014. | |||||||||||||
On April 11, 2014, we issued 22.0 million shares of common stock for gross proceeds of $491.0 million. In connection with this offering, the underwriters had a 30-day option to purchase an additional 3.3 million shares of common stock, which they exercised in full, resulting in additional gross proceeds of $73.7 million. | |||||||||||||
On May 15, 2014, we established the Starwood Property Trust, Inc. Dividend Reinvestment and Direct Stock Purchase Plan (the “DRIP Plan”) which provides stockholders with a means of purchasing additional shares of our common stock by reinvesting the cash dividends paid on our common stock and by making additional optional cash purchases. Shares of our common stock purchased under the DRIP Plan will either be issued directly by the Company or purchased in the open market by the plan administrator. The Company may issue up to 11 million shares of common stock under the DRIP Plan. During the three months ended June 30, 2014, shares issued under the DRIP Plan were not material. | |||||||||||||
On May 27, 2014, we entered into an amended and restated At-The-Market Equity Offering Sales Agreement (the “ATM Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated to sell shares of the Company’s common stock of up to $500 million from time to time, through an “at the market” equity offering program. Sales of shares under the ATM Agreement will be made by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices. During the three months ended June 30, 2014, we issued 759 thousand shares under the ATM Agreement for gross proceeds of $18.3 million. | |||||||||||||
Equity Incentive Plans | |||||||||||||
The Company currently maintains the Manager Equity Plan, the Starwood Property Trust, Inc. Equity Plan (the “Equity Plan”), and the Starwood Property Trust, Inc. Non-Executive Director Stock Plan (“Non-Executive Director Stock Plan”). Refer to Note 17 to the consolidated financial statements included in our Form 10-K for further information regarding these plans. | |||||||||||||
On January 2, 2014, the Company granted 2,000,000 restricted stock units to our Manager under the Manager Equity Plan. These awards vest ratably on a quarterly basis over a three-year period beginning on March 31, 2014 and had a grant date fair value of $55.4 million. On January 31, 2014, in connection with the spin-off of the SFR segment, the Company granted our Manager 489,281 restricted stock units of the Company in consideration of the Company’s currently unvested restricted stock units. Of these restricted stock units, 99,480 vest ratably on a quarterly basis over a 21-month period beginning on March 31, 2014 and 389,801 vest ratably on a quarterly basis over a three-year period beginning on March 31, 2014. These restricted stock units had a grant date fair value of $14.8 million. | |||||||||||||
As of June 30, 2014, there were 3.4 million shares available for future grants under the Manager Equity Plan and the Equity Plan. | |||||||||||||
Schedule of Non-Vested Shares and Share Equivalents | |||||||||||||
Non-Executive | Equity Plan | Manager | Total | Weighted | |||||||||
Director | Equity Plan | Average | |||||||||||
Stock Plan | Grant Date | ||||||||||||
Fair Value | |||||||||||||
(per share) | |||||||||||||
Balance as of January 1, 2014 | 11,228 | 22,502 | 510,415 | 544,145 | $ | 22.88 | |||||||
Granted | — | 162,458 | 2,489,281 | 2,651,739 | 27.94 | ||||||||
Vested | — | (42,475 | ) | (572,556 | ) | (615,031 | ) | 26.65 | |||||
Forfeited | — | — | — | — | — | ||||||||
Balance as of June 30, 2014 | 11,228 | 142,485 | 2,427,140 | 2,580,853 | $ | 27.18 | |||||||
Earnings_per_Share
Earnings per Share | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings per Share | ' | |||||||||||||
Earnings per Share | ' | |||||||||||||
16. Earnings per Share | ||||||||||||||
We present both basic and diluted EPS amounts in our financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from (i) our share-based compensation, consisting of unvested restricted stock units and awards, (ii) contingently issuable shares to our Manager; and (iii) the “in-the-money” conversion options associated with our outstanding Convertible Notes (see further discussion below). Potential dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period. | ||||||||||||||
The Company’s unvested restricted share units and awards contain rights to receive non-forfeitable dividends and thus are participating securities. Due to the existence of these participating securities, the two-class method of computing EPS is required, unless another method is determined to be more dilutive. Under the two-class method, undistributed earnings are reallocated between common shares and participating securities. For the three and six months ended June 30, 2014 and 2013, the two-class method resulted in the most dilutive EPS calculation. | ||||||||||||||
The following table provides a reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic EPS and diluted EPS (in thousands, except per share amounts): | ||||||||||||||
For the Three Month Ended | For the Six Month Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic Earnings | ||||||||||||||
Continuing Operations: | ||||||||||||||
Income from continuing operations attributable to STWD common stockholders | $ | 117,868 | $ | 66,512 | $ | 240,020 | $ | 131,043 | ||||||
Less: Income attributable to unvested shares | (1,367 | ) | (369 | ) | (3,100 | ) | (823 | ) | ||||||
Basic — Income from continuing operations | $ | 116,501 | $ | 66,143 | $ | 236,920 | $ | 130,220 | ||||||
Discontinued Operations: | ||||||||||||||
Loss from discontinued operations | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
Basic — Net income attributable to STWD common stockholders after allocation to participating securities | $ | 116,501 | $ | 60,085 | $ | 235,369 | $ | 121,874 | ||||||
Diluted Earnings | ||||||||||||||
Continuing Operations: | ||||||||||||||
Basic — Income from continuing operations attributable to STWD common stockholders | $ | 117,868 | $ | 66,512 | $ | 240,020 | $ | 131,043 | ||||||
Less: Income attributable to unvested shares | (1,367 | ) | (369 | ) | (3,100 | ) | (823 | ) | ||||||
Add: Undistributed earnings to unvested shares | 128 | — | 480 | — | ||||||||||
Less: Undistributed earnings reallocated to unvested shares | (126 | ) | — | (471 | ) | — | ||||||||
Diluted — Income from continuing operations | $ | 116,503 | $ | 66,143 | $ | 236,929 | $ | 130,220 | ||||||
Discontinued Operations: | ||||||||||||||
Basic — Loss from discontinued operations | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
Diluted — Net income attributable to STWD common stockholders after allocation to participating securities | $ | 116,503 | $ | 60,085 | $ | 235,378 | $ | 121,874 | ||||||
Number of Shares: | ||||||||||||||
Basic — Average shares outstanding | 218,751 | 162,448 | 207,203 | 149,037 | ||||||||||
Effect of dilutive securities — Convertible Notes | 4,056 | — | 3,906 | — | ||||||||||
Effect of dilutive securities — Contingently Issuable Shares | 85 | — | 85 | — | ||||||||||
Diluted — Average shares outstanding | 222,892 | 162,448 | 211,194 | 149,037 | ||||||||||
Earnings Per Share Attributable to STWD Common Stockholders | ||||||||||||||
Basic: | ||||||||||||||
Income from continuing operations | $ | 0.53 | $ | 0.41 | $ | 1.14 | $ | 0.87 | ||||||
Loss from discontinued operations | — | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
Net income | $ | 0.53 | $ | 0.37 | $ | 1.13 | $ | 0.82 | ||||||
Diluted: | ||||||||||||||
Income from continuing operations | $ | 0.52 | $ | 0.41 | $ | 1.12 | $ | 0.87 | ||||||
Loss from discontinued operations | — | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
Net income | $ | 0.52 | $ | 0.37 | $ | 1.11 | $ | 0.82 | ||||||
As of June 30, 2014 and 2013, unvested restricted shares of 2.6 million and 0.9 million, respectively, were excluded from the computation of diluted EPS as their effect was determined to be anti-dilutive. | ||||||||||||||
Also as of June 30, 2014, there were 48.7 million potential shares of common stock contingently issuable upon the conversion of the Convertible Notes. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, this principal amount, representing 44.6 million and 44.8 million shares for the three and six months ended June 30, 2014, respectively, was not included in the computation of diluted EPS. However, as discussed in Note 9, the conversion options associated with both Convertible Notes are “in-the-money.” The if-converted value of the 2018 Notes and the 2019 Notes exceeded their respective principal amounts by $36.7 million and $59.9 million, respectively, at June 30, 2014. The dilutive effect to EPS is determined by dividing this “conversion spread value” by the average share price. The “conversion spread value” is the value that would be delivered to investors in shares based on the terms of the Convertible Notes, upon an assumed conversion. In calculating the dilutive effect of these shares, the treasury stock method was used and resulted in a dilution of 4.1 million shares and 3.9 million shares for the three and six months ended June 30, 2014, respectively. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||||
17. Accumulated Other Comprehensive Income | ||||||||||||||||
The changes in AOCI by component are as follows (in thousands): | ||||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||||
Cash Flow Hedges | (Loss) on | Translation | ||||||||||||||
Available-for- | ||||||||||||||||
Sale Securities | ||||||||||||||||
Three Months ended June 30, 2014 | ||||||||||||||||
Balance at March 31, 2014 | $ | (482 | ) | $ | 70,064 | $ | 10,533 | $ | 80,115 | |||||||
OCI before reclassifications | (457 | ) | 2,285 | 4,558 | 6,386 | |||||||||||
Amounts reclassified from AOCI | 364 | (11,903 | ) | — | (11,539 | ) | ||||||||||
Net period OCI | (93 | ) | (9,618 | ) | 4,558 | (5,153 | ) | |||||||||
Balance at June 30, 2014 | $ | (575 | ) | $ | 60,446 | $ | 15,091 | $ | 74,962 | |||||||
Three Months ended June 30, 2013 | ||||||||||||||||
Balance at March 31, 2013 | $ | (2,292 | ) | $ | 79,897 | $ | (7,061 | ) | $ | 70,544 | ||||||
OCI before reclassifications | 1,094 | (11,419 | ) | 18 | (10,307 | ) | ||||||||||
Amounts reclassified from AOCI | 407 | (359 | ) | — | 48 | |||||||||||
Net period OCI | 1,501 | (11,778 | ) | 18 | (10,259 | ) | ||||||||||
Balance at June 30, 2013 | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||||
Cash Flow Hedges | (Loss) on | Translation | ||||||||||||||
Available-for- | ||||||||||||||||
Sale Securities | ||||||||||||||||
Six Months ended June 30, 2014 | ||||||||||||||||
Balance at January 1, 2014 | $ | (604 | ) | $ | 66,566 | $ | 9,487 | $ | 75,449 | |||||||
OCI before reclassifications | (708 | ) | 5,566 | 5,604 | 10,462 | |||||||||||
Amounts reclassified from AOCI | 737 | (11,686 | ) | — | (10,949 | ) | ||||||||||
Net period OCI | 29 | (6,120 | ) | 5,604 | (487 | ) | ||||||||||
Balance at June 30, 2014 | $ | (575 | ) | $ | 60,446 | $ | 15,091 | $ | 74,962 | |||||||
Six Months ended June 30, 2013 | ||||||||||||||||
Balance at January 1, 2013 | $ | (2,571 | ) | $ | 82,246 | $ | — | $ | 79,675 | |||||||
OCI before reclassifications | 926 | 537 | (7,043 | ) | (5,580 | ) | ||||||||||
Amounts reclassified from AOCI | 854 | (14,664 | ) | — | (13,810 | ) | ||||||||||
Net period OCI | 1,780 | (14,127 | ) | (7,043 | ) | (19,390 | ) | |||||||||
Balance at June 30, 2013 | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||||
The reclassifications out of AOCI impacted the condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013 as follows: | ||||||||||||||||
Amounts Reclassified from | Amounts Reclassified from | Affected Line Item | ||||||||||||||
AOCI during the Three Months | AOCI during the Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
Details about AOCI Components | 2014 | 2013 | 2014 | 2013 | in the Statements | |||||||||||
Losses on cash flow hedges: | ||||||||||||||||
Interest rate contracts | $ | (364 | ) | $ | (407 | ) | $ | (737 | ) | $ | (854 | ) | Interest expense | |||
Unrealized gains on available for sale securities: | ||||||||||||||||
Net realized gain on sale of investments | 11,903 | 718 | 11,899 | 15,065 | Gain (loss) on sale of investments, net | |||||||||||
OTTI | — | (359 | ) | (213 | ) | (401 | ) | OTTI | ||||||||
Total | 11,903 | 359 | 11,686 | 14,664 | ||||||||||||
Total reclassifications for the period | $ | 11,539 | $ | (48 | ) | $ | 10,949 | $ | 13,810 | |||||||
Fair_Value
Fair Value | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Fair Value | ' | ||||||||||||||||||||||
Fair Value | ' | ||||||||||||||||||||||
18. Fair Value | |||||||||||||||||||||||
GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: | |||||||||||||||||||||||
Level I—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | |||||||||||||||||||||||
Level II—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. | |||||||||||||||||||||||
Level III—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | |||||||||||||||||||||||
Valuation Process | |||||||||||||||||||||||
We have valuation control processes in place to validate the fair value of the Company’s financial assets and liabilities measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. Refer to Note 21 to the consolidated financial statements included in our Form 10-K for further discussion of our valuation process. | |||||||||||||||||||||||
We determine the fair value of our assets and liabilities measured at fair value on a recurring and nonrecurring basis in accordance with the methodology described in our Form 10-K. | |||||||||||||||||||||||
The following tables present our financial assets and liabilities carried at fair value on a recurring basis in the condensed consolidated balance sheets by their level in the fair value hierarchy as of June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 154,412 | $ | — | $ | — | $ | 154,412 | |||||||||||||||
RMBS | 231,605 | — | — | 231,605 | |||||||||||||||||||
CMBS | 284,619 | — | 2,258 | 282,361 | |||||||||||||||||||
Equity security | 16,104 | 16,104 | — | — | |||||||||||||||||||
Domestic servicing rights | 138,318 | — | — | 138,318 | |||||||||||||||||||
Derivative assets | 4,681 | — | 4,681 | — | |||||||||||||||||||
VIE assets | 114,091,158 | — | — | 114,091,158 | |||||||||||||||||||
Total | $ | 114,920,897 | $ | 16,104 | $ | 6,939 | $ | 114,897,854 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 26,294 | $ | — | $ | 26,294 | $ | — | |||||||||||||||
VIE liabilities | 113,541,151 | — | 108,355,026 | 5,186,125 | |||||||||||||||||||
Total | $ | 113,567,445 | $ | — | $ | 108,381,320 | $ | 5,186,125 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 206,672 | $ | — | $ | — | $ | 206,672 | |||||||||||||||
RMBS | 296,236 | — | — | 296,236 | |||||||||||||||||||
CMBS | 255,306 | — | 47,300 | 208,006 | |||||||||||||||||||
Equity security | 15,247 | 15,247 | — | — | |||||||||||||||||||
Domestic servicing rights | 150,149 | — | — | 150,149 | |||||||||||||||||||
Derivative assets | 7,769 | — | 7,769 | — | |||||||||||||||||||
VIE assets | 103,151,624 | — | — | 103,151,624 | |||||||||||||||||||
Total | $ | 104,083,003 | $ | 15,247 | $ | 55,069 | $ | 104,012,687 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 24,192 | $ | — | $ | 24,192 | $ | — | |||||||||||||||
VIE liabilities | 102,649,263 | — | 101,051,279 | 1,597,984 | |||||||||||||||||||
Total | $ | 102,673,455 | $ | — | $ | 101,075,471 | $ | 1,597,984 | |||||||||||||||
The changes in financial assets and liabilities classified as Level III were as follows for the three and six months ended June 30, 2014 and 2013 (amounts in thousands): | |||||||||||||||||||||||
Three Months ended June 30, 2014 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
April 1, 2014 balance | $ | 74,117 | $ | 291,217 | $ | 240,665 | $ | 144,898 | $ | 118,451,518 | $ | (3,482,922 | ) | $ | 115,719,493 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value / gain on sale | 11,546 | 10,130 | 4,393 | (5,523 | ) | (3,332,084 | ) | (1,664 | ) | (3,313,202 | ) | ||||||||||||
Net accretion | — | 3,323 | — | — | — | — | 3,323 | ||||||||||||||||
Included in OCI | — | (9,363 | ) | 2,740 | — | — | — | (6,623 | ) | ||||||||||||||
Purchases / Originations | 320,566 | — | 42,740 | — | — | — | 363,306 | ||||||||||||||||
Sales | (251,612 | ) | (53,236 | ) | (13,457 | ) | — | — | — | (318,305 | ) | ||||||||||||
Issuances | — | — | — | — | — | (25,995 | ) | (25,995 | ) | ||||||||||||||
Cash repayments / receipts | (205 | ) | (10,466 | ) | (421 | ) | — | — | 50,984 | 39,892 | |||||||||||||
Transfers into Level III | — | — | 5,480 | — | — | (1,983,525 | ) | (1,978,045 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | (1,057 | ) | — | 293,115 | 292,058 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 3,720,885 | (68,772 | ) | 3,652,113 | |||||||||||||||
Deconsolidations of VIEs | — | — | 221 | — | (4,749,161 | ) | 32,654 | (4,716,286 | ) | ||||||||||||||
June 30, 2014 balance | $ | 154,412 | $ | 231,605 | $ | 282,361 | $ | 138,318 | $ | 114,091,158 | $ | (5,186,125 | ) | $ | 109,711,729 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at June 30, 2014 | $ | 688 | $ | 2,804 | $ | 4,513 | $ | (5,523 | ) | $ | (3,332,084 | ) | $ | (1,664 | ) | $ | (3,331,266 | ) | |||||
Three Months ended June 30, 2013 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
April 1, 2013 balance | $ | — | $ | 321,043 | $ | — | $ | — | $ | — | $ | — | $ | 321,043 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | — | — | 18 | — | — | — | 18 | ||||||||||||||||
Included in earnings: | — | — | — | — | — | — | — | ||||||||||||||||
Change in fair value | 458 | (1,187 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,698,024 | ) | ||||||||||||||
Impairment | — | (359 | ) | — | — | — | — | (359 | ) | ||||||||||||||
Net accretion | — | 5,755 | — | — | — | — | 5,755 | ||||||||||||||||
Included in OCI | — | (11,103 | ) | 1,908 | — | — | — | (9,195 | ) | ||||||||||||||
Purchases / Originations | 390,669 | 20,090 | 39 | — | — | — | 410,798 | ||||||||||||||||
Sales | (476,336 | ) | — | (10,072 | ) | — | — | — | (486,408 | ) | |||||||||||||
Issuances | — | — | — | — | — | — | — | ||||||||||||||||
Cash repayments / receipts | (117 | ) | (15,771 | ) | — | — | — | 79,735 | 63,847 | ||||||||||||||
Transfers into Level III | — | — | 115,814 | — | — | (489,513 | ) | (373,699 | ) | ||||||||||||||
Transfers out of Level III | — | — | (3,499 | ) | — | — | 152,683 | 149,184 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 10,674,125 | (178,631 | ) | 10,495,494 | |||||||||||||||
Deconsolidations of VIEs | — | — | (1,054 | ) | — | (584,804 | ) | 861 | (584,997 | ) | |||||||||||||
June 30, 2013 balance | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at June 30, 2013 | (8,344 | ) | 6,627 | (3,430 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,702,442 | ) | ||||||||||||
Six Months ended June 30, 2014 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
January 1, 2014 balance | $ | 206,672 | $ | 296,236 | $ | 208,006 | $ | 150,149 | $ | 103,151,624 | $ | (1,597,984 | ) | $ | 102,414,703 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value / gain on sale | 32,439 | 11,141 | 9,600 | (10,774 | ) | (7,013,623 | ) | 99,837 | (6,871,380 | ) | |||||||||||||
OTTI | — | (213 | ) | — | — | — | — | (213 | ) | ||||||||||||||
Net accretion | — | 9,887 | — | — | — | — | 9,887 | ||||||||||||||||
Included in OCI | — | (4,615 | ) | 2,207 | — | — | — | (2,408 | ) | ||||||||||||||
Purchases / Originations | 582,391 | — | 46,571 | — | — | — | 628,962 | ||||||||||||||||
Sales | (554,073 | ) | (62,546 | ) | (29,301 | ) | — | — | — | (645,920 | ) | ||||||||||||
Issuances | — | — | — | — | — | (71,756 | ) | (71,756 | ) | ||||||||||||||
Cash repayments / receipts | (297 | ) | (18,285 | ) | (829 | ) | — | — | 86,349 | 66,938 | |||||||||||||
Transfers into Level III | — | — | 52,780 | — | — | (2,555,137 | ) | (2,502,357 | ) | ||||||||||||||
Transfers out of Level III | (112,720 | ) | — | (179 | ) | (1,057 | ) | — | 712,856 | 598,900 | |||||||||||||
Consolidations of VIEs | — | — | (6,715 | ) | — | 23,991,532 | (1,892,944 | ) | 22,091,873 | ||||||||||||||
Deconsolidations of VIEs | — | — | 221 | — | (6,038,375 | ) | 32,654 | (6,005,500 | ) | ||||||||||||||
June 30, 2014 balance | $ | 154,412 | $ | 231,605 | $ | 282,361 | $ | 138,318 | $ | 114,091,158 | $ | (5,186,125 | ) | $ | 109,711,729 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at June 30, 2014 | $ | 688 | $ | 7,971 | $ | 9,018 | $ | (10,774 | ) | $ | (7,013,623 | ) | $ | 99,837 | $ | (6,906,883 | ) | ||||||
Six Months ended June 30, 2013 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
January 1, 2013 balance | $ | — | $ | 333,153 | $ | — | $ | — | $ | — | $ | — | $ | 333,153 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | — | 2,129 | 18 | — | — | — | 2,147 | ||||||||||||||||
Included in earnings: | — | — | — | — | — | — | — | ||||||||||||||||
Change in fair value | 458 | — | (1,187 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,698,024 | ) | |||||||||||||
Impairment | — | (402 | ) | — | — | — | — | (402 | ) | ||||||||||||||
Net accretion | — | 11,906 | — | — | — | — | 11,906 | ||||||||||||||||
Included in OCI | — | (1,871 | ) | 1,908 | — | — | — | 37 | |||||||||||||||
Purchases / Originations | 390,669 | 20,090 | 39 | — | — | — | 410,798 | ||||||||||||||||
Sales | (476,336 | ) | (12,712 | ) | (10,072 | ) | — | — | — | (499,120 | ) | ||||||||||||
Issuances | — | — | — | — | — | — | — | ||||||||||||||||
Cash repayments / receipts | (117 | ) | (32,638 | ) | — | — | — | 79,735 | 46,980 | ||||||||||||||
Transfers into Level III | — | — | 115,814 | — | — | (489,513 | ) | (373,699 | ) | ||||||||||||||
Transfers out of Level III | — | — | (3,499 | ) | — | — | 152,683 | 149,184 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 10,674,125 | (178,631 | ) | 10,495,494 | |||||||||||||||
Deconsolidations of VIEs | — | — | (1,054 | ) | — | (584,804 | ) | 861 | (584,997 | ) | |||||||||||||
June 30, 2013 balance | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at June 30, 2013 | (8,344 | ) | 14,306 | (3,430 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,694,763 | ) | ||||||||||||
During the three and six months ended June 30, 2014, we transferred $5.5 million and $52.8 million, respectively of CMBS investments from Level II to Level III due to a decrease in the observable relevant market activity. During both the three and six months ended June 30, 2013, we transferred $115.8 million of CMBS investments from Level II to Level III due to a decrease in the observable relevant market activity. | |||||||||||||||||||||||
The following table presents the fair values of our financial instruments not carried at fair value on the consolidated balance sheets (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value | Value | Value | Value | ||||||||||||||||||||
Financial assets not carried at fair value: | |||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 5,028,721 | $ | 5,163,988 | $ | 4,544,132 | $ | 4,609,040 | |||||||||||||||
Securities, held-to-maturity | 370,096 | 371,603 | 368,318 | 368,453 | |||||||||||||||||||
European servicing rights | 18,528 | 18,528 | 27,024 | 29,327 | |||||||||||||||||||
Non-performing residential loans | — | — | 215,371 | 215,371 | |||||||||||||||||||
Financial liabilities not carried at fair value: | |||||||||||||||||||||||
Secured financing agreements and secured borrowings on transferred loans | $ | 2,704,082 | $ | 2,705,452 | $ | 2,438,798 | $ | 2,436,708 | |||||||||||||||
Convertible senior notes | 1,003,847 | 1,190,700 | 997,851 | 1,160,000 | |||||||||||||||||||
The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | |||||||||||||||||||||||
Carrying Value at | Valuation | Range as of (1) | |||||||||||||||||||||
June 30, 2014 | Technique | Unobservable Input | June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Loans held-for-sale, fair value option | $ | 154,412 | Discounted cash flow | Yield (b) | 4.5% - 5.2% | 5.2% - 5.9% | |||||||||||||||||
Duration(c) | 5.0 - 10.0 years | 5.0 - 10.0 years | |||||||||||||||||||||
RMBS | 231,605 | Discounted cash flow | Constant prepayment rate(a) | 0.3% - 16.8% | (0.6)% - 16.6% | ||||||||||||||||||
Constant default rate(b) | 1.5% - 9.5% | 1.4% - 11.3% | |||||||||||||||||||||
Loss severity(b) | 12% - 81%(e) | 15% - 92%(e) | |||||||||||||||||||||
Delinquency rate(c) | 3% - 32% | 3% - 48% | |||||||||||||||||||||
Servicer advances(a) | 23% - 96% | 24% - 95% | |||||||||||||||||||||
Annual coupon deterioration(b) | 0% - 0.8% | 0% - 0.7% | |||||||||||||||||||||
Putback amount per projected total collateral loss(d) | 0% - 11% | 0% - 9% | |||||||||||||||||||||
CMBS | 282,361 | Discounted cash flow | Yield(b) | 0% - 527.9% | 0% - 890.0% | ||||||||||||||||||
Duration(c) | 0 – 11.5 years | 0 - 11.0 years | |||||||||||||||||||||
Domestic servicing rights | 138,318 | Discounted cash flow | Debt yield(a) | 8.75% | 8.75% | ||||||||||||||||||
Discount rate(b) | 15% | 15% | |||||||||||||||||||||
Control migration(b) | 0% - 80% | 0% - 80% | |||||||||||||||||||||
VIE assets | 114,091,158 | Discounted cash flow | Yield(b) | 0% - 912.2% | 0% - 952.3% | ||||||||||||||||||
Duration(c) | 0 – 21.9 years | 0 - 22.7 years | |||||||||||||||||||||
VIE liabilities | 5,186,125 | Discounted cash flow | Yield(b) | 0% - 912.2% | 0% - 952.3% | ||||||||||||||||||
Duration(c) | 0 – 21.9 years | 0 - 22.7 years | |||||||||||||||||||||
(1) The ranges of significant unobservable inputs are represented in percentages and years. | |||||||||||||||||||||||
Sensitivity of the Fair Value to Changes in the Unobservable Inputs | |||||||||||||||||||||||
(a) Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement. | |||||||||||||||||||||||
(b) Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement. | |||||||||||||||||||||||
(c) Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question. | |||||||||||||||||||||||
(d) Any delay in the putback recovery date leads to a decrease in fair value, for the majority of securities in our RMBS portfolio. | |||||||||||||||||||||||
(e) 85% and 90% of the portfolio falls within a range of 45%-80% as of June 30, 2014 and December 31, 2013, respectively. |
Income_Taxes
Income Taxes | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
19. Income Taxes | ||||||||||||||||||||||
As described in Note 1, we established additional TRSs to hold certain operations of the LNR Segment. Our income tax provision consisted of the following for the three and six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Current | ||||||||||||||||||||||
Federal | $ | 5,484 | $ | 9,481 | $ | 10,624 | $ | 9,931 | ||||||||||||||
Foreign | 1,782 | 570 | 3,231 | 570 | ||||||||||||||||||
State | 929 | 1,534 | 1,799 | 1,861 | ||||||||||||||||||
Total current | 8,195 | 11,585 | 15,654 | 12,362 | ||||||||||||||||||
Deferred | ||||||||||||||||||||||
Federal | (2,344 | ) | 63 | (3,048 | ) | 63 | ||||||||||||||||
Foreign | (1,192 | ) | (465 | ) | (2,198 | ) | (465 | ) | ||||||||||||||
State | (382 | ) | 10 | (511 | ) | 10 | ||||||||||||||||
Total deferred | (3,918 | ) | (392 | ) | (5,757 | ) | (392 | ) | ||||||||||||||
Total income tax provision (1) | $ | 4,277 | $ | 11,193 | $ | 9,897 | $ | 11,970 | ||||||||||||||
(1) Includes (benefit) provision of $0 and $(150) thousand reflected in discontinued operations for the three months ended June 30, 2014 and 2013, respectively, and $0 and $12 thousand reflected in discontinued operators for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are presented net by tax jurisdiction and are reported in other assets and other liabilities, respectively. At June 30, 2014 and December 31, 2013, our U.S. tax jurisdiction was in a net deferred tax asset position, while our European tax jurisdiction was in a net deferred tax liability position. The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | ||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||
U.S. | ||||||||||||||||||||||
Deferred tax asset, net | ||||||||||||||||||||||
Reserves and accruals | $ | 11,506 | $ | 11,454 | ||||||||||||||||||
Domestic intangible assets | 3,673 | (714 | ) | |||||||||||||||||||
Investment securities and loans | (2,303 | ) | (892 | ) | ||||||||||||||||||
Investment in unconsolidated entities | 1,901 | 1,811 | ||||||||||||||||||||
Deferred income | 360 | 59 | ||||||||||||||||||||
Net operating and capital loss carryforwards | 1,379 | 967 | ||||||||||||||||||||
Valuation allowance | (1,379 | ) | (799 | ) | ||||||||||||||||||
Other U.S. temporary differences | (202 | ) | (242 | ) | ||||||||||||||||||
14,935 | 11,644 | |||||||||||||||||||||
Europe | ||||||||||||||||||||||
Deferred tax liability, net | ||||||||||||||||||||||
European servicing rights | (4,224 | ) | (6,257 | ) | ||||||||||||||||||
Net operating and capital loss carryforwards | 11,064 | 10,951 | ||||||||||||||||||||
Valuation allowance | (11,064 | ) | (10,951 | ) | ||||||||||||||||||
Other European temporary differences | (373 | ) | (527 | ) | ||||||||||||||||||
(4,597 | ) | (6,784 | ) | |||||||||||||||||||
Net deferred tax assets | $ | 10,338 | $ | 4,860 | ||||||||||||||||||
Unrecognized tax benefits were not material as of and during the three and six months ended June 30, 2014. | ||||||||||||||||||||||
The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three and six months ended June 30, 2014 and 2013 (dollar amounts in thousands): | ||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Federal statutory tax rate | $ | 43,631 | 35 | % | $ | 25,446 | 35 | % | $ | 87,906 | 35 | % | $ | 47,917 | 35 | % | ||||||
REIT and other non-taxable income | (38,989 | ) | (31.3 | )% | (15,516 | ) | (21.3 | )% | (79,372 | ) | (31.7 | )% | (37,308 | ) | (27.3 | )% | ||||||
State income taxes | 753 | 0.6 | % | 1,592 | 2.2 | % | 1,203 | 0.5 | % | 1,592 | 1.2 | % | ||||||||||
Federal benefit of state tax deduction | (263 | ) | (0.2 | )% | (557 | ) | (0.8 | )% | (421 | ) | (0.2 | )% | (557 | ) | (0.4 | )% | ||||||
Valuation allowance | (1,100 | ) | (0.9 | )% | — | — | % | 412 | 0.2 | % | — | — | % | |||||||||
Other | 245 | 0.2 | % | 228 | 0.3 | % | 169 | 0.1 | % | 326 | 0.2 | % | ||||||||||
Effective tax rate | $ | 4,277 | 3.4 | % | $ | 11,193 | 15.4 | % | $ | 9,897 | 3.9 | % | $ | 11,970 | 8.7 | % | ||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies. | ' |
Commitments and Contingencies | ' |
20. Commitments and Contingencies | |
As of June 30, 2014, we had future funding commitments on 43 loans totaling $1.8 billion, primarily related to construction projects, capital improvements, tenant improvements, and leasing commissions. Generally, funding commitments are subject to certain conditions that must be met, such as customary construction draw certifications, minimum debt service coverage ratios or executions of new leases before advances are made to the borrower. | |
Management is not aware of any other contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our condensed consolidated financial statements. |
Segment_Data
Segment Data | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Segment Data | ' | |||||||||||||||||||
Segment Data | ' | |||||||||||||||||||
21. Segment Data | ||||||||||||||||||||
In its operation of the business, management, including our chief operating decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis prior to the impact of consolidating VIEs under ASC 810. The segment information within this note is reported on that basis. Refer to Note 24 to the consolidated financial statements included in our Form 10-K for further discussion of the composition of our reportable business segments. | ||||||||||||||||||||
The table below presents our results of operations for the three months ended June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Subtotal | LNR VIEs | Total | ||||||||||||||||
Investment | ||||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 102,892 | $ | 2,563 | $ | 105,455 | $ | — | $ | 105,455 | ||||||||||
Interest income from investment securities | 15,178 | 30,081 | 45,259 | (17,639 | ) | 27,620 | ||||||||||||||
Servicing fees | 153 | 57,834 | 57,987 | (25,306 | ) | 32,681 | ||||||||||||||
Other revenues | 108 | 5,236 | 5,344 | (350 | ) | 4,994 | ||||||||||||||
Total revenues | 118,331 | 95,714 | 214,045 | (43,295 | ) | 170,750 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees (1) | 20,423 | 4,622 | 25,045 | 40 | 25,085 | |||||||||||||||
Interest expense (1) | 31,557 | 6,138 | 37,695 | — | 37,695 | |||||||||||||||
General and administrative | 7,921 | 34,992 | 42,913 | 181 | 43,094 | |||||||||||||||
Acquisition and investment pursuit costs | 523 | 248 | 771 | — | 771 | |||||||||||||||
Depreciation and amortization | — | 5,154 | 5,154 | — | 5,154 | |||||||||||||||
Loan loss allowance, net | (139 | ) | — | (139 | ) | — | (139 | ) | ||||||||||||
Other expense | 66 | 5,960 | 6,026 | — | 6,026 | |||||||||||||||
Total costs and expenses | 60,351 | 57,114 | 117,465 | 221 | 117,686 | |||||||||||||||
Income before other income, income taxes and non-controlling interests | 57,980 | 38,600 | 96,580 | (43,516 | ) | 53,064 | ||||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | 47,028 | 47,028 | |||||||||||||||
Change in fair value of servicing rights | — | (12,804 | ) | (12,804 | ) | 7,281 | (5,523 | ) | ||||||||||||
Change in fair value of investment securities, net | 861 | 16,294 | 17,155 | (12,196 | ) | 4,959 | ||||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 11,608 | 11,608 | — | 11,608 | |||||||||||||||
Earnings from unconsolidated entities | 3,432 | 5,219 | 8,651 | 912 | 9,563 | |||||||||||||||
Gain on sale of investments, net | 10,078 | — | 10,078 | — | 10,078 | |||||||||||||||
Loss on derivative financial instruments, net | (7,610 | ) | (2,180 | ) | (9,790 | ) | — | (9,790 | ) | |||||||||||
Foreign currency gain (loss), net | 4,082 | (305 | ) | 3,777 | — | 3,777 | ||||||||||||||
OTTI | — | (797 | ) | (797 | ) | — | (797 | ) | ||||||||||||
Other income, net | 35 | 657 | 692 | — | 692 | |||||||||||||||
Total other income | 10,878 | 17,692 | 28,570 | 43,025 | 71,595 | |||||||||||||||
Income from continuing operations before income taxes | 68,858 | 56,292 | 125,150 | (491 | ) | 124,659 | ||||||||||||||
Income tax provision | (443 | ) | (3,834 | ) | (4,277 | ) | — | (4,277 | ) | |||||||||||
Income from continuing operations | 68,415 | 52,458 | 120,873 | (491 | ) | 120,382 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | — | — | |||||||||||||||
Net income | 68,415 | 52,458 | 120,873 | (491 | ) | 120,382 | ||||||||||||||
Net income attributable to non-controlling interests | (3,005 | ) | — | (3,005 | ) | 491 | (2,514 | ) | ||||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 65,410 | $ | 52,458 | $ | 117,868 | $ | — | $ | 117,868 | ||||||||||
(1) Due to the structure of our business, certain costs incurred by one segment may benefit other segments. Costs that are identifiable are allocated to the segments that benefit so that one segment is not solely burdened by this cost. Allocated costs currently include interest expense related to our consolidated debt (excluding VIEs) and management fees payable to our Manager, both of which represent shared costs. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. During the three months ended June 30, 2014, management fees and interest expense of $4.6 million and $5.2 million, respectively, were allocated to the LNR segment. | ||||||||||||||||||||
The table below presents our results of operations for the three months ended June 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 72,676 | $ | 2,260 | $ | — | $ | 74,936 | $ | — | $ | 74,936 | ||||||||
Interest income from investment securities | 13,638 | 11,758 | — | 25,396 | (6,819 | ) | 18,577 | |||||||||||||
Servicing fees | — | 52,860 | — | 52,860 | (13,725 | ) | 39,135 | |||||||||||||
Other revenues | 96 | 1,972 | — | 2,068 | (273 | ) | 1,795 | |||||||||||||
Total revenues | 86,410 | 68,850 | — | 155,260 | (20,817 | ) | 134,443 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 13,854 | 2,274 | — | 16,128 | 18 | 16,146 | ||||||||||||||
Interest expense | 19,941 | 2,707 | — | 22,648 | — | 22,648 | ||||||||||||||
General and administrative | 3,615 | 40,573 | — | 44,188 | 147 | 44,335 | ||||||||||||||
Business combination costs | 13,420 | — | — | 13,420 | — | 13,420 | ||||||||||||||
Acquisition and investment pursuit costs | 525 | 391 | — | 916 | — | 916 | ||||||||||||||
Depreciation and amortization | — | 2,228 | — | 2,228 | — | 2,228 | ||||||||||||||
Loan loss allowance | 725 | — | — | 725 | — | 725 | ||||||||||||||
Other expense | 58 | 138 | — | 196 | — | 196 | ||||||||||||||
Total costs and expenses | 52,138 | 48,311 | — | 100,449 | 165 | 100,614 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 34,272 | 20,539 | — | 54,811 | (20,982 | ) | 33,829 | |||||||||||||
Other income: | — | |||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 31,949 | 31,949 | ||||||||||||||
Change in fair value of servicing rights | — | 6,114 | — | 6,114 | (3,216 | ) | 2,898 | |||||||||||||
Change in fair value of investment securities, net | (331 | ) | 6,388 | — | 6,057 | (7,449 | ) | (1,392 | ) | |||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 458 | — | 458 | — | 458 | ||||||||||||||
Earnings from unconsolidated entities | 1,851 | 2,115 | — | 3,966 | (196 | ) | 3,770 | |||||||||||||
Loss on sale of investments | (18 | ) | — | — | (18 | ) | — | (18 | ) | |||||||||||
(Loss) gain on derivative financial instruments | (2,001 | ) | 8,159 | — | 6,158 | — | 6,158 | |||||||||||||
Foreign currency gain (loss), net | 1,647 | (67 | ) | — | 1,580 | — | 1,580 | |||||||||||||
OTTI | (359 | ) | — | — | (359 | ) | — | (359 | ) | |||||||||||
Other income, net | — | 39 | — | 39 | — | 39 | ||||||||||||||
Total other income | 789 | 23,206 | — | 23,995 | 21,088 | 45,083 | ||||||||||||||
Income from continuing operations before income taxes | 35,061 | 43,745 | — | 78,806 | 106 | 78,912 | ||||||||||||||
Income tax provision | (411 | ) | (10,932 | ) | — | (11,343 | ) | — | (11,343 | ) | ||||||||||
Income from continuing operations | 34,650 | 32,813 | — | 67,463 | 106 | 67,569 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | (6,058 | ) | (6,058 | ) | — | (6,058 | ) | |||||||||||
Net income | 34,650 | 32,813 | (6,058 | ) | 61,405 | 106 | 61,511 | |||||||||||||
Net income attributable to non-controlling interests | (951 | ) | — | — | (951 | ) | (106 | ) | (1,057 | ) | ||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 33,699 | $ | 32,813 | $ | (6,058 | ) | $ | 60,454 | $ | — | $ | 60,454 | |||||||
The table below presents our results of operations for the six months ended June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 204,979 | $ | 5,386 | $ | — | $ | 210,365 | $ | — | $ | 210,365 | ||||||||
Interest income from investment securities | 33,467 | 53,089 | — | 86,556 | (29,482 | ) | 57,074 | |||||||||||||
Servicing fees | 190 | 114,019 | — | 114,209 | (47,317 | ) | 66,892 | |||||||||||||
Other revenues | 188 | 8,833 | — | 9,021 | (623 | ) | 8,398 | |||||||||||||
Total revenues | 238,824 | 181,327 | — | 420,151 | (77,422 | ) | 342,729 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees (1) | 41,778 | 10,259 | 791 | 52,828 | 78 | 52,906 | ||||||||||||||
Interest expense (1) | 62,811 | 11,624 | 1,091 | 75,526 | — | 75,526 | ||||||||||||||
General and administrative | 15,066 | 73,762 | — | 88,828 | 367 | 89,195 | ||||||||||||||
Acquisition and investment pursuit costs | 735 | 430 | — | 1,165 | — | 1,165 | ||||||||||||||
Depreciation and amortization | — | 9,790 | — | 9,790 | — | 9,790 | ||||||||||||||
Loan loss allowance, net | 358 | — | — | 358 | — | 358 | ||||||||||||||
Other expense | 52 | 7,663 | — | 7,715 | — | 7,715 | ||||||||||||||
Total costs and expenses | 120,800 | 113,528 | 1,882 | 236,210 | 445 | 236,655 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 118,024 | 67,799 | (1,882 | ) | 183,941 | (77,867 | ) | 106,074 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 103,032 | 103,032 | ||||||||||||||
Change in fair value of servicing rights | — | (24,979 | ) | — | (24,979 | ) | 14,205 | (10,774 | ) | |||||||||||
Change in fair value of investment securities, net | 705 | 53,246 | — | 53,951 | (40,631 | ) | 13,320 | |||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 32,501 | — | 32,501 | — | 32,501 | ||||||||||||||
Earnings from unconsolidated entities | 4,972 | 3,836 | — | 8,808 | 819 | 9,627 | ||||||||||||||
Gain on sale of investments, net | 11,633 | — | — | 11,633 | — | 11,633 | ||||||||||||||
Loss on derivative financial instruments, net | (10,398 | ) | (7,258 | ) | — | (17,656 | ) | — | (17,656 | ) | ||||||||||
Foreign currency gain (loss), net | 5,643 | (389 | ) | — | 5,254 | — | 5,254 | |||||||||||||
OTTI | (213 | ) | (797 | ) | — | (1,010 | ) | — | (1,010 | ) | ||||||||||
Other income, net | 53 | 657 | — | 710 | — | 710 | ||||||||||||||
Total other income | 12,395 | 56,817 | — | 69,212 | 77,425 | 146,637 | ||||||||||||||
Income from continuing operations before income taxes | 130,419 | 124,616 | (1,882 | ) | 253,153 | (442 | ) | 252,711 | ||||||||||||
Income tax provision | (526 | ) | (9,371 | ) | — | (9,897 | ) | — | (9,897 | ) | ||||||||||
Income from continuing operations | 129,893 | 115,245 | (1,882 | ) | 243,256 | (442 | ) | 242,814 | ||||||||||||
Loss from discontinued operations, net of tax | — | — | (1,551 | ) | (1,551 | ) | — | (1,551 | ) | |||||||||||
Net income | 129,893 | 115,245 | (3,433 | ) | 241,705 | (442 | ) | 241,263 | ||||||||||||
Net income attributable to non-controlling interests | (3,236 | ) | — | — | (3,236 | ) | 442 | (2,794 | ) | |||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 126,657 | $ | 115,245 | $ | (3,433 | ) | $ | 238,469 | $ | — | $ | 238,469 | |||||||
(1) Refer to Note 1 to the table above for the three months ended June 30, 2014. During the six months ended June 30, 2014, management fees and interest expense of $10.2 million and $9.7 million, respectively, were allocated to the LNR segment while $0.8 million and $1.1 million, respectively, were allocated to the SFR segment. | ||||||||||||||||||||
The table below presents our results of operations for the six months ended June 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 140,366 | $ | 2,260 | $ | — | $ | 142,626 | $ | — | $ | 142,626 | ||||||||
Interest income from investment securities | 29,878 | 11,758 | — | 41,636 | (6,819 | ) | 34,817 | |||||||||||||
Servicing fees | — | 52,860 | — | 52,860 | (13,725 | ) | 39,135 | |||||||||||||
Other revenues | 175 | 1,972 | — | 2,147 | (273 | ) | 1,874 | |||||||||||||
Total revenues | 170,419 | 68,850 | — | 239,269 | (20,817 | ) | 218,452 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 28,923 | 2,274 | — | 31,197 | 18 | 31,215 | ||||||||||||||
Interest expense | 37,367 | 2,707 | — | 40,074 | — | 40,074 | ||||||||||||||
General and administrative | 7,653 | 40,573 | — | 48,226 | 147 | 48,373 | ||||||||||||||
Business combination costs | 17,616 | — | — | 17,616 | — | 17,616 | ||||||||||||||
Acquisition and investment pursuit costs | 606 | 391 | — | 997 | — | 997 | ||||||||||||||
Depreciation and amortization | — | 2,228 | — | 2,228 | — | 2,228 | ||||||||||||||
Loan loss allowance | 755 | — | — | 755 | — | 755 | ||||||||||||||
Other expense | 91 | 138 | — | 229 | — | 229 | ||||||||||||||
Total costs and expenses | 93,011 | 48,311 | — | 141,322 | 165 | 141,487 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 77,408 | 20,539 | — | 97,947 | (20,982 | ) | 76,965 | |||||||||||||
Other income: | — | |||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 31,949 | 31,949 | ||||||||||||||
Change in fair value of servicing rights | — | 6,114 | — | 6,114 | (3,216 | ) | 2,898 | |||||||||||||
Change in fair value of investment securities | 74 | 6,388 | — | 6,462 | (7,449 | ) | (987 | ) | ||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 458 | — | 458 | — | 458 | ||||||||||||||
Earnings from unconsolidated entities | 2,592 | 2,115 | — | 4,707 | (196 | ) | 4,511 | |||||||||||||
Gain on sale of investments | 13,506 | — | — | 13,506 | — | 13,506 | ||||||||||||||
Gain on derivative financial instruments | 14,227 | 8,159 | — | 22,386 | — | 22,386 | ||||||||||||||
Foreign currency loss, net | (6,018 | ) | (67 | ) | — | (6,085 | ) | — | (6,085 | ) | ||||||||||
OTTI | (401 | ) | — | — | (401 | ) | — | (401 | ) | |||||||||||
Other income, net | — | 39 | — | 39 | — | 39 | ||||||||||||||
Total other income | 23,980 | 23,206 | — | 47,186 | 21,088 | 68,274 | ||||||||||||||
Income from continuing operations before income taxes | 101,388 | 43,745 | — | 145,133 | 106 | 145,239 | ||||||||||||||
Income tax provision | (1,026 | ) | (10,932 | ) | — | (11,958 | ) | — | (11,958 | ) | ||||||||||
Income from continuing operations | 100,362 | 32,813 | — | 133,175 | 106 | 133,281 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | (8,346 | ) | (8,346 | ) | — | (8,346 | ) | |||||||||||
Net income | 100,362 | 32,813 | (8,346 | ) | 124,829 | 106 | 124,935 | |||||||||||||
Net income attributable to non-controlling interests | (2,132 | ) | — | — | (2,132 | ) | (106 | ) | (2,238 | ) | ||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 98,230 | $ | 32,813 | $ | (8,346 | ) | $ | 122,697 | $ | — | $ | 122,697 | |||||||
The table below presents our condensed consolidated balance sheet as of June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Subtotal | LNR VIEs | Total | ||||||||||||||||
Investment | ||||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 382,285 | $ | 136,148 | $ | 518,433 | $ | 194 | $ | 518,627 | ||||||||||
Restricted cash | 34,324 | 10,237 | 44,561 | — | 44,561 | |||||||||||||||
Loans held-for-investment, net | 4,881,439 | 4,415 | 4,885,854 | — | 4,885,854 | |||||||||||||||
Loans held-for-sale | 8,750 | 145,662 | 154,412 | — | 154,412 | |||||||||||||||
Loans transferred as secured borrowings | 142,867 | — | 142,867 | — | 142,867 | |||||||||||||||
Investment securities | 733,876 | 638,069 | 1,371,945 | (469,521 | ) | 902,424 | ||||||||||||||
Intangible assets—servicing rights | — | 224,676 | 224,676 | (67,830 | ) | 156,846 | ||||||||||||||
Investment in unconsolidated entities | 52,541 | 68,644 | 121,185 | (2,564 | ) | 118,621 | ||||||||||||||
Goodwill | — | 140,437 | 140,437 | — | 140,437 | |||||||||||||||
Derivative assets | 2,321 | 2,360 | 4,681 | — | 4,681 | |||||||||||||||
Accrued interest receivable | 36,904 | 579 | 37,483 | — | 37,483 | |||||||||||||||
Other assets | 80,279 | 86,432 | 166,711 | (1,179 | ) | 165,532 | ||||||||||||||
VIE assets, at fair value | — | — | — | 114,091,158 | 114,091,158 | |||||||||||||||
Total Assets | $ | 6,355,586 | $ | 1,457,659 | $ | 7,813,245 | $ | 113,550,258 | $ | 121,363,503 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 50,540 | $ | 89,904 | $ | 140,444 | $ | 365 | $ | 140,809 | ||||||||||
Related-party payable | 19,784 | 4,691 | 24,475 | — | 24,475 | |||||||||||||||
Dividends payable | 108,012 | — | 108,012 | — | 108,012 | |||||||||||||||
Derivative liabilities | 25,019 | 1,275 | 26,294 | — | 26,294 | |||||||||||||||
Secured financing agreements, net | 2,465,699 | 95,568 | 2,561,267 | — | 2,561,267 | |||||||||||||||
Convertible senior notes, net | 1,003,847 | — | 1,003,847 | — | 1,003,847 | |||||||||||||||
Secured borrowings on transferred loans | 142,815 | — | 142,815 | — | 142,815 | |||||||||||||||
VIE liabilities, at fair value | — | — | — | 113,541,151 | 113,541,151 | |||||||||||||||
Total Liabilities | 3,815,716 | 191,438 | 4,007,154 | 113,541,516 | 117,548,670 | |||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 2,232 | — | 2,232 | — | 2,232 | |||||||||||||||
Additional paid-in capital | 2,417,704 | 1,366,871 | 3,784,575 | — | 3,784,575 | |||||||||||||||
Treasury stock | (10,642 | ) | — | (10,642 | ) | — | (10,642 | ) | ||||||||||||
Accumulated other comprehensive income | 65,712 | 9,250 | 74,962 | — | 74,962 | |||||||||||||||
Retained earnings (deficit) | 60,214 | (109,900 | ) | (49,686 | ) | — | (49,686 | ) | ||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,535,220 | 1,266,221 | 3,801,441 | — | 3,801,441 | |||||||||||||||
Non-controlling interests in consolidated subsidiaries | 4,650 | — | 4,650 | 8,742 | 13,392 | |||||||||||||||
Total Equity | 2,539,870 | 1,266,221 | 3,806,091 | 8,742 | 3,814,833 | |||||||||||||||
Total Liabilities and Equity | $ | 6,355,586 | $ | 1,457,659 | $ | 7,813,245 | $ | 113,550,258 | $ | 121,363,503 | ||||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Family | |||||||||||||||||||
Lending | Residential | |||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 232,270 | $ | 40,274 | $ | 44,807 | $ | 317,351 | $ | 276 | $ | 317,627 | ||||||||
Restricted cash | 36,593 | 32,208 | 251 | 69,052 | — | 69,052 | ||||||||||||||
Loans held-for-investment, net | 4,350,937 | 12,781 | — | 4,363,718 | — | 4,363,718 | ||||||||||||||
Loans held-for-sale | — | 206,672 | — | 206,672 | — | 206,672 | ||||||||||||||
Loans transferred as secured borrowings | 180,414 | — | — | 180,414 | — | 180,414 | ||||||||||||||
Investment securities | 794,147 | 550,282 | — | 1,344,429 | (409,322 | ) | 935,107 | |||||||||||||
Intangible assets-servicing rights | — | 257,736 | — | 257,736 | (80,563 | ) | 177,173 | |||||||||||||
Residential real estate, net | — | — | 749,214 | 749,214 | — | 749,214 | ||||||||||||||
Non-performing residential loans | — | — | 215,371 | 215,371 | — | 215,371 | ||||||||||||||
Investment in unconsolidated entities | 50,167 | 76,170 | — | 126,337 | (3,383 | ) | 122,954 | |||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||
Derivative assets | 3,138 | 4,631 | — | 7,769 | — | 7,769 | ||||||||||||||
Accrued interest receivable | 35,501 | 2,129 | — | 37,630 | — | 37,630 | ||||||||||||||
Other assets | 31,020 | 57,620 | 8,045 | 96,685 | (872 | ) | 95,813 | |||||||||||||
VIE assets, at fair value | — | — | — | — | 103,151,624 | 103,151,624 | ||||||||||||||
Total Assets | $ | 5,714,187 | $ | 1,380,940 | $ | 1,017,688 | $ | 8,112,815 | $ | 102,657,760 | $ | 110,770,575 | ||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 66,127 | $ | 135,882 | $ | 23,056 | $ | 225,065 | $ | 309 | $ | 225,374 | ||||||||
Related-party payable | 11,245 | 6,548 | — | 17,793 | — | 17,793 | ||||||||||||||
Dividends payable | 90,171 | — | — | 90,171 | — | 90,171 | ||||||||||||||
Derivative liabilities | 24,149 | 43 | — | 24,192 | — | 24,192 | ||||||||||||||
Secured financing agreements, net | 2,127,717 | 129,843 | — | 2,257,560 | — | 2,257,560 | ||||||||||||||
Convertible senior notes, net | 997,851 | — | — | 997,851 | — | 997,851 | ||||||||||||||
Secured borrowings on transferred loans | 181,238 | — | — | 181,238 | — | 181,238 | ||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 102,649,263 | 102,649,263 | ||||||||||||||
Total Liabilities | 3,498,498 | 272,316 | 23,056 | 3,793,870 | 102,649,572 | 106,443,442 | ||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||
Common stock | 1,961 | — | — | 1,961 | — | 1,961 | ||||||||||||||
Additional paid-in capital | 1,987,133 | 1,308,500 | 1,004,846 | 4,300,479 | — | 4,300,479 | ||||||||||||||
Treasury stock | (10,642 | ) | — | — | (10,642 | ) | — | (10,642 | ) | |||||||||||
Accumulated other comprehensive income | 68,092 | 7,357 | — | 75,449 | — | 75,449 | ||||||||||||||
Retained earnings (deficit) | 132,625 | (207,233 | ) | (10,111 | (84,719 | ) | — | (84,719 | ) | |||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,179,169 | 1,108,624 | 994,735 | 4,282,528 | — | 4,282,528 | ||||||||||||||
Non-controlling interests in consolidated subsidiaries | 36,520 | — | (103 | 36,417 | 8,188 | 44,605 | ||||||||||||||
Total Equity | 2,215,689 | 1,108,624 | 994,632 | 4,318,945 | 8,188 | 4,327,133 | ||||||||||||||
Total Liabilities and Equity | $ | 5,714,187 | $ | 1,380,940 | $ | 1,017,688 | $ | 8,112,815 | $ | 102,657,760 | $ | 110,770,575 | ||||||||
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
22. Subsequent Events | |
Our significant events subsequent to June 30, 2014 were as follows: | |
Secured Financing Agreements | |
On July 24, 2014, we amended the Lender 2 Repo 1 facility to upsize available borrowings from $225 million to $325 million and reduce pricing 25-50 basis points depending on the collateral type. | |
On August 1, 2014, we entered into a new $250 million warehouse line to finance our more transitional assets. | |
Dividend Declaration | |
On August 6, 2014, our board of directors declared a dividend of $0.48 per share for the third quarter of 2014, which is payable on October 15, 2014 to common stockholders of record as of September 30, 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Summary of Significant Accounting Policies | ' |
Basis of Accounting and Principles of Consolidation | ' |
Basis of Accounting and Principles of Consolidation | |
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries and VIEs. Intercompany amounts have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows have been included. | |
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the operating results for the full year. | |
Refer to our Form 10-K for a description of our recurring accounting policies. We have included disclosure in this Note 2 regarding principles of consolidation and other accounting policies that (i) are required to be disclosed quarterly, (ii) we view as critical, or (iii) became significant since December 31, 2013 due to a corporate action or increase in the significance of the underlying business activity. | |
Variable Interest Entities | ' |
Variable Interest Entities | |
We evaluate all of our interests in VIEs for consolidation. When our interests are determined to be variable interests, we assess whether we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. ASC 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. We consider our variable interests as well as any variable interests of our related parties in making this determination. Where both of these factors are present, we are deemed to be the primary beneficiary and we consolidate the VIE. Where either one of these factors is not present, we are not the primary beneficiary and do not consolidate the VIE. | |
To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. | |
To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that we apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by us. | |
Our purchased investment securities include CMBS, which are unrated and non-investment grade rated securities issued by CMBS trusts. In certain cases, we may contract to provide special servicing activities for these CMBS trusts, or, as holder of the controlling class, we may have the right to name and remove the special servicer for these trusts. In our role as special servicer, we provide services on defaulted loans within the trusts, such as foreclosure or work-out procedures, as permitted by the underlying contractual agreements. In exchange for these services, we receive a fee. These rights give us the ability to direct activities that could significantly impact the trust’s economic performance. However, in those instances where an unrelated third party has the right to unilaterally remove us as special servicer, we do not have the power to direct activities that most significantly impact the trust’s economic performance. We evaluated all of our positions in such investments for consolidation. | |
For VIEs in which we are determined to be the primary beneficiary, all of the underlying assets, liabilities and equity of the structures are recorded on our books, and the initial investment, along with any associated unrealized holding gains and losses, are eliminated in consolidation. Similarly, the interest income earned from these structures, as well as the fees paid by these trusts to us in our capacity as special servicer, are eliminated in consolidation. Further, an allocable portion of the identified servicing intangible asset associated with the servicing fee streams, and the corresponding allocable amortization or change in fair value of the servicing intangible asset, are also eliminated in consolidation. | |
We perform ongoing reassessments of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding our involvement with a VIE causes our consolidation conclusion regarding the VIE to change. | |
We have elected the fair value option in measuring the assets and liabilities of any VIEs we consolidate. Fluctuations in the fair values of the VIE assets and liabilities, along with trust interest income and trust interest and administrative expenses, are presented net in income of consolidated VIEs in our consolidated statements of operations. | |
Discontinued Operations | ' |
Discontinued Operations | |
On January 31, 2014, we completed the spin-off of our former SFR segment to our stockholders as discussed in Note 1. In accordance with Accounting Standards Codification (“ASC”) Topic 205, Presentation of Financial Statements, the results of the SFR segment are presented within discontinued operations in our condensed consolidated statements of operations for the six months ended June 30, 2014 and the three and six months ended June 30, 2013. | |
Fair Value Option | ' |
Fair Value Option | |
The guidance in ASC 825, Financial Instruments, provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our consolidated balance sheets from those instruments using another accounting method. | |
We have elected the fair value option for eligible financial assets and liabilities of our consolidated VIEs, loans held-for-sale originated by LNR’s conduit platform, purchased CMBS issued by VIEs we could consolidate in the future and certain investments in marketable equity securities. The fair value elections for VIE and securitization related items were made in order to mitigate accounting mismatches between the carrying value of the instruments and the related assets and liabilities that we consolidate at fair value. The fair value elections for mortgage loans held-for-sale originated by LNR’s conduit platform were made due to the short-term nature of these instruments. The fair value elections for investments in marketable equity securities were made because the shares are listed on an exchange, which allows us to determine the fair value using a quoted price from an active market. | |
Loans Receivable and Provision for Loan Losses | ' |
Loans Receivable and Provision for Loan Losses | |
In our Lending Segment we purchase and originate commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Actual losses, if any, could ultimately differ from these estimates. | |
We perform a quarterly review of our portfolio of loans. In connection with this review, we assess the performance of each loan and assign a risk rating based on several factors including risk of loss, loan-to-value ratio (“LTV”), collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” through “5”, from less risk to greater risk, in connection with this review. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant and subjective estimate that we make is the projection of cash flows we expect to receive on our loans, investment securities and intangible assets, which has a significant impact on the amounts of interest income, credit losses (if any), and fair values that we record and/or disclose. In addition, the fair value of financial assets and liabilities that are estimated using a discounted cash flows method is significantly impacted by the rates at which we estimate market participants would discount the expected cash flows. | |
Reclassifications and Measurement Period Adjustments | ' |
Reclassifications and Measurement Period Adjustments | |
As a result of the spin-off, the results from our SFR segment have been reclassified as discontinued operations in our condensed consolidated statements of operations for the three and six months ended June 30, 2013. In addition, certain prior period amounts have been reclassified to conform to the current period presentation, which had no effect on our previously reported net income. In that regard, we reclassified $177.0 million of proceeds from sales of loans held-for-sale by LNR to cash flows from operating activities in the condensed consolidated statement of cash flows for the six months ended June 30, 2013 in order to conform to the current period presentation, which is also consistent with the presentation in our Form 10-K. These proceeds were previously reported as a non-cash financing activity and reflected net against principal repayments on borrowings for the related repurchase agreements that were settled net with those proceeds. | |
The prior period financial statements included herein reflect the retrospective measurement period adjustment related to the LNR acquisition as described in Note 3 to the consolidated financial statements included in our Form 10-K. Such adjustment reduced earnings from unconsolidated entities and net income by $1.8 million in the three and six months ended June 30, 2013. |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Acquisitions and Divestitures | ' | |||||||||||||
Summary of consolidated results of operations for the SFR segment prior to spin-off, excluding segment allocations | ' | |||||||||||||
The following table presents the summarized consolidated results of operations for the SFR segment prior to the spin-off, excluding segment allocations during the six months ended June 30, 2014 (in thousands): | ||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Total revenues | $ | — | $ | 2,594 | $ | 3,876 | $ | 3,758 | ||||||
Total costs and expenses | — | 9,870 | 6,369 | 13,495 | ||||||||||
Loss before other income and income taxes | — | (7,276 | ) | (2,493 | ) | (9,737 | ) | |||||||
Total other income | — | 1,068 | 942 | 1,403 | ||||||||||
Loss before income taxes | — | (6,208 | ) | (1,551 | ) | (8,334 | ) | |||||||
Income tax benefit (provision) | — | 150 | — | (12 | ) | |||||||||
Net loss | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
Summary of consolidated balance sheet of the SFR segment | ' | |||||||||||||
The following table presents the summarized consolidated balance sheet of the SFR segment as of January 31, 2014, the date of the spin-off (in thousands): | ||||||||||||||
January 31, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 111,960 | ||||||||||||
Restricted cash | 189 | |||||||||||||
Residential real estate, net | 812,017 | |||||||||||||
Non-performing residential loans | 211,019 | |||||||||||||
Other assets | 9,498 | |||||||||||||
Total Assets | $ | 1,144,683 | ||||||||||||
Liabilities and Equity | ||||||||||||||
Liabilities: | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 24,346 | ||||||||||||
Equity: | ||||||||||||||
Additional paid-in capital | 1,130,405 | |||||||||||||
Accumulated deficit | (11,662 | ) | ||||||||||||
Total Stockholders’ Equity | 1,118,743 | |||||||||||||
Non-controlling interests in consolidated subsidiaries | 1,594 | |||||||||||||
Total Equity | 1,120,337 | |||||||||||||
Total Liabilities and Equity | $ | 1,144,683 |
Loans_Tables
Loans (Tables) | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Loans | ' | ||||||||||||||||||||||
Schedule of investments in mortgages and loans by subordination class | ' | ||||||||||||||||||||||
The following tables summarize our investments in mortgages and loans by subordination class as of June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||||||||||||
Carrying | Face | Weighted | Weighted | ||||||||||||||||||||
Value | Amount | Average | Average Life | ||||||||||||||||||||
Coupon | (“WAL”) | ||||||||||||||||||||||
(years)(2) | |||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||
First mortgages | $ | 3,259,428 | $ | 3,317,358 | 5.4 | % | 3.9 | ||||||||||||||||
Subordinated mortgages(1) | 355,561 | 388,449 | 8.6 | % | 4.1 | ||||||||||||||||||
Mezzanine loans | 1,275,207 | 1,281,518 | 10.6 | % | 3.3 | ||||||||||||||||||
Total loans held-for-investment | 4,890,196 | 4,987,325 | |||||||||||||||||||||
Loans held-for-sale, fair value option elected | 154,412 | 153,724 | 4.7 | % | 9.8 | ||||||||||||||||||
Loans transferred as secured borrowings | 142,867 | 142,883 | 5.5 | % | 2.8 | ||||||||||||||||||
Total gross loans | 5,187,475 | 5,283,932 | |||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | (4,342 | ) | — | ||||||||||||||||||||
Total net loans | $ | 5,183,133 | $ | 5,283,932 | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
First mortgages | $ | 2,714,512 | $ | 2,766,217 | 5.5 | % | 4.3 | ||||||||||||||||
Subordinated mortgages(1) | 407,462 | 442,475 | 9.7 | % | 4.2 | ||||||||||||||||||
Mezzanine loans | 1,245,728 | 1,246,841 | 11.7 | % | 3.5 | ||||||||||||||||||
Total loans held-for-investment | 4,367,702 | 4,455,533 | |||||||||||||||||||||
Loans held-for-sale, fair value option elected | 206,672 | 209,099 | 5.3 | % | 9.6 | ||||||||||||||||||
Loans transferred as secured borrowings | 180,414 | 180,483 | 5.4 | % | 2.9 | ||||||||||||||||||
Total gross loans | 4,754,788 | 4,845,115 | |||||||||||||||||||||
Loan loss allowance (loans held-for-investment) | (3,984 | ) | — | ||||||||||||||||||||
Total net loans | $ | 4,750,804 | $ | 4,845,115 | |||||||||||||||||||
(1) Subordinated mortgages include B-notes and junior participations in first mortgages where we do not own the senior A-note or senior participation. If we own both the A-note and B-note we categorize the loan as a first mortgage loan. | |||||||||||||||||||||||
(2) Represents the WAL of each respective group of loans as of the respective balance sheet date. The WAL of each individual loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the loan. | |||||||||||||||||||||||
Schedule of investments in floating rate loans | ' | ||||||||||||||||||||||
As of June 30, 2014, approximately $3.9 billion, or 74.8%, of the loans were variable rate and paid interest principally at LIBOR plus a weighted-average spread of 5.65%. The following table summarizes our investments in floating rate loans (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Index | Base Rate | Carrying | Base Rate | Carrying | |||||||||||||||||||
Value | Value | ||||||||||||||||||||||
1 Month LIBOR | 0.16% | $ | 137,092 | 0.17% | $ | 150,076 | |||||||||||||||||
3 Month LIBOR | 0.55% | 406,392 | 0.53% | 392,950 | |||||||||||||||||||
LIBOR Floor | 0.15% - 3.00%(1) | 3,333,849 | 0.19% - 3.00%(1) | 2,688,308 | |||||||||||||||||||
Total | $ | 3,877,333 | $ | 3,231,334 | |||||||||||||||||||
(1) The weighted-average LIBOR Floor was 0.36% and 0.49% as of June 30, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||
Schedule of risk ratings by class of loan | ' | ||||||||||||||||||||||
As of June 30, 2014, the risk ratings for loans subject to our rating system, which are described in our Form 10-K and excludes loans on the cost recovery method and loans for which the fair value option has been elected, by class of loan were as follows (amounts in thousands): | |||||||||||||||||||||||
Balance Sheet Classification | |||||||||||||||||||||||
Loans Held-For-Investment | Loans | ||||||||||||||||||||||
Risk | First | Subordinated | Mezzanine | Cost | Loans Held- | Transferred | Total | ||||||||||||||||
Rating | Mortgages | Mortgages | Loans | Recovery | For-Sale | As Secured | |||||||||||||||||
Category | Loans | Borrowings | |||||||||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
2 | 101,875 | 104,821 | 209,690 | — | — | 12,971 | 429,357 | ||||||||||||||||
3 | 3,010,516 | 218,685 | 950,268 | — | — | 129,896 | 4,309,365 | ||||||||||||||||
4 | 142,166 | 32,055 | 115,249 | — | — | — | 289,470 | ||||||||||||||||
5 | — | — | — | — | — | — | — | ||||||||||||||||
N/A | 455 | — | — | 4,416 | 154,412 | — | 159,283 | ||||||||||||||||
$ | 3,255,012 | $ | 355,561 | $ | 1,275,207 | $ | 4,416 | $ | 154,412 | $ | 142,867 | $ | 5,187,475 | ||||||||||
As of December 31, 2013, the risk ratings for loans subject to our rating system by class of loan were as follows (amounts in thousands): | |||||||||||||||||||||||
Balance Sheet Classification | |||||||||||||||||||||||
Loans Held-For-Investment | Loans | ||||||||||||||||||||||
Risk | First | Subordinated | Mezzanine | Cost | Loans Held- | Transferred | Total | ||||||||||||||||
Rating | Mortgages | Mortgages | Loans | Recovery | For-Sale | As Secured | |||||||||||||||||
Category | Loans | Borrowings | |||||||||||||||||||||
1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
2 | 94,981 | 103,369 | 153,119 | — | — | 13,022 | 364,491 | ||||||||||||||||
3 | 2,452,763 | 272,375 | 1,012,674 | — | — | 167,392 | 3,905,204 | ||||||||||||||||
4 | 153,987 | 31,718 | 79,935 | — | — | — | 265,640 | ||||||||||||||||
5 | — | — | — | — | — | — | — | ||||||||||||||||
N/A | — | — | — | 12,781 | 206,672 | — | 219,453 | ||||||||||||||||
$ | 2,701,731 | $ | 407,462 | $ | 1,245,728 | $ | 12,781 | $ | 206,672 | $ | 180,414 | $ | 4,754,788 | ||||||||||
Schedule of activity in allowance for loan losses | ' | ||||||||||||||||||||||
The following table presents the activity in our allowance for loan losses (amounts in thousands): | |||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||
June 30, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Allowance for loan losses at January 1 | $ | 3,984 | $ | 2,061 | |||||||||||||||||||
Provision for loan losses | 577 | 755 | |||||||||||||||||||||
Charge-offs | — | — | |||||||||||||||||||||
Recoveries | (219 | ) | — | ||||||||||||||||||||
Allowance for loan losses at June 30 | $ | 4,342 | $ | 2,816 | |||||||||||||||||||
Recorded investment in loans related to the allowance for loan loss | $ | 289,470 | $ | 160,893 | |||||||||||||||||||
Schedule of activity in loan portfolio | ' | ||||||||||||||||||||||
The activity in our loan portfolio was as follows (amounts in thousands): | |||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||
June 30, | |||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||
Balance at January 1 | $ | 4,750,804 | $ | 3,000,335 | |||||||||||||||||||
Acquisitions/originations/additional funding | 1,860,026 | 1,308,602 | |||||||||||||||||||||
Capitalized interest(1) | 19,022 | 5,279 | |||||||||||||||||||||
Basis of loans sold(2) | (868,804 | ) | (573,825 | ) | |||||||||||||||||||
Loan maturities/principal repayments | (633,425 | ) | (140,596 | ) | |||||||||||||||||||
Discount accretion/premium amortization | 10,147 | 14,243 | |||||||||||||||||||||
Changes in fair value | 32,501 | 458 | |||||||||||||||||||||
Unrealized foreign currency remeasurement gain (loss) | 16,462 | (4,572 | ) | ||||||||||||||||||||
Capitalized costs written off | — | (1,517 | ) | ||||||||||||||||||||
Loan loss allowance, net | (358 | ) | (755 | ) | |||||||||||||||||||
Transfer to other assets | (3,242 | ) | — | ||||||||||||||||||||
Balance at June 30 | $ | 5,183,133 | $ | 3,607,652 | |||||||||||||||||||
(1) Represents accrued interest income on loans whose terms do not require current payment of interest. | |||||||||||||||||||||||
(2) See Note 10 for additional disclosure on these transactions. |
Investment_Securities_Tables
Investment Securities (Tables) | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Investment Securities | ' | |||||||||||||||||||||||||
Schedule of investment securities | ' | |||||||||||||||||||||||||
Investment securities were comprised of the following as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Carrying Value as of | ||||||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
RMBS, available-for-sale | $ | 231,605 | $ | 296,236 | ||||||||||||||||||||||
Single-borrower CMBS, available-for-sale | 116,071 | 114,346 | ||||||||||||||||||||||||
CMBS, fair value option (1) | 638,069 | 550,282 | ||||||||||||||||||||||||
Held-to-maturity (“HTM”) securities | 370,096 | 368,318 | ||||||||||||||||||||||||
Equity security, fair value option | 16,104 | 15,247 | ||||||||||||||||||||||||
Subtotal - Investment securities | 1,371,945 | 1,344,429 | ||||||||||||||||||||||||
VIE eliminations (1) | (469,521 | ) | (409,322 | ) | ||||||||||||||||||||||
Total investment securities | $ | 902,424 | $ | 935,107 | ||||||||||||||||||||||
(1) Certain fair value option CMBS are eliminated in consolidation against VIE liabilities pursuant to ASC 810. | ||||||||||||||||||||||||||
Schedule of purchases, sales and principal collections for all investment securities | ' | |||||||||||||||||||||||||
Purchases, sales and principal collections for all investment securities were as follows (amounts in thousands): | ||||||||||||||||||||||||||
Three Months ended | Available-for-sale | CMBS, fair | HTM | Equity | ||||||||||||||||||||||
June 30, 2014 | RMBS | CMBS | value option | Securities | Security | Total | ||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 43,563 | $ | — | $ | — | $ | 43,563 | ||||||||||||||
Sales | 53,236 | — | 13,548 | — | — | 66,784 | ||||||||||||||||||||
Principal collections | 10,466 | 421 | — | — | — | 10,887 | ||||||||||||||||||||
June 30, 2013 | ||||||||||||||||||||||||||
Purchases | 20,090 | — | 1,618 | — | — | 21,708 | ||||||||||||||||||||
Sales | — | — | 10,072 | — | — | 10,072 | ||||||||||||||||||||
Principal collections | 15,771 | 2,627 | — | — | — | 18,398 | ||||||||||||||||||||
Six Months ended | ||||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
Purchases | $ | — | $ | — | $ | 53,453 | $ | — | $ | — | $ | 53,453 | ||||||||||||||
Sales | 62,546 | -1 | — | 32,032 | — | — | 94,578 | |||||||||||||||||||
Principal collections | 18,285 | 829 | — | — | — | 19,114 | ||||||||||||||||||||
June 30, 2013 | ||||||||||||||||||||||||||
Purchases | 20,090 | — | 1,618 | 37,190 | — | 58,898 | ||||||||||||||||||||
Sales | 12,712 | 206,608 | 10,072 | — | 6,769 | 236,161 | ||||||||||||||||||||
Principal collections | 32,638 | 7,484 | — | — | — | 40,122 | ||||||||||||||||||||
(1) Settlement of $44.4 million occurred subsequent to June 30, 2014. We account for all investment securities transactions on a trade-date basis. | ||||||||||||||||||||||||||
Schedule of investments in available-for-sale RMBS and single-borrower CMBS where the fair value option has not been elected | ' | |||||||||||||||||||||||||
The tables below summarize various attributes of our investments in available-for-sale RMBS and single-borrower CMBS where the fair value option has not been elected as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Unrealized Gains or (Losses) | ||||||||||||||||||||||||||
Recognized in AOCI | ||||||||||||||||||||||||||
Purchase | Credit | Recorded | Non-Credit | Gross | Gross | Net | Fair Value | |||||||||||||||||||
Amortized | OTTI | Amortized | OTTI | Unrealized | Unrealized | Fair Value | ||||||||||||||||||||
Cost | Cost | Gains | Losses | Adjustment | ||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
RMBS | $ | 193,084 | $ | (10,322 | ) | $ | 182,762 | $ | (3 | ) | $ | 49,529 | $ | (683 | ) | $ | 48,843 | $ | 231,605 | |||||||
Single-borrower CMBS | 103,498 | — | 103,498 | — | 12,573 | — | 12,573 | 116,071 | ||||||||||||||||||
Total | $ | 296,582 | $ | (10,322 | ) | $ | 286,260 | $ | (3 | ) | $ | 62,102 | $ | (683 | ) | $ | 61,416 | $ | 347,676 | |||||||
December 31, 2013 | ||||||||||||||||||||||||||
RMBS | $ | 253,912 | $ | (11,134 | ) | $ | 242,778 | $ | (55 | ) | $ | 55,154 | $ | (1,641 | ) | $ | 53,458 | $ | 296,236 | |||||||
Single-borrower CMBS | 100,687 | — | 100,687 | — | 13,659 | — | 13,659 | 114,346 | ||||||||||||||||||
Total | $ | 354,599 | $ | (11,134 | ) | $ | 343,465 | $ | (55 | ) | $ | 68,813 | $ | (1,641 | ) | $ | 67,117 | $ | 410,582 | |||||||
Weighted Average | Weighted Average | WAL (Years)(3) | ||||||||||||||||||||||||
Coupon(1) | Rating | |||||||||||||||||||||||||
(Standard & Poor’s) | ||||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
RMBS | 1 | % | B- | 7.4 | ||||||||||||||||||||||
Single-borrower CMBS | 11.6 | % | BB+ | -2 | 3.7 | |||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
RMBS | 1 | % | B- | 6.8 | ||||||||||||||||||||||
Single-borrower CMBS | 11.5 | % | BB+ | -2 | 5.9 | |||||||||||||||||||||
(1) Calculated using the June 30, 2014 and December 31, 2013 one-month LIBOR rate of 0.155% and 0.168%, respectively, for floating rate securities. | ||||||||||||||||||||||||||
(2) As of June 30, 2014 and December 31, 2013, approximately 99.3% and 98.8%, respectively, of the CMBS securities were rated BB+. | ||||||||||||||||||||||||||
(3) Represents the WAL of each respective group of securities calculated as of the respective balance sheet date. The WAL of each individual security or loan is calculated as a fraction, the numerator of which is the sum of the timing (in years) of each expected future principal payment multiplied by the balance of the respective payment, and with a denominator equal to the sum of the expected principal payments using the contractually extended maturity dates of the assets. Assumptions for the calculation of the WAL are adjusted as necessary for changes in projected principal repayments and/or maturity dates of the security. | ||||||||||||||||||||||||||
Schedule of reconciliation of aggregate principal balance to amortized cost for the entity's RMBS and single-borrower CMBS, excluding CMBS where the entity have elected the fair value option | ' | |||||||||||||||||||||||||
The following table contains a reconciliation of aggregate principal balance to amortized cost for our RMBS and single-borrower CMBS as of June 30, 2014 and December 31, 2013, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
RMBS | CMBS | RMBS | CMBS | |||||||||||||||||||||||
Principal balance | $ | 312,280 | $ | 103,498 | $ | 414,020 | $ | 100,687 | ||||||||||||||||||
Accretable yield | (90,876 | ) | — | (101,046 | ) | — | ||||||||||||||||||||
Non-accretable difference | (38,642 | ) | — | (70,196 | ) | — | ||||||||||||||||||||
Total discount | (129,518 | ) | — | (171,242 | ) | — | ||||||||||||||||||||
Amortized cost | $ | 182,762 | $ | 103,498 | $ | 242,778 | $ | 100,687 | ||||||||||||||||||
Schedule of changes to accretable yield and non-accretable difference for the entity's RMBS and single-borrower CMBS, excluding CMBS where the entity have elected the fair value option | ' | |||||||||||||||||||||||||
The following table discloses the changes to accretable yield and non-accretable difference for our RMBS and single-borrower CMBS during the three and six months ended June 30, 2014, excluding CMBS where we have elected the fair value option (amounts in thousands): | ||||||||||||||||||||||||||
Accretable Yield | Non-Accretable | |||||||||||||||||||||||||
Difference | ||||||||||||||||||||||||||
RMBS | CMBS | RMBS | CMBS | |||||||||||||||||||||||
Three Months ended June 30, 2014 | ||||||||||||||||||||||||||
Balance as of April 1, 2014 | $ | 99,622 | $ | — | $ | 55,432 | $ | — | ||||||||||||||||||
Accretion of discount | (3,323 | ) | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | (509 | ) | — | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (10,276 | ) | — | (11,428 | ) | — | ||||||||||||||||||||
OTTI | — | — | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | 4,853 | — | (4,853 | ) | — | |||||||||||||||||||||
Balance as of June 30, 2014 | $ | 90,876 | $ | — | $ | 38,642 | $ | — | ||||||||||||||||||
Six Months ended June 30, 2014 | ||||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 101,046 | $ | — | $ | 70,196 | $ | — | ||||||||||||||||||
Accretion of discount | (9,887 | ) | — | — | — | |||||||||||||||||||||
Principal write-downs | — | — | (875 | ) | — | |||||||||||||||||||||
Purchases | — | — | — | — | ||||||||||||||||||||||
Sales | (12,238 | ) | — | (18,937 | ) | — | ||||||||||||||||||||
OTTI | 213 | — | — | — | ||||||||||||||||||||||
Transfer to/from non-accretable difference | 11,742 | — | (11,742 | ) | — | |||||||||||||||||||||
Balance as of June 30, 2014 | $ | 90,876 | $ | — | $ | 38,642 | $ | — | ||||||||||||||||||
Schedule of gross unrealized losses and estimated fair value of securities in an unrealized loss position, excluding CMBS where we have elected the fair value option | ' | |||||||||||||||||||||||||
The following table presents the gross unrealized losses and estimated fair value of the available-for-sale securities (i) where we have not elected the fair value option, (ii) that were in an unrealized loss position as of June 30, 2014 and December 31, 2013, and (iii) for which OTTIs (full or partial) have not been recognized in earnings (amounts in thousands): | ||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | |||||||||||||||||||||||||
Securities with a | Securities with a | Securities with a | Securities with a | |||||||||||||||||||||||
loss less than | loss greater than | loss less than | loss greater than | |||||||||||||||||||||||
12 months | 12 months | 12 months | 12 months | |||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||||||
RMBS | $ | 16,255 | $ | 1,552 | $ | (480 | ) | $ | (206 | ) | ||||||||||||||||
Single-borrower CMBS | — | — | — | — | ||||||||||||||||||||||
Total | $ | 16,255 | $ | 1,552 | $ | (480 | ) | $ | (206 | ) | ||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||||
RMBS | $ | 26,344 | $ | 1,809 | $ | (1,444 | ) | $ | (252 | ) | ||||||||||||||||
Single-borrower CMBS | — | — | — | — | ||||||||||||||||||||||
Total | $ | 26,344 | $ | 1,809 | $ | (1,444 | ) | $ | (252 | ) | ||||||||||||||||
Schedule of various attributes of investment in fair value option CMBS | ' | |||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, none of our CMBS where we have elected the fair value option were variable rate. The table below summarizes various attributes of our investment in fair value option CMBS as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Weighted | Weighted | WAL | ||||||||||||||||||||||||
Average | Average | (Years)(1) | ||||||||||||||||||||||||
Coupon | Rating | |||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
CMBS, fair value option | 5 | % | CCC | -2 | 5.3 | |||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
CMBS, fair value option | 5.4 | % | CC | -2 | 4.4 | |||||||||||||||||||||
(1) The WAL of each security is calculated based on the period of time over which we expect to receive principal cash flows. Expected principal cash flows are based on contractual payments net of expected losses. | ||||||||||||||||||||||||||
(2) As of June 30, 2014 and December 31, 2013, excludes $27.3 million and $55.5 million, respectively, in fair value option CMBS that are not rated. | ||||||||||||||||||||||||||
Summary of various attributes of investments in HTM securities | ' | |||||||||||||||||||||||||
The table below summarizes various attributes of our investments in HTM securities as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||||
Net Carrying | Gross | Gross | Fair Value | |||||||||||||||||||||||
Amount | Unrealized | Unrealized | ||||||||||||||||||||||||
(Amortized | Holding | Holding | ||||||||||||||||||||||||
Cost) | Gains | Losses | ||||||||||||||||||||||||
June 30, 2014 | ||||||||||||||||||||||||||
Preferred interests | $ | 285,946 | $ | 2,083 | $ | — | $ | 288,029 | ||||||||||||||||||
CMBS | 84,150 | — | (576 | ) | 83,574 | |||||||||||||||||||||
Total | $ | 370,096 | $ | 2,083 | $ | (576 | ) | $ | 371,603 | |||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Preferred interests | $ | 284,087 | $ | 135 | $ | — | $ | 284,222 | ||||||||||||||||||
CMBS | 84,231 | — | — | 84,231 | ||||||||||||||||||||||
Total | $ | 368,318 | $ | 135 | $ | — | $ | 368,453 |
Investment_in_Unconsolidated_E1
Investment in Unconsolidated Entities (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Investment in Unconsolidated Entities | ' | ||||||||||||
Summary of investments in unconsolidated entities | ' | ||||||||||||
The below table summarizes our investments in unconsolidated entities as of June 30, 2014 and December 31, 2013 (dollar amounts in thousands): | |||||||||||||
Participation / | Carrying value as of | Carrying value over (under) | |||||||||||
equity in net assets as of | |||||||||||||
Ownership %(1) | June 30, 2014 | December 31, 2013 | June 30, 2014(2) | ||||||||||
Equity method: | |||||||||||||
Investor entity which owns equity interests in two real estate services providers | 50% | $ | 20,010 | $ | 19,371 | $ | — | ||||||
Small balance bridge loan financing venture | 50% | 26,445 | 26,121 | — | |||||||||
European investment fund | 50% | 7,974 | 23,779 | (4,235 | ) | ||||||||
Mezzanine loan venture | 49% | 23,335 | 23,676 | — | |||||||||
Healthcare bridge loan venture | various | 14,945 | 14,163 | — | |||||||||
Various | 25% - 50% | 5,118 | 4,371 | — | |||||||||
97,827 | 111,481 | $ | (4,235 | ) | |||||||||
Cost method: | |||||||||||||
Loan servicing venture | 4% - 6% | 9,225 | 8,014 | ||||||||||
Various | 2% - 10% | 11,569 | 3,459 | ||||||||||
20,794 | 11,473 | ||||||||||||
$ | 118,621 | $ | 122,954 | ||||||||||
(1) None of these investments are publicly traded and therefore quoted market prices are not available. | |||||||||||||
(2) Differences between the carrying value of our investment and the underlying equity in net assets of the investee are accounted for as if the investee were a consolidated entity in accordance with ASC 323, Investments—Equity Method and Joint Ventures. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Schedule of information about servicing intangibles | ' | |||||||
The table below presents information about our GAAP servicing intangibles for the six months ended June 30, 2014 and 2013 (in thousands): | ||||||||
2014 | 2013 | |||||||
Domestic servicing rights, at fair value | ||||||||
Fair value at January 1 | $ | 150,149 | $ | — | ||||
Acquisition of LNR | — | 156,993 | ||||||
Changes in fair value due to changes in inputs and assumptions | (10,774 | ) | 2,898 | |||||
Other | (1,057 | ) | — | |||||
Fair value at June 30 | 138,318 | 159,891 | ||||||
European servicing rights | ||||||||
Net carrying amount at January 1 (fair value of $29.3 million) | 27,024 | — | ||||||
Acquisition of LNR | — | 32,649 | ||||||
Foreign exchange gain (loss) | 713 | (18 | ) | |||||
Amortization and OTTI | (9,209 | ) | (1,876 | ) | ||||
Net carrying value at June 30 (fair value of $18.5 million and $33.9 million) | 18,528 | 30,755 | ||||||
Total servicing rights at June 30 | $ | 156,846 | $ | 190,646 |
Secured_Financing_Agreements_T
Secured Financing Agreements (Tables) | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Secured Financing Agreements | ' | |||||||||||||||||||||||||
Summary of secured financing agreements | ' | |||||||||||||||||||||||||
The following table is a summary of our secured financing agreements in place as of June 30, 2014 and December 31, 2013 (dollars in thousands): | ||||||||||||||||||||||||||
Pledged | Maximum | Carrying Value at | ||||||||||||||||||||||||
Asset | ||||||||||||||||||||||||||
Facility | Revolver | Eligible | Current | Extended | Pricing | Carrying | Facility | June 30, 2014 | December 31, | |||||||||||||||||
Type | Assets | Maturity | Maturity(a) | Value | Size | 2013 | ||||||||||||||||||||
Lender 1 Repo 1 | Repurchase | Yes | Identified Loans and CMBS | (b) | (b) | LIBOR + 1.85% to 5.25% | $ | 1,349,733 | $ | 1,000,000 | $ | 753,032 | $ | 449,323 | ||||||||||||
Lender 1 Repo 2 | Repurchase | Yes | Identified RMBS | (c) | N/A | LIBOR + 1.90% | 230,129 | 175,000 | 120,627 | 127,943 | ||||||||||||||||
Lender 1 Repo 3 | Repurchase | No | Identified Loans | Dec-14 | Dec-16 | LIBOR + 2.75% | 210,041 | 148,860 | 148,860 | 154,133 | ||||||||||||||||
Lender 2 Repo 1 | Repurchase | Yes | Identified Loans | Oct-15 | Oct-18 | LIBOR + 2.00% to 2.75% | 269,290 | 225,000 | (d) | 181,151 | 100,886 | |||||||||||||||
Lender 3 Repo 1 | Repurchase | No | Identified Loans | May 2017 | May 2019 | LIBOR + 2.85% | 135,132 | 93,836 | 93,836 | 50,871 | ||||||||||||||||
Conduit Repo 1 | Repurchase | Yes | Identified Loans | Sep-14 | Sep-14 | LIBOR + 2.20% | — | 250,000 | — | 129,843 | ||||||||||||||||
Conduit Repo 2 | Repurchase | Yes | Identified Loans | Nov-14 | Nov-14 | LIBOR + 2.10% | 128,083 | 150,000 | 95,568 | — | ||||||||||||||||
Lender 4 Repo 1 | Repurchase | No | Identified Loans | Oct-15 | Oct-17 | LIBOR + 2.60% | 456,758 | 359,226 | 359,226 | 347,697 | ||||||||||||||||
Lender 5 Repo 1 | Repurchase | No | Identified CMBS | Dec-14 | Dec-14 | LIBOR + 2.00% | 84,150 | 58,467 | 58,467 | 58,467 | ||||||||||||||||
Borrowing Base | Bank Credit Facility | Yes | Identified Loans | Sep-15 | Sep-17 | LIBOR + 3.25%(e) | 661,164 | 250,000 | 84,386 | 169,104 | ||||||||||||||||
Term Loan | Syndicated Facility | No | Specifically Identified Assets | Apr-20 | Apr-20 | LIBOR + 2.75%(e) | 2,936,771 | 668,423 | 666,114 | (f) | 669,293 | (f) | ||||||||||||||
$ | 6,461,251 | $ | 3,378,812 | $ | 2,561,267 | $ | 2,257,560 | |||||||||||||||||||
(a) Subject to certain conditions as defined in the respective facility agreement. | ||||||||||||||||||||||||||
(b) Maturity date for borrowings collateralized by loans of January 2017 before extension options and January 2019 assuming initial extension options. Maturity date for borrowings collateralized by CMBS of January 2015 before extension options and January 2016 assuming initial extension options. | ||||||||||||||||||||||||||
(c) The date that is 180 days after the buyer delivers notice to seller, subject to a maximum date of March 13, 2015. | ||||||||||||||||||||||||||
(d) On July 24, 2014, we amended the Lender 2 Repo 1 facility to upsize available borrowings from $225 million to $325 million and reduce pricing 25-50 basis points depending on the collateral type. | ||||||||||||||||||||||||||
(e) Subject to borrower’s option to choose alternative benchmark based rates pursuant to the terms of the credit agreement. The Term Loan is also subject to a 75 basis point floor. | ||||||||||||||||||||||||||
(f) Term loan outstanding balance is net of $2.3 million and $2.5 million of unamortized discount as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||
Schedule of five-year principal repayments for secured financings | ' | |||||||||||||||||||||||||
The amount reflected in each period includes principal repayments on our credit facilities that would be required if (i) we received the repayments that we expect to receive on the investments that have been pledged as collateral under the credit facilities, as applicable, and (ii) the credit facilities that are expected to have amounts outstanding at their current maturity dates are extended where extension options are available to us (amounts in thousands): | ||||||||||||||||||||||||||
2014 (remainder of) | $ | 194,472 | ||||||||||||||||||||||||
2015 | 155,464 | |||||||||||||||||||||||||
2016 | 296,329 | |||||||||||||||||||||||||
2017 | 568,760 | |||||||||||||||||||||||||
2018 | 223,683 | |||||||||||||||||||||||||
Thereafter(1) | 1,124,868 | |||||||||||||||||||||||||
Total | $ | 2,563,576 | ||||||||||||||||||||||||
(1) Principal paydown of the Term Loan through 2020 excludes $2.3 million of discount amortization. |
Convertible_Senior_Notes_Table
Convertible Senior Notes (Tables) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Convertible Senior Notes | ' | ||||||||||||||
Schedule of the unsecured convertible senior notes outstanding | ' | ||||||||||||||
The following summarizes the unsecured convertible senior notes (collectively, the “Convertible Notes”) outstanding as of June 30, 2014 (amounts in thousands, except rates): | |||||||||||||||
Principal | Coupon | Effective | Conversion | Maturity | Remaining | ||||||||||
Amount | Rate | Rate(1) | Rate(2) | Date | Period of | ||||||||||
Amortization | |||||||||||||||
2018 Notes | $ | 599,981 | 4.55 | % | 6.08 | % | 44.6455 | 3/1/18 | 3.7 years | ||||||
2019 Notes | $ | 459,997 | 4 | % | 5.37 | % | 47.5456 | 1/15/19 | 4.5 years | ||||||
As of | As of | ||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||
Total principal | $ | 1,059,978 | $ | 1,060,000 | |||||||||||
Net unamortized discount | (56,131 | ) | (62,149 | ) | |||||||||||
Carrying amount of debt components | $ | 1,003,847 | $ | 997,851 | |||||||||||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ | 48,502 | $ | 48,502 | |||||||||||
(1) Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in-capital. | |||||||||||||||
(2) The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the applicable indentures as a result of the spin-off of the SFR segment and cash dividend payments. The if-converted value of the 2018 Notes exceeded their principal amount by $36.7 million at June 30, 2014 since the closing market price of the Company’s common stock of $23.77 per share exceeded the implicit conversion price of $22.40 per share. The if-converted value of the 2019 Notes exceeded their principal amount by $59.9 million at June 30, 2014 since the closing market price of $23.77 per share exceeded the implicit conversion price of $21.03 per share for the 2019 Notes. The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As a result, conversion of this principal amount, totaling 44.6 million and 44.8 million shares for the three and six months ended June 30, 2014, respectively, was not included in the computation of diluted earnings per share (“EPS”). However, the conversion spread value, representing 4.1 million and 3.9 million shares for the three and six months ended June 30, 2014, respectively, was included in the computation of diluted EPS. See further discussion at Note 16. |
Loan_SecuritizationSale_Activi1
Loan Securitization/Sale Activities (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Loan Securitization/Sale Activities | ' | |||||||||||||
Summary of loans sold and loans transferred as secured borrowings by the Real Estate Lending segment net of expenses | ' | |||||||||||||
The following table summarizes our loans sold and loans transferred as secured borrowings by the Lending Segment net of expenses (in thousands): | ||||||||||||||
Loan Transfers Accounted | Loan Transfers | |||||||||||||
for as Sales | Accounted for as Secured | |||||||||||||
Borrowings | ||||||||||||||
Face Amount | Proceeds | Face Amount | Proceeds | |||||||||||
For the three months ended June 30, | ||||||||||||||
2014 | $ | 56,975 | $ | 56,124 | $ | — | $ | — | ||||||
2013 | 52,849 | 52,859 | 95,000 | 95,000 | ||||||||||
For the six months ended June 30, | ||||||||||||||
2014 | $ | 204,859 | $ | 202,524 | $ | — | $ | — | ||||||
2013 | 97,380 | 97,490 | 95,000 | 95,000 |
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activity (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Derivatives and Hedging Activity | ' | |||||||||||||||
Tabular disclosure of fair values of derivative instruments | ' | |||||||||||||||
The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of June 30, 2014 and December 31, 2013 (amounts in thousands): | ||||||||||||||||
Fair Value of Derivatives in an | Fair Value of Derivatives in a | |||||||||||||||
Asset Position(1) As of | Liability Position(2) As of | |||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | $ | 63 | $ | 125 | $ | 638 | $ | 729 | ||||||||
Total derivatives designated as hedging instruments | 63 | 125 | 638 | 729 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Interest rate swaps | 1,874 | 5,102 | 1,819 | 983 | ||||||||||||
Foreign exchange contracts | 502 | 269 | 23,837 | 22,480 | ||||||||||||
Credit index instruments | 2,242 | 2,273 | — | — | ||||||||||||
Total derivatives not designated as hedging instruments | 4,618 | 7,644 | 25,656 | 23,463 | ||||||||||||
Total derivatives | $ | 4,681 | $ | 7,769 | $ | 26,294 | $ | 24,192 | ||||||||
(1) Classified as derivative assets in our condensed consolidated balance sheets. | ||||||||||||||||
(2) Classified as derivative liabilities in our condensed consolidated balance sheets. | ||||||||||||||||
Schedule of effect of derivative financial instruments on the condensed consolidated statements of operations and of comprehensive income | ' | |||||||||||||||
Derivatives Designated as Hedging Instruments | (Loss) Gain | (Loss) Gain | (Loss) Gain | Location of (Loss) Gain | ||||||||||||
For the Three Months Ended June 30, | Recognized | Reclassified | Recognized | Recognized in Income | ||||||||||||
in OCI | from AOCI | in Income | ||||||||||||||
(effective portion) | into Income | (ineffective portion) | ||||||||||||||
(effective portion) | ||||||||||||||||
2014 | $ | (457 | ) | $ | (364 | ) | $ | — | Interest expense | |||||||
2013 | $ | 1,094 | $ | (407 | ) | $ | — | Interest expense | ||||||||
For the Six Months Ended June 30, | ||||||||||||||||
2014 | $ | (708 | ) | $ | (737 | ) | $ | — | Interest expense | |||||||
2013 | $ | 926 | $ | (854 | ) | $ | — | Interest expense | ||||||||
Derivatives Not Designated as | Location of (Loss) Gain | Amount of (Loss) Gain | Amount of (Loss) Gain | |||||||||||||
Recognized in Income for the | Recognized in Income for the | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Hedging Instruments | Recognized in Income | 2014 | 2013 | 2014 | 2013 | |||||||||||
Interest rate swaps | (Loss) gain on derivative financial instruments | $ | (2,314 | ) | $ | 6,863 | $ | (6,511 | ) | $ | 7,013 | |||||
Foreign exchange contracts | (Loss) gain on derivative financial instruments | (6,965 | ) | (1,311 | ) | (10,012 | ) | 14,767 | ||||||||
Credit index instruments | (Loss) gain on derivative financial instruments | (511 | ) | 606 | (1,133 | ) | 606 | |||||||||
$ | (9,790 | ) | $ | 6,158 | $ | (17,656 | ) | $ | 22,386 |
Offsetting_Assets_and_Liabilit1
Offsetting Assets and Liabilities (Tables) | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Offsetting Assets and Liabilities | ' | |||||||||||||||||||
Schedule of offsetting assets and liabilities | ' | |||||||||||||||||||
The following tables present the potential effects of netting arrangements on our financial position for financial assets and liabilities within the scope of ASC 210-20, Balance Sheet—Offsetting, which for us are derivative assets and liabilities as well as repurchase agreement liabilities (amounts in thousands): | ||||||||||||||||||||
(ii) | (iii) =160;(i) - (ii) | (iv) | ||||||||||||||||||
Gross Amounts Not | ||||||||||||||||||||
Offset in the Statement | ||||||||||||||||||||
of Financial Position | ||||||||||||||||||||
(i) | Gross Amounts | Net Amounts | Financial | Cash | (v) =160;(iii) - (iv) | |||||||||||||||
Gross Amounts | Offset in the | Presented in | Instruments | Collateral | Net Amount | |||||||||||||||
Recognized | Statement of | the Statement of | Received / | |||||||||||||||||
Financial Position | Financial Position | Pledged | ||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||
Derivative assets | $ | 4,681 | $ | — | $ | 4,681 | $ | 606 | $ | 1,564 | $ | 2,511 | ||||||||
Derivative liabilities | $ | 26,294 | $ | — | $ | 26,294 | $ | 606 | $ | 18,412 | $ | 7,276 | ||||||||
Repurchase agreements | 1,810,767 | — | 1,810,767 | 1,810,767 | — | — | ||||||||||||||
$ | 1,837,061 | $ | — | $ | 1,837,061 | $ | 1,811,373 | $ | 18,412 | $ | 7,276 | |||||||||
As of December 31, 2013 | ||||||||||||||||||||
Derivative assets | $ | 7,769 | $ | — | $ | 7,769 | $ | 692 | $ | 1,916 | $ | 5,161 | ||||||||
Derivative liabilities | $ | 24,192 | $ | — | $ | 24,192 | $ | 692 | $ | 7,150 | $ | 16,350 | ||||||||
Repurchase agreements | 1,419,163 | — | 1,419,163 | 1,419,163 | — | — | ||||||||||||||
$ | 1,443,355 | $ | — | $ | 1,443,355 | $ | 1,419,855 | $ | 7,150 | $ | 16,350 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Stockholders' Equity | ' | ||||||||||||
Schedule of Non-Vested Shares and Share Equivalents | ' | ||||||||||||
Non-Executive | Equity Plan | Manager | Total | Weighted | |||||||||
Director | Equity Plan | Average | |||||||||||
Stock Plan | Grant Date | ||||||||||||
Fair Value | |||||||||||||
(per share) | |||||||||||||
Balance as of January 1, 2014 | 11,228 | 22,502 | 510,415 | 544,145 | $ | 22.88 | |||||||
Granted | — | 162,458 | 2,489,281 | 2,651,739 | 27.94 | ||||||||
Vested | — | (42,475 | ) | (572,556 | ) | (615,031 | ) | 26.65 | |||||
Forfeited | — | — | — | — | — | ||||||||
Balance as of June 30, 2014 | 11,228 | 142,485 | 2,427,140 | 2,580,853 | $ | 27.18 |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings per Share | ' | |||||||||||||
Net Income (Loss) per Share | ' | |||||||||||||
The following table provides a reconciliation of net income from continuing operations and the number of shares of common stock used in the computations of basic EPS and diluted EPS (in thousands, except per share amounts): | ||||||||||||||
For the Three Month Ended | For the Six Month Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic Earnings | ||||||||||||||
Continuing Operations: | ||||||||||||||
Income from continuing operations attributable to STWD common stockholders | $ | 117,868 | $ | 66,512 | $ | 240,020 | $ | 131,043 | ||||||
Less: Income attributable to unvested shares | (1,367 | ) | (369 | ) | (3,100 | ) | (823 | ) | ||||||
Basic — Income from continuing operations | $ | 116,501 | $ | 66,143 | $ | 236,920 | $ | 130,220 | ||||||
Discontinued Operations: | ||||||||||||||
Loss from discontinued operations | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
Basic — Net income attributable to STWD common stockholders after allocation to participating securities | $ | 116,501 | $ | 60,085 | $ | 235,369 | $ | 121,874 | ||||||
Diluted Earnings | ||||||||||||||
Continuing Operations: | ||||||||||||||
Basic — Income from continuing operations attributable to STWD common stockholders | $ | 117,868 | $ | 66,512 | $ | 240,020 | $ | 131,043 | ||||||
Less: Income attributable to unvested shares | (1,367 | ) | (369 | ) | (3,100 | ) | (823 | ) | ||||||
Add: Undistributed earnings to unvested shares | 128 | — | 480 | — | ||||||||||
Less: Undistributed earnings reallocated to unvested shares | (126 | ) | — | (471 | ) | — | ||||||||
Diluted — Income from continuing operations | $ | 116,503 | $ | 66,143 | $ | 236,929 | $ | 130,220 | ||||||
Discontinued Operations: | ||||||||||||||
Basic — Loss from discontinued operations | $ | — | $ | (6,058 | ) | $ | (1,551 | ) | $ | (8,346 | ) | |||
Diluted — Net income attributable to STWD common stockholders after allocation to participating securities | $ | 116,503 | $ | 60,085 | $ | 235,378 | $ | 121,874 | ||||||
Number of Shares: | ||||||||||||||
Basic — Average shares outstanding | 218,751 | 162,448 | 207,203 | 149,037 | ||||||||||
Effect of dilutive securities — Convertible Notes | 4,056 | — | 3,906 | — | ||||||||||
Effect of dilutive securities — Contingently Issuable Shares | 85 | — | 85 | — | ||||||||||
Diluted — Average shares outstanding | 222,892 | 162,448 | 211,194 | 149,037 | ||||||||||
Earnings Per Share Attributable to STWD Common Stockholders | ||||||||||||||
Basic: | ||||||||||||||
Income from continuing operations | $ | 0.53 | $ | 0.41 | $ | 1.14 | $ | 0.87 | ||||||
Loss from discontinued operations | — | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
Net income | $ | 0.53 | $ | 0.37 | $ | 1.13 | $ | 0.82 | ||||||
Diluted: | ||||||||||||||
Income from continuing operations | $ | 0.52 | $ | 0.41 | $ | 1.12 | $ | 0.87 | ||||||
Loss from discontinued operations | — | (0.04 | ) | (0.01 | ) | (0.05 | ) | |||||||
Net income | $ | 0.52 | $ | 0.37 | $ | 1.11 | $ | 0.82 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||||||
Schedule of changes in AOCI | ' | |||||||||||||||
The changes in AOCI by component are as follows (in thousands): | ||||||||||||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||||
Cash Flow Hedges | (Loss) on | Translation | ||||||||||||||
Available-for- | ||||||||||||||||
Sale Securities | ||||||||||||||||
Three Months ended June 30, 2014 | ||||||||||||||||
Balance at March 31, 2014 | $ | (482 | ) | $ | 70,064 | $ | 10,533 | $ | 80,115 | |||||||
OCI before reclassifications | (457 | ) | 2,285 | 4,558 | 6,386 | |||||||||||
Amounts reclassified from AOCI | 364 | (11,903 | ) | — | (11,539 | ) | ||||||||||
Net period OCI | (93 | ) | (9,618 | ) | 4,558 | (5,153 | ) | |||||||||
Balance at June 30, 2014 | $ | (575 | ) | $ | 60,446 | $ | 15,091 | $ | 74,962 | |||||||
Three Months ended June 30, 2013 | ||||||||||||||||
Balance at March 31, 2013 | $ | (2,292 | ) | $ | 79,897 | $ | (7,061 | ) | $ | 70,544 | ||||||
OCI before reclassifications | 1,094 | (11,419 | ) | 18 | (10,307 | ) | ||||||||||
Amounts reclassified from AOCI | 407 | (359 | ) | — | 48 | |||||||||||
Net period OCI | 1,501 | (11,778 | ) | 18 | (10,259 | ) | ||||||||||
Balance at June 30, 2013 | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||||
Effective Portion of | Cumulative | Foreign | Total | |||||||||||||
Cumulative Loss on | Unrealized Gain | Currency | ||||||||||||||
Cash Flow Hedges | (Loss) on | Translation | ||||||||||||||
Available-for- | ||||||||||||||||
Sale Securities | ||||||||||||||||
Six Months ended June 30, 2014 | ||||||||||||||||
Balance at January 1, 2014 | $ | (604 | ) | $ | 66,566 | $ | 9,487 | $ | 75,449 | |||||||
OCI before reclassifications | (708 | ) | 5,566 | 5,604 | 10,462 | |||||||||||
Amounts reclassified from AOCI | 737 | (11,686 | ) | — | (10,949 | ) | ||||||||||
Net period OCI | 29 | (6,120 | ) | 5,604 | (487 | ) | ||||||||||
Balance at June 30, 2014 | $ | (575 | ) | $ | 60,446 | $ | 15,091 | $ | 74,962 | |||||||
Six Months ended June 30, 2013 | ||||||||||||||||
Balance at January 1, 2013 | $ | (2,571 | ) | $ | 82,246 | $ | — | $ | 79,675 | |||||||
OCI before reclassifications | 926 | 537 | (7,043 | ) | (5,580 | ) | ||||||||||
Amounts reclassified from AOCI | 854 | (14,664 | ) | — | (13,810 | ) | ||||||||||
Net period OCI | 1,780 | (14,127 | ) | (7,043 | ) | (19,390 | ) | |||||||||
Balance at June 30, 2013 | $ | (791 | ) | $ | 68,119 | $ | (7,043 | ) | $ | 60,285 | ||||||
Schedule of reclassifications out of AOCI that impacted the condensed consolidated statements of operations | ' | |||||||||||||||
Amounts Reclassified from | Amounts Reclassified from | Affected Line Item | ||||||||||||||
AOCI during the Three Months | AOCI during the Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
Details about AOCI Components | 2014 | 2013 | 2014 | 2013 | in the Statements | |||||||||||
Losses on cash flow hedges: | ||||||||||||||||
Interest rate contracts | $ | (364 | ) | $ | (407 | ) | $ | (737 | ) | $ | (854 | ) | Interest expense | |||
Unrealized gains on available for sale securities: | ||||||||||||||||
Net realized gain on sale of investments | 11,903 | 718 | 11,899 | 15,065 | Gain (loss) on sale of investments, net | |||||||||||
OTTI | — | (359 | ) | (213 | ) | (401 | ) | OTTI | ||||||||
Total | 11,903 | 359 | 11,686 | 14,664 | ||||||||||||
Total reclassifications for the period | $ | 11,539 | $ | (48 | ) | $ | 10,949 | $ | 13,810 |
Fair_Value_Tables
Fair Value (Tables) | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Fair Value | ' | ||||||||||||||||||||||
Schedule of financial assets and liabilities carried at fair value on a recurring basis | ' | ||||||||||||||||||||||
The following tables present our financial assets and liabilities carried at fair value on a recurring basis in the condensed consolidated balance sheets by their level in the fair value hierarchy as of June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 154,412 | $ | — | $ | — | $ | 154,412 | |||||||||||||||
RMBS | 231,605 | — | — | 231,605 | |||||||||||||||||||
CMBS | 284,619 | — | 2,258 | 282,361 | |||||||||||||||||||
Equity security | 16,104 | 16,104 | — | — | |||||||||||||||||||
Domestic servicing rights | 138,318 | — | — | 138,318 | |||||||||||||||||||
Derivative assets | 4,681 | — | 4,681 | — | |||||||||||||||||||
VIE assets | 114,091,158 | — | — | 114,091,158 | |||||||||||||||||||
Total | $ | 114,920,897 | $ | 16,104 | $ | 6,939 | $ | 114,897,854 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 26,294 | $ | — | $ | 26,294 | $ | — | |||||||||||||||
VIE liabilities | 113,541,151 | — | 108,355,026 | 5,186,125 | |||||||||||||||||||
Total | $ | 113,567,445 | $ | — | $ | 108,381,320 | $ | 5,186,125 | |||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Total | Level I | Level II | Level III | ||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Loans held-for-sale, fair value option | $ | 206,672 | $ | — | $ | — | $ | 206,672 | |||||||||||||||
RMBS | 296,236 | — | — | 296,236 | |||||||||||||||||||
CMBS | 255,306 | — | 47,300 | 208,006 | |||||||||||||||||||
Equity security | 15,247 | 15,247 | — | — | |||||||||||||||||||
Domestic servicing rights | 150,149 | — | — | 150,149 | |||||||||||||||||||
Derivative assets | 7,769 | — | 7,769 | — | |||||||||||||||||||
VIE assets | 103,151,624 | — | — | 103,151,624 | |||||||||||||||||||
Total | $ | 104,083,003 | $ | 15,247 | $ | 55,069 | $ | 104,012,687 | |||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Derivative liabilities | $ | 24,192 | $ | — | $ | 24,192 | $ | — | |||||||||||||||
VIE liabilities | 102,649,263 | — | 101,051,279 | 1,597,984 | |||||||||||||||||||
Total | $ | 102,673,455 | $ | — | $ | 101,075,471 | $ | 1,597,984 | |||||||||||||||
Schedule of changes in financial assets and liabilities classified as Level III | ' | ||||||||||||||||||||||
The changes in financial assets and liabilities classified as Level III were as follows for the three and six months ended June 30, 2014 and 2013 (amounts in thousands): | |||||||||||||||||||||||
Three Months ended June 30, 2014 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
April 1, 2014 balance | $ | 74,117 | $ | 291,217 | $ | 240,665 | $ | 144,898 | $ | 118,451,518 | $ | (3,482,922 | ) | $ | 115,719,493 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value / gain on sale | 11,546 | 10,130 | 4,393 | (5,523 | ) | (3,332,084 | ) | (1,664 | ) | (3,313,202 | ) | ||||||||||||
Net accretion | — | 3,323 | — | — | — | — | 3,323 | ||||||||||||||||
Included in OCI | — | (9,363 | ) | 2,740 | — | — | — | (6,623 | ) | ||||||||||||||
Purchases / Originations | 320,566 | — | 42,740 | — | — | — | 363,306 | ||||||||||||||||
Sales | (251,612 | ) | (53,236 | ) | (13,457 | ) | — | — | — | (318,305 | ) | ||||||||||||
Issuances | — | — | — | — | — | (25,995 | ) | (25,995 | ) | ||||||||||||||
Cash repayments / receipts | (205 | ) | (10,466 | ) | (421 | ) | — | — | 50,984 | 39,892 | |||||||||||||
Transfers into Level III | — | — | 5,480 | — | — | (1,983,525 | ) | (1,978,045 | ) | ||||||||||||||
Transfers out of Level III | — | — | — | (1,057 | ) | — | 293,115 | 292,058 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 3,720,885 | (68,772 | ) | 3,652,113 | |||||||||||||||
Deconsolidations of VIEs | — | — | 221 | — | (4,749,161 | ) | 32,654 | (4,716,286 | ) | ||||||||||||||
June 30, 2014 balance | $ | 154,412 | $ | 231,605 | $ | 282,361 | $ | 138,318 | $ | 114,091,158 | $ | (5,186,125 | ) | $ | 109,711,729 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at June 30, 2014 | $ | 688 | $ | 2,804 | $ | 4,513 | $ | (5,523 | ) | $ | (3,332,084 | ) | $ | (1,664 | ) | $ | (3,331,266 | ) | |||||
Three Months ended June 30, 2013 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
April 1, 2013 balance | $ | — | $ | 321,043 | $ | — | $ | — | $ | — | $ | — | $ | 321,043 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | — | — | 18 | — | — | — | 18 | ||||||||||||||||
Included in earnings: | — | — | — | — | — | — | — | ||||||||||||||||
Change in fair value | 458 | (1,187 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,698,024 | ) | ||||||||||||||
Impairment | — | (359 | ) | — | — | — | — | (359 | ) | ||||||||||||||
Net accretion | — | 5,755 | — | — | — | — | 5,755 | ||||||||||||||||
Included in OCI | — | (11,103 | ) | 1,908 | — | — | — | (9,195 | ) | ||||||||||||||
Purchases / Originations | 390,669 | 20,090 | 39 | — | — | — | 410,798 | ||||||||||||||||
Sales | (476,336 | ) | — | (10,072 | ) | — | — | — | (486,408 | ) | |||||||||||||
Issuances | — | — | — | — | — | — | — | ||||||||||||||||
Cash repayments / receipts | (117 | ) | (15,771 | ) | — | — | — | 79,735 | 63,847 | ||||||||||||||
Transfers into Level III | — | — | 115,814 | — | — | (489,513 | ) | (373,699 | ) | ||||||||||||||
Transfers out of Level III | — | — | (3,499 | ) | — | — | 152,683 | 149,184 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 10,674,125 | (178,631 | ) | 10,495,494 | |||||||||||||||
Deconsolidations of VIEs | — | — | (1,054 | ) | — | (584,804 | ) | 861 | (584,997 | ) | |||||||||||||
June 30, 2013 balance | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at June 30, 2013 | (8,344 | ) | 6,627 | (3,430 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,702,442 | ) | ||||||||||||
Six Months ended June 30, 2014 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
January 1, 2014 balance | $ | 206,672 | $ | 296,236 | $ | 208,006 | $ | 150,149 | $ | 103,151,624 | $ | (1,597,984 | ) | $ | 102,414,703 | ||||||||
Total realized and unrealized (losses) gains: | |||||||||||||||||||||||
Included in earnings: | |||||||||||||||||||||||
Change in fair value / gain on sale | 32,439 | 11,141 | 9,600 | (10,774 | ) | (7,013,623 | ) | 99,837 | (6,871,380 | ) | |||||||||||||
OTTI | — | (213 | ) | — | — | — | — | (213 | ) | ||||||||||||||
Net accretion | — | 9,887 | — | — | — | — | 9,887 | ||||||||||||||||
Included in OCI | — | (4,615 | ) | 2,207 | — | — | — | (2,408 | ) | ||||||||||||||
Purchases / Originations | 582,391 | — | 46,571 | — | — | — | 628,962 | ||||||||||||||||
Sales | (554,073 | ) | (62,546 | ) | (29,301 | ) | — | — | — | (645,920 | ) | ||||||||||||
Issuances | — | — | — | — | — | (71,756 | ) | (71,756 | ) | ||||||||||||||
Cash repayments / receipts | (297 | ) | (18,285 | ) | (829 | ) | — | — | 86,349 | 66,938 | |||||||||||||
Transfers into Level III | — | — | 52,780 | — | — | (2,555,137 | ) | (2,502,357 | ) | ||||||||||||||
Transfers out of Level III | (112,720 | ) | — | (179 | ) | (1,057 | ) | — | 712,856 | 598,900 | |||||||||||||
Consolidations of VIEs | — | — | (6,715 | ) | — | 23,991,532 | (1,892,944 | ) | 22,091,873 | ||||||||||||||
Deconsolidations of VIEs | — | — | 221 | — | (6,038,375 | ) | 32,654 | (6,005,500 | ) | ||||||||||||||
June 30, 2014 balance | $ | 154,412 | $ | 231,605 | $ | 282,361 | $ | 138,318 | $ | 114,091,158 | $ | (5,186,125 | ) | $ | 109,711,729 | ||||||||
Amount of total gains (losses) included in earnings attributable to assets still held at June 30, 2014 | $ | 688 | $ | 7,971 | $ | 9,018 | $ | (10,774 | ) | $ | (7,013,623 | ) | $ | 99,837 | $ | (6,906,883 | ) | ||||||
Six Months ended June 30, 2013 | Loans | RMBS | CMBS | Domestic | VIE Assets | VIE | Total | ||||||||||||||||
Held-for-sale | Servicing | Liabilities | |||||||||||||||||||||
Rights | |||||||||||||||||||||||
January 1, 2013 balance | $ | — | $ | 333,153 | $ | — | $ | — | $ | — | $ | — | $ | 333,153 | |||||||||
Acquisition of LNR | 256,502 | — | 62,432 | 156,993 | 90,989,793 | (1,994,243 | ) | 89,471,477 | |||||||||||||||
Total realized and unrealized (losses) gains: | — | 2,129 | 18 | — | — | — | 2,147 | ||||||||||||||||
Included in earnings: | — | — | — | — | — | — | — | ||||||||||||||||
Change in fair value | 458 | — | (1,187 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,698,024 | ) | |||||||||||||
Impairment | — | (402 | ) | — | — | — | — | (402 | ) | ||||||||||||||
Net accretion | — | 11,906 | — | — | — | — | 11,906 | ||||||||||||||||
Included in OCI | — | (1,871 | ) | 1,908 | — | — | — | 37 | |||||||||||||||
Purchases / Originations | 390,669 | 20,090 | 39 | — | — | — | 410,798 | ||||||||||||||||
Sales | (476,336 | ) | (12,712 | ) | (10,072 | ) | — | — | — | (499,120 | ) | ||||||||||||
Issuances | — | — | — | — | — | — | — | ||||||||||||||||
Cash repayments / receipts | (117 | ) | (32,638 | ) | — | — | — | 79,735 | 46,980 | ||||||||||||||
Transfers into Level III | — | — | 115,814 | — | — | (489,513 | ) | (373,699 | ) | ||||||||||||||
Transfers out of Level III | — | — | (3,499 | ) | — | — | 152,683 | 149,184 | |||||||||||||||
Consolidations of VIEs | — | — | — | — | 10,674,125 | (178,631 | ) | 10,495,494 | |||||||||||||||
Deconsolidations of VIEs | — | — | (1,054 | ) | — | (584,804 | ) | 861 | (584,997 | ) | |||||||||||||
June 30, 2013 balance | $ | 171,176 | $ | 319,655 | $ | 164,399 | $ | 159,891 | $ | 97,284,473 | $ | (2,334,660 | ) | $ | 95,764,934 | ||||||||
Amount of total (losses) gains included in earnings attributable to assets still held at June 30, 2013 | (8,344 | ) | 14,306 | (3,430 | ) | 2,898 | (3,794,641 | ) | 94,448 | (3,694,763 | ) | ||||||||||||
Schedule of fair value of financial instruments not carried at fair value (level III) | ' | ||||||||||||||||||||||
The following table presents the fair values of our financial instruments not carried at fair value on the consolidated balance sheets (amounts in thousands): | |||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||||||||
Value | Value | Value | Value | ||||||||||||||||||||
Financial assets not carried at fair value: | |||||||||||||||||||||||
Loans held-for-investment and loans transferred as secured borrowings | $ | 5,028,721 | $ | 5,163,988 | $ | 4,544,132 | $ | 4,609,040 | |||||||||||||||
Securities, held-to-maturity | 370,096 | 371,603 | 368,318 | 368,453 | |||||||||||||||||||
European servicing rights | 18,528 | 18,528 | 27,024 | 29,327 | |||||||||||||||||||
Non-performing residential loans | — | — | 215,371 | 215,371 | |||||||||||||||||||
Financial liabilities not carried at fair value: | |||||||||||||||||||||||
Secured financing agreements and secured borrowings on transferred loans | $ | 2,704,082 | $ | 2,705,452 | $ | 2,438,798 | $ | 2,436,708 | |||||||||||||||
Convertible senior notes | 1,003,847 | 1,190,700 | 997,851 | 1,160,000 | |||||||||||||||||||
Schedule of quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ||||||||||||||||||||||
The following is quantitative information about significant unobservable inputs in our Level III measurements for those assets and liabilities measured at fair value on a recurring basis (dollar amounts in thousands): | |||||||||||||||||||||||
Carrying Value at | Valuation | Range as of (1) | |||||||||||||||||||||
June 30, 2014 | Technique | Unobservable Input | June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Loans held-for-sale, fair value option | $ | 154,412 | Discounted cash flow | Yield (b) | 4.5% - 5.2% | 5.2% - 5.9% | |||||||||||||||||
Duration(c) | 5.0 - 10.0 years | 5.0 - 10.0 years | |||||||||||||||||||||
RMBS | 231,605 | Discounted cash flow | Constant prepayment rate(a) | 0.3% - 16.8% | (0.6)% - 16.6% | ||||||||||||||||||
Constant default rate(b) | 1.5% - 9.5% | 1.4% - 11.3% | |||||||||||||||||||||
Loss severity(b) | 12% - 81%(e) | 15% - 92%(e) | |||||||||||||||||||||
Delinquency rate(c) | 3% - 32% | 3% - 48% | |||||||||||||||||||||
Servicer advances(a) | 23% - 96% | 24% - 95% | |||||||||||||||||||||
Annual coupon deterioration(b) | 0% - 0.8% | 0% - 0.7% | |||||||||||||||||||||
Putback amount per projected total collateral loss(d) | 0% - 11% | 0% - 9% | |||||||||||||||||||||
CMBS | 282,361 | Discounted cash flow | Yield(b) | 0% - 527.9% | 0% - 890.0% | ||||||||||||||||||
Duration(c) | 0 – 11.5 years | 0 - 11.0 years | |||||||||||||||||||||
Domestic servicing rights | 138,318 | Discounted cash flow | Debt yield(a) | 8.75% | 8.75% | ||||||||||||||||||
Discount rate(b) | 15% | 15% | |||||||||||||||||||||
Control migration(b) | 0% - 80% | 0% - 80% | |||||||||||||||||||||
VIE assets | 114,091,158 | Discounted cash flow | Yield(b) | 0% - 912.2% | 0% - 952.3% | ||||||||||||||||||
Duration(c) | 0 – 21.9 years | 0 - 22.7 years | |||||||||||||||||||||
VIE liabilities | 5,186,125 | Discounted cash flow | Yield(b) | 0% - 912.2% | 0% - 952.3% | ||||||||||||||||||
Duration(c) | 0 – 21.9 years | 0 - 22.7 years | |||||||||||||||||||||
(1) The ranges of significant unobservable inputs are represented in percentages and years. |
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||
Schedule of income tax provision | ' | |||||||||||||||||||||
Our income tax provision consisted of the following for the three and six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Current | ||||||||||||||||||||||
Federal | $ | 5,484 | $ | 9,481 | $ | 10,624 | $ | 9,931 | ||||||||||||||
Foreign | 1,782 | 570 | 3,231 | 570 | ||||||||||||||||||
State | 929 | 1,534 | 1,799 | 1,861 | ||||||||||||||||||
Total current | 8,195 | 11,585 | 15,654 | 12,362 | ||||||||||||||||||
Deferred | ||||||||||||||||||||||
Federal | (2,344 | ) | 63 | (3,048 | ) | 63 | ||||||||||||||||
Foreign | (1,192 | ) | (465 | ) | (2,198 | ) | (465 | ) | ||||||||||||||
State | (382 | ) | 10 | (511 | ) | 10 | ||||||||||||||||
Total deferred | (3,918 | ) | (392 | ) | (5,757 | ) | (392 | ) | ||||||||||||||
Total income tax provision (1) | $ | 4,277 | $ | 11,193 | $ | 9,897 | $ | 11,970 | ||||||||||||||
(1) Includes (benefit) provision of $0 and $(150) thousand reflected in discontinued operations for the three months ended June 30, 2014 and 2013, respectively, and $0 and $12 thousand reflected in discontinued operators for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||
Schedule of tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities | ' | |||||||||||||||||||||
The following table presents each of these tax jurisdictions and the tax effects of temporary differences on their respective net deferred tax assets and liabilities (in thousands): | ||||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||||
U.S. | ||||||||||||||||||||||
Deferred tax asset, net | ||||||||||||||||||||||
Reserves and accruals | $ | 11,506 | $ | 11,454 | ||||||||||||||||||
Domestic intangible assets | 3,673 | (714 | ) | |||||||||||||||||||
Investment securities and loans | (2,303 | ) | (892 | ) | ||||||||||||||||||
Investment in unconsolidated entities | 1,901 | 1,811 | ||||||||||||||||||||
Deferred income | 360 | 59 | ||||||||||||||||||||
Net operating and capital loss carryforwards | 1,379 | 967 | ||||||||||||||||||||
Valuation allowance | (1,379 | ) | (799 | ) | ||||||||||||||||||
Other U.S. temporary differences | (202 | ) | (242 | ) | ||||||||||||||||||
14,935 | 11,644 | |||||||||||||||||||||
Europe | ||||||||||||||||||||||
Deferred tax liability, net | ||||||||||||||||||||||
European servicing rights | (4,224 | ) | (6,257 | ) | ||||||||||||||||||
Net operating and capital loss carryforwards | 11,064 | 10,951 | ||||||||||||||||||||
Valuation allowance | (11,064 | ) | (10,951 | ) | ||||||||||||||||||
Other European temporary differences | (373 | ) | (527 | ) | ||||||||||||||||||
(4,597 | ) | (6,784 | ) | |||||||||||||||||||
Net deferred tax assets | $ | 10,338 | $ | 4,860 | ||||||||||||||||||
Schedule of reconciliation of federal income tax determined using statutory federal tax rate to reported income tax provision | ' | |||||||||||||||||||||
The following table is a reconciliation of our federal income tax determined using our statutory federal tax rate to our reported income tax provision for the three and six months ended June 30, 2014 and 2013 (dollar amounts in thousands): | ||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Federal statutory tax rate | $ | 43,631 | 35 | % | $ | 25,446 | 35 | % | $ | 87,906 | 35 | % | $ | 47,917 | 35 | % | ||||||
REIT and other non-taxable income | (38,989 | ) | (31.3 | )% | (15,516 | ) | (21.3 | )% | (79,372 | ) | (31.7 | )% | (37,308 | ) | (27.3 | )% | ||||||
State income taxes | 753 | 0.6 | % | 1,592 | 2.2 | % | 1,203 | 0.5 | % | 1,592 | 1.2 | % | ||||||||||
Federal benefit of state tax deduction | (263 | ) | (0.2 | )% | (557 | ) | (0.8 | )% | (421 | ) | (0.2 | )% | (557 | ) | (0.4 | )% | ||||||
Valuation allowance | (1,100 | ) | (0.9 | )% | — | — | % | 412 | 0.2 | % | — | — | % | |||||||||
Other | 245 | 0.2 | % | 228 | 0.3 | % | 169 | 0.1 | % | 326 | 0.2 | % | ||||||||||
Effective tax rate | $ | 4,277 | 3.4 | % | $ | 11,193 | 15.4 | % | $ | 9,897 | 3.9 | % | $ | 11,970 | 8.7 | % |
Segment_Data_Tables
Segment Data (Tables) | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Segment Data | ' | |||||||||||||||||||
Schedule of results of operations by business segment | ' | |||||||||||||||||||
The table below presents our results of operations for the three months ended June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Subtotal | LNR VIEs | Total | ||||||||||||||||
Investment | ||||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 102,892 | $ | 2,563 | $ | 105,455 | $ | — | $ | 105,455 | ||||||||||
Interest income from investment securities | 15,178 | 30,081 | 45,259 | (17,639 | ) | 27,620 | ||||||||||||||
Servicing fees | 153 | 57,834 | 57,987 | (25,306 | ) | 32,681 | ||||||||||||||
Other revenues | 108 | 5,236 | 5,344 | (350 | ) | 4,994 | ||||||||||||||
Total revenues | 118,331 | 95,714 | 214,045 | (43,295 | ) | 170,750 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees (1) | 20,423 | 4,622 | 25,045 | 40 | 25,085 | |||||||||||||||
Interest expense (1) | 31,557 | 6,138 | 37,695 | — | 37,695 | |||||||||||||||
General and administrative | 7,921 | 34,992 | 42,913 | 181 | 43,094 | |||||||||||||||
Acquisition and investment pursuit costs | 523 | 248 | 771 | — | 771 | |||||||||||||||
Depreciation and amortization | — | 5,154 | 5,154 | — | 5,154 | |||||||||||||||
Loan loss allowance, net | (139 | ) | — | (139 | ) | — | (139 | ) | ||||||||||||
Other expense | 66 | 5,960 | 6,026 | — | 6,026 | |||||||||||||||
Total costs and expenses | 60,351 | 57,114 | 117,465 | 221 | 117,686 | |||||||||||||||
Income before other income, income taxes and non-controlling interests | 57,980 | 38,600 | 96,580 | (43,516 | ) | 53,064 | ||||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | 47,028 | 47,028 | |||||||||||||||
Change in fair value of servicing rights | — | (12,804 | ) | (12,804 | ) | 7,281 | (5,523 | ) | ||||||||||||
Change in fair value of investment securities, net | 861 | 16,294 | 17,155 | (12,196 | ) | 4,959 | ||||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 11,608 | 11,608 | — | 11,608 | |||||||||||||||
Earnings from unconsolidated entities | 3,432 | 5,219 | 8,651 | 912 | 9,563 | |||||||||||||||
Gain on sale of investments, net | 10,078 | — | 10,078 | — | 10,078 | |||||||||||||||
Loss on derivative financial instruments, net | (7,610 | ) | (2,180 | ) | (9,790 | ) | — | (9,790 | ) | |||||||||||
Foreign currency gain (loss), net | 4,082 | (305 | ) | 3,777 | — | 3,777 | ||||||||||||||
OTTI | — | (797 | ) | (797 | ) | — | (797 | ) | ||||||||||||
Other income, net | 35 | 657 | 692 | — | 692 | |||||||||||||||
Total other income | 10,878 | 17,692 | 28,570 | 43,025 | 71,595 | |||||||||||||||
Income from continuing operations before income taxes | 68,858 | 56,292 | 125,150 | (491 | ) | 124,659 | ||||||||||||||
Income tax provision | (443 | ) | (3,834 | ) | (4,277 | ) | — | (4,277 | ) | |||||||||||
Income from continuing operations | 68,415 | 52,458 | 120,873 | (491 | ) | 120,382 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | — | — | |||||||||||||||
Net income | 68,415 | 52,458 | 120,873 | (491 | ) | 120,382 | ||||||||||||||
Net income attributable to non-controlling interests | (3,005 | ) | — | (3,005 | ) | 491 | (2,514 | ) | ||||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 65,410 | $ | 52,458 | $ | 117,868 | $ | — | $ | 117,868 | ||||||||||
(1) Due to the structure of our business, certain costs incurred by one segment may benefit other segments. Costs that are identifiable are allocated to the segments that benefit so that one segment is not solely burdened by this cost. Allocated costs currently include interest expense related to our consolidated debt (excluding VIEs) and management fees payable to our Manager, both of which represent shared costs. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. During the three months ended June 30, 2014, management fees and interest expense of $4.6 million and $5.2 million, respectively, were allocated to the LNR segment. | ||||||||||||||||||||
The table below presents our results of operations for the three months ended June 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 72,676 | $ | 2,260 | $ | — | $ | 74,936 | $ | — | $ | 74,936 | ||||||||
Interest income from investment securities | 13,638 | 11,758 | — | 25,396 | (6,819 | ) | 18,577 | |||||||||||||
Servicing fees | — | 52,860 | — | 52,860 | (13,725 | ) | 39,135 | |||||||||||||
Other revenues | 96 | 1,972 | — | 2,068 | (273 | ) | 1,795 | |||||||||||||
Total revenues | 86,410 | 68,850 | — | 155,260 | (20,817 | ) | 134,443 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 13,854 | 2,274 | — | 16,128 | 18 | 16,146 | ||||||||||||||
Interest expense | 19,941 | 2,707 | — | 22,648 | — | 22,648 | ||||||||||||||
General and administrative | 3,615 | 40,573 | — | 44,188 | 147 | 44,335 | ||||||||||||||
Business combination costs | 13,420 | — | — | 13,420 | — | 13,420 | ||||||||||||||
Acquisition and investment pursuit costs | 525 | 391 | — | 916 | — | 916 | ||||||||||||||
Depreciation and amortization | — | 2,228 | — | 2,228 | — | 2,228 | ||||||||||||||
Loan loss allowance | 725 | — | — | 725 | — | 725 | ||||||||||||||
Other expense | 58 | 138 | — | 196 | — | 196 | ||||||||||||||
Total costs and expenses | 52,138 | 48,311 | — | 100,449 | 165 | 100,614 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 34,272 | 20,539 | — | 54,811 | (20,982 | ) | 33,829 | |||||||||||||
Other income: | — | |||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 31,949 | 31,949 | ||||||||||||||
Change in fair value of servicing rights | — | 6,114 | — | 6,114 | (3,216 | ) | 2,898 | |||||||||||||
Change in fair value of investment securities, net | (331 | ) | 6,388 | — | 6,057 | (7,449 | ) | (1,392 | ) | |||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 458 | — | 458 | — | 458 | ||||||||||||||
Earnings from unconsolidated entities | 1,851 | 2,115 | — | 3,966 | (196 | ) | 3,770 | |||||||||||||
Loss on sale of investments | (18 | ) | — | — | (18 | ) | — | (18 | ) | |||||||||||
(Loss) gain on derivative financial instruments | (2,001 | ) | 8,159 | — | 6,158 | — | 6,158 | |||||||||||||
Foreign currency gain (loss), net | 1,647 | (67 | ) | — | 1,580 | — | 1,580 | |||||||||||||
OTTI | (359 | ) | — | — | (359 | ) | — | (359 | ) | |||||||||||
Other income, net | — | 39 | — | 39 | — | 39 | ||||||||||||||
Total other income | 789 | 23,206 | — | 23,995 | 21,088 | 45,083 | ||||||||||||||
Income from continuing operations before income taxes | 35,061 | 43,745 | — | 78,806 | 106 | 78,912 | ||||||||||||||
Income tax provision | (411 | ) | (10,932 | ) | — | (11,343 | ) | — | (11,343 | ) | ||||||||||
Income from continuing operations | 34,650 | 32,813 | — | 67,463 | 106 | 67,569 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | (6,058 | ) | (6,058 | ) | — | (6,058 | ) | |||||||||||
Net income | 34,650 | 32,813 | (6,058 | ) | 61,405 | 106 | 61,511 | |||||||||||||
Net income attributable to non-controlling interests | (951 | ) | — | — | (951 | ) | (106 | ) | (1,057 | ) | ||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 33,699 | $ | 32,813 | $ | (6,058 | ) | $ | 60,454 | $ | — | $ | 60,454 | |||||||
The table below presents our results of operations for the six months ended June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 204,979 | $ | 5,386 | $ | — | $ | 210,365 | $ | — | $ | 210,365 | ||||||||
Interest income from investment securities | 33,467 | 53,089 | — | 86,556 | (29,482 | ) | 57,074 | |||||||||||||
Servicing fees | 190 | 114,019 | — | 114,209 | (47,317 | ) | 66,892 | |||||||||||||
Other revenues | 188 | 8,833 | — | 9,021 | (623 | ) | 8,398 | |||||||||||||
Total revenues | 238,824 | 181,327 | — | 420,151 | (77,422 | ) | 342,729 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees (1) | 41,778 | 10,259 | 791 | 52,828 | 78 | 52,906 | ||||||||||||||
Interest expense (1) | 62,811 | 11,624 | 1,091 | 75,526 | — | 75,526 | ||||||||||||||
General and administrative | 15,066 | 73,762 | — | 88,828 | 367 | 89,195 | ||||||||||||||
Acquisition and investment pursuit costs | 735 | 430 | — | 1,165 | — | 1,165 | ||||||||||||||
Depreciation and amortization | — | 9,790 | — | 9,790 | — | 9,790 | ||||||||||||||
Loan loss allowance, net | 358 | — | — | 358 | — | 358 | ||||||||||||||
Other expense | 52 | 7,663 | — | 7,715 | — | 7,715 | ||||||||||||||
Total costs and expenses | 120,800 | 113,528 | 1,882 | 236,210 | 445 | 236,655 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 118,024 | 67,799 | (1,882 | ) | 183,941 | (77,867 | ) | 106,074 | ||||||||||||
Other income: | ||||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 103,032 | 103,032 | ||||||||||||||
Change in fair value of servicing rights | — | (24,979 | ) | — | (24,979 | ) | 14,205 | (10,774 | ) | |||||||||||
Change in fair value of investment securities, net | 705 | 53,246 | — | 53,951 | (40,631 | ) | 13,320 | |||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 32,501 | — | 32,501 | — | 32,501 | ||||||||||||||
Earnings from unconsolidated entities | 4,972 | 3,836 | — | 8,808 | 819 | 9,627 | ||||||||||||||
Gain on sale of investments, net | 11,633 | — | — | 11,633 | — | 11,633 | ||||||||||||||
Loss on derivative financial instruments, net | (10,398 | ) | (7,258 | ) | — | (17,656 | ) | — | (17,656 | ) | ||||||||||
Foreign currency gain (loss), net | 5,643 | (389 | ) | — | 5,254 | — | 5,254 | |||||||||||||
OTTI | (213 | ) | (797 | ) | — | (1,010 | ) | — | (1,010 | ) | ||||||||||
Other income, net | 53 | 657 | — | 710 | — | 710 | ||||||||||||||
Total other income | 12,395 | 56,817 | — | 69,212 | 77,425 | 146,637 | ||||||||||||||
Income from continuing operations before income taxes | 130,419 | 124,616 | (1,882 | ) | 253,153 | (442 | ) | 252,711 | ||||||||||||
Income tax provision | (526 | ) | (9,371 | ) | — | (9,897 | ) | — | (9,897 | ) | ||||||||||
Income from continuing operations | 129,893 | 115,245 | (1,882 | ) | 243,256 | (442 | ) | 242,814 | ||||||||||||
Loss from discontinued operations, net of tax | — | — | (1,551 | ) | (1,551 | ) | — | (1,551 | ) | |||||||||||
Net income | 129,893 | 115,245 | (3,433 | ) | 241,705 | (442 | ) | 241,263 | ||||||||||||
Net income attributable to non-controlling interests | (3,236 | ) | — | — | (3,236 | ) | 442 | (2,794 | ) | |||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 126,657 | $ | 115,245 | $ | (3,433 | ) | $ | 238,469 | $ | — | $ | 238,469 | |||||||
(1) Refer to Note 1 to the table above for the three months ended June 30, 2014. During the six months ended June 30, 2014, management fees and interest expense of $10.2 million and $9.7 million, respectively, were allocated to the LNR segment while $0.8 million and $1.1 million, respectively, were allocated to the SFR segment. | ||||||||||||||||||||
The table below presents our results of operations for the six months ended June 30, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single Family | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Residential | |||||||||||||||||||
Lending | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Interest income from loans | $ | 140,366 | $ | 2,260 | $ | — | $ | 142,626 | $ | — | $ | 142,626 | ||||||||
Interest income from investment securities | 29,878 | 11,758 | — | 41,636 | (6,819 | ) | 34,817 | |||||||||||||
Servicing fees | — | 52,860 | — | 52,860 | (13,725 | ) | 39,135 | |||||||||||||
Other revenues | 175 | 1,972 | — | 2,147 | (273 | ) | 1,874 | |||||||||||||
Total revenues | 170,419 | 68,850 | — | 239,269 | (20,817 | ) | 218,452 | |||||||||||||
Costs and expenses: | ||||||||||||||||||||
Management fees | 28,923 | 2,274 | — | 31,197 | 18 | 31,215 | ||||||||||||||
Interest expense | 37,367 | 2,707 | — | 40,074 | — | 40,074 | ||||||||||||||
General and administrative | 7,653 | 40,573 | — | 48,226 | 147 | 48,373 | ||||||||||||||
Business combination costs | 17,616 | — | — | 17,616 | — | 17,616 | ||||||||||||||
Acquisition and investment pursuit costs | 606 | 391 | — | 997 | — | 997 | ||||||||||||||
Depreciation and amortization | — | 2,228 | — | 2,228 | — | 2,228 | ||||||||||||||
Loan loss allowance | 755 | — | — | 755 | — | 755 | ||||||||||||||
Other expense | 91 | 138 | — | 229 | — | 229 | ||||||||||||||
Total costs and expenses | 93,011 | 48,311 | — | 141,322 | 165 | 141,487 | ||||||||||||||
Income before other income, income taxes and non-controlling interests | 77,408 | 20,539 | — | 97,947 | (20,982 | ) | 76,965 | |||||||||||||
Other income: | — | |||||||||||||||||||
Income of consolidated VIEs, net | — | — | — | — | 31,949 | 31,949 | ||||||||||||||
Change in fair value of servicing rights | — | 6,114 | — | 6,114 | (3,216 | ) | 2,898 | |||||||||||||
Change in fair value of investment securities | 74 | 6,388 | — | 6,462 | (7,449 | ) | (987 | ) | ||||||||||||
Change in fair value of mortgage loans held- for-sale, net | — | 458 | — | 458 | — | 458 | ||||||||||||||
Earnings from unconsolidated entities | 2,592 | 2,115 | — | 4,707 | (196 | ) | 4,511 | |||||||||||||
Gain on sale of investments | 13,506 | — | — | 13,506 | — | 13,506 | ||||||||||||||
Gain on derivative financial instruments | 14,227 | 8,159 | — | 22,386 | — | 22,386 | ||||||||||||||
Foreign currency loss, net | (6,018 | ) | (67 | ) | — | (6,085 | ) | — | (6,085 | ) | ||||||||||
OTTI | (401 | ) | — | — | (401 | ) | — | (401 | ) | |||||||||||
Other income, net | — | 39 | — | 39 | — | 39 | ||||||||||||||
Total other income | 23,980 | 23,206 | — | 47,186 | 21,088 | 68,274 | ||||||||||||||
Income from continuing operations before income taxes | 101,388 | 43,745 | — | 145,133 | 106 | 145,239 | ||||||||||||||
Income tax provision | (1,026 | ) | (10,932 | ) | — | (11,958 | ) | — | (11,958 | ) | ||||||||||
Income from continuing operations | 100,362 | 32,813 | — | 133,175 | 106 | 133,281 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | (8,346 | ) | (8,346 | ) | — | (8,346 | ) | |||||||||||
Net income | 100,362 | 32,813 | (8,346 | ) | 124,829 | 106 | 124,935 | |||||||||||||
Net income attributable to non-controlling interests | (2,132 | ) | — | — | (2,132 | ) | (106 | ) | (2,238 | ) | ||||||||||
Net income attributable to Starwood Property Trust, Inc. | $ | 98,230 | $ | 32,813 | $ | (8,346 | ) | $ | 122,697 | $ | — | $ | 122,697 | |||||||
Schedule of condensed consolidated balance sheet by business segment | ' | |||||||||||||||||||
The table below presents our condensed consolidated balance sheet as of June 30, 2014 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Subtotal | LNR VIEs | Total | ||||||||||||||||
Investment | ||||||||||||||||||||
Lending | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 382,285 | $ | 136,148 | $ | 518,433 | $ | 194 | $ | 518,627 | ||||||||||
Restricted cash | 34,324 | 10,237 | 44,561 | — | 44,561 | |||||||||||||||
Loans held-for-investment, net | 4,881,439 | 4,415 | 4,885,854 | — | 4,885,854 | |||||||||||||||
Loans held-for-sale | 8,750 | 145,662 | 154,412 | — | 154,412 | |||||||||||||||
Loans transferred as secured borrowings | 142,867 | — | 142,867 | — | 142,867 | |||||||||||||||
Investment securities | 733,876 | 638,069 | 1,371,945 | (469,521 | ) | 902,424 | ||||||||||||||
Intangible assets—servicing rights | — | 224,676 | 224,676 | (67,830 | ) | 156,846 | ||||||||||||||
Investment in unconsolidated entities | 52,541 | 68,644 | 121,185 | (2,564 | ) | 118,621 | ||||||||||||||
Goodwill | — | 140,437 | 140,437 | — | 140,437 | |||||||||||||||
Derivative assets | 2,321 | 2,360 | 4,681 | — | 4,681 | |||||||||||||||
Accrued interest receivable | 36,904 | 579 | 37,483 | — | 37,483 | |||||||||||||||
Other assets | 80,279 | 86,432 | 166,711 | (1,179 | ) | 165,532 | ||||||||||||||
VIE assets, at fair value | — | — | — | 114,091,158 | 114,091,158 | |||||||||||||||
Total Assets | $ | 6,355,586 | $ | 1,457,659 | $ | 7,813,245 | $ | 113,550,258 | $ | 121,363,503 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 50,540 | $ | 89,904 | $ | 140,444 | $ | 365 | $ | 140,809 | ||||||||||
Related-party payable | 19,784 | 4,691 | 24,475 | — | 24,475 | |||||||||||||||
Dividends payable | 108,012 | — | 108,012 | — | 108,012 | |||||||||||||||
Derivative liabilities | 25,019 | 1,275 | 26,294 | — | 26,294 | |||||||||||||||
Secured financing agreements, net | 2,465,699 | 95,568 | 2,561,267 | — | 2,561,267 | |||||||||||||||
Convertible senior notes, net | 1,003,847 | — | 1,003,847 | — | 1,003,847 | |||||||||||||||
Secured borrowings on transferred loans | 142,815 | — | 142,815 | — | 142,815 | |||||||||||||||
VIE liabilities, at fair value | — | — | — | 113,541,151 | 113,541,151 | |||||||||||||||
Total Liabilities | 3,815,716 | 191,438 | 4,007,154 | 113,541,516 | 117,548,670 | |||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 2,232 | — | 2,232 | — | 2,232 | |||||||||||||||
Additional paid-in capital | 2,417,704 | 1,366,871 | 3,784,575 | — | 3,784,575 | |||||||||||||||
Treasury stock | (10,642 | ) | — | (10,642 | ) | — | (10,642 | ) | ||||||||||||
Accumulated other comprehensive income | 65,712 | 9,250 | 74,962 | — | 74,962 | |||||||||||||||
Retained earnings (deficit) | 60,214 | (109,900 | ) | (49,686 | ) | — | (49,686 | ) | ||||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,535,220 | 1,266,221 | 3,801,441 | — | 3,801,441 | |||||||||||||||
Non-controlling interests in consolidated subsidiaries | 4,650 | — | 4,650 | 8,742 | 13,392 | |||||||||||||||
Total Equity | 2,539,870 | 1,266,221 | 3,806,091 | 8,742 | 3,814,833 | |||||||||||||||
Total Liabilities and Equity | $ | 6,355,586 | $ | 1,457,659 | $ | 7,813,245 | $ | 113,550,258 | $ | 121,363,503 | ||||||||||
The table below presents our condensed consolidated balance sheet as of December 31, 2013 by business segment (amounts in thousands): | ||||||||||||||||||||
Real Estate | LNR | Single | Subtotal | LNR VIEs | Total | |||||||||||||||
Investment | Family | |||||||||||||||||||
Lending | Residential | |||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 232,270 | $ | 40,274 | $ | 44,807 | $ | 317,351 | $ | 276 | $ | 317,627 | ||||||||
Restricted cash | 36,593 | 32,208 | 251 | 69,052 | — | 69,052 | ||||||||||||||
Loans held-for-investment, net | 4,350,937 | 12,781 | — | 4,363,718 | — | 4,363,718 | ||||||||||||||
Loans held-for-sale | — | 206,672 | — | 206,672 | — | 206,672 | ||||||||||||||
Loans transferred as secured borrowings | 180,414 | — | — | 180,414 | — | 180,414 | ||||||||||||||
Investment securities | 794,147 | 550,282 | — | 1,344,429 | (409,322 | ) | 935,107 | |||||||||||||
Intangible assets-servicing rights | — | 257,736 | — | 257,736 | (80,563 | ) | 177,173 | |||||||||||||
Residential real estate, net | — | — | 749,214 | 749,214 | — | 749,214 | ||||||||||||||
Non-performing residential loans | — | — | 215,371 | 215,371 | — | 215,371 | ||||||||||||||
Investment in unconsolidated entities | 50,167 | 76,170 | — | 126,337 | (3,383 | ) | 122,954 | |||||||||||||
Goodwill | — | 140,437 | — | 140,437 | — | 140,437 | ||||||||||||||
Derivative assets | 3,138 | 4,631 | — | 7,769 | — | 7,769 | ||||||||||||||
Accrued interest receivable | 35,501 | 2,129 | — | 37,630 | — | 37,630 | ||||||||||||||
Other assets | 31,020 | 57,620 | 8,045 | 96,685 | (872 | ) | 95,813 | |||||||||||||
VIE assets, at fair value | — | — | — | — | 103,151,624 | 103,151,624 | ||||||||||||||
Total Assets | $ | 5,714,187 | $ | 1,380,940 | $ | 1,017,688 | $ | 8,112,815 | $ | 102,657,760 | $ | 110,770,575 | ||||||||
Liabilities and Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 66,127 | $ | 135,882 | $ | 23,056 | $ | 225,065 | $ | 309 | $ | 225,374 | ||||||||
Related-party payable | 11,245 | 6,548 | — | 17,793 | — | 17,793 | ||||||||||||||
Dividends payable | 90,171 | — | — | 90,171 | — | 90,171 | ||||||||||||||
Derivative liabilities | 24,149 | 43 | — | 24,192 | — | 24,192 | ||||||||||||||
Secured financing agreements, net | 2,127,717 | 129,843 | — | 2,257,560 | — | 2,257,560 | ||||||||||||||
Convertible senior notes, net | 997,851 | — | — | 997,851 | — | 997,851 | ||||||||||||||
Secured borrowings on transferred loans | 181,238 | — | — | 181,238 | — | 181,238 | ||||||||||||||
VIE liabilities, at fair value | — | — | — | — | 102,649,263 | 102,649,263 | ||||||||||||||
Total Liabilities | 3,498,498 | 272,316 | 23,056 | 3,793,870 | 102,649,572 | 106,443,442 | ||||||||||||||
Equity: | ||||||||||||||||||||
Starwood Property Trust, Inc. Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||
Common stock | 1,961 | — | — | 1,961 | — | 1,961 | ||||||||||||||
Additional paid-in capital | 1,987,133 | 1,308,500 | 1,004,846 | 4,300,479 | — | 4,300,479 | ||||||||||||||
Treasury stock | (10,642 | ) | — | — | (10,642 | ) | — | (10,642 | ) | |||||||||||
Accumulated other comprehensive income | 68,092 | 7,357 | — | 75,449 | — | 75,449 | ||||||||||||||
Retained earnings (deficit) | 132,625 | (207,233 | ) | (10,111 | (84,719 | ) | — | (84,719 | ) | |||||||||||
Total Starwood Property Trust, Inc. Stockholders’ Equity | 2,179,169 | 1,108,624 | 994,735 | 4,282,528 | — | 4,282,528 | ||||||||||||||
Non-controlling interests in consolidated subsidiaries | 36,520 | — | (103 | 36,417 | 8,188 | 44,605 | ||||||||||||||
Total Equity | 2,215,689 | 1,108,624 | 994,632 | 4,318,945 | 8,188 | 4,327,133 | ||||||||||||||
Total Liabilities and Equity | $ | 5,714,187 | $ | 1,380,940 | $ | 1,017,688 | $ | 8,112,815 | $ | 102,657,760 | $ | 110,770,575 |
Business_and_Organization_Deta
Business and Organization (Details) (USD $) | 6 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Apr. 19, 2013 | Jun. 30, 2014 |
item | LNR | LNR | |
Business and Organization | ' | ' | ' |
Number of reportable business segments | 2 | ' | ' |
Acquisition of LNR Property LLC | ' | ' | ' |
Initial agreed upon purchase price | ' | $859 | ' |
Net purchase price | ' | 730 | ' |
Cost of remaining net assets of acquiree purchased by an affiliate | ' | 194 | ' |
Assets owned by TRS entities | ' | ' | $854.50 |
Business_and_Organization_Deta1
Business and Organization (Details 2) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | ||
Apr. 11, 2014 | Jun. 30, 2014 | Feb. 21, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Jan. 24, 2014 | |
SWAY | SWAY | Spin off | Spin off | |||
item | Single Family Residential | Single Family Residential | ||||
Business and Organization | ' | ' | ' | ' | ' | ' |
Minimum annual REIT taxable income distributable to stockholders (as a percent) | ' | 90.00% | ' | ' | ' | ' |
Spin-off transaction | ' | ' | ' | ' | ' | ' |
Share exchange ratio | ' | ' | ' | ' | ' | 0.2 |
Cash contribution | ' | ' | ' | ' | $100,000,000 | ' |
Net assets | ' | ' | ' | $1,100,000,000 | ' | ' |
Number of units of single-family homes | ' | ' | ' | 7,200 | ' | ' |
Shares issued | 22,000,000 | ' | 40,100,000 | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Proceeds from sale of loans held-for-sale | ' | ' | $666,793 | $476,453 |
Earnings from unconsolidated entities | 9,563 | 3,770 | 9,627 | 4,511 |
Net income | 120,382 | 61,511 | 241,263 | 124,935 |
Reclassification Adjustment | ' | ' | ' | ' |
Proceeds from sale of loans held-for-sale | ' | ' | ' | 177,000 |
Earnings from unconsolidated entities | ' | -1,800 | ' | -1,800 |
Net income | ' | ($1,800) | ' | ($1,800) |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jan. 31, 2014 |
SFR Spin-off | SFR Spin-off | SFR Spin-off | SFR Spin-off | |||||
Results of operations for the SFR segment prior to spin-off, excluding segment allocations | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | ' | ' | ' | ' | $2,594 | $3,876 | $3,758 | ' |
Total costs and expenses | ' | ' | ' | ' | 9,870 | 6,369 | 13,495 | ' |
Loss before other income and income taxes | ' | ' | ' | ' | -7,276 | -2,493 | -9,737 | ' |
Total other income | ' | ' | ' | ' | 1,068 | 942 | 1,403 | ' |
Loss before income taxes | ' | ' | ' | ' | -6,208 | -1,551 | -8,334 | ' |
Income tax benefit (provision) | 0 | 150 | 0 | -12 | 150 | ' | -12 | ' |
Net loss | ' | -6,058 | -1,551 | -8,346 | -6,058 | -1,551 | -8,346 | ' |
Assets: | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | 111,960 |
Restricted cash | ' | ' | ' | ' | ' | ' | ' | 189 |
Residential real estate, net | ' | ' | ' | ' | ' | ' | ' | 812,017 |
Non-performing residential loans | ' | ' | ' | ' | ' | ' | ' | 211,019 |
Other assets | ' | ' | ' | ' | ' | ' | ' | 9,498 |
Total Assets | ' | ' | ' | ' | ' | ' | ' | 1,144,683 |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | ' | ' | ' | ' | ' | ' | ' | 24,346 |
Equity: | ' | ' | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | ' | ' | ' | ' | ' | ' | 1,130,405 |
Accumulated deficit | ' | ' | ' | ' | ' | ' | ' | -11,662 |
Total Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | 1,118,743 |
Non-controlling interests in consolidated subsidiaries | ' | ' | ' | ' | ' | ' | ' | 1,594 |
Total Equity | ' | ' | ' | ' | ' | ' | ' | 1,120,337 |
Total Liabilities and Equity | ' | ' | ' | ' | ' | ' | ' | $1,144,683 |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures (Details 2) (LNR, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Apr. 19, 2013 |
LNR | ' |
Acquisitions | ' |
Initial agreed upon purchase price | $859 |
Purchase price | $730 |
Loans_Details
Loans (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | $5,187,475,000 | ' | $5,187,475,000 | ' | $4,754,788,000 |
Face value | 5,283,932,000 | ' | 5,283,932,000 | ' | 4,845,115,000 |
Loan loss allowance (loans held-for-investment) | -4,342,000 | -2,816,000 | -4,342,000 | -2,816,000 | -3,984,000 |
Carrying Value | 5,183,133,000 | ' | 5,183,133,000 | ' | 4,750,804,000 |
Loans with variable rates of interest | 3,877,333,000 | ' | 3,877,333,000 | ' | 3,231,334,000 |
Loans with variable rates of interest (as a percent) | 74.80% | ' | 74.80% | ' | ' |
Variable rate basis of loans | ' | ' | 'LIBOR | ' | ' |
Weighted average spread of loans (as a percent) | 5.65% | ' | 5.65% | ' | ' |
Amount of loan impairment charges on individual loans held for investment | ' | ' | 0 | ' | 0 |
Allowance for loan losses as a percent of carrying amount | ' | ' | 5.60% | ' | 5.60% |
Activity in allowance for loan losses | ' | ' | ' | ' | ' |
Allowance for loan losses at the beginning of the period | ' | ' | 3,984,000 | 2,061,000 | 2,061,000 |
Provision for loan losses | ' | ' | 577,000 | 755,000 | ' |
Recoveries | ' | ' | -219,000 | ' | ' |
Allowance for loan losses at the end of the period | 4,342,000 | 2,816,000 | 4,342,000 | 2,816,000 | 3,984,000 |
Recorded investment in loans related to the allowance for loan loss | 289,470,000 | 160,893,000 | 289,470,000 | 160,893,000 | ' |
Movement of loans held for investment | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 4,750,804,000 | 3,000,335,000 | 3,000,335,000 |
Acquisitions/origination/additional funding | ' | ' | 1,860,026,000 | 1,308,602,000 | ' |
Capitalized Interest | ' | ' | 19,022,000 | 5,279,000 | ' |
Basis of loans sold | ' | ' | -868,804,000 | -573,825,000 | ' |
Loan maturities/principal repayments | ' | ' | -633,425,000 | -140,596,000 | ' |
Discount accretion/premium amortization | ' | ' | 10,147,000 | 14,243,000 | ' |
Changes in fair value | 11,608,000 | 458,000 | 32,501,000 | 458,000 | ' |
Unrealized foreign currency remeasurement gain (loss) | ' | ' | 16,462,000 | -4,572,000 | ' |
Capitalized cost written off | ' | ' | ' | -1,517,000 | ' |
Loan loss allowance, net | ' | ' | -358,000 | -755,000 | ' |
Transfer to other assets | ' | ' | -3,242,000 | ' | ' |
Balance at the end of the period | 5,183,133,000 | 3,607,652,000 | 5,183,133,000 | 3,607,652,000 | 4,750,804,000 |
1-month LIBOR | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Loans with variable rates of interest | 137,092,000 | ' | 137,092,000 | ' | 150,076,000 |
Effective variable rate basis (as a percent) | 0.16% | ' | 0.16% | ' | 0.17% |
3 Month LIBOR | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Loans with variable rates of interest | 406,392,000 | ' | 406,392,000 | ' | 392,950,000 |
Effective variable rate basis (as a percent) | 0.55% | ' | 0.55% | ' | 0.52% |
LIBOR floor | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Loans with variable rates of interest | 3,333,849,000 | ' | 3,333,849,000 | ' | 2,688,308,000 |
Weighted average spread of loans (as a percent) | 0.36% | ' | 0.36% | ' | 0.49% |
LIBOR floor | Minimum | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Effective variable rate basis (as a percent) | 0.15% | ' | 0.15% | ' | 0.19% |
LIBOR floor | Maximum | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Effective variable rate basis (as a percent) | 3.00% | ' | 3.00% | ' | 3.00% |
Rating 2 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 429,357,000 | ' | 429,357,000 | ' | 364,491,000 |
Rating 3 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 4,309,365,000 | ' | 4,309,365,000 | ' | 3,905,204,000 |
Rating 4 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 289,470,000 | ' | 289,470,000 | ' | 265,640,000 |
Allowance for loan losses as a percent of carrying amount | ' | ' | 1.50% | ' | ' |
Rating 5 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Allowance for loan losses as a percent of carrying amount | ' | ' | 5.00% | ' | ' |
N/A | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 159,283,000 | ' | 159,283,000 | ' | 219,453,000 |
Total loans held-for-investment | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 4,890,196,000 | ' | 4,890,196,000 | ' | 4,367,702,000 |
Face value | 4,987,325,000 | ' | 4,987,325,000 | ' | 4,455,533,000 |
Carrying Value of loan in default | 4,400,000 | ' | 4,400,000 | ' | ' |
Total loans held-for-investment | First Mortgages | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 3,259,428,000 | ' | 3,259,428,000 | ' | 2,714,512,000 |
Face value | 3,317,358,000 | ' | 3,317,358,000 | ' | 2,766,217,000 |
Weighted Average Coupon (as a percent) | ' | ' | 5.40% | ' | 5.50% |
Weighted Average Life | ' | ' | '3 years 10 months 24 days | ' | '4 years 3 months 18 days |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 3,255,012,000 | ' | 3,255,012,000 | ' | 2,701,731,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 2 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 101,875,000 | ' | 101,875,000 | ' | 94,981,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 3 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 3,010,516,000 | ' | 3,010,516,000 | ' | 2,452,763,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | Rating 4 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 142,166,000 | ' | 142,166,000 | ' | 153,987,000 |
Total loans held-for-investment | First Mortgages, excluding Cost Recovery Loans | N/A | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 455,000 | ' | 455,000 | ' | ' |
Total loans held-for-investment | Subordinated mortgages | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 355,561,000 | ' | 355,561,000 | ' | 407,462,000 |
Face value | 388,449,000 | ' | 388,449,000 | ' | 442,475,000 |
Weighted Average Coupon (as a percent) | ' | ' | 8.60% | ' | 9.70% |
Weighted Average Life | ' | ' | '4 years 1 month 6 days | ' | '4 years 2 months 12 days |
Total loans held-for-investment | Subordinated mortgages | Rating 2 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 104,821,000 | ' | 104,821,000 | ' | 103,369,000 |
Total loans held-for-investment | Subordinated mortgages | Rating 3 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 218,685,000 | ' | 218,685,000 | ' | 272,375,000 |
Total loans held-for-investment | Subordinated mortgages | Rating 4 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 32,055,000 | ' | 32,055,000 | ' | 31,718,000 |
Total loans held-for-investment | Mezzanine Loans | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 1,275,207,000 | ' | 1,275,207,000 | ' | 1,245,728,000 |
Face value | 1,281,518,000 | ' | 1,281,518,000 | ' | 1,246,841,000 |
Weighted Average Coupon (as a percent) | ' | ' | 10.60% | ' | 11.70% |
Weighted Average Life | ' | ' | '3 years 3 months 18 days | ' | '3 years 6 months |
Total loans held-for-investment | Mezzanine Loans | Rating 2 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 209,690,000 | ' | 209,690,000 | ' | 153,119,000 |
Total loans held-for-investment | Mezzanine Loans | Rating 3 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 950,268,000 | ' | 950,268,000 | ' | 1,012,674,000 |
Total loans held-for-investment | Mezzanine Loans | Rating 4 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 115,249,000 | ' | 115,249,000 | ' | 79,935,000 |
Total loans held-for-investment | Cost Recovery Loans | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 4,416,000 | ' | 4,416,000 | ' | 12,781,000 |
Total loans held-for-investment | Cost Recovery Loans | N/A | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 4,416,000 | ' | 4,416,000 | ' | 12,781,000 |
Loans Held-for-sale | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 154,412,000 | ' | 154,412,000 | ' | 206,672,000 |
Face value | 153,724,000 | ' | 153,724,000 | ' | 209,099,000 |
Weighted Average Coupon (as a percent) | ' | ' | 4.70% | ' | 5.30% |
Weighted Average Life | ' | ' | '9 years 9 months 18 days | ' | '9 years 7 months 6 days |
Loans Held-for-sale | N/A | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 154,412,000 | ' | 154,412,000 | ' | 206,672,000 |
Loans transferred as secured borrowings | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 142,867,000 | ' | 142,867,000 | ' | 180,414,000 |
Face value | 142,883,000 | ' | 142,883,000 | ' | 180,483,000 |
Weighted Average Coupon (as a percent) | ' | ' | 5.50% | ' | 5.40% |
Weighted Average Life | ' | ' | '2 years 9 months 18 days | ' | '2 years 10 months 24 days |
Loans transferred as secured borrowings | Rating 2 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | 12,971,000 | ' | 12,971,000 | ' | 13,022,000 |
Loans transferred as secured borrowings | Rating 3 | ' | ' | ' | ' | ' |
Investments in loans | ' | ' | ' | ' | ' |
Total gross loans | $129,896,000 | ' | $129,896,000 | ' | $167,392,000 |
Investment_Securities_Details
Investment Securities (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
item | item | ||||
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | $902,424,000 | ' | $902,424,000 | ' | $935,107,000 |
Purchases | 43,563,000 | 21,708,000 | 53,453,000 | 58,898,000 | ' |
Sales | 66,784,000 | 10,072,000 | 50,219,000 | 235,904,000 | ' |
Principal collections | 10,887,000 | 18,398,000 | 19,114,000 | 40,124,000 | ' |
Number of CMBS classified as HTM | ' | ' | 1 | ' | 1 |
Before consolidation of securitization VIEs | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 1,371,945,000 | ' | 1,371,945,000 | ' | 1,344,429,000 |
Mortgage-backed securities | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Purchase Amortized Cost | 296,582,000 | ' | 296,582,000 | ' | 354,599,000 |
Credit OTTI | -10,322,000 | ' | -10,322,000 | ' | -11,134,000 |
Recorded Amortized Cost | 286,260,000 | ' | 286,260,000 | ' | 343,465,000 |
Non-Credit OTTI | -3,000 | ' | -3,000 | ' | -55,000 |
Gross Unrealized Gains | 62,102,000 | ' | 62,102,000 | ' | 68,813,000 |
Gross Unrealized Losses | -683,000 | ' | -683,000 | ' | -1,641,000 |
Net Fair Value Adjustment | 61,416,000 | ' | 61,416,000 | ' | 67,117,000 |
Fair Value | 347,676,000 | ' | 347,676,000 | ' | 410,582,000 |
Description of variable rate basis | ' | ' | 'one-month LIBOR | ' | 'one-month LIBOR |
Effective variable rate basis (as a percent) | 0.16% | ' | 0.16% | ' | 0.17% |
RMBS, available-for-sale | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 231,605,000 | ' | 231,605,000 | ' | 296,236,000 |
Purchases | ' | 20,090,000 | ' | 20,090,000 | ' |
Sales | 53,236,000 | ' | 62,546,000 | 12,712,000 | ' |
Principal collections | 10,466,000 | 15,771,000 | 18,285,000 | 32,638,000 | ' |
Purchase Amortized Cost | 193,084,000 | ' | 193,084,000 | ' | 253,912,000 |
Credit OTTI | -10,322,000 | ' | -10,322,000 | ' | -11,134,000 |
Recorded Amortized Cost | 182,762,000 | ' | 182,762,000 | ' | 242,778,000 |
Non-Credit OTTI | -3,000 | ' | -3,000 | ' | -55,000 |
Gross Unrealized Gains | 49,529,000 | ' | 49,529,000 | ' | 55,154,000 |
Gross Unrealized Losses | -683,000 | ' | -683,000 | ' | -1,641,000 |
Net Fair Value Adjustment | 48,843,000 | ' | 48,843,000 | ' | 53,458,000 |
Fair Value | 231,605,000 | ' | 231,605,000 | ' | 296,236,000 |
Weighted Average Coupon (as a percent) | 1.00% | ' | 1.00% | ' | 1.00% |
WAL | ' | ' | '7 years 4 months 24 days | ' | '6 years 9 months 18 days |
Description of variable rate basis | ' | ' | 'LIBOR | ' | 'LIBOR |
Portion of securities with variable rate (as a percent) | 84.30% | ' | 84.30% | ' | 86.50% |
Variable rate, weighted average spread (as a percent) | ' | ' | 0.44% | ' | 0.37% |
Portion of securities with variable rate | 195,400,000 | ' | 195,400,000 | ' | 256,100,000 |
Principal balance | 312,280,000 | ' | 312,280,000 | ' | 414,020,000 |
Accretable yield | -90,876,000 | ' | -90,876,000 | ' | -101,046,000 |
Non-accretable difference | -38,642,000 | ' | -38,642,000 | ' | -70,196,000 |
Total discount | -129,518,000 | ' | -129,518,000 | ' | -171,242,000 |
Amortized Cost | 182,762,000 | ' | 182,762,000 | ' | 242,778,000 |
Credit deteriorated RMBS | 240,800,000 | ' | 240,800,000 | ' | 320,400,000 |
Accretable yield related to credit deteriorated RMBS | 73,500,000 | ' | 73,500,000 | ' | 78,300,000 |
Changes to accretable yield | ' | ' | ' | ' | ' |
Balance at the beginning of the period | 99,622,000 | ' | 101,046,000 | ' | ' |
Accretion of discount | -3,323,000 | ' | -9,887,000 | ' | ' |
Sales | -10,276,000 | ' | -12,238,000 | ' | ' |
OTTI | ' | ' | 213,000 | ' | ' |
Transfer to/from non-accretable difference | 4,853,000 | ' | 11,742,000 | ' | ' |
Balance at the end of the period | 90,876,000 | ' | 90,876,000 | ' | 101,046,000 |
Changes to non accretable difference | ' | ' | ' | ' | ' |
Balance at the beginning of the period | 55,432,000 | ' | 70,196,000 | ' | ' |
Principal write-downs | -509,000 | ' | -875,000 | ' | ' |
Sales | -11,428,000 | ' | -18,937,000 | ' | ' |
Transfer to/from non-accretable difference | -4,853,000 | ' | -11,742,000 | ' | ' |
Balance at the end of the period | 38,642,000 | ' | 38,642,000 | ' | 70,196,000 |
RMBS, available-for-sale | Subsequent event | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Settlement received on sales of investment securities | ' | ' | 44,400,000 | ' | ' |
Single-borrower CMBS, available-for-sale | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 116,701,000 | ' | 116,701,000 | ' | 114,346,000 |
Sales | ' | ' | ' | 206,608,000 | ' |
Principal collections | 421,000 | 2,627,000 | 829,000 | 7,484,000 | ' |
Purchase Amortized Cost | 103,498,000 | ' | 103,498,000 | ' | 100,687,000 |
Recorded Amortized Cost | 103,498,000 | ' | 103,498,000 | ' | 100,687,000 |
Gross Unrealized Gains | 12,573,000 | ' | 12,573,000 | ' | 13,659,000 |
Net Fair Value Adjustment | 12,573,000 | ' | 12,573,000 | ' | 13,659,000 |
Fair Value | 116,071,000 | ' | 116,071,000 | ' | 114,346,000 |
Weighted Average Coupon (as a percent) | 11.60% | ' | 11.60% | ' | 11.50% |
WAL | ' | ' | '3 years 8 months 12 days | ' | '5 years 10 months 24 days |
Portion of securities with variable rate (as a percent) | 0.70% | ' | 0.70% | ' | 1.20% |
Portion of securities with variable rate | 900,000 | ' | 900,000 | ' | 1,300,000 |
Principal balance | 103,498,000 | ' | 103,498,000 | ' | 100,687,000 |
Amortized Cost | 103,498,000 | ' | 103,498,000 | ' | 100,687,000 |
Single-borrower CMBS, available-for-sale | BB+ | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Percentage of CMBS securities | ' | ' | 99.30% | ' | 98.80% |
CMBS, fair value option | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 638,069,000 | ' | 638,069,000 | ' | 550,282,000 |
Purchases | 43,563,000 | 1,618,000 | 53,453,000 | 1,618,000 | ' |
Sales | 13,548,000 | 10,072,000 | 32,032,000 | 10,072,000 | ' |
Weighted Average Coupon (as a percent) | 5.00% | ' | 5.00% | ' | 5.40% |
WAL | ' | ' | '5 years 3 months 18 days | ' | '4 years 4 months 24 days |
CMBS, fair value option | VIE eliminations | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | -469,521,000 | ' | -469,521,000 | ' | -409,322,000 |
HTM Securities | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 370,096,000 | ' | 370,096,000 | ' | 368,318,000 |
Purchases | ' | ' | ' | 37,190,000 | ' |
Equity Security, fair value option | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Investment securities | 16,104,000 | ' | 16,104,000 | ' | 15,247,000 |
Sales | ' | ' | ' | $6,769,000 | ' |
Investment_Securities_Details_
Investment Securities (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Estimated Fair Value | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | $16,255,000 | ' | $16,255,000 | ' | $26,344,000 |
Securities with a loss greater than 12 months | 1,552,000 | ' | 1,552,000 | ' | 1,809,000 |
Unrealized Losses | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | -480,000 | ' | -480,000 | ' | -1,444,000 |
Securities with a loss greater than 12 months | -206,000 | ' | -206,000 | ' | -252,000 |
Investment securities | 902,424,000 | ' | 902,424,000 | ' | 935,107,000 |
Mortgage-backed securities | ' | ' | ' | ' | ' |
Unrealized Losses | ' | ' | ' | ' | ' |
Number of securities with unrealized loss position | 3 | ' | 3 | ' | ' |
RMBS | ' | ' | ' | ' | ' |
Mortgage-Backed Securities Available-for-Sale | ' | ' | ' | ' | ' |
Maximum investment in available-for-sale securities with aggregate expected modified durations of less than 12 months (as a percent) | ' | ' | 10.00% | ' | ' |
Cost of third party management | 500,000 | 800,000 | 1,100,000 | 1,400,000 | ' |
Estimated Fair Value | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | 16,255,000 | ' | 16,255,000 | ' | 26,344,000 |
Securities with a loss greater than 12 months | 1,552,000 | ' | 1,552,000 | ' | 1,809,000 |
Unrealized Losses | ' | ' | ' | ' | ' |
Securities with a loss less than 12 months | -480,000 | ' | -480,000 | ' | -1,444,000 |
Securities with a loss greater than 12 months | -206,000 | ' | -206,000 | ' | -252,000 |
Weighted Average Coupon (as a percent) | 1.00% | ' | 1.00% | ' | 1.00% |
WAL | ' | ' | '7 years 4 months 24 days | ' | '6 years 9 months 18 days |
Investment securities | 231,605,000 | ' | 231,605,000 | ' | 296,236,000 |
CMBS, fair value option | ' | ' | ' | ' | ' |
Unrealized Losses | ' | ' | ' | ' | ' |
Unpaid Principal Balance of investment securities before consolidation of VIEs | 4,100,000,000 | ' | 4,100,000,000 | ' | ' |
Purchases in which fair value option was elected | 107,100,000 | ' | 151,700,000 | ' | ' |
Purchase amount reflected as repayment of debt of consolidated VIEs | 63,500,000 | ' | 98,300,000 | ' | ' |
Weighted Average Coupon (as a percent) | 5.00% | ' | 5.00% | ' | 5.40% |
WAL | ' | ' | '5 years 3 months 18 days | ' | '4 years 4 months 24 days |
Amount not rated | 27,300,000 | ' | 27,300,000 | ' | 55,500,000 |
Investment securities | 638,069,000 | ' | 638,069,000 | ' | 550,282,000 |
HTM Securities | ' | ' | ' | ' | ' |
Unrealized Losses | ' | ' | ' | ' | ' |
Investment securities | $370,096,000 | ' | $370,096,000 | ' | $368,318,000 |
Investment_Securities_Details_1
Investment Securities (Details 3) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
HTM Securities | ' | ' |
Net Carrying Amount (Amortized Cost) | $370,096,000 | $368,318,000 |
Gross Unrealized Holdings Gains | 2,083,000 | 135,000 |
Gross Unrealized Holdings Losses | -576,000 | ' |
Fair Value | 371,603,000 | 368,453,000 |
Preferred interests | ' | ' |
HTM Securities | ' | ' |
Net Carrying Amount (Amortized Cost) | 285,946,000 | 284,087,000 |
Gross Unrealized Holdings Gains | 2,083,000 | 135,000 |
Fair Value | 288,029,000 | 284,222,000 |
Number of securities originated | ' | 2 |
Preferred equity interests one | ' | ' |
HTM Securities | ' | ' |
Origination of preferred equity interest in limited liability company mandatory redemption | ' | 246,100,000 |
Preferred equity interests two | ' | ' |
HTM Securities | ' | ' |
Origination of preferred equity interest in limited liability company mandatory redemption | ' | 37,200,000 |
Single-borrower CMBS, available-for-sale | ' | ' |
HTM Securities | ' | ' |
Net Carrying Amount (Amortized Cost) | 84,150,000 | 84,231,000 |
Gross Unrealized Holdings Losses | -576,000 | ' |
Fair Value | 83,574,000 | 84,231,000 |
Purchase of investments | ' | $84,100,000 |
Investment_Securities_Details_2
Investment Securities (Details 4) (SEREF, USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2013 |
SEREF | ' | ' | ' |
Residential Real Estate | ' | ' | ' |
Number of shares acquired | 9,140,000 | ' | ' |
Ownership percentage | 4.00% | ' | ' |
Fair value of investment | ' | $16.10 | $15.20 |
Investment_in_Unconsolidated_E2
Investment in Unconsolidated Entities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment in Unconsolidated Entities | ' | ' |
Equity method, Carrying value | $97,827 | $111,481 |
Carrying value over (under) equity in net assets | -4,235 | ' |
Cost method, Carrying value | 20,794 | 11,473 |
Investment in unconsolidated entities | 118,621 | 122,954 |
Investor entity which owns equity interests in two real estate services providers | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 50.00% | ' |
Equity method, Carrying value | 20,010 | 19,371 |
Small balance bridge loan financing venture | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 50.00% | ' |
Equity method, Carrying value | 26,445 | 26,121 |
European investment fund | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 50.00% | ' |
Equity method, Carrying value | 7,974 | 23,779 |
Carrying value over (under) equity in net assets | -4,235 | ' |
Mezzanine loan venture | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 49.00% | ' |
Equity method, Carrying value | 23,335 | 23,676 |
Healthcare bridge loan venture | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Carrying value | 14,945 | 14,163 |
Various - Equity method | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Carrying value | 5,118 | 4,371 |
Various - Equity method | Minimum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 25.00% | ' |
Various - Equity method | Maximum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Equity method, Participation / Ownership % | 50.00% | ' |
Loan servicing venture | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Carrying value | 9,225 | 8,014 |
Loan servicing venture | Minimum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Ownership % | 4.00% | ' |
Loan servicing venture | Maximum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Ownership % | 6.00% | ' |
Various | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Carrying value | $11,569 | $3,459 |
Various | Minimum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Ownership % | 2.00% | ' |
Various | Maximum | ' | ' |
Investment in Unconsolidated Entities | ' | ' |
Cost method, Ownership % | 10.00% | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
European servicing rights | European servicing rights | Domestic servicing rights | Domestic servicing rights | Domestic servicing rights | Domestic servicing rights | Domestic servicing rights | Domestic servicing rights | ||||
Before consolidation of securitization VIEs | Before consolidation of securitization VIEs | VIE eliminations | VIE eliminations | ||||||||
Servicing rights, at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value at the beginning of the period | ' | ' | ' | ' | ' | $150,149,000 | ' | $206,100,000 | $230,700,000 | $67,800,000 | $80,600,000 |
Acquisition of LNR | ' | ' | ' | ' | ' | ' | 156,993,000 | ' | ' | ' | ' |
Changes in fair value due to changes in inputs and assumptions | ' | ' | ' | ' | ' | -10,774,000 | 2,898,000 | ' | ' | ' | ' |
Other | ' | ' | ' | ' | ' | -1,057,000 | ' | ' | ' | ' | ' |
Fair value at the end of the period | ' | ' | ' | ' | ' | 138,318,000 | 159,891,000 | 206,100,000 | 230,700,000 | 67,800,000 | 80,600,000 |
Servicing rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net carrying value at the beginning of the period | ' | ' | ' | 27,024,000 | ' | ' | ' | ' | ' | ' | ' |
Acquisition of LNR | ' | ' | ' | ' | 32,649,000 | ' | ' | ' | ' | ' | ' |
Foreign exchange gain (loss) | ' | ' | ' | 713,000 | -18,000 | ' | ' | ' | ' | ' | ' |
Amortization and OTTI | ' | ' | ' | -9,209,000 | -1,876,000 | ' | ' | ' | ' | ' | ' |
Net carrying value at the end of the period | ' | ' | ' | 18,528,000 | 30,755,000 | ' | ' | ' | ' | ' | ' |
Total servicing rights | 156,846,000 | 177,173,000 | 190,646,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value at the beginning of the period | ' | ' | ' | 29,300,000 | ' | ' | ' | ' | ' | ' | ' |
Fair value at the end of the period | ' | ' | ' | $18,500,000 | $33,900,000 | ' | ' | ' | ' | ' | ' |
Secured_Financing_Agreements_D
Secured Financing Agreements (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 27, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jul. 24, 2014 | Jun. 30, 2014 | Jul. 24, 2014 | Jun. 30, 2014 | Jul. 24, 2014 | 31-May-14 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
Secured financing agreements | Secured financing agreements | Secured financing agreements | Secured financing agreements | Secured financing agreements | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 1 Facility | Lender 1 Repo 2 Facility | Lender 1 Repo 2 Facility | Lender 1 Repo 3 Facility | Lender 1 Repo 3 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 3 Repo I | Lender 3 Repo I | Lender 3 Repo I | Conduit Repo 1 Facility | Conduit Repo 1 Facility | Conduit Repo 2 Facility | Lender 4 Repo 1 Facility | Lender 4 Repo 1 Facility | Lender 5 Repo 1 Facility | Lender 5 Repo 1 Facility | Borrowing Base | Borrowing Base | Term Loan | Term Loan | |||
Minimum | Minimum | Maximum | Maximum | Subsequent event | Minimum | Minimum | Maximum | Maximum | item | ||||||||||||||||||||||||||||||
Subsequent event | Subsequent event | ||||||||||||||||||||||||||||||||||||||
Debt Instrument: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pricing rate, basis | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | 'LIBOR | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | 'LIBOR | ' | 'LIBOR | 'LIBOR | ' | 'LIBOR | ' | 'LIBOR | ' | 'LIBOR | ' |
Pricing margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.85% | ' | 5.25% | ' | 1.90% | ' | 2.75% | ' | ' | ' | ' | 2.00% | ' | 2.75% | ' | ' | 2.85% | ' | 2.20% | ' | 2.10% | 2.60% | ' | 2.00% | ' | 3.25% | ' | 2.75% | ' |
Pledged Asset Carrying Value | $6,461,251,000 | ' | ' | ' | ' | ' | ' | $1,349,733,000 | ' | ' | ' | ' | ' | ' | $230,129,000 | ' | $210,041,000 | ' | $269,290,000 | ' | ' | ' | ' | ' | ' | ' | $135,132,000 | ' | ' | ' | $128,083,000 | $456,758,000 | ' | $84,150,000 | ' | $661,164,000 | ' | $2,936,771,000 | ' |
Maximum Facility Size | 3,378,812,000 | ' | ' | ' | ' | ' | ' | 1,000,000,000 | 1,000,000,000 | ' | ' | ' | ' | ' | 175,000,000 | ' | 148,860,000 | ' | 225,000,000 | ' | 325,000,000 | ' | ' | ' | ' | ' | 93,836,000 | ' | 250,000,000 | ' | 150,000,000 | 359,226,000 | ' | 58,467,000 | ' | 250,000,000 | ' | 668,423,000 | ' |
Carrying Value | 2,561,267,000 | 2,257,560,000 | ' | ' | ' | ' | ' | 753,032,000 | ' | 449,323,000 | ' | ' | ' | ' | 120,627,000 | 127,943,000 | 148,860,000 | 154,133,000 | 181,151,000 | 100,886,000 | ' | ' | ' | ' | ' | ' | 93,836,000 | 50,871,000 | ' | 129,843,000 | 95,568,000 | 359,226,000 | 347,697,000 | 58,467,000 | 58,467,000 | 84,386,000 | 169,104,000 | 666,114,000 | 669,293,000 |
Current maturity period, after which the buyer delivers notice to seller, subject to a maximum date of March 13, 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument reduction in basis spread | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Floor interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | ' |
Discount amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | 2,500,000 |
Available borrowings under the facility before amendment | ' | ' | ' | ' | ' | ' | ' | ' | 550,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum liability guaranteed (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 25.00% | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of increase in additional borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of extension options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extended term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of secured financings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 (remainder of) | ' | ' | 194,472,000 | ' | 194,472,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,600,000 | ' | ' | 58,500,000 | ' | ' | ' | ' | ' |
2015 | ' | ' | 155,464,000 | ' | 155,464,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | ' | 296,329,000 | ' | 296,329,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | ' | ' | 568,760,000 | ' | 568,760,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | ' | ' | 223,683,000 | ' | 223,683,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | ' | ' | 1,124,868,000 | ' | 1,124,868,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | 2,563,576,000 | ' | 2,563,576,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs, net of amortization | ' | ' | 24,900,000 | ' | 24,900,000 | ' | 22,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional non-cash interest expense | ' | ' | $2,600,000 | $1,800,000 | $5,300,000 | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Senior_Notes_Detai
Convertible Senior Notes (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 2 Months Ended | 6 Months Ended | 2 Months Ended | 6 Months Ended | ||||||||||
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Feb. 03, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Feb. 15, 2013 | Feb. 03, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Jul. 03, 2013 | |
Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of closing market price condition | Conversion upon satisfaction of trading price condition | Conversion upon satisfaction of trading price condition | Convertible Senior Notes | Convertible Senior Notes | Convertible Senior Notes | 2018 Notes | 2018 Notes | 2018 Notes | 2018 Notes | 2019 Notes | 2019 Notes | 2019 Notes | 2019 Notes | ||||
D | Minimum | Maximum | Maximum | ||||||||||||||||
item | |||||||||||||||||||
Convertible Senior Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $600,000,000 | ' | ' | ' | $460,000,000 |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.55% | ' | ' | ' | 4.00% | ' | ' |
Principal Amount | ' | ' | ' | ' | ' | ' | ' | ' | 1,059,978,000 | 1,059,978,000 | 1,060,000,000 | ' | 599,981,000 | ' | ' | ' | 459,997,000 | ' | ' |
Effective Rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.08% | ' | ' | ' | 5.37% | ' | ' |
Conversion Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44.6455 | ' | ' | ' | 47.5456 | ' | ' |
Remaining Period of Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years 8 months 12 days | ' | ' | ' | '4 years 6 months | ' | ' |
Net unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | -56,131,000 | -56,131,000 | -62,149,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | 1,003,847,000 | 1,003,847,000 | 997,851,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount of conversion option equity components recorded in additional paid-in capital | ' | ' | 28,107,000 | ' | ' | ' | ' | ' | ' | 48,502,000 | 48,502,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of notes, basis for conversion | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount by which if-converted value of the Notes exceed principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,700,000 | ' | ' | ' | 59,900,000 | ' | ' |
Closing share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $23.77 | ' | ' | ' | $23.77 | ' | ' |
Conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $22.40 | ' | ' | ' | $21.03 | ' | ' |
Number of anti-dilutive common shares excluded from the calculation of diluted income per share | ' | ' | ' | ' | ' | ' | ' | ' | 44,600,000 | 44,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion spread value included in computation of diluted EPS | 4,056,000 | 3,906,000 | ' | ' | ' | ' | ' | ' | 4,100,000 | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs, net of amortization | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | 1,500,000 | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum number of conditions to be satisfied for conversion of debt | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion price as a basis for debt conversion | ' | ' | ' | ' | 130.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum trading period as a basis for debt conversion | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consecutive trading period as a basis for debt conversion | ' | ' | ' | '30 days | ' | ' | '5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion price and last reported sales price as a basis for debt conversion | ' | ' | ' | ' | ' | ' | ' | 98.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of average closing market price of common stock as a basis for debt conversion | ' | ' | ' | ' | ' | '10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of per share value of distributions that exceeds the market price of the entity's common stock as a basis for debt conversion | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice of conversion, principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $19,000 | ' | ' | ' | $3,000 | ' | ' | ' |
Quarterly dividend threshold amount per share of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.35 | ' | $0.44 | ' | $0.37 | ' | $0.46 | ' |
Loan_SecuritizationSale_Activi2
Loan Securitization/Sale Activities (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Loan Transfer Activities | ' | ' | ' | ' |
Par value of loans held-for-sale, sold during period | $348,000,000 | ' | $637,400,000 | ' |
Fair value of loans held-for-sale, sold during period | 364,300,000 | ' | 666,800,000 | ' |
Amount repaid for outstanding balance | 261,000,000 | ' | 478,100,000 | ' |
Loan Transfers Accounted for as Secured Borrowings | ' | ' | ' | ' |
Proceeds | ' | ' | ' | 95,000,000 |
Securitizations | Real Estate Investment Lending | ' | ' | ' | ' |
Loan Transfers Accounted for as Sales | ' | ' | ' | ' |
Face Amount | 56,975,000 | 52,849,000 | 204,859,000 | 97,380,000 |
Proceeds | 56,124,000 | 52,859,000 | 202,524,000 | 97,490,000 |
Loan Transfers Accounted for as Secured Borrowings | ' | ' | ' | ' |
Face Amount | ' | 95,000 | ' | 95,000 |
Proceeds | ' | $95,000 | ' | $95,000 |
Derivatives_and_Hedging_Activi2
Derivatives and Hedging Activity (Details) | 6 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Foreign exchange contracts | Credit spread instrument | |
Derivatives designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | |
USD ($) | Long | Long | Long | Short | Short | Short | GBP | GBP | EUR | EUR | EUR | SEK | NOK | DKK | USD ($) | |
instrument | USD ($) | Minimum | Maximum | USD ($) | Minimum | Maximum | instrument | Short | instrument | Long | Short | Short | Short | Short | instrument | |
instrument | instrument | GBP (£) | EUR (€) | EUR (€) | USD ($) | USD ($) | USD ($) | |||||||||
instrument | instrument | instrument | instrument | |||||||||||||
Derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of derivative instruments held | 7 | 34 | ' | ' | 4 | ' | ' | ' | ' | ' | 1 | ' | 2 | 1 | 1 | 8 |
Notional amount of derivative instruments | $162.90 | $203.10 | ' | ' | $59.90 | ' | ' | ' | £ 226.2 | ' | € 60.30 | € 147.90 | $23 | $1.30 | $3.20 | $50 |
Fixed monthly coupons at fixed rate, low end of range (as a percent) | 0.56% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed monthly coupons at fixed rate, high end of range (as a percent) | 2.23% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Floating rate | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount expected to be reclassified from other comprehensive income to interest expense over the next twelve months | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Hedging period for covering exposure to the variability in future cash flows | '83 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of derivative instruments held | ' | ' | ' | ' | ' | ' | ' | 66 | ' | 29 | ' | ' | ' | ' | ' | ' |
Maturity period | ' | ' | '2 years | '10 years | ' | '0 years | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivatives_and_Hedging_Activi3
Derivatives and Hedging Activity (Details 2) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | $4,681 | $7,769 |
Fair Value of Derivatives in a Liability Position | 26,294 | 24,192 |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | 63 | 125 |
Fair Value of Derivatives in a Liability Position | 638 | 729 |
Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | 4,618 | 7,644 |
Fair Value of Derivatives in a Liability Position | 25,656 | 23,463 |
Interest rate contracts | Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | 63 | 125 |
Fair Value of Derivatives in a Liability Position | 638 | 729 |
Interest rate contracts | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | 1,874 | 5,102 |
Fair Value of Derivatives in a Liability Position | 1,819 | 983 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | 502 | 269 |
Fair Value of Derivatives in a Liability Position | 23,837 | 22,480 |
Credit spread instrument | Derivatives not designated as hedging instruments | ' | ' |
Fair value of derivative instruments | ' | ' |
Fair Value of Derivatives in an Asset Position | $2,242 | $2,273 |
Derivatives_and_Hedging_Activi4
Derivatives and Hedging Activity (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Credit-risk-related Contingent Features | ' | ' | ' | ' |
Ratio of indebtedness to total assets above which will the Company could be declared in default (as a percent) | ' | ' | 75.00% | ' |
Derivatives in net liability position | $24,500,000 | ' | $24,500,000 | ' |
Collateral posted | 19,100,000 | ' | 19,100,000 | ' |
Termination liability value | 24,500,000 | ' | 24,500,000 | ' |
Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of (Loss) Gain Recognized in Income | -9,790,000 | 6,158,000 | -17,656,000 | 22,386,000 |
Interest rate contracts | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of (Loss) Gain Recognized in Income | -2,314,000 | 6,863,000 | -6,511,000 | 7,013,000 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of (Loss) Gain Recognized in Income | -6,965,000 | -1,311,000 | -10,012,000 | 14,767,000 |
Credit spread instrument | Derivatives not designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
Amount of (Loss) Gain Recognized in Income | -511,000 | 606,000 | -1,133,000 | 606,000 |
Cash flow hedges | Interest rate contracts | Derivatives designated as hedging instruments | ' | ' | ' | ' |
Gain loss derivative instruments | ' | ' | ' | ' |
(Loss) Gain Recognized in OCI (effective portion) | -457,000 | 1,094,000 | -708,000 | 926,000 |
(Loss) Gain Reclassified from AOCI into Income (effective portion) | ($364,000) | ($407,000) | ($737,000) | ($854,000) |
Offsetting_Assets_and_Liabilit2
Offsetting Assets and Liabilities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Net Amounts of Assets Presented in the Statement of Financial Position | $4,681 | $7,769 |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 1,837,061 | 1,443,355 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,837,061 | 1,443,355 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 1,811,373 | 1,419,855 |
Cash Collateral Pledged | 18,412 | 7,150 |
Net Amount | 7,276 | 16,350 |
Derivatives | ' | ' |
Assets | ' | ' |
Gross Amounts of Recognized Assets | 4,681 | 7,769 |
Net Amounts of Assets Presented in the Statement of Financial Position | 4,681 | 7,769 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 606 | 692 |
Cash Collateral Received | 1,564 | 1,916 |
Net Amount | 2,511 | 5,161 |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 26,294 | 24,192 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 26,294 | 24,192 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | 606 | 692 |
Cash Collateral Pledged | 18,412 | 7,150 |
Net Amount | 7,276 | 16,350 |
Repurchase agreements (2) | ' | ' |
Liabilities | ' | ' |
Gross Amounts of Recognized Liabilities | 1,810,767 | 1,419,163 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 1,810,767 | 1,419,163 |
Gross Amounts Not Offset in the Statement of Financial Position | ' | ' |
Financial Instruments | $1,810,767 | $1,419,163 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (Not primary beneficiary, USD $) | 3 Months Ended | |
Mar. 31, 2014 | Jun. 30, 2014 | |
item | item | |
Variable interest entities | ' | ' |
Number of CDO structures currently in default | ' | 1 |
Number of CDO structures currently ceased to be in default | 1 | ' |
Maximum risk of loss related to VIEs, on fair value basis | ' | $168,500,000 |
Securitization SPEs | ' | ' |
Variable interest entities | ' | ' |
Debt obligations to beneficial interest holders, unpaid principal balances | ' | $106,400,000,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details) (USD $) | 6 Months Ended | 1 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jan. 31, 2014 | Oct. 31, 2012 | Jun. 30, 2014 | Jan. 02, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Co-origination of financing through joint venture with Fund IX | Co-origination of financing through joint venture with Fund IX | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Manager | Manager | Manager | Manager | Manager | Fund IX | Fund IX | |||
First Mortgages: | First Mortgages: | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | LNR | LNR | |||||||||
Related-Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base management fee incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $13,600,000 | $12,700,000 | $26,800,000 | $22,400,000 | ' | ' | ' |
Base management Fee Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | 13,500,000 | ' | 0 | ' | ' |
Incentive fee incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | 0 | 11,300,000 | 0 | ' | ' | ' |
Incentive fees payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | ' | 4,100,000 | ' | 6,800,000 | ' | ' |
Executive compensation and other reimbursable expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 1,800,000 | 3,900,000 | 4,300,000 | ' | ' | ' |
Executive compensation and other reimbursable expense payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | 2,400,000 | ' | 4,400,000 | ' | ' |
Obligation funded by an affiliate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,200,000 | ' |
Related party payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400,000 | 6,200,000 |
Number of units granted to Manager under plan | 2,651,739 | ' | ' | ' | 2,489,281 | 2,000,000 | 2,489,281 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | 6,800,000 | 4,000,000 | 13,600,000 | 8,500,000 | ' | ' | ' | ' | ' | ' | ' |
Co-origination of mortgage financing | 1,860,026,000 | 1,308,602,000 | 815,000,000 | 475,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution for liquidation of interest in joint venture | ' | ' | $31,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 6 Months Ended | ||||||||||
6-May-14 | Apr. 11, 2014 | Feb. 24, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Aug. 06, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jan. 02, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Subsequent event | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Starwood Property Trust, Inc. Equity Plan and Manager Equity Plan | Starwood Property Trust, Inc. Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Manager Equity Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | Starwood Property Trust, Inc. Non-Executive Director Stock Plan | ||||||||
SFR Spin-off | Vests ratably on a quarterly basis over a 21-month period | Vests ratably on a quarterly basis over a 21-month period | Vest ratably on a quarterly basis over a three-year period | Vest ratably on a quarterly basis over a three-year period | Restricted stock units | Restricted stock units | Restricted stock units | ||||||||||||||
SFR Spin-off | SFR Spin-off | SFR Spin-off | SFR Spin-off | ||||||||||||||||||
Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend declared (in dollars per share) | $0.48 | ' | $0.48 | $0.48 | $0.46 | $0.96 | $0.90 | $0.48 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued | ' | 22,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from issuance of common stock | ' | $491,000,000 | ' | ' | ' | $583,053,000 | $822,368,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Optional period of time for underwriters to purchase additional shares of common sock | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional shares available to purchase by underwriters during 30-day option period | ' | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional gross proceeds from issuance of additional shares of common stock granted to underwriter | ' | 73,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares that may be issued under the DRIP Plan | ' | ' | ' | 11,000,000 | ' | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of shares that may be issued under the ATM Agreement | ' | ' | ' | 500,000,000 | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from ATM Agreement (in shares) | ' | ' | ' | 759,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from ATM Agreement | ' | ' | ' | 18,300,000 | ' | 18,346,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards granted, fair value | ' | ' | ' | ' | ' | ' | ' | ' | $14,800,000 | ' | ' | ' | ' | ' | ' | ' | $55,400,000 | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '21 months | ' | '3 years | ' | ' | ' | ' | ' | '3 years | ' | ' |
Number of shares available for future grants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,400,000 | ' | ' | ' | ' | ' | ' | ' |
Non-Vested Shares and Share Equivalents activity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance (in shares) | ' | ' | ' | ' | ' | 544,145 | ' | ' | ' | ' | ' | ' | ' | ' | 22,502 | 510,415 | ' | ' | ' | 11,228 | 11,228 |
Granted (in shares) | ' | ' | ' | ' | ' | 2,651,739 | ' | ' | 489,281 | 99,480 | ' | 389,801 | ' | ' | 162,458 | 2,489,281 | 2,000,000 | 2,489,281 | ' | ' | ' |
Vested (in shares) | ' | ' | ' | ' | ' | -615,031 | ' | ' | ' | ' | ' | ' | ' | ' | -42,475 | -572,556 | ' | ' | ' | ' | ' |
Balance at the end of period (in shares) | ' | ' | ' | 2,580,853 | ' | 2,580,853 | ' | ' | ' | ' | ' | ' | ' | ' | 142,485 | 2,427,140 | ' | ' | ' | 11,228 | 11,228 |
Weighted Average Grant Date Fair Value (per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of period (in dollars per share) | ' | ' | ' | ' | ' | $22.88 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | $27.94 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in dollars per share) | ' | ' | ' | ' | ' | $26.65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the end of period (in dollars per share) | ' | ' | ' | $27.18 | ' | $27.18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Continuing Operations: | ' | ' | ' | ' |
Income from continuing operations attributable to STWD common stockholders | $117,868,000 | $66,512,000 | $240,020,000 | $131,043,000 |
Less: Income attributable to unvested shares | -1,367,000 | -369,000 | -3,100,000 | -823,000 |
Basic - Income from continuing operations | 116,501,000 | 66,143,000 | 236,920,000 | 130,220,000 |
Discontinued Operations: | ' | ' | ' | ' |
Loss from discontinued operations | ' | -6,058,000 | -1,551,000 | -8,346,000 |
Basic - Net income attributable to STWD common stockholders after allocation to participating securities | 116,501,000 | 60,085,000 | 235,369,000 | 121,874,000 |
Continuing Operations: | ' | ' | ' | ' |
Basic - Income from continuing operations attributable to STWD common stockholders | 117,868,000 | 66,512,000 | 240,020,000 | 131,043,000 |
Less: Income attributable to unvested shares | -1,367,000 | -369,000 | -3,100,000 | -823,000 |
Add: Undistributed earnings to unvested shares | 128,000 | ' | 480,000 | ' |
Less: Undistributed earnings reallocated to unvested shares | -126,000 | ' | -471,000 | ' |
Diluted - Income from continuing operations | 116,503,000 | 66,143,000 | 236,929,000 | 130,220,000 |
Discontinued Operations: | ' | ' | ' | ' |
Basic - Loss from discontinued operations | ' | -6,058,000 | -1,551,000 | -8,346,000 |
Diluted - Net income attributable to STWD common stockholders after allocation to participating securities | 116,503,000 | 60,085,000 | 235,378,000 | 121,874,000 |
Number of Shares: | ' | ' | ' | ' |
Basic - Average shares outstanding | 218,751,000 | 162,448,000 | 207,203,000 | 149,037,000 |
Effect of dilutive securities - Convertible Notes | 4,056,000 | ' | 3,906,000 | ' |
Effect of dilutive securities - Contingently Issuable Shares | 85,000 | ' | 85,000 | ' |
Diluted (in shares) | 222,892,000 | 162,448,000 | 211,194,000 | 149,037,000 |
Earnings Per Share Attributable to STWD Common Stockholders - Basic: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.53 | $0.41 | $1.14 | $0.87 |
Loss from discontinued operations (in dollars per share) | ' | ($0.04) | ($0.01) | ($0.05) |
Net income (in dollars per share) | $0.53 | $0.37 | $1.13 | $0.82 |
Earnings Per Share Attributable to STWD Common Stockholders - Diluted: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.52 | $0.41 | $1.12 | $0.87 |
Loss from discontinued operations (in dollars per share) | ' | ($0.04) | ($0.01) | ($0.05) |
Net income (in dollars per share) | $0.52 | $0.37 | $1.11 | $0.82 |
Restricted stock | ' | ' | ' | ' |
Anti-dilutive shares | ' | ' | ' | ' |
Number of anti-dilutive common shares excluded from the calculation of diluted income per share | ' | ' | 2,600,000 | 900,000 |
Convertible Senior Notes | ' | ' | ' | ' |
Anti-dilutive shares | ' | ' | ' | ' |
Number of anti-dilutive common shares excluded from the calculation of diluted income per share | 44,600,000 | ' | 44,800,000 | ' |
Potential shares of common stock contingently issuable upon conversion of the Convertible Notes | ' | ' | 48,700,000 | ' |
2018 Notes | ' | ' | ' | ' |
Anti-dilutive shares | ' | ' | ' | ' |
Amount by which if-converted value of the Notes exceed principal amount | ' | ' | 36,700,000 | ' |
2019 Notes | ' | ' | ' | ' |
Anti-dilutive shares | ' | ' | ' | ' |
Amount by which if-converted value of the Notes exceed principal amount | ' | ' | $59,900,000 | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Beginning balance | $80,115 | $70,544 | $75,449 | $79,675 |
OCI before reclassifications | 6,386 | -10,307 | 10,462 | -5,580 |
Amounts reclassified from AOCI | -11,539 | 48 | -10,949 | -13,810 |
Net period OCI | -5,153 | -10,259 | -487 | -19,390 |
Ending balance | 74,962 | 60,285 | 74,962 | 60,285 |
Effective Portion of Cumulative Loss on Cash Flow Hedges | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Beginning balance | -482 | -2,292 | -604 | -2,571 |
OCI before reclassifications | -457 | 1,094 | -708 | 926 |
Amounts reclassified from AOCI | 364 | 407 | 737 | 854 |
Net period OCI | -93 | 1,501 | 29 | 1,780 |
Ending balance | -575 | -791 | -575 | -791 |
Cumulative Unrealized Gain (Loss) on Available-for-Sale Securities | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Beginning balance | 70,064 | 79,897 | 66,566 | 82,246 |
OCI before reclassifications | 2,285 | -11,419 | 5,566 | 537 |
Amounts reclassified from AOCI | -11,903 | -359 | -11,686 | -14,664 |
Net period OCI | -9,618 | -11,778 | -6,120 | -14,127 |
Ending balance | 60,446 | 68,119 | 60,446 | 68,119 |
Foreign Currency Translation | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Beginning balance | 10,533 | -7,061 | 9,487 | ' |
OCI before reclassifications | 4,558 | 18 | 5,604 | -7,043 |
Net period OCI | 4,558 | 18 | 5,604 | -7,043 |
Ending balance | $15,091 | ($7,043) | $15,091 | ($7,043) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Interest expense | ($37,695) | ($22,648) | ($75,526) | ($40,074) |
OTTI | -797 | -359 | -1,010 | -401 |
Total | 120,382 | 61,511 | 241,263 | 124,935 |
Amounts Reclassified from AOCI | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Total | 11,539 | -48 | 10,949 | 13,810 |
Losses on cash flow hedges | Interest rate contracts | Amounts Reclassified from AOCI | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Interest expense | -364 | -407 | -737 | -854 |
Unrealized gains on available for sale securities | Amounts Reclassified from AOCI | ' | ' | ' | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Gain (loss) on sale of investments, net | 11,903 | 718 | 11,899 | 15,065 |
OTTI | ' | -359 | -213 | -401 |
Total | $11,903 | $359 | $11,686 | $14,664 |
Fair_Value_Details
Fair Value (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | $902,424,000 | $902,424,000 | $935,107,000 |
Intangible assets - servicing rights at fair value | 138,318,000 | 138,318,000 | 150,149,000 |
Derivative assets | 4,681,000 | 4,681,000 | 7,769,000 |
VIE Assets | 114,091,158,000 | 114,091,158,000 | 103,151,624,000 |
Derivative liabilities | 26,294,000 | 26,294,000 | 24,192,000 |
VIE Liabilities | 113,541,151,000 | 113,541,151,000 | 102,649,263,000 |
RMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | 231,605,000 | 231,605,000 | 296,236,000 |
CMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | 116,701,000 | 116,701,000 | 114,346,000 |
Transfer of investment from Level II to Level III | 5,500,000 | 52,800,000 | ' |
Equity Securities | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | 16,104,000 | 16,104,000 | 15,247,000 |
Fair value measurements on recurring basis | Total fair value | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Loans held-for-sale, fair value option | 154,412,000 | 154,412,000 | 206,672,000 |
Derivative assets | 4,681,000 | 4,681,000 | 7,769,000 |
VIE Assets | 114,091,158,000 | 114,091,158,000 | 103,151,624,000 |
Total | 114,920,897,000 | 114,920,897,000 | 104,083,003,000 |
Derivative liabilities | 26,294,000 | 26,294,000 | 24,192,000 |
VIE Liabilities | 113,541,151,000 | 113,541,151,000 | 102,649,263,000 |
Total | 113,567,445,000 | 113,567,445,000 | 102,673,455,000 |
Fair value measurements on recurring basis | Total fair value | Domestic Servicing Rights | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Intangible assets - servicing rights at fair value | 138,318,000 | 138,318,000 | 150,149,000 |
Fair value measurements on recurring basis | Total fair value | RMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Available-for-sale securities | 231,605,000 | 231,605,000 | 296,236,000 |
Fair value measurements on recurring basis | Total fair value | CMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Available-for-sale securities | 284,619,000 | 284,619,000 | 255,306,000 |
Fair value measurements on recurring basis | Total fair value | Equity Securities | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | 16,104,000 | 16,104,000 | 15,247,000 |
Fair value measurements on recurring basis | Level I | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Total | 16,104,000 | 16,104,000 | 15,247,000 |
Fair value measurements on recurring basis | Level I | Equity Securities | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Marketable securities | 16,104,000 | 16,104,000 | 15,247,000 |
Fair value measurements on recurring basis | Level II | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Derivative assets | 4,681,000 | 4,681,000 | 7,769,000 |
Total | 6,939,000 | 6,939,000 | 55,069,000 |
Derivative liabilities | 26,294,000 | 26,294,000 | 24,192,000 |
VIE Liabilities | 108,355,026,000 | 108,355,026,000 | 101,051,279,000 |
Total | 108,381,320,000 | 108,381,320,000 | 101,075,471,000 |
Fair value measurements on recurring basis | Level II | CMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Available-for-sale securities | 2,258,000 | 2,258,000 | 47,300,000 |
Fair value measurements on recurring basis | Level III | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Loans held-for-sale, fair value option | 154,412,000 | 154,412,000 | 206,672,000 |
VIE Assets | 114,091,158,000 | 114,091,158,000 | 103,151,624,000 |
Total | 114,897,854,000 | 114,897,854,000 | 104,012,687,000 |
VIE Liabilities | 5,186,125,000 | 5,186,125,000 | 1,597,984,000 |
Total | 5,186,125,000 | 5,186,125,000 | 1,597,984,000 |
Fair value measurements on recurring basis | Level III | Domestic Servicing Rights | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Intangible assets - servicing rights at fair value | 138,318,000 | 138,318,000 | 150,149,000 |
Fair value measurements on recurring basis | Level III | RMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Available-for-sale securities | 231,605,000 | 231,605,000 | 296,236,000 |
Fair value measurements on recurring basis | Level III | CMBS | ' | ' | ' |
Assets and liabilities measured at fair value | ' | ' | ' |
Available-for-sale securities | $282,361,000 | $282,361,000 | $208,006,000 |
Fair_Value_Details_2
Fair Value (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
OTTI/Impairment | ($797) | ($359) | ($1,010) | ($401) |
Net accretion | ' | ' | 11,680 | 16,568 |
Level III | ' | ' | ' | ' |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
OTTI/Impairment | ' | -359 | -213 | -402 |
Net accretion | 3,323 | 5,755 | 9,887 | 11,906 |
Changes in financial instruments classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 115,719,493 | 321,043 | 102,414,703 | 333,153 |
Acquisition of LNR | ' | 89,471,477 | ' | 89,471,477 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | -3,313,202 | -3,698,024 | 6,871,380 | -3,698,024 |
Total realized and unrealized (losses) gains | ' | 18 | ' | 2,147 |
Included in OCI | -6,623 | -9,195 | -2,408 | 37 |
Purchases / Originations | 363,306 | 410,798 | 628,962 | 410,798 |
Sales | -318,305 | -486,408 | -645,920 | -499,120 |
Issuances | -25,995 | ' | -71,756 | ' |
Cash repayments / receipts | 39,892 | 63,847 | 66,938 | 46,980 |
Transfers into level III | -1,978,045 | -373,699 | -2,502,357 | -373,699 |
Transfers out of level III | 292,058 | 149,184 | 598,900 | 149,184 |
Consolidations of VIEs | 3,652,113 | 10,495,494 | 22,091,873 | 10,495,494 |
Deconsolidations of VIEs | -4,716,286 | -584,997 | -6,005,500 | -584,997 |
Balance at the end of the period | 109,711,729 | 95,764,934 | 109,711,729 | 95,764,934 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -3,331,266 | -3,702,442 | -6,906,883 | -3,694,763 |
VIE Liabilities | Level III | ' | ' | ' | ' |
Changes in financial liabilities classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | -3,482,922 | ' | -1,597,984 | ' |
Acquisition of LNR | ' | -1,994,243 | ' | -1,994,243 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value/ gain on sale | -1,664 | 94,448 | 99,837 | 94,448 |
Issuances | -25,995 | ' | -71,756 | ' |
Cash repayments / receipts | 50,984 | 79,735 | 86,349 | 79,735 |
Transfers into Level III | -1,983,525 | -489,513 | -2,555,137 | -489,513 |
Transfers out of Level III | 293,115 | 152,683 | 712,856 | 152,683 |
Consolidations of VIEs | -68,772 | -178,631 | -1,892,944 | -178,631 |
Deconsolidations of VIEs | 32,654 | 861 | 32,654 | 861 |
Balance at the end of the period | -5,186,125 | -2,334,660 | -5,186,125 | -2,334,660 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -1,664 | 94,448 | 99,837 | 94,448 |
Loans Held-for-sale | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 74,117 | ' | 206,672 | ' |
Acquisition of LNR | ' | 256,502 | ' | 256,502 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | 11,546 | 458 | 32,439 | 458 |
Purchases / Originations | 320,566 | 390,669 | 582,391 | 390,669 |
Sales | -251,612 | -476,336 | -554,073 | -476,336 |
Cash repayments / receipts | -205 | -117 | -297 | -117 |
Transfers out of Level III | ' | ' | -112,720 | ' |
Balance at the end of the period | 154,412 | 171,176 | 154,412 | 171,176 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 688 | -8,344 | 688 | -8,344 |
RMBS | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 291,217 | 321,043 | 296,236 | 333,153 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | 10,130 | ' | 11,141 | ' |
Total realized and unrealized (losses) gains | ' | ' | ' | 2,129 |
OTTI/Impairment | ' | -359 | -213 | -402 |
Net accretion | 3,323 | 5,755 | 9,887 | 11,906 |
Included in OCI | -9,363 | -11,103 | -4,615 | -1,871 |
Purchases / Originations | ' | 20,090 | ' | 20,090 |
Sales | -53,236 | ' | -62,546 | -12,712 |
Cash repayments / receipts | -10,466 | -15,771 | -18,285 | -32,638 |
Balance at the end of the period | 231,605 | 319,655 | 231,605 | 319,655 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 2,804 | 6,627 | 7,971 | 14,306 |
CMBS | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 240,665 | ' | 208,006 | ' |
Acquisition of LNR | ' | 62,432 | ' | 62,432 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | 4,393 | -1,187 | 9,600 | -1,187 |
Total realized and unrealized (losses) gains | ' | 18 | ' | 18 |
Included in OCI | 2,740 | 1,908 | 2,207 | 1,908 |
Purchases / Originations | 42,740 | 39 | 46,571 | 39 |
Sales | -13,457 | -10,072 | -29,301 | -10,072 |
Cash repayments / receipts | -421 | ' | -829 | ' |
Transfers into Level III | 5,480 | 115,814 | 52,780 | 115,814 |
Transfers out of Level III | ' | -3,499 | -179 | -3,499 |
Consolidations of VIEs | ' | ' | -6,715 | ' |
Deconsolidations of VIEs | 221 | -1,054 | 221 | -1,054 |
Balance at the end of the period | 282,361 | 164,399 | 282,361 | 164,399 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | 4,513 | -3,430 | 9,018 | -3,430 |
Domestic Servicing Rights | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 144,898 | ' | 150,149 | ' |
Acquisition of LNR | ' | 156,993 | ' | 156,993 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | -5,523 | 2,898 | -10,774 | 2,898 |
Transfers out of Level III | -1,057 | ' | -1,057 | ' |
Balance at the end of the period | 138,318 | 159,891 | 138,318 | 159,891 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | -5,523 | 2,898 | -10,774 | 2,898 |
VIE Assets | Level III | ' | ' | ' | ' |
Changes in financial assets classified as Level III | ' | ' | ' | ' |
Balance at the beginning of the period | 118,451,518 | ' | 103,151,624 | ' |
Acquisition of LNR | ' | 90,989,793 | ' | 90,989,793 |
Total realized and unrealized (losses) gains: | ' | ' | ' | ' |
Included in earnings: Change in fair value / gain on sale | -3,332,084 | -3,794,641 | -7,013,623 | -3,794,641 |
Consolidations of VIEs | 3,720,885 | 10,674,125 | 23,991,532 | 10,674,125 |
Deconsolidations of VIEs | -4,749,161 | -584,804 | -6,038,375 | -584,804 |
Balance at the end of the period | 114,091,158 | 97,284,473 | 114,091,158 | 97,284,473 |
Amount of total gains (losses) included in earnings attributable to assets still held at period end | ($3,332,084) | ($3,794,641) | ($7,013,623) | ($3,794,641) |
Fair_Value_Details_3
Fair Value (Details 3) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets not carried at fair value: | ' | ' |
Securities, held-to-maturity | $370,096 | $368,318 |
Non-performing residential loans | ' | 215,371 |
Financial liabilities not carried at fair value: | ' | ' |
Convertible senior notes | 1,003,847 | 997,851 |
Carrying Value | ' | ' |
Financial assets not carried at fair value: | ' | ' |
Loans held-for-investment and loans transferred as secured borrowings | 5,028,721 | 4,544,132 |
Securities, held-to-maturity | 370,096 | 368,318 |
European servicing rights | 18,528 | 27,024 |
Non-performing residential loans | ' | 215,371 |
Financial liabilities not carried at fair value: | ' | ' |
Secured financing agreements and secured borrowings on transferred loans | 2,704,082 | 2,438,798 |
Convertible senior notes | 1,003,847 | 997,851 |
Fair Value | ' | ' |
Financial assets not carried at fair value: | ' | ' |
Loans held-for-investment and loans transferred as secured borrowings | 5,163,988 | 4,609,040 |
Securities, held-to-maturity | 371,603 | 368,453 |
European servicing rights | 18,528 | 29,327 |
Non-performing residential loans | ' | 215,371 |
Financial liabilities not carried at fair value: | ' | ' |
Secured financing agreements and secured borrowings on transferred loans | 2,705,452 | 2,436,708 |
Convertible senior notes | $1,190,700 | $1,160,000 |
Fair_Value_Details_4
Fair Value (Details 4) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 121,363,503 | 110,770,575 |
Recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 154,412 | ' |
Recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 4.50% | 5.20% |
Duration | '5 years | '5 years |
Recurring basis | Level III | Loans held-for-sale, fair value option | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 5.20% | 5.90% |
Duration | '10 years | '10 years |
Recurring basis | Level III | RMBS | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 231,605 | ' |
Portfolio percentage | 85.00% | 90.00% |
Recurring basis | Level III | RMBS | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Constant prepayment rate (as a percent) | 0.30% | -0.60% |
Constant default rate (as a percent) | 1.50% | 1.40% |
Loss severity (as a percent) | 12.00% | 15.00% |
Delinquency rate (as a percent) | 3.00% | 3.00% |
Servicer advances (as a percent) | 23.00% | 24.00% |
Annual coupon deterioration (as a percent) | 0.00% | 0.00% |
Putback amount per projected total collateral loss (as a percent) | 0.00% | 0.00% |
Loss severity for specified percentage of portfolio (as a percent) | 45.00% | 45.00% |
Recurring basis | Level III | RMBS | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Constant prepayment rate (as a percent) | 16.80% | 16.60% |
Constant default rate (as a percent) | 9.50% | 11.30% |
Loss severity (as a percent) | 81.00% | 92.00% |
Delinquency rate (as a percent) | 32.00% | 48.00% |
Servicer advances (as a percent) | 96.00% | 95.00% |
Annual coupon deterioration (as a percent) | 0.80% | 0.70% |
Putback amount per projected total collateral loss (as a percent) | 11.00% | 9.00% |
Loss severity for specified percentage of portfolio (as a percent) | 80.00% | 80.00% |
Recurring basis | Level III | CMBS | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 282,361 | ' |
Recurring basis | Level III | CMBS | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 0.00% | 0.00% |
Duration | '0 years | '0 years |
Recurring basis | Level III | CMBS | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 527.90% | 890.00% |
Duration | '11 years 6 months | '11 years |
Recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 138,318 | ' |
Yield (as a percent) | 8.75% | 8.75% |
Discount rates (as a percent) | 15.00% | 15.00% |
Recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Control migration (as a percent) | 0.00% | 0.00% |
Recurring basis | Level III | Domestic Servicing Rights | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Control migration (as a percent) | 80.00% | 80.00% |
Recurring basis | Level III | VIE Assets | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Carrying Value | 114,091,158 | ' |
Recurring basis | Level III | VIE Assets | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 0.00% | 0.00% |
Duration | '0 years | '0 years |
Recurring basis | Level III | VIE Assets | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements for assets and liabilities measured at fair value on recurring basis | ' | ' |
Yield (as a percent) | 912.20% | 952.30% |
Duration | '21 years 10 months 24 days | '22 years 8 months 12 days |
Fair_Value_Details_5
Fair Value (Details 5) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Quantitative information for Level 3 Fair Value Measurements Liabilities | ' | ' |
Carrying Value | 117,548,670 | 106,443,442 |
Recurring basis | Level III | VIE liabilities | Discounted cash flow | ' | ' |
Quantitative information for Level 3 Fair Value Measurements Liabilities | ' | ' |
Carrying Value | 5,186,125 | ' |
Recurring basis | Level III | VIE liabilities | Discounted cash flow | Minimum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements Liabilities | ' | ' |
Yield (as a percent) | 0.00% | 0.00% |
Duration | '0 years | '0 years |
Recurring basis | Level III | VIE liabilities | Discounted cash flow | Maximum | ' | ' |
Quantitative information for Level 3 Fair Value Measurements Liabilities | ' | ' |
Yield (as a percent) | 912.20% | 952.30% |
Duration | '21 years 10 months 24 days | '22 years 8 months 12 days |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Current | ' | ' | ' | ' | ' |
Federal | $5,484 | $9,481 | $10,624 | $9,931 | ' |
Foreign | 1,782 | 570 | 3,231 | 570 | ' |
State | 929 | 1,534 | 1,799 | 1,861 | ' |
Total current | 8,195 | 11,585 | 15,654 | 12,362 | ' |
Deferred | ' | ' | ' | ' | ' |
Federal | -2,344 | 63 | -3,048 | 63 | ' |
Foreign | -1,192 | -465 | -2,198 | -465 | ' |
State | -382 | 10 | -511 | 10 | ' |
Total deferred | -3,918 | -392 | -5,757 | -392 | ' |
Total income tax provision | 4,277 | 11,193 | 9,897 | 11,970 | ' |
Income tax benefit reflected in discontinued operations | 0 | -150 | 0 | 12 | ' |
Deferred tax assets and liabilities | ' | ' | ' | ' | ' |
Net deferred tax assets | 10,338 | ' | 10,338 | ' | 4,860 |
U.S. | ' | ' | ' | ' | ' |
Deferred tax assets and liabilities | ' | ' | ' | ' | ' |
Reserves and accruals | 11,506 | ' | 11,506 | ' | 11,454 |
Domestic intangible assets | 3,673 | ' | 3,673 | ' | -714 |
Investment securities and loans | -2,303 | ' | -2,303 | ' | -892 |
Investment in unconsolidated entities | 1,901 | ' | 1,901 | ' | 1,811 |
Deferred income | 360 | ' | 360 | ' | 59 |
Net operating and capital loss carryforwards | 1,379 | ' | 1,379 | ' | 967 |
Valuation allowance | -1,379 | ' | -1,379 | ' | -799 |
Other temporary differences | -202 | ' | -202 | ' | -242 |
Net deferred tax assets | 14,935 | ' | 14,935 | ' | 11,644 |
Europe | ' | ' | ' | ' | ' |
Deferred tax assets and liabilities | ' | ' | ' | ' | ' |
European servicing rights | -4,224 | ' | -4,224 | ' | -6,257 |
Net operating and capital loss carryforwards | 11,064 | ' | 11,064 | ' | 10,951 |
Valuation allowance | -11,064 | ' | -11,064 | ' | -10,951 |
Other temporary differences | -373 | ' | -373 | ' | -527 |
Net deferred tax liabilities | ($4,597) | ' | ($4,597) | ' | ($6,784) |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Reconciliation of statutory tax to effective tax | ' | ' | ' | ' |
Federal statutory tax rate | $43,631 | $25,446 | $87,906 | $47,917 |
REIT and other non-taxable income | -38,989 | -15,516 | -79,372 | -37,308 |
State income taxes | 753 | 1,592 | 1,203 | 1,592 |
Federal benefit of state tax deduction | -263 | -557 | -421 | -557 |
Valuation allowance | -1,100 | ' | 412 | ' |
Other | 245 | 228 | 169 | 326 |
Total income tax provision | $4,277 | $11,193 | $9,897 | $11,970 |
Reconciliation of statutory tax rate to effective tax rate | ' | ' | ' | ' |
Federal statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
REIT and other non-taxable income (as a percent) | -31.30% | -21.30% | -31.70% | -27.30% |
State income taxes (as a percent) | 0.60% | 2.20% | 0.50% | 1.20% |
Federal benefit of state tax deduction (as a percent) | -0.20% | -0.80% | -0.20% | -0.40% |
Valuation allowance (as a percent) | -0.90% | ' | 0.20% | ' |
Other (as a percent) | 0.20% | 0.30% | 0.10% | 0.20% |
Effective tax rate (as a percent) | 3.40% | 15.40% | 3.90% | 8.70% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Commitment to invest in venture, USD $) | Jun. 30, 2014 |
In Billions, unless otherwise specified | loan |
Commitment to invest in venture | ' |
Commitments | ' |
Number of loans with future funding commitments | 43 |
Value of loans with future funding commitments | $1.80 |
Segment_Data_Details
Segment Data (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Interest income from loans | $105,455 | $74,936 | $210,365 | $142,626 |
Interest income from investment securities | 27,620 | 18,577 | 57,074 | 34,817 |
Servicing fees | 32,681 | 39,135 | 66,892 | 39,135 |
Other revenues | 4,994 | 1,795 | 8,398 | 1,874 |
Total revenues | 170,750 | 134,443 | 342,729 | 218,452 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 25,085 | 16,146 | 52,906 | 31,215 |
Interest expense | 37,695 | 22,648 | 75,526 | 40,074 |
General and administrative | 43,094 | 44,335 | 89,195 | 48,373 |
Business combination costs | ' | 13,420 | ' | 17,616 |
Acquisition and investment pursuit costs | 771 | 916 | 1,165 | 997 |
Depreciation and amortization | 5,154 | 2,228 | 9,790 | 2,228 |
Loan loss allowance, net | -139 | 725 | 358 | 755 |
Other expense | 6,026 | 196 | 7,715 | 229 |
Total costs and expenses | 117,686 | 100,614 | 236,655 | 141,487 |
Income before other income, income taxes and non controlling interests | 53,064 | 33,829 | 106,074 | 76,965 |
Other income: | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,028 | 31,949 | 103,032 | 31,949 |
Change in fair value of servicing rights | -5,523 | 2,898 | -10,774 | 2,898 |
Change in fair value of investment securities, net | 4,959 | -1,392 | 13,320 | -987 |
Change in fair value of mortgage loans held-for-sale, net | 11,608 | 458 | 32,501 | 458 |
Earnings from unconsolidated entities | 9,563 | 3,770 | 9,627 | 4,511 |
Gain (loss) on sale of investments, net | 10,078 | -18 | 11,633 | 13,506 |
(Loss) gain on derivative financial instruments, net | -9,790 | 6,158 | -17,656 | 22,386 |
Foreign currency gain (loss), net | 3,777 | 1,580 | 5,254 | -6,085 |
OTTI | -797 | -359 | -1,010 | -401 |
Other income, net | 692 | 39 | 710 | 39 |
Total other income | 71,595 | 45,083 | 146,637 | 68,274 |
Income from continuing operations before income taxes | 124,659 | 78,912 | 252,711 | 145,239 |
Income tax provision | -4,277 | -11,343 | -9,897 | -11,958 |
Income from continuing operations | 120,382 | 67,569 | 242,814 | 133,281 |
Loss from discontinued operations, net of tax | ' | -6,058 | -1,551 | -8,346 |
Net income | 120,382 | 61,511 | 241,263 | 124,935 |
Net income attributable to non-controlling interests | -2,514 | -1,057 | -2,794 | -2,238 |
Net income attributable to Starwood Property Trust, Inc. | 117,868 | 60,454 | 238,469 | 122,697 |
Operating segment | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Interest income from loans | 105,455 | 74,936 | 210,365 | 142,626 |
Interest income from investment securities | 45,259 | 25,396 | 86,556 | 41,636 |
Servicing fees | 57,987 | 52,860 | 114,209 | 52,860 |
Other revenues | 5,344 | 2,068 | 9,021 | 2,147 |
Total revenues | 214,045 | 155,260 | 420,151 | 239,269 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 25,045 | 16,128 | 52,828 | 31,197 |
Interest expense | 37,695 | 22,648 | 75,526 | 40,074 |
General and administrative | 42,913 | 44,188 | 88,828 | 48,226 |
Business combination costs | ' | 13,420 | ' | 17,616 |
Acquisition and investment pursuit costs | 771 | 916 | 1,165 | 997 |
Depreciation and amortization | 5,154 | 2,228 | 9,790 | 2,228 |
Loan loss allowance, net | -139 | 725 | 358 | 755 |
Other expense | 6,026 | 196 | 7,715 | 229 |
Total costs and expenses | 117,465 | 100,449 | 236,210 | 141,322 |
Income before other income, income taxes and non controlling interests | 96,580 | 54,811 | 183,941 | 97,947 |
Other income: | ' | ' | ' | ' |
Change in fair value of servicing rights | -12,804 | 6,114 | -24,979 | 6,114 |
Change in fair value of investment securities, net | 17,155 | 6,057 | 53,951 | 6,462 |
Change in fair value of mortgage loans held-for-sale, net | 11,608 | 458 | 32,501 | 458 |
Earnings from unconsolidated entities | 8,651 | 3,966 | 8,808 | 4,707 |
Gain (loss) on sale of investments, net | 10,078 | -18 | 11,633 | 13,506 |
(Loss) gain on derivative financial instruments, net | -9,790 | 6,158 | -17,656 | 22,386 |
Foreign currency gain (loss), net | 3,777 | 1,580 | 5,254 | -6,085 |
OTTI | -797 | -359 | -1,010 | -401 |
Other income, net | 692 | 39 | 710 | 39 |
Total other income | 28,570 | 23,995 | 69,212 | 47,186 |
Income from continuing operations before income taxes | 125,150 | 78,806 | 253,153 | 145,133 |
Income tax provision | -4,277 | -11,343 | -9,897 | -11,958 |
Income from continuing operations | 120,873 | 67,463 | 243,256 | 133,175 |
Loss from discontinued operations, net of tax | ' | -6,058 | -1,551 | -8,346 |
Net income | 120,873 | 61,405 | 241,705 | 124,829 |
Net income attributable to non-controlling interests | -3,005 | -951 | -3,236 | -2,132 |
Net income attributable to Starwood Property Trust, Inc. | 117,868 | 60,454 | 238,469 | 122,697 |
Operating segment | Real Estate Investment Lending | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Interest income from loans | 102,892 | 72,676 | 204,979 | 140,366 |
Interest income from investment securities | 15,178 | 13,638 | 33,467 | 29,878 |
Servicing fees | 153 | ' | 190 | ' |
Other revenues | 108 | 96 | 188 | 175 |
Total revenues | 118,331 | 86,410 | 238,824 | 170,419 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 20,423 | 13,854 | 41,778 | 28,923 |
Interest expense | 31,557 | 19,941 | 62,811 | 37,367 |
General and administrative | 7,921 | 3,615 | 15,066 | 7,653 |
Business combination costs | ' | 13,420 | ' | 17,616 |
Acquisition and investment pursuit costs | 523 | 525 | 735 | 606 |
Loan loss allowance, net | -139 | 725 | 358 | 755 |
Other expense | 66 | 58 | 52 | 91 |
Total costs and expenses | 60,351 | 52,138 | 120,800 | 93,011 |
Income before other income, income taxes and non controlling interests | 57,980 | 34,272 | 118,024 | 77,408 |
Other income: | ' | ' | ' | ' |
Change in fair value of investment securities, net | 861 | -331 | 705 | 74 |
Earnings from unconsolidated entities | 3,432 | 1,851 | 4,972 | 2,592 |
Gain (loss) on sale of investments, net | 10,078 | -18 | 11,633 | 13,506 |
(Loss) gain on derivative financial instruments, net | -7,610 | -2,001 | -10,398 | 14,227 |
Foreign currency gain (loss), net | 4,082 | 1,647 | 5,643 | -6,018 |
OTTI | ' | -359 | -213 | -401 |
Other income, net | 35 | ' | 53 | ' |
Total other income | 10,878 | 789 | 12,395 | 23,980 |
Income from continuing operations before income taxes | 68,858 | 35,061 | 130,419 | 101,388 |
Income tax provision | -443 | -411 | -526 | -1,026 |
Income from continuing operations | 68,415 | 34,650 | 129,893 | 100,362 |
Net income | 68,415 | 34,650 | 129,893 | 100,362 |
Net income attributable to non-controlling interests | -3,005 | -951 | -3,236 | -2,132 |
Net income attributable to Starwood Property Trust, Inc. | 65,410 | 33,699 | 126,657 | 98,230 |
Operating segment | LNR | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Interest income from loans | 2,563 | 2,260 | 5,386 | 2,260 |
Interest income from investment securities | 30,081 | 11,758 | 53,089 | 11,758 |
Servicing fees | 57,834 | 52,860 | 114,019 | 52,860 |
Other revenues | 5,236 | 1,972 | 8,833 | 1,972 |
Total revenues | 95,714 | 68,850 | 181,327 | 68,850 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 4,622 | 2,274 | 10,259 | 2,274 |
Interest expense | 6,138 | 2,707 | 11,624 | 2,707 |
General and administrative | 34,992 | 40,573 | 73,762 | 40,573 |
Acquisition and investment pursuit costs | 248 | 391 | 430 | 391 |
Depreciation and amortization | 5,154 | 2,228 | 9,790 | 2,228 |
Other expense | 5,960 | 138 | 7,663 | 138 |
Total costs and expenses | 57,114 | 48,311 | 113,528 | 48,311 |
Income before other income, income taxes and non controlling interests | 38,600 | 20,539 | 67,799 | 20,539 |
Other income: | ' | ' | ' | ' |
Change in fair value of servicing rights | -12,804 | 6,114 | -24,979 | 6,114 |
Change in fair value of investment securities, net | 16,294 | 6,388 | 53,246 | 6,388 |
Change in fair value of mortgage loans held-for-sale, net | 11,608 | 458 | 32,501 | 458 |
Earnings from unconsolidated entities | 5,219 | 2,115 | 3,836 | 2,115 |
(Loss) gain on derivative financial instruments, net | -2,180 | 8,159 | -7,258 | 8,159 |
Foreign currency gain (loss), net | -305 | -67 | -389 | -67 |
OTTI | -797 | ' | -797 | ' |
Other income, net | 657 | 39 | 657 | 39 |
Total other income | 17,692 | 23,206 | 56,817 | 23,206 |
Income from continuing operations before income taxes | 56,292 | 43,745 | 124,616 | 43,745 |
Income tax provision | -3,834 | -10,932 | -9,371 | -10,932 |
Income from continuing operations | 52,458 | 32,813 | 115,245 | 32,813 |
Net income | 52,458 | 32,813 | 115,245 | 32,813 |
Net income attributable to Starwood Property Trust, Inc. | 52,458 | 32,813 | 115,245 | 32,813 |
Operating segment | Single Family Residential | ' | ' | ' | ' |
Costs and expenses: | ' | ' | ' | ' |
Management fees | ' | ' | 791 | ' |
Interest expense | ' | ' | 1,091 | ' |
Total costs and expenses | ' | ' | 1,882 | ' |
Income before other income, income taxes and non controlling interests | ' | ' | -1,882 | ' |
Other income: | ' | ' | ' | ' |
Income from continuing operations before income taxes | ' | ' | -1,882 | ' |
Income from continuing operations | ' | ' | -1,882 | ' |
Loss from discontinued operations, net of tax | ' | -6,058 | -1,551 | -8,346 |
Net income | ' | -6,058 | -3,433 | -8,346 |
Net income attributable to Starwood Property Trust, Inc. | ' | -6,058 | -3,433 | -8,346 |
LNR VIEs | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Interest income from investment securities | -17,639 | -6,819 | -29,482 | -6,819 |
Servicing fees | -25,306 | -13,725 | -47,317 | -13,725 |
Other revenues | -350 | -273 | -623 | -273 |
Total revenues | -43,295 | -20,817 | -77,422 | -20,817 |
Costs and expenses: | ' | ' | ' | ' |
Management fees | 40 | 18 | 78 | 18 |
General and administrative | 181 | 147 | 367 | 147 |
Total costs and expenses | 221 | 165 | 445 | 165 |
Income before other income, income taxes and non controlling interests | -43,516 | -20,982 | -77,867 | -20,982 |
Other income: | ' | ' | ' | ' |
Income of consolidated VIEs, net | 47,028 | 31,949 | 103,032 | 31,949 |
Change in fair value of servicing rights | 7,281 | -3,216 | 14,205 | -3,216 |
Change in fair value of investment securities, net | -12,196 | -7,449 | -40,631 | -7,449 |
Earnings from unconsolidated entities | 912 | -196 | 819 | -196 |
Total other income | 43,025 | 21,088 | 77,425 | 21,088 |
Income from continuing operations before income taxes | -491 | 106 | -442 | 106 |
Income from continuing operations | -491 | 106 | -442 | 106 |
Net income | -491 | 106 | -442 | 106 |
Net income attributable to non-controlling interests | $491 | ($106) | $442 | ($106) |
Segment_Data_Details_2
Segment Data (Details 2) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||||
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $518,627 | ' | $317,627 | $366,787 | ' | $177,671 |
Restricted cash | 44,561 | ' | 69,052 | ' | ' | ' |
Loans held-for-investment, net | 4,885,854 | ' | 4,363,718 | ' | ' | ' |
Loans held-for-sale | 154,412 | ' | 206,672 | ' | ' | ' |
Loans transferred as secured borrowings | 142,867 | ' | 180,414 | ' | ' | ' |
Investment securities | 902,424 | ' | 935,107 | ' | ' | ' |
Intangible assets - servicing rights | 156,846 | ' | 177,173 | 190,646 | ' | ' |
Residential real estate, net | ' | ' | 749,214 | ' | ' | ' |
Non-performing residential loans | ' | ' | 215,371 | ' | ' | ' |
Investment in unconsolidated entities | 118,621 | ' | 122,954 | ' | ' | ' |
Goodwill | 140,437 | ' | 140,437 | ' | ' | ' |
Derivative assets | 4,681 | ' | 7,769 | ' | ' | ' |
Accrued interest receivable | 37,483 | ' | 37,630 | ' | ' | ' |
Other assets | 165,532 | ' | 95,813 | ' | ' | ' |
VIE assets, at fair value | 114,091,158 | ' | 103,151,624 | ' | ' | ' |
Total Assets | 121,363,503 | ' | 110,770,575 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 140,809 | ' | 225,374 | ' | ' | ' |
Related-party payable | 24,475 | ' | 17,793 | ' | ' | ' |
Dividends payable | 108,012 | ' | 90,171 | 76,900 | ' | ' |
Derivative liabilities | 26,294 | ' | 24,192 | ' | ' | ' |
Secured financing agreements, net | 2,561,267 | ' | 2,257,560 | ' | ' | ' |
Convertible senior notes, net | 1,003,847 | ' | 997,851 | ' | ' | ' |
Secured borrowings on transferred loans | 142,815 | ' | 181,238 | ' | ' | ' |
VIE liabilities, at fair value | 113,541,151 | ' | 102,649,263 | ' | ' | ' |
Total Liabilities | 117,548,670 | ' | 106,443,442 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Preferred stock | ' | ' | ' | ' | ' | ' |
Common stock | 2,232 | ' | 1,961 | ' | ' | ' |
Additional paid-in capital | 3,784,575 | ' | 4,300,479 | ' | ' | ' |
Treasury stock | -10,642 | ' | -10,642 | ' | ' | ' |
Accumulated other comprehensive income | 74,962 | 80,115 | 75,449 | 60,285 | 70,544 | 79,675 |
Retained earnings (deficit) | -49,686 | ' | -84,719 | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,801,441 | ' | 4,282,528 | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 13,392 | ' | 44,605 | ' | ' | ' |
Total Equity | 3,814,833 | ' | 4,327,133 | 3,586,506 | ' | 2,797,205 |
Total Liabilities and Equity | 121,363,503 | ' | 110,770,575 | ' | ' | ' |
Operating segment | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 518,433 | ' | 317,351 | ' | ' | ' |
Restricted cash | 44,561 | ' | 69,052 | ' | ' | ' |
Loans held-for-investment, net | 4,885,854 | ' | 4,363,718 | ' | ' | ' |
Loans held-for-sale | 154,412 | ' | 206,672 | ' | ' | ' |
Loans transferred as secured borrowings | 142,867 | ' | 180,414 | ' | ' | ' |
Investment securities | 1,371,945 | ' | 1,344,429 | ' | ' | ' |
Intangible assets - servicing rights | 224,676 | ' | 257,736 | ' | ' | ' |
Residential real estate, net | ' | ' | 749,214 | ' | ' | ' |
Non-performing residential loans | ' | ' | 215,371 | ' | ' | ' |
Investment in unconsolidated entities | 121,185 | ' | 126,337 | ' | ' | ' |
Goodwill | 140,437 | ' | 140,437 | ' | ' | ' |
Derivative assets | 4,681 | ' | 7,769 | ' | ' | ' |
Accrued interest receivable | 37,483 | ' | 37,630 | ' | ' | ' |
Other assets | 166,711 | ' | 96,685 | ' | ' | ' |
Total Assets | 7,813,245 | ' | 8,112,815 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 140,444 | ' | 225,065 | ' | ' | ' |
Related-party payable | 24,475 | ' | 17,793 | ' | ' | ' |
Dividends payable | 108,012 | ' | 90,171 | ' | ' | ' |
Derivative liabilities | 26,294 | ' | 24,192 | ' | ' | ' |
Secured financing agreements, net | 2,561,267 | ' | 2,257,560 | ' | ' | ' |
Convertible senior notes, net | 1,003,847 | ' | 997,851 | ' | ' | ' |
Secured borrowings on transferred loans | 142,815 | ' | 181,238 | ' | ' | ' |
Total Liabilities | 4,007,154 | ' | 3,793,870 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Common stock | 2,232 | ' | 1,961 | ' | ' | ' |
Additional paid-in capital | 3,784,575 | ' | 4,300,479 | ' | ' | ' |
Treasury stock | -10,642 | ' | -10,642 | ' | ' | ' |
Accumulated other comprehensive income | 74,962 | ' | 75,449 | ' | ' | ' |
Retained earnings (deficit) | -49,686 | ' | -84,719 | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 3,801,441 | ' | 4,282,528 | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 4,650 | ' | 36,417 | ' | ' | ' |
Total Equity | 3,806,091 | ' | 4,318,945 | ' | ' | ' |
Total Liabilities and Equity | 7,813,245 | ' | 8,112,815 | ' | ' | ' |
Operating segment | Real Estate Investment Lending | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 382,285 | ' | 232,270 | ' | ' | ' |
Restricted cash | 34,324 | ' | 36,593 | ' | ' | ' |
Loans held-for-investment, net | 4,881,439 | ' | 4,350,937 | ' | ' | ' |
Loans held-for-sale | 8,750 | ' | ' | ' | ' | ' |
Loans transferred as secured borrowings | 142,867 | ' | 180,414 | ' | ' | ' |
Investment securities | 733,876 | ' | 794,147 | ' | ' | ' |
Investment in unconsolidated entities | 52,541 | ' | 50,167 | ' | ' | ' |
Derivative assets | 2,321 | ' | 3,138 | ' | ' | ' |
Accrued interest receivable | 36,904 | ' | 35,501 | ' | ' | ' |
Other assets | 80,279 | ' | 31,020 | ' | ' | ' |
Total Assets | 6,355,586 | ' | 5,714,187 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 50,540 | ' | 66,127 | ' | ' | ' |
Related-party payable | 19,784 | ' | 11,245 | ' | ' | ' |
Dividends payable | 108,012 | ' | 90,171 | ' | ' | ' |
Derivative liabilities | 25,019 | ' | 24,149 | ' | ' | ' |
Secured financing agreements, net | 2,465,699 | ' | 2,127,717 | ' | ' | ' |
Convertible senior notes, net | 1,003,847 | ' | 997,851 | ' | ' | ' |
Secured borrowings on transferred loans | 142,815 | ' | 181,238 | ' | ' | ' |
Total Liabilities | 3,815,716 | ' | 3,498,498 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Common stock | 2,232 | ' | 1,961 | ' | ' | ' |
Additional paid-in capital | 2,417,704 | ' | 1,987,133 | ' | ' | ' |
Treasury stock | -10,642 | ' | -10,642 | ' | ' | ' |
Accumulated other comprehensive income | 65,712 | ' | 68,092 | ' | ' | ' |
Retained earnings (deficit) | 60,214 | ' | 132,625 | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 2,535,220 | ' | 2,179,169 | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 4,650 | ' | 36,520 | ' | ' | ' |
Total Equity | 2,539,870 | ' | 2,215,689 | ' | ' | ' |
Total Liabilities and Equity | 6,355,586 | ' | 5,714,187 | ' | ' | ' |
Operating segment | Single Family Residential | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | 44,807 | ' | ' | ' |
Restricted cash | ' | ' | 251 | ' | ' | ' |
Residential real estate, net | ' | ' | 749,214 | ' | ' | ' |
Non-performing residential loans | ' | ' | 215,371 | ' | ' | ' |
Other assets | ' | ' | 8,045 | ' | ' | ' |
Total Assets | ' | ' | 1,017,688 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | ' | ' | 23,056 | ' | ' | ' |
Total Liabilities | ' | ' | 23,056 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | ' | 1,004,846 | ' | ' | ' |
Retained earnings (deficit) | ' | ' | -10,111 | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | ' | ' | 994,735 | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | ' | ' | -103 | ' | ' | ' |
Total Equity | ' | ' | 994,632 | ' | ' | ' |
Total Liabilities and Equity | ' | ' | 1,017,688 | ' | ' | ' |
Operating segment | LNR | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 136,148 | ' | 40,274 | ' | ' | ' |
Restricted cash | 10,237 | ' | 32,208 | ' | ' | ' |
Loans held-for-investment, net | 4,415 | ' | 12,781 | ' | ' | ' |
Loans held-for-sale | 145,662 | ' | 206,672 | ' | ' | ' |
Investment securities | 638,069 | ' | 550,282 | ' | ' | ' |
Intangible assets - servicing rights | 224,676 | ' | 257,736 | ' | ' | ' |
Investment in unconsolidated entities | 68,644 | ' | 76,170 | ' | ' | ' |
Goodwill | 140,437 | ' | 140,437 | ' | ' | ' |
Derivative assets | 2,360 | ' | 4,631 | ' | ' | ' |
Accrued interest receivable | 579 | ' | 2,129 | ' | ' | ' |
Other assets | 86,432 | ' | 57,620 | ' | ' | ' |
Total Assets | 1,457,659 | ' | 1,380,940 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 89,904 | ' | 135,882 | ' | ' | ' |
Related-party payable | 4,691 | ' | 6,548 | ' | ' | ' |
Derivative liabilities | 1,275 | ' | 43 | ' | ' | ' |
Secured financing agreements, net | 95,568 | ' | 129,843 | ' | ' | ' |
Total Liabilities | 191,438 | ' | 272,316 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | 1,366,871 | ' | 1,308,500 | ' | ' | ' |
Accumulated other comprehensive income | 9,250 | ' | 7,357 | ' | ' | ' |
Retained earnings (deficit) | -109,900 | ' | -207,233 | ' | ' | ' |
Total Starwood Property Trust, Inc. Stockholders' Equity | 1,266,221 | ' | 1,108,624 | ' | ' | ' |
Total Equity | 1,266,221 | ' | 1,108,624 | ' | ' | ' |
Total Liabilities and Equity | 1,457,659 | ' | 1,380,940 | ' | ' | ' |
LNR VIEs | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 194 | ' | 276 | ' | ' | ' |
Investment securities | -469,521 | ' | -409,322 | ' | ' | ' |
Intangible assets - servicing rights | -67,830 | ' | -80,563 | ' | ' | ' |
Investment in unconsolidated entities | -2,564 | ' | -3,383 | ' | ' | ' |
Other assets | -1,179 | ' | -872 | ' | ' | ' |
VIE assets, at fair value | 114,091,158 | ' | 103,151,624 | ' | ' | ' |
Total Assets | 113,550,258 | ' | 102,657,760 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' |
Accounts payable, accrued expenses and other liabilities | 365 | ' | 309 | ' | ' | ' |
VIE liabilities, at fair value | 113,541,151 | ' | 102,649,263 | ' | ' | ' |
Total Liabilities | 113,541,516 | ' | 102,649,572 | ' | ' | ' |
Starwood Property Trust, Inc. Stockholders' Equity: | ' | ' | ' | ' | ' | ' |
Non-controlling interests in consolidated subsidiaries | 8,742 | ' | 8,188 | ' | ' | ' |
Total Equity | 8,742 | ' | 8,188 | ' | ' | ' |
Total Liabilities and Equity | $113,550,258 | ' | $102,657,760 | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | |||||||
6-May-14 | Feb. 24, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Aug. 06, 2014 | Jul. 24, 2014 | Jul. 24, 2014 | Jul. 24, 2014 | Aug. 01, 2014 | |
Lender 2 Repo 1 Facility | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||||||
Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Lender 2 Repo 1 Facility | Warehouse line | |||||||||
Minimum | Maximum | |||||||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowings under the facility before amendment | ' | ' | ' | ' | ' | ' | ' | ' | $225,000,000 | ' | ' | ' |
Maximum facility size | ' | ' | $3,378,812,000 | ' | $3,378,812,000 | ' | $225,000,000 | ' | $325,000,000 | ' | ' | $250,000,000 |
Debt instrument reduction in basis spread | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.50% | ' |
Dividend declared (in dollars per share) | $0.48 | $0.48 | $0.48 | $0.46 | $0.96 | $0.90 | ' | $0.48 | ' | ' | ' | ' |