Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 10, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35845 | |
Entity Registrant Name | LUMENT FINANCE TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 45-4966519 | |
Entity Address, Address Line One | 230 Park Avenue, 23rd Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10169 | |
City Area Code | 212 | |
Local Phone Number | 521-6323 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,943,383 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001547546 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | LFT | |
Security Exchange Name | NYSE | |
Redeemable Preferred Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.875% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share | |
Trading Symbol | LFTPrA | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | ||
ASSETS | ||||
Cash and cash equivalents | [1] | $ 11,717,804 | $ 11,375,960 | |
Restricted cash | [1] | 32,154,188 | 57,999,396 | |
Commercial mortgage loans held-for-investment, at amortized cost | 484,165,249 | [1] | 547,345,334 | |
Mortgage servicing rights, at fair value | [1] | 899,223 | 919,678 | |
Accrued interest receivable | [1] | 2,173,007 | 2,015,617 | |
Investment related receivable | [1] | 34,539,187 | 0 | |
Other assets | [1] | 1,757,914 | 1,833,794 | |
Total Assets | [1] | 567,406,572 | 621,489,779 | |
LIABILITIES: | ||||
Collateralized loan obligations, net | [1] | 409,404,872 | 463,060,090 | |
Secured term loan, net | [1] | 39,598,532 | 39,556,198 | |
Accrued interest payable | [1] | 393,130 | 432,936 | |
Dividends payable | [1] | 2,248,612 | 3,242,640 | |
Fees and expenses payable to Manager | [1] | 1,204,688 | 1,156,340 | |
Other accounts payable and accrued expenses | [1] | 290,670 | 338,423 | |
Total Liabilities | [1] | 453,140,504 | 507,786,627 | |
Commitments and contingencies | [1] | |||
EQUITY: | ||||
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 24,943,383 shares issued and outstanding, at March 31, 2021 and December 31, 2020, respectively | [1] | 249,389 | 249,389 | |
Additional paid-in capital | [1] | 233,853,156 | 233,850,271 | |
Cumulative distributions to stockholders | [1] | (133,604,590) | (131,355,978) | |
Accumulated earnings | [1] | 13,668,613 | 10,859,970 | |
Total stockholders' equity | [1] | 114,166,568 | 113,603,652 | |
Noncontrolling interests | [1] | 99,500 | 99,500 | |
Total equity | [1] | 114,266,068 | 113,703,152 | |
Total liabilities and equity | [1] | $ 567,406,572 | $ 621,489,779 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | |
Common stock, shares issued (in shares) | 24,943,383 | 24,943,383 | |
Common stock, shares outstanding (in shares) | 24,943,383 | 24,943,383 | |
Assets | [1] | $ 567,406,572 | $ 621,489,779 |
Liabilities | [1] | 453,140,504 | 507,786,627 |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |||
Variable Interest Entity [Line Items] | |||
Assets | 537,399,673 | 591,318,506 | |
Liabilities | $ 409,716,943 | $ 463,411,967 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest income: | ||
Commercial mortgage loans held-for-investment | $ 7,470,117 | $ 9,165,805 |
Cash and cash equivalents | 4,300 | 28,167 |
Interest expense: | ||
Collateralized loan obligations | (2,185,242) | (4,237,889) |
Secured term loan | (771,865) | (780,441) |
Net interest income | 4,517,310 | 4,175,642 |
Other income (loss): | ||
Unrealized (loss) on mortgage servicing rights | (20,455) | (877,749) |
Servicing income, net | 124,156 | 194,147 |
Other income | 0 | 2 |
Total other income (loss) | 103,701 | (683,600) |
Expenses: | ||
Management and incentive fees | 720,999 | 584,821 |
General and administrative expenses | 680,314 | 765,892 |
Operating expenses reimbursable to Manager | 312,454 | 461,121 |
Other operating expenses | 34,753 | 300,926 |
Compensation expense | 49,135 | 54,132 |
Total expenses | 1,797,655 | 2,166,892 |
Net income before provision for income taxes | 2,823,356 | 1,325,150 |
(Provision for) benefit from income taxes | (14,713) | 226,521 |
Net income | 2,808,643 | 1,551,671 |
Dividends to preferred stockholders | (3,708) | (3,750) |
Net income attributable to common stockholders | 2,804,935 | 1,547,921 |
Earnings per share: | ||
Net income attributable to common stockholders (basic and diluted) | $ 2,804,935 | $ 1,547,921 |
Weighted average number of shares of common stock outstanding (in shares) | 24,943,383 | 24,911,483 |
Basic and diluted income per share (in dollars per share) | $ 0.11 | $ 0.06 |
Dividends declared per share of common stock (in dollars per share) | $ 0.09 | $ 0.08 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions to Stockholders | Accumulated Earnings | Total Stockholders' Equity | Noncontrolling interests | |
Balance (in shares) at Dec. 31, 2019 | 23,692,164 | |||||||
Balance at Dec. 31, 2019 | $ 108,644,712 | $ 236,877 | $ 228,135,116 | $ (122,236,981) | $ 2,410,200 | $ 108,545,212 | $ 99,500 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock (in shares) | 1,246,719 | |||||||
Issuance of common stock | 5,747,375 | $ 12,467 | 5,734,908 | 5,747,375 | ||||
Cost of issuing common stock | (13,333) | (13,333) | (13,333) | |||||
Restricted stock compensation expense | 7,882 | 7,882 | 7,882 | |||||
Net income | 1,551,671 | 1,551,671 | 1,551,671 | |||||
Common dividends declared | (1,870,416) | (1,870,416) | (1,870,416) | |||||
Preferred dividends declared | (3,750) | (3,750) | (3,750) | |||||
Balance (in shares) at Mar. 31, 2020 | 24,938,883 | |||||||
Balance at Mar. 31, 2020 | 114,064,141 | $ 249,344 | 233,864,573 | (124,111,147) | 3,961,871 | 113,964,641 | 99,500 | |
Balance (in shares) at Dec. 31, 2020 | 24,943,383 | |||||||
Balance at Dec. 31, 2020 | 113,703,152 | [1] | $ 249,389 | 233,850,271 | (131,355,978) | 10,859,970 | 113,603,652 | 99,500 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock | 0 | 0 | ||||||
Cost of issuing common stock | 0 | 0 | 0 | |||||
Restricted stock compensation expense | 2,885 | 2,885 | 2,885 | |||||
Net income | 2,808,643 | 2,808,643 | 2,808,643 | |||||
Common dividends declared | (2,244,904) | (2,244,904) | (2,244,904) | |||||
Preferred dividends declared | (3,708) | (3,708) | (3,708) | |||||
Balance (in shares) at Mar. 31, 2021 | 24,943,383 | |||||||
Balance at Mar. 31, 2021 | $ 114,266,068 | [1] | $ 249,389 | $ 233,853,156 | $ (133,604,590) | $ 13,668,613 | $ 114,166,568 | $ 99,500 |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Cash flows from operating activities: | |||
Net income | $ 2,808,643 | $ 1,551,671 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Accretion of collateralized loan obligations discounts, net | 207,767 | 273,188 | |
Amortization of deferred offering costs | 0 | (13,333) | |
Amortization of deferred financing costs | 253,254 | 256,069 | |
Unrealized loss on mortgage servicing rights | 20,455 | 877,749 | |
Restricted stock compensation expense | 2,885 | 7,882 | |
Net change in: | |||
Accrued interest receivable | (157,390) | (81,404) | |
Deferred offering costs | 0 | 13,333 | |
Other assets | 75,880 | (582,432) | |
Accrued interest payable | (39,806) | (241,020) | |
Fees and expenses payable to Manager | 48,348 | 21,019 | |
Other accounts payable and accrued expenses | (47,753) | 289,276 | |
Net cash provided by operating activities | 3,172,283 | 2,371,998 | |
Cash flows from investing activities: | |||
Purchase of commercial mortgage loans held-for-investment | (34,888,000) | (38,613,756) | |
Principal payments from commercial mortgage loans held-for-investment | 98,068,085 | 34,507,879 | |
Investment related receivable | (34,539,187) | 0 | |
Net cash provided by (used in) investing activities | 28,640,898 | (4,105,877) | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 0 | 5,747,375 | |
Dividends paid on common stock | (3,242,640) | (1,776,912) | |
Payment of collateralized loan obligations | (54,073,905) | 0 | |
Net cash (used in) provided by financing activities | (57,316,545) | 3,970,463 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (25,503,364) | 2,236,584 | |
Cash, cash equivalents and restricted cash, beginning of period | 69,375,356 | 16,011,830 | |
Cash, cash equivalents and restricted cash, end of period | 43,871,992 | 18,248,414 | |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 2,535,893 | 4,730,094 | |
Non-cash investing and financing activities information | |||
Dividends declared but not paid at end of period | $ 2,248,612 | [1] | $ 1,874,166 |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS OPERATIONS | ORGANIZATION AND BUSINESS OPERATIONS Lument Finance Trust, Inc. (together with its consolidated subsidiaries, the "Company"), formerly Hunt Companies Finance Trust, Inc. is a Maryland corporation that focuses primarily on investing in, financing and managing a portfolio of commercial real estate ("CRE") debt investments. Effective January 3, 2020, the Company is externally managed by OREC Investment Management, LLC, doing business as Lument Investment Management (the "Manager" or "Lument IM"), who replaced the prior manager, Hunt Investment Management, LLC ("HIM"). On December 28, 2020, the Company changed its name from Hunt Companies Finance Trust, Inc. to Lument Finance Trust, Inc., and its common stock began trading on the NYSE under the symbol "LFT." Previously, the Company's common stock was listed on the NYSE under the symbol "HCFT." The Company was incorporated on March 28, 2012 and commenced operations on May 16, 2012. The Company began trading as a publicly traded company on March 22, 2013. The Company has elected to be taxed as a real estate investment trust ("REIT") and to comply with Sections 856 through 859 of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. On January 3, 2020, the Company and HIM entered into a termination agreement pursuant to which the Company and HIM agreed to mutually and immediately terminate that certain management agreement dated January 18, 2018. The Company simultaneously entered into a new management agreement with Lument IM. Pursuant to the terms of the termination agreement between the Company and HIM, the termination of the management agreement did not trigger, and HIM was not paid, a termination fee by the Company. See Note 10 for further discussion. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (“SEC”) on March 15, 2021. Principles of Consolidation The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and all subsidiaries which it controls (i) through voting or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted for under the equity method or other appropriate GAAP. All significant intercompany transactions have been eliminated on consolidation. VIEs An entity is considered a VIE when any of the following applies: (1) the equity investors (if any) lack one or more essential characteristics of a controlling financial interest; (2) the equity investment at risk is not sufficient to finance that entity's activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both the following characteristics: (1) the power to direct activities that, when taken together, most significantly impact the VIE performance; and (2) the obligation to absorb losses and right to receive returns from the VIE that would be significant to the VIE. The Company evaluates quarterly its junior retained notes and preferred shares of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for potential consolidation. At March 31, 2021, the Company determined it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligation to absorb losses derived from ownership of its preferred shares. Accordingly, the Company consolidated the assets, liabilities, income and expenses of the underlying issuing entities. The Company's maximum exposure to loss from collateralized loan obligations ("CLO") was $124,046,671 at March 31, 2021 and December 31, 2020. Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. As of March 31, 2021, the novel coronavirus, or COVID-19, pandemic is ongoing. During 2020, the COVID-19 pandemic created disruption in global supply chains, increased rates of unemployment and adversely impacted many industries, including industries related to the collateral underlying certain of our loans. In 2021, the global economy has, with certain setbacks, begun reopening and wider distribution of vaccines will likely encourage greater economic activity. Nonetheless, the recovery could remain uneven, particularly given uncertainty with respect to the distribution and acceptance of the vaccines and their effectiveness with respect to new variants of the virus. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of March 31, 2021, however uncertainty over the ultimate impact of COVID-19 on the global economy generally, and our business in particular, makes any estimates and assumptions as of March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results could differ from our estimates and the differences may be material. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at time of purchase include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having maturities of 90 days or less at time of acquisition. The Company maintains its cash and cash equivalents with highly rated financial institutions, and at times these balances exceed insurable amounts. Restricted cash includes cash held within Hunt CRE 2018-FL2 as of March 31, 2021 and December 31, 2020. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2021 December 31, 2020 Cash and cash equivalents $ 11,717,804 $ 11,375,960 Restricted cash CRE 2018-FL2, Ltd. $ 32,154,188 $ 57,999,396 Total cash, cash equivalents and restricted cash $ 43,871,992 $ 69,375,356 Deferred Offering Costs Direct costs incurred to issue shares classified as equity, such as legal and accounting fees, are deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item "Deferred offering costs", for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in "Other accounts payable and accrued expenses" on the accompanying consolidated balance sheets. Fair Value Measurements The "Fair Value Measurements and Disclosures" Topic 820 of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurement under GAAP. Specifically, the guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at measurement date. ASC 820 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable market data from independent sources, while unobservable inputs reflect the Company's market assumptions. The three levels are defined as follows: • Level 1 Inputs – Quoted prices for identical instruments in active markets. • Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs – Instruments with primarily unobservable value drivers. Pursuant to ASC 820 we disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate fair value for those certain instruments. The following methods and assumptions are used to estimate the fair value of each class of financial instrument, for which it is practicable to estimate that value: • Cash and cash equivalents : The carrying amount of cash and cash equivalents approximates fair value. • Restricted cash : The carrying amount of restricted cash approximates fair value. • Commercial mortgage loans : The Company determines the fair value of commercial mortgage loans by utilizing a pricing model based on discounted cash flow methodologies using discount rates, which reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Additionally, the Company may record fair value adjustments on a non-recurring basis when it has determined it necessary to record a specific impairment reserve or charge-off against a loan and the Company measures such specific reserve or charge-off using the fair value of the loan's collateral. To determine the fair value of loan collateral, the Company employs the income capitalization approach, appraised values, broker opinion of value, sale offers, letter of intentions of purchase, or other valuation benchmarks, as applicable, depending upon the nature of such collateral and other relevant market factors. • Mortgage servicing rights : The Company determines the fair value of MSRs from a third-party pricing service on a recurring basis. The third-party pricing service uses common market pricing methods that include using discounted cash flow models to calculate present value, estimated net servicing income and observed market pricing for MSR purchase and sale transactions. The model considers contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. • Collateralized loan obligations : The Company determines the fair value of collateralized loan obligations by utilizing a third-party pricing service. In determining the value of a particular investment, pricing service providers may use market spreads, inventory levels, trade and bid history, as well as market insight from clients, trading desks and global research platform. • Secured term loan : The Company determines the fair value of its secured term loan based on a discounted cash flow methodology. Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, costs, premiums and discounts associated with these loan investments are deferred and amortized over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of March 31, 2021, the Company did not hold any loans placed in non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratio ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. The Company's loans are rated on a 5-point scale, from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk : exceeds expectations and is outperforming underwriting or it is very likely that the underlying loan can be refinanced easily in the period's prevailing capital market conditions 2. Low Risk : meeting or exceeding underwritten expectations 3. Moderate Risk : in-line with underwritten expectations or the sponsor may be in the early stages of executing the business plan and the loan structure appropriately mitigates additional risks 4. High Risk : potential risk of default, a loss may occur in the event of default 5. Default Risk : imminent risk of default, a loss is likely in the event of default The Company evaluates each loan rated High Risk or above as to whether it is impaired on a quarterly basis. Impaired loans are individually evaluated based on the Company's quarterly assessment of each loan and assignment of a risk rating. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, all of which are deemed collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. As of March 31, 2021, the Company has not recognized any impairments on its loans held-for-investment. We also assessed the remainder of the portfolio, considering the absence of delinquencies and current market conditions, and, as such has not recorded any allowance for loan losses. Mortgage Servicing Rights, at Fair Value Mortgage servicing rights ("MSRs") are associated with residential mortgage loans that the Company historically purchased and subsequently sold or securitized. MSRs are held and managed at Five Oaks Acquisition Corp. ("FOAC"), the Company’s taxable REIT subsidiary ("TRS"). As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service, directly or through a subservicer, the associated loan. MSRs are reported at fair value. Residential mortgage loans for which the Company owns the MSRs are directly serviced by two sub-servicers retained by the Company. The Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed upon rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary of and accordingly are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. CLOs are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums, discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. In the second quarter of 2020, $624,816 in costs related to a contemplated collateralized loan transaction, that were previously deferred as "other assets" in the consolidated balance sheets were expensed as "other operating expenses" in the consolidated statements of operations as a result of abandoning the contemplated transaction due to the then current market environment, which had been impacted by the COVID-19 pandemic. Secured Term Loan The Company and certain of its subsidiaries are party to a $40.25 million credit and guaranty agreement with the lenders referred to therein and Cortland Capital Service LLC, as administrative agent and collateral agent for the lenders (the "Secured Term Loan"). The Secured Term Loan is carried at its unpaid principal balance, net of deferred financing costs. Deferred financing costs of $1,017,419 associated with this liability are amortized to interest expense on a straight line basis when it approximates the effective interest method. See Note 16 for additional information related to the Secured Term Loan. Common Stock At March 31, 2021 and December 31, 2020, the Company was authorized to issue up to 450,000,000 shares of common stock, par value $0.01 per share. The Company had 24,943,383 shares of common stock issued and outstanding at March 31, 2021 and December 31, 2020, respectively. Stock Repurchase Program On December 15, 2015, the Company’s Board of Directors authorized a stock repurchase program ("Repurchase Program"), to repurchase up to $10 million of the Company’s outstanding common stock. Subject to applicable securities laws, the repurchase of common stock under the Repurchase Program may be made at times and in amounts as the Company deems appropriate, using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. Preferred Stock At March 31, 2021 and December 31, 2020, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company's Board of Directors. The Company had no shares of preferred stock issued and outstanding at March 31, 2021 and December 31, 2020. See Note 16 for additional information related to our preferred stock. Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to stockholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that the Company is not permitted to engage in as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements, including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholders; (ii) invest at least 75% of its assets in REIT qualifying assets, with additional restrictions with respect to asset concentration risk; and (iii) earn at least 95% of its gross income from qualifying sources of income, including at least 75% from qualifying real estate and real estate related sources. Regardless of the REIT election, the Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax as a U.S. C-Corporation, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The TRS is not subject to a distribution requirement with respect to its REIT owner. The TRS may retain earnings annually, resulting in an increase in the consolidated book equity of the Company and without a corresponding distribution requirement by the REIT. If the TRS generates net income, and declares dividends to the Company, such dividends will be included in its taxable income and necessitate a distribution to its stockholders in accordance with the REIT distribution requirements. The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company's accounting policy with respect to interest and penalties is to classify these amounts as other interest expense. Earnings per Share The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 13 for details of the computation of basic and diluted earnings per share. Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the consolidated financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair-value based methodology prescribed by ASC 505, Equity ("ASC 505"), or ASC 718, Share-Based Payment ("ASC 718"), as appropriate. Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, the compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period. See Note 10 for details of stock-based awards issuable under the Manager Equity Plan. Comprehensive Income (Loss) Attributable to Common Stockholders For the three months ended March 31, 2021 and 2020, comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. Recently Issued and/or Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, which is a comprehensive amendment of credit losses on financial instruments. Currently GAAP requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The standard’s core principle is that an entity replaces the "incurred loss" impairment methodology in current GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates. For public business entities that are SEC filers, the amendment in this update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 which amended the effective dates for implementation of ASU 2016-13. ASU 2019-10 defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, public business entities that are not SEC filers and all other companies, including not-for-profit companies and employee benefit plans for fiscal years beginning after December 15 2022, including interim periods within those fiscal years. The Company is designated as a smaller reporting company and has deferred implementation of ASU 2016-13 pursuant to ASU 2019-10 and is continuing to assess the impact of this guidance. In February 2020, the FASB issued ASU 2020-02, amending SEC paragraphs in the Codification to reflect the issuance of SEC Staff Accounting Bulletin ("SAB") No. 119 related to the new credit losses standard and revised effective date of the new leases standard. SAB No. 119 provides interpretive guidance on methodologies and supporting documentation for measuring credit losses, with a focus on the documentation the staff would normally expect registrants engaged in lending transactions to prepare and maintain to support estimates of current expected credit losses for loan transactions. This new guidance is effective for fiscal years beginning after December 15, 2022 for smaller reporting companies such as the Company. The Company is assessing the impact of this guidance. Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This guidance eliminates certain exceptions to the general principles in Topic 740. This new guidance is effective for us on January 1, 2021, with early adoption permitted. The Company adopted ASU 2019-12 beginning with the first quarter of 2021, which had no material impact on the Company's financial condition or results of operations. Financial Instruments In March 2020, the FASB issued ASU 2020-03 which makes improvements to financial instruments guidance, including the current expected credit losses (CECL) guidance in ASU 2016-13. Only Issue 1, of the 7 improvement issues applies to the Company, which is effective upon issuance, requires all entities to provide fair value option disclosures. MSRs are reported at fair value as a result of the fair value election, as discussed in Mortgage Servicing Rights, at Fair Value above . Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 828): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The standard was issued to ease the accounting effects of reform to the London Interbank Offered Rate ("LIBOR") and other reference rates. The standard provides optional expedients and exceptions for applying GAAP to debt instruments, leases, derivatives and other contracts affected by reference rate reform. ASU 2020-04 generally considers contract modifications related to reference rate reform to be an event that does not require contract remeasurement at the modification date nor a reassessment of a previous accounting determination. The standard is effective for all entities as of March 12, 2020 through December 31, 2022 and may be elected over time as reference rate reform activities occur. We are currently evaluating the impact of this guidance on our consolidated financial statements. CARES Act On March 27, 2020, former President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Section 4013 of the CARES Act includes a provision that permits financial institutions an election to suspend temporarily troubled debt restructuring ("TDR") accounting under ASC Subtopic 310-40 in certain circumstances ("Section 4013 Elections"). Additionally, Section 4014 of the CARES Act includes a provision that permits deferral of the effective date of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), for insured depository institutions, bank holding companies, or any affiliates thereof ("Section 4014 Election"). The Company is not a financial institution, nor a depository institution, bank holding company or an affiliate of one and therefore would not be permitted to make Section 4013 or Section 4014 Elections. The Company is designated as a smaller reporting company for SEC filing purposes and has previously deferred implementation of ASU 2016-13 until January 1, 2023 pursuant to ASU 2019-10. |
COMMERCIAL MORTGAGE LOANS HELD-
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT | COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENTThe following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2021 and December 31, 2020: Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) March 31, 2021 Loans held-for-investment Senior secured loans (3) $ 484,165,249 $ 484,165,249 34 100.0 % 5.1 % 2.9 484,165,249 484,165,249 34 100.0 % 5.1 % 2.9 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) December 31, 2020 Loans held-for-investment Senior secured loans (3) $ 547,345,334 $ 547,345,334 40 100.0 % 5.1 % 3.1 547,345,334 547,345,334 40 100.0 % 5.1 % 3.1 (1) Weighted average coupon assumes applicable one-month LIBOR of 0.11% and 0.14% as of March 31, 2021 and December 31, 2020, respectively, inclusive of weighted average floors of 1.54% and 1.64%, respectively. (2) Weighted average remaining term assumes all extension options are exercised by the borrower, provided, however, that our loans may be repaid prior to such date. (3) As of March 31, 2021, $468,945,755 of the outstanding senior secured loans were held in VIEs and $15,219,494 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2020, $531,363,401 of the outstanding senior secured loans were held in VIEs and $15,981,933 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2021, the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2020 $ 547,345,334 Purchases and fundings 34,888,000 Proceeds from principal payments (98,068,085) Balance at March 31, 2021 $ 484,165,249 Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — — — — 2 10 149,871,667 149,871,667 14 168,401,366 168,401,366 3 21 293,534,594 293,534,594 20 309,726,343 309,726,343 4 3 40,758,988 40,758,988 6 69,217,625 69,217,625 5 — — — — — — 34 $ 484,165,249 484,165,249 40 547,345,334 547,345,334 As of March 31, 2021, the average risk rating of the commercial mortgage loan portfolio was 2.7 (Moderate Risk), weighted by investment carrying value, with 91.6% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. As of December 31, 2020, the average risk rating of the commercial mortgage loan portfolio was 3.1 (Moderate Risk), weighted by investment carrying value, with 84.4% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager. The decrease in average risk rating is primarily the result of commercial mortgage loans that paid off with a risk rating of "4" of $16.7 million, the purchase of $34.9 million of commercial mortgage loans with a risk rating of "2" and the migration of $31.1 million of commercial mortgage loans from a risk rating of "4" to a risk rating of "3" during the first quarter of 2021. Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2021 and December 31, 2020: Loans Held-for-Investment March 31, 2021 December 31, 2020 Geography Southwest 39.0 % 38.7 % South 30.4 36.5 Midwest 19.0 16.8 Mid-Atlantic 7.0 6.2 West 4.6 1.8 Total 100.0 % 100.0 % March 31, 2021 December 31, 2020 Collateral Property Type Multifamily 88.2 % 89.5 % Retail 7.2 6.4 Office 3.7 3.3 Self-Storage 0.9 0.8 Total 100.0 % 100.0 % We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of March 31, 2021 or December 31, 2020. |
USE OF SPECIAL PURPOSE ENTITIES
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2021 | |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |
Variable Interest Entity [Line Items] | |
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES On April 30, 2018, the Company acquired Hunt CMT Equity LLC, which was comprised of commercial mortgage loans financed through collateralized loan obligations ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender and eight loan participations. As discussed in Note 2 ("Summary of Significant Accounting Policies - Principles of Consolidation - VIE"), the Company determined Hunt CRE 2017-FL1, Ltd., a CRE CLO, was a VIE and that the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. On August 20, 2018, the Company closed a CRE CLO ("Hunt CRE 2018-FL2, Ltd."). As discussed in Note 2 ("Summary of Significant Accounting Policies - Principles of Consolidation - VIE"), the Company determined Hunt CRE 2018-FL2, Ltd., a CRE CLO, was a VIE and the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. However, the assets of each of the trusts are restricted, and can only be used to fulfill the obligations of the respective trusts. Additionally, the obligations of each of the trusts do not have any recourse to the Company as the consolidator of the trusts. At March 31, 2021, the Company continued to determine it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligations to absorb losses derived from ownership of preferred shares. The CRE CLOs we consolidate are subject to collateralization and coverage tests that are customary for these types of securitizations. As of March 31, 2021 and December 31, 2020 all such collateralization and coverage tests in the CRE CLOs we consolidate were met. If the duration of the COVID-19 pandemic continues to prolong, its impact on our borrowers and their tenants could result in a sustained deterioration in a material amount of assets and may impact these tests. The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at March 31, 2021 and December 31, 2020 included the following VIE assets and liabilities: ASSETS March 31, 2021 December 31, 2020 Cash, cash equivalents and restricted cash $ 32,154,188 $ 57,999,396 Accrued interest receivable (1) 2,110,781 1,955,709 Investment related receivable (2) 34,188,949 — Loans held for investment 468,945,755 531,363,401 Total Assets $ 537,399,673 $ 591,318,506 LIABILITIES Accrued interest payable $ 312,071 $ 351,877 Collateralized loan obligations (3) 409,404,872 463,060,090 Total Liabilities $ 409,716,943 $ 463,411,967 Equity 127,682,730 127,906,539 Total liabilities and equity $ 537,399,673 $ 591,318,506 (1) Accrued interest receivable includes $498,911 of interest and exit fees receivable, which were settled subsequent to March 31, 2021. (2) Investment related receivable relates to one loan in Hunt CRE 2017-FL1 with a principal amount due of 9,808,696 and two loans in Hunt CRE 2018-FL2 with principal amounts due of $24,380,253 which paid off in March 2021 after the March remittance and were received in April. The Hunt CRE 2017-FL1 repayment will be used to pay down the Class A Notes of the CLO in April 2021. (3) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of March 31, 2021 and December 31, 2020: As of March 31, 2021 Collateralized Loan Obligations Count Principal Value Carrying Value (1) Wtd. Avg. Yield Collateral (loan investments) 34 $ 468,945,755 $ 468,945,755 L + 3.53% Financings provided 2 411,242,221 409,404,872 L + 1.50% As of December 31, 2020 Collateralized Loan Obligations Count Principal Value Carrying Value (1) Wtd. Avg. Yield Collateral (loan investments) 40 $ 531,363,401 $ 531,363,401 L + 3.50% Financing provided 2 465,316,126 463,060,090 L + 1.44% (1) The carrying value for Hunt CRE 2017-FL1, Ltd. is net of discount of $0 and $207,767 for March 31, 2021 and December 31, 2020, respectively and the carrying value for Hunt CRE 2018-FL2, Ltd. is net of debt issuance costs of $1,837,349 and $2,048,269 for March 31, 2021 and December 31, 2020, respectively. The statement of operations related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for the three months ended March 31, 2021 and March 31, 2020 include the following income and expense items: Statements of Operations Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Interest income $ 7,263,861 $ 9,032,178 Interest expense (2,185,242) (4,237,889) Net interest income $ 5,078,619 $ 4,794,289 General and administrative fees (120,586) (145,986) Net income $ 4,958,033 $ 4,648,303 |
RESTRICTED CASH
RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2021 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | RESTRICTED CASHHunt CRE 2018-FL2, Ltd. is actively managed with an initial reinvestment period of 36 months that expires in August 2021. As loans payoff or mature, as applicable, during this reinvestment period, cash received is restricted and intended to be reinvested within Hunt CRE 2018-FL2, Ltd. in accordance with the terms and conditions of their respective governing agreements. |
SECURED TERM LOAN
SECURED TERM LOAN | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
SECURED TERM LOAN | SECURED TERM LOAN On January 15, 2019, the Company, together with its FOAC and Hunt CMT Equity subsidiaries (together with the Company, the "Credit Parties"), entered into the Secured Term Loan, as amended on February 13, 2019 and July 9, 2020 with the lenders party thereto and Cortland Capital Market Services, LLC, as administrative agent (in such capacity, the "Agent"), providing for a term facility ("Credit Agreement") to be drawn in an aggregate principal amount of $40.25 million with a maturity of 6 years. On February 14, 2019, the Company drew on the Secured Term Loan in the aggregate principal amount of $40.25 million generating net proceeds of $39.2 million. The outstanding balance of the Secured Term Loan in the table below is presented gross of deferred financing costs ($651,468 and $693,802 at March 31, 2021 and December 31, 2020, respectively). As of March 31, 2021 and December 31, 2020, the outstanding balance and total commitment under the Credit Agreement consisted of the following: March 31, 2021 December 31, 2020 Outstanding Balance Total Commitment Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 $ 40,250,000 $ 40,250,000 The borrowings under the Secured Term Loan are joint and several obligations of the Credit Parties. In addition, the Credit Parties’ obligations under the Secured Term Loan are secured by substantially all the assets of the Credit Parties through pledge and security documentation. Amounts advanced under the Secured Term Loan are subject to compliance with a borrowing base comprised of assets of the Credit Parties and certain of their subsidiaries, and include senior and subordinated CRE mortgage loans, preferred equity in CRE assets (directly or indirectly), CRE construction mortgage loans and certain types of equity interests (the "Eligible Assets"). Borrowings under the Secured Term Loan bear interest at a fixed rate of 7.25% for the five-year period following the initial draw-down, which is subject to step up by 0.25% for the first four months after the fifth anniversary of the borrowing of the Senior Secured Term Loan, then by 0.375% for the following four months, then by 0.50% for the last four months until maturity. In response to the continued COVID-19 pandemic, on July 9, 2020, the Company entered into the Second Amendment to the Credit and Guaranty Agreement. This amendment provides the Company with additional flexibility to effectively manage any potential borrower distress related to COVID-19 that were not originally contemplated in loan documentation. The Credit Agreement contains affirmative and negative covenants binding the Company and its subsidiaries that are customary for credit facilities of this type, including, but not limited to: minimum asset coverage ratio; minimum unencumbered assets ratio; maximum total net leverage ratio; minimum tangible net worth; and an interest charge coverage ratio. As of March 31, 2021 and December 31, 2020 we were in compliance with these covenants. If the duration of the COVID-19 pandemic continues to prolong, its impact on our borrowers and their tenants could result in a sustained deterioration in a material amount of assets and may impact these covenants. The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, violation of covenants, cross default with material indebtedness, and change of control. See Note 16 for additional information related to the Secured Term Loan. |
MSRs
MSRs | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSRs | MSRs As of March 31, 2021, the Company retained the servicing rights associated with an aggregate principal balance of $152,465,708 of residential mortgage loans that the Company had previously transferred to residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs two licensed sub-servicers to perform the related servicing activities. The following table presents the Company’s MSR activity for the three months ended March 31, 2021 and the three months ended March 31, 2020: March 31, 2021 March 31, 2020 Balance at beginning of period $ 919,678 $ 2,700,207 Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model 167,839 (728,585) Other changes to fair value (1) (188,294) (149,164) Balance at end of period $ 899,223 $ 1,822,458 Loans associated with MSRs (2) $ 152,465,708 $ 315,173,382 MSR values as percent of loans (3) 0.59 % 0.58 % (1) Amounts represent changes due to realization of expected cash flows and prepayment of principal of the underlying loan portfolio. (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at March 31, 2021 and March 31, 2020, respectively. (3) Amounts represent the carrying value of MSRs at March 31, 2021 and March 31, 2020, respectively divided by the outstanding balance of the loans associated with these MSRs The following table presents the servicing income recorded on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended Three Months Ended Servicing income, net $ 124,156 $ 194,147 Total servicing income $ 124,156 $ 194,147 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following tables summarize the valuation of the Company’s assets and liabilities carried at fair value on a recurring basis within the fair value hierarchy levels as of March 31, 2021 and December 31, 2020: March 31, 2021 Quoted prices in Significant Unobservable Balance as of March 31, 2021 Assets: Mortgage servicing rights — — 899,223 899,223 Total $ — $ — $ 899,223 $ 899,223 December 31, 2020 Quoted prices in Significant Unobservable Balance as of Assets: Mortgage servicing rights — — 919,678 919,678 Total $ — $ — $ 919,678 $ 919,678 As of March 31, 2021 and December 31, 2020, the Company had $899,223 and $919,678, respectively, in Level 3 assets. The Company’s Level 3 assets are comprised of MSRs. For more detail about Level 3 assets, also see Notes 2 and 7. The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at March 31, 2021 and December 31, 2020: As of March 31, 2021 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 10.0 - 28.7% 18.5 % Discount rate 12.0 % 12.0 % As of December 31, 2020 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 12.4 - 28.0% 21.6 % Discount rate 12.0 % 12.0 % As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the condensed consolidated balance sheets, for which it is practicable to estimate that value. The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 2: March 31, 2021 Level in Fair Value Hierarchy Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 1 11,717,804 11,717,804 11,717,804 Restricted cash 1 32,154,188 32,154,188 32,154,188 Commercial mortgage loans held-for-investment 3 484,165,249 484,165,249 484,086,679 Total $ 528,037,241 $ 528,037,241 $ 527,958,671 Liabilities: Collateralized loan obligations 2 409,404,872 411,242,221 410,864,162 Secured Term Loan 3 39,598,532 40,250,000 44,361,328 Total $ 449,003,404 $ 451,492,221 $ 455,225,490 December 31, 2020 Level in Fair Value Hierarchy Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 1 11,375,960 11,375,960 11,375,960 Restricted cash 1 57,999,396 57,999,396 57,999,396 Commercial mortgage loans held-for-investment 3 547,345,334 547,345,334 547,134,755 Total $ 616,720,690 $ 616,720,690 $ 616,510,111 Liabilities: Collateralized loan obligations 2 463,060,090 465,316,126 458,094,412 Secured term loan 3 39,556,198 40,250,000 44,514,373 Total $ 502,616,288 $ 505,566,126 $ 502,608,785 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Management and Incentive Fee The Company is externally managed and advised by the Manager and through January 3, 2020 by HIM, our prior manager. Pursuant to the terms of the prior management agreement in effect for the year ended December 31, 2019, the Company paid the prior manager a management fee equal to 1.5% per annum, calculated and payable quarterly (0.375% per quarter) in arrears. For purposes of calculating the management fee, the Company’s stockholders’ equity included the sum of the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less any amount that the Company paid for repurchases of the Company’s common stock since inception, and excluding any unrealized gains, losses or other items that did not affect realized net income (regardless of whether such items were included in other comprehensive income or loss, or in net income). This amount was adjusted to exclude one-time events pursuant to changes in GAAP and certain non-cash items after discussions between the manager and the Company’s independent directors and approval by a majority of the Company’s independent directors. To the extent asset impairment reduced the Company’s retained earnings at the end of any completed calendar quarter, it would reduce the management fee for such quarter. The Company’s stockholders’ equity for the purposes of calculating the management fee could be greater than the amount of stockholders’ equity shown on the consolidated financial statements. Additionally, under the terms of the prior management agreement, starting in the first full calendar quarter following January 18, 2019, the Company was also required to pay the Manager a quarterly incentive fee equal to 20% of the excess of Core Earnings (as defined in the management agreement) over the product of (i) Stockholders' Equity as of the end of such fiscal quarter, and (ii) 8% per annum. On January 3, 2020, the management agreement in effect for the year ended December 31, 2019 was terminated, and a new management agreement with the Manager became effective. Pursuant to the terms of the new management contract, the Company is required to pay the Manager an annual base management fee of 1.50% of Stockholders' Equity (as defined in the management agreement), payable quarterly (0.375% per quarter) in arrears. The definition of stockholders' equity in the new management agreement is materially unchanged from the definition in the prior management agreement. Additionally, starting in the first full calendar quarter following January 3, 2020, the Company is also required to pay the Manager a quarterly incentive fee equal to 20% of the excess of Core Earnings (as defined in the management agreement) over the product of (i) the Stockholders' Equity as of the end of such fiscal quarter, and (ii) 8% per annum. For the three months ended March 31, 2021, the Company incurred management fees of $588,767 (March 31, 2020: $584,821), recorded as "Management and incentive fees" in the condensed consolidated statement of operations, of which $588,000 (March 31, 2020: $566,000) was accrued but had not been paid, included in "Fees and expenses payable to Manager" in the condensed consolidated balance sheets. For the three months ended March 31, 2021 the Company incurred incentive fees of $132,232 (March 31, 2020: $0), recorded as "Management and incentive fees" in the condensed consolidated statement of operations, of which $132,232 (March 31, 2020: $0) was accrued but had not been paid, included in "Fees and expenses payable to Manager" in the condensed consolidated balance sheets. Expense Reimbursement Pursuant to the management agreement, the Company is required to reimburse the Manager for operating expenses related to the Company incurred by the Manager, including accounting, auditing and tax services, technology and office facilities, operations, compliance, legal and filing fees, and miscellaneous general and administrative costs, including the cost of non-investment management personnel of the Manager who spend all or a portion of their time managing the Company’s affairs. The Manager has agreed to certain limitations on manager expense reimbursement from the Company. On March 18, 2019, the Company entered into a support agreement with the prior manager, pursuant to which, the prior manager agreed to reduce the reimbursement cap by 25% per annum (subject to such reduction not exceeding $568,000 per annum) until such time as the aggregate support provided thereunder equaled approximately $1.96 million. Pursuant to the new management agreement, the terms of the support agreement are materially unchanged. For the three months ended March 31, 2021, the Company incurred reimbursable expenses of $312,454 (March 31, 2020: $461,121), recorded as "operating expenses reimbursable to Manager" in the condensed consolidated statement of operations, of which $311,879 (March 31, 2020: $447,000) was accrued but had not yet been paid, included in "fees and expenses payable to Manager" in the condensed consolidated balance sheets. Per the management agreement, any exit fees waived by the Company as a result of permanent financing by the Manager or any of its affiliates, shall result in a reduction to reimbursed expenses by an amount equal to 50% of the amount of any such waived exit fee. For the three months ended March 31, 2021, the Company waived $129,120 of exit fees and for the three months ended March 31, 2020, the Company did not waive any exit fees. Manager Equity Plan The Company has in place a Manager Equity Plan under which the Company may compensate the Manager and the Company’s independent directors or consultants, or officers whom it may employ in the future. In turn, the Manager, in its sole discretion, grants such awards to its directors, officers, employees or consultants. The Company is able to issue under the Manager Equity Plan up to 3.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis) at the time of each award. Stock based compensation arrangements may include incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock awards and other awards based on the Company’s common stock. The following table summarizes the activity related to restricted common stock for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended March 31, 2021 2021 2020 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 2.60 4,500 $ 3.33 Granted — — — — Vested — — — $ — Outstanding Unvested Shares at End of Period 4,500 $ 2.60 4,500 $ 3.33 For the period ended March 31, 2021, the Company recognized compensation expense related to restricted common stock of $2,885 (2020: $7,882). The Company has unrecognized compensation expense of $2,468 as of March 31, 2021 (2020: $6,063) for unvested shares of restricted common stock. As of March 31, 2021, the weighted average period for which the unrecognized compensation expense will be recognized is 2.6 months. OREC Structured Finance, LLC During the first quarter of 2021, Hunt CRE 2018-FL2, Ltd. purchased three loans with an aggregate unpaid principal balance of $34.9 million at par from OREC Structured Finance, LLC d/b/a Lument Structured Finance ("LSF"), an affiliate of our Manager. During the first quarter of 2020, Hunt CRE 2017-FL1, Ltd. purchased two loans with an aggregate unpaid principal balance of $31.9 million at par from LSF. On August 5, 2020, the Company entered into an amendment to its Participation Agreements amongst Hunt CRE 2017-FL1 Seller, LLC ("FL1 Seller"), Hunt CRE 2017-FL1, Ltd. and ORIX Real Estate Capital Holdings, LLC d/b/a Lument to transfer future funding participation interests from FL1 Seller to LSF, an affiliate of the Manager (the "FL1 Future Funding Participation Transfer"). As a result of the FL1 Future Funding Participation Transfer, LSF will make all advances pursuant to the unfunded loan commitments. In connection with the FL1 Future Funding Participation transfer, the Company has agreed that at such time it (i) has available excess capital and (ii) the satisfaction of the applicable requirements for acquiring such assets, each as determined by the Manager, it will purchase from LSF, at a price equal to par, any FL1 Participations funded by LSF. The maximum amount of future payments that the Company could be required to purchase from LSF under the Future Funding Participation Transfer, which represents the unfunded commitments of Hunt CRE 2017-FL1, Ltd., was $17.1 million as of March 31, 2021. As of March 31, 2021, $6.9 million of participation interests had been funded by LSF and $10.2 million remain unfunded. ORIX Real Estate Capital ORIX Real Estate Capital, LLC ("OREC"), an affiliate of the Manager, was appointed as the sub-servicer to the servicer with respect to mortgage assets for Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. by KeyBank in its capacity as servicer of both CRE CLOs. Additionally, OREC was appointed by KeyBank as servicer to act as special servicer of any serviced mortgage loan that becomes a specially serviced mortgage loan. As of November 20, 2020 KeyBank resigned from its role as servicer of both CRE CLOs and OREC assumed servicer obligations and responsibilities. Hunt Companies, Inc. One of the Company's directors is also Chief Executive Officer and President of Hunt Companies, Inc. ("Hunt") and is a member of the Hunt Board of Directors, with which affiliates of the Manager have a commercial business relationship. The Manager's affiliates may from time to time sell commercial mortgage loans to Hunt or various of its subsidiaries and affiliates. |
GUARANTEES
GUARANTEES | 3 Months Ended |
Mar. 31, 2021 | |
Guarantees [Abstract] | |
GUARANTEES | GUARANTEES The Company, through FOAC, is party to customary and standard loan repurchase obligations in respect of residential mortgage loans that it has sold into securitizations or to third parties, to the extent it is determined that there has been a breach of standard seller representations and warranties in respect of such loans. To date, the Company has not been required to repurchase any loan due to a claim of breached seller reps and warranties. In July 2016, the Company announced that it would no longer aggregate and securitize residential mortgage loans; however, the Company sought to capitalize on its infrastructure and knowledge to become the provider of seller eligibility review and backstop services to MAXEX. MAXEX's wholly owned clearinghouse subsidiary, MAXEX Clearing LLC, formerly known as Central Clearing and Settlement LLC ("MAXEX Clearing LLC"), functions as the central counterparty with which buyers and sellers transact, and acts as the buyer's counterparty for each transaction. Pursuant to a Master Agreement dated June 15, 2016, as amended on August 29, 2016, January 30, 2017 and June 27, 2018, among MAXEX, MAXEX Clearing LLC and FOAC (the "Master Agreement"), FOAC provided seller eligibility review services under which it reviewed, approved and monitored sellers that sold loans via MAXEX Clearing LLC. Once approved, and having signed the standardized loan sale contract, the seller sold loan(s) to MAXEX Clearing LLC, and MAXEX Clearing LLC simultaneously sold loan(s) to the buyer on substantially the same terms including representations and warranties. The Master Agreement was terminated on November 28, 2018 (the "MAXEX Termination Date"). To the extent that a seller approved by FOAC prior to the MAXEX Termination Date failed to honor its obligations to repurchase a loan based on an arbitration finding that it breached its representations and warranties, FOAC was obligated to backstop the seller's repurchase obligation. The term of the backstop guarantee is the earlier of the contractual maturity of the underlying mortgage, or its earlier repayment in full; however, the incidence of claims for breaches of representations and warranties over time is considered unlikely to occur more than five years from the sale of a mortgage. FOAC's obligations to provide further seller eligibility review and backstop guarantee services terminated on the MAXEX Termination Date. Pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantee. FOAC paid MAXEX Clearing LLC, as the replacement backstop provider, a fee of $426,770 (the "Alternate Backstop Fee"). MAXEX Clearing LLC represented to FOAC in the Assumption Agreement that it (i) is rated at least "A" (or equivalent) by at least one nationally recognized statistical rating agency or (ii) has (a) adjusted tangible net worth of at least $20 million and (b) minimum available liquidity equal to the greater of (x) $5 million and (y) 0.1% multiplied by the scheduled unpaid principal balance of each outstanding loan covered by the backstop guarantees. MAXEX's chief financial officer is required to certify ongoing compliance by MAXEX Clearing LLC with the aforementioned criteria on a quarterly basis and if MAXEX Clearing LLC fails to satisfy such criteria, MAXEX Clearing LLC is required to deposit into an escrow account for FOAC's benefit an amount equal to the greater of (A) the unamortized Alternate Backstop Fee for each outstanding loan covered by the backstop guarantee and (B) the product of 0.01% multiplied by the scheduled unpaid principal balance of each outstanding loan covered by the backstop guarantees. The maximum potential amount of future payments that the Company could be required to make under the outstanding backstop guarantees, which represents the outstanding balance of all underlying mortgage loans sold by approved sellers to MAXEX Clearing LLC, was estimated to be $724.1 million and $860.5 million as of March 31, 2021 and December 31, 2020, respectively, although the Company believes this amount is not indicative of the Company's actual potential losses. Amounts payable in excess of the outstanding principal balance of the related mortgage, for example any premium paid by the loan buyer or costs associated with collecting mortgage payments, are not currently estimable. Amounts that may become payable under the backstop guarantee are normally recoverable from the related seller, as well as from any payments received on (or from the sale of property securing) the mortgage loan repurchased and, as noted above, MAXEX Clearing LLC has assumed all of FOAC's obligations in respect of its backstop guarantees. Pursuant to the Master Agreement, FOAC is required to maintain minimum available liquidity equal to the greater of (i) $5.0 million or (ii) 0.10% of the aggregate unpaid principal balance of loans backstopped by FOAC, either directly or through a credit support agreement acceptable by MAXEX. As of March 31, 2021, the Company was not aware of any circumstances expected to lead to the triggering of a backstop guarantee obligation. In addition, the Company enters into certain contracts that contain a variety of indemnification obligations, principally with the Manager, brokers and counterparties to repurchase agreements. The maximum potential future payment amount the Company could be required to pay under these indemnification obligations is unlimited. The Company has not incurred any costs to defend lawsuits or settle claims related to the indemnification obligations. As a result, the estimated fair value of these agreements is minimal. Accordingly, the Company recorded no liabilities for these agreements as of March 31, 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Impact of COVID-19 As further discussed in Note 2, the full extent of the impact of COVID-19 on the global economy generally, and our business in particular, remains uncertain. As of March 31, 2021, no contingencies have been recorded on our consolidated balance sheet as a result of COVID-19, however, as the global pandemic continues and the economic implications worsen, it may have long-term impacts on our financial condition, results of operations, and cash flows. Refer to Note 2 for further discussion of COVID-19. Litigation From time to time, LFT may be involved in various claims and legal actions arising in the ordinary course of business. LFT establishes an accrued liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. As of March 31, 2021, LFT was not involved in any material legal proceedings regarding claims or legal actions against LFT. Unfunded Commitments As of March 31, 2021, LSF, an affiliate of the Manager, had $6.9 million in funded commitments and $10.2 million of unfunded commitments related to loans held in Hunt CRE 2017-FL1 that the Company could be required to purchase from LSF under the Future Funding Participation Transfer. See Note 9 for discussion of the August 5, 2020 FL1 Future Funding Participation Agreement. These commitments are not reflected on the Company's condensed consolidated balance sheets. As of December 31, 2020, LSF, an affiliate of the Manager had $5.6 million in funded commitments and $24.6 million of unfunded commitments related to loans held in Hunt CRE 2017-FL1, Ltd that the Company could be required to purchase from LSF under the Future Funding Participation Transfer. These commitments are not reflected on the Company's condensed consolidated balance sheets. As of March 31, 2021 and December 31, 2020, LSF, an affiliate of the Manager, had $23.8 million and $25.8 million, respectively, of unfunded commitments related to loans held in Hunt CRE 2018-FL2, Ltd. These commitments are not reflected on the Company's condensed consolidated balance sheets. Future loan fundings comprise funding for capital improvements, leasing costs, interest and carry costs, and fundings will vary depending on the progress of the business plan and cash flows at the mortgage assets. Therefore, the exact timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of the underlying mortgage assets. Due to the ongoing COVID-19 pandemic, the progress of capital improvements and leasing is anticipated to be slower than otherwise expected, and, as such the pace of future funding relating to these capital needs may be commensurately lower. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Common Stock The Company has 450,000,000 authorized shares of common stock, par value $0.01 per share, with 24,943,383 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively. On January 3, 2020, the Company issued 1,246,719 shares of common stock to an affiliate of the Manager in a private placement at a purchase price of $4.61 per share resulting in aggregate net proceeds of $5.7 million. Stock Repurchase Program On December 15, 2015, the Company’s board of directors authorized a stock repurchase program (or the "Repurchase Program"), to repurchase up to $10 million of the Company’s outstanding common stock. Shares of the Company’s common stock may be purchased in the open market, including through block purchases, or through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b18(b)(1) of the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion and the program may be suspended, terminated or modified at any time for any reason. Among other factors, the Company intends to only consider repurchasing shares of the Company’s common stock when the purchase price is less than the Company’s estimate of the Company’s current net asset value per common share. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of the Company’s common stock. Through March 31, 2021, the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09. No share repurchases have been made since January 19, 2016. As of March 31, 2021, $9.4 million of common stock remained authorized for future share repurchase under the Repurchase Program. Preferred Stock At March 31, 2021 and December 31, 2020, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.01 per share. Voting and other rights and preferences will be determined by the Company's Board of Directors upon issuance. The Company had no shares of preferred stock issued and outstanding at March 31, 2021 and December 31, 2020. See Note 16 for additional information related to our preferred stock. Distributions to Stockholders For the 2021 taxable year to date, the Company has declared dividends to common stockholders totaling $2,244,904, or $0.09 per share. The following table presents cash dividends declared by the Company on its common stock during the three months ended March 31, 2021: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 15, 2021 March 31, 2021 April 15, 2021 $ 2,244,904 $ 0.090 Non-controlling Interests On November 29, 2018, Lument Commercial Mortgage Trust, Inc. ("LCMT"), formerly known as Hunt Commercial Mortgage Trust ("HCMT"), an indirect wholly-owned subsidiary of the Company that has elected to be taxed as a REIT issued 125 shares of Series A Preferred Shares ("LCMT Preferred Shares"). Net proceeds to LCMT were $99,500 representing $125,000 in equity raised, less $25,500 in expenses and is reflected as "Non-controlling interests" in the Company’s consolidated balance sheets. Dividends on the LCMT Preferred Shares are cumulative annually, in an amount equal to 12% of the initial purchase price plus any accrued unpaid dividends. The LCMT Preferred Shares are redeemable at any time by LCMT. The redemption price through December 31, 2020 is 1.1x the initial purchase price plus all accrued and unpaid dividends, and the initial purchase price plus all accrued and unpaid dividends thereafter. The holders of the LCMT Preferred Shares have limited voting rights, which do not entitle the holders to participate or otherwise direct the management of LCMT or the Company. The LCMT Preferred Shares are not convertible into or exchangeable for any other property or securities of LCMT or the Company. Dividends on the LCMT Preferred Shares, which amounted to $15,000 for the year ended December 31, 2020 are reflected in "Dividends to preferred stockholders" in the Company’s consolidated statements of operations. As of March 31, 2021, LCMT had $3,708 in accrued dividends on the LCMT Preferred Shares which are reflected in "dividends to preferred stockholders" in the Company's condensed consolidated statements of operations of which $3,708 were accrued and unpaid dividends on the LCMT Preferred Shares which are reflected in "Dividends payable" in the Company's condensed consolidated balance sheet. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE In accordance with ASC 260, outstanding instruments that contain rights to non-forfeitable dividends are considered participating securities. The Company is required to apply the two-class method or the treasury stock method of computing basic and diluted earnings per share when there are participating securities outstanding. The Company has determined that outstanding unvested restricted shares issued under the Manager Equity Plan are participating securities, and they are therefore included in the computation of basic and diluted earnings per share. The following tables provide additional disclosure regarding the computation for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Net income $ 2,808,643 $ 1,551,671 Less dividends: Common stock $ 2,244,904 $ 1,870,416 Preferred stock 3,708 3,750 2,248,612 1,874,166 Undistributed earnings (deficit) $ 560,031 $ (322,495) Unvested Share-Based Common Stock Unvested Share-Based Common Stock Distributed earnings $ 0.09 $ 0.09 $ 0.08 $ 0.08 Undistributed earnings (deficit) 0.02 0.02 — (0.02) Total $ 0.11 $ 0.11 $ 0.08 $ 0.06 For the three months ended March 31, 2021 2020 Basic weighted average shares of common stock 24,938,883 24,906,983 Weighted average of non-vested restricted stock 4,500 4,500 Diluted weighted average shares of common stock outstanding 24,943,383 24,911,483 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTINGThe Company invests in a portfolio comprised of commercial mortgage loans and other mortgage-related investments, and operates as a single reporting segment. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company has elected to be treated as a REIT under federal income tax laws. As a REIT, the Company must generally distribute annually at least 90% of our taxable income, subject to certain adjustments and excluding any capital net gain, in order for U.S. federal income not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. Certain activities of the Company that produce prohibited income are conducted through a TRS, FOAC, to protect REIT election and FOAC is therefore subject to tax as a U.S. C-Corporation. To maintain our REIT election, the Company must continue to meet certain ownership, asset and income requirements set forth in the Code. As further discussed below, the Company may be subject to non-income taxes on excess amounts of assets or income that cause a failure of any of the REIT testing requirements. As of March 31, 2021 and December 31, 2020, we were in compliance with all REIT requirements. As of March 31, 2021, tax years 2017 through 2020 remain subject to examination by taxing authorities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 21, 2021, the Company, together with its FOAC and Hunt CMT Equity subsidiaries (together with the Company, the "Credit Parties"), entered into an amendment (the "Third Amendment") to the Credit and Guaranty Agreement dated January 15, 2019, as amended on February 13, 2019 and July 9, 2020 with Cortland Capital Market Services, LLC, as the administrative agent and collateral agent (the "Administrative Agent") and the lenders party thereto. The Third Amendment amends the Credit and Guaranty Agreement to, among other things (i) provide the Company with an incremental secured term loan in the aggregate principal amount of $7.5 million ("Incremental Secured Term Loan"); (ii) extend the maturity date of the Secured Term Loan from February 14, 2025 to February 14, 2026; (iii) amend certain asset concentration limits and; (iv) amend certain financial covenants. Pursuant to the terms of the Amended Credit and Guaranty Agreement, borrowings under the Secured Term Loan bear interest at a fixed rate of 7.25% per annum, which is subject to step up by 0.25% per annum for the first four months after February 14, 2025, then by 0.375% per annum for the following four months and then by 0.50% for the last four months until the maturity date. Effectiveness of the Third Amendment was conditioned on the completion of the Company's public offering of Series A Cumulative Redeemable Preferred Stock. On May 5, 2021, LFT issued 2,400,000 shares of 7.875% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"), and received net proceeds, after underwriting discounts and commissions but before offering expenses payable by the Company, of $58.1 million. The Series A Preferred Stock is redeemable, at LFT's option, at a liquidation preference price of $25.00 per share plus accrued dividends commencing in May 2026. Dividends on the Series A Preferred Stock are payable quarterly in arrears. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (“SEC”) on March 15, 2021. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and all subsidiaries which it controls (i) through voting or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted for under the equity method or other appropriate GAAP. All significant intercompany transactions have been eliminated on consolidation. |
VIEs | VIEs An entity is considered a VIE when any of the following applies: (1) the equity investors (if any) lack one or more essential characteristics of a controlling financial interest; (2) the equity investment at risk is not sufficient to finance that entity's activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both the following characteristics: (1) the power to direct activities that, when taken together, most significantly impact the VIE performance; and (2) the obligation to absorb losses and right to receive returns from the VIE that would be significant to the VIE. The Company evaluates quarterly its junior retained notes and preferred shares of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for potential consolidation. At March 31, 2021, the Company determined it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligation to absorb losses derived from ownership of its preferred shares. Accordingly, the Company consolidated the assets, liabilities, income and expenses of the underlying issuing entities. The Company's maximum exposure to loss from collateralized loan obligations ("CLO") was $124,046,671 at March 31, 2021 and December 31, 2020. |
Use of Estimates | Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. As of March 31, 2021, the novel coronavirus, or COVID-19, pandemic is ongoing. During 2020, the COVID-19 pandemic created disruption in global supply chains, increased rates of unemployment and adversely impacted many industries, including industries related to the collateral underlying certain of our loans. In 2021, the global economy has, with certain setbacks, begun reopening and wider distribution of vaccines will likely encourage greater economic activity. Nonetheless, the recovery could remain uneven, particularly given uncertainty with respect to the distribution and acceptance of the vaccines and their effectiveness with respect to new variants of the virus. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of March 31, 2021, however uncertainty over the ultimate impact of COVID-19 on the global economy generally, and our business in particular, makes any estimates and assumptions as of March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results could differ from our estimates and the differences may be material. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at time of purchase include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having maturities of 90 days or less at time of acquisition. The Company maintains its cash and cash equivalents with highly rated financial institutions, and at times these balances exceed insurable amounts. Restricted cash includes cash held within Hunt CRE 2018-FL2 as of March 31, 2021 and December 31, 2020. |
Deferred Offering Costs | Deferred Offering Costs Direct costs incurred to issue shares classified as equity, such as legal and accounting fees, are deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item "Deferred offering costs", for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in "Other accounts payable and accrued expenses" on the accompanying consolidated balance sheets. |
Fair Value Measurements | Fair Value Measurements The "Fair Value Measurements and Disclosures" Topic 820 of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurement under GAAP. Specifically, the guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at measurement date. ASC 820 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable market data from independent sources, while unobservable inputs reflect the Company's market assumptions. The three levels are defined as follows: • Level 1 Inputs – Quoted prices for identical instruments in active markets. • Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs – Instruments with primarily unobservable value drivers. Pursuant to ASC 820 we disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate fair value for those certain instruments. The following methods and assumptions are used to estimate the fair value of each class of financial instrument, for which it is practicable to estimate that value: • Cash and cash equivalents : The carrying amount of cash and cash equivalents approximates fair value. • Restricted cash : The carrying amount of restricted cash approximates fair value. • Commercial mortgage loans : The Company determines the fair value of commercial mortgage loans by utilizing a pricing model based on discounted cash flow methodologies using discount rates, which reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Additionally, the Company may record fair value adjustments on a non-recurring basis when it has determined it necessary to record a specific impairment reserve or charge-off against a loan and the Company measures such specific reserve or charge-off using the fair value of the loan's collateral. To determine the fair value of loan collateral, the Company employs the income capitalization approach, appraised values, broker opinion of value, sale offers, letter of intentions of purchase, or other valuation benchmarks, as applicable, depending upon the nature of such collateral and other relevant market factors. • Mortgage servicing rights : The Company determines the fair value of MSRs from a third-party pricing service on a recurring basis. The third-party pricing service uses common market pricing methods that include using discounted cash flow models to calculate present value, estimated net servicing income and observed market pricing for MSR purchase and sale transactions. The model considers contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. • Collateralized loan obligations : The Company determines the fair value of collateralized loan obligations by utilizing a third-party pricing service. In determining the value of a particular investment, pricing service providers may use market spreads, inventory levels, trade and bid history, as well as market insight from clients, trading desks and global research platform. • Secured term loan : The Company determines the fair value of its secured term loan based on a discounted cash flow methodology. |
Commercial Mortgage Loans Held-For-Investment | Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, costs, premiums and discounts associated with these loan investments are deferred and amortized over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of March 31, 2021, the Company did not hold any loans placed in non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratio ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. The Company's loans are rated on a 5-point scale, from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk : exceeds expectations and is outperforming underwriting or it is very likely that the underlying loan can be refinanced easily in the period's prevailing capital market conditions 2. Low Risk : meeting or exceeding underwritten expectations 3. Moderate Risk : in-line with underwritten expectations or the sponsor may be in the early stages of executing the business plan and the loan structure appropriately mitigates additional risks 4. High Risk : potential risk of default, a loss may occur in the event of default 5. Default Risk : imminent risk of default, a loss is likely in the event of default The Company evaluates each loan rated High Risk or above as to whether it is impaired on a quarterly basis. Impaired loans are individually evaluated based on the Company's quarterly assessment of each loan and assignment of a risk rating. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, all of which are deemed collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. |
Mortgage Servicing Rights, at Fair Value | Mortgage Servicing Rights, at Fair Value Mortgage servicing rights ("MSRs") are associated with residential mortgage loans that the Company historically purchased and subsequently sold or securitized. MSRs are held and managed at Five Oaks Acquisition Corp. ("FOAC"), the Company’s taxable REIT subsidiary ("TRS"). As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service, directly or through a subservicer, the associated loan. MSRs are reported at fair value. Residential mortgage loans for which the Company owns the MSRs are directly serviced by two sub-servicers retained by the Company. The Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed upon rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. |
Collateralized Loan Obligations and Secured Term Loan | Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary of and accordingly are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. CLOs are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums, discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. In the second quarter of 2020, $624,816 in costs related to a contemplated collateralized loan transaction, that were previously deferred as "other assets" in the consolidated balance sheets were expensed as "other operating expenses" in the consolidated statements of operations as a result of abandoning the contemplated transaction due to the then current market environment, which had been impacted by the COVID-19 pandemic. Secured Term Loan The Company and certain of its subsidiaries are party to a $40.25 million credit and guaranty agreement with the lenders referred to therein and Cortland Capital Service LLC, as administrative agent and collateral agent for the lenders (the "Secured Term Loan"). The Secured Term Loan is carried at its unpaid principal balance, net of deferred financing costs. Deferred financing costs of $1,017,419 associated with this liability are amortized to interest expense on a straight line basis when it approximates the effective interest method. See Note 16 for additional information related to the Secured Term Loan. |
Common Stock, Stock Repurchase Program and Preferred Stock | Common Stock At March 31, 2021 and December 31, 2020, the Company was authorized to issue up to 450,000,000 shares of common stock, par value $0.01 per share. The Company had 24,943,383 shares of common stock issued and outstanding at March 31, 2021 and December 31, 2020, respectively. Stock Repurchase Program On December 15, 2015, the Company’s Board of Directors authorized a stock repurchase program ("Repurchase Program"), to repurchase up to $10 million of the Company’s outstanding common stock. Subject to applicable securities laws, the repurchase of common stock under the Repurchase Program may be made at times and in amounts as the Company deems appropriate, using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. Preferred Stock At March 31, 2021 and December 31, 2020, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company's Board of Directors. The Company had no shares of preferred stock issued and outstanding at March 31, 2021 and December 31, 2020. See Note 16 for additional information related to our preferred stock. |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to stockholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that the Company is not permitted to engage in as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements, including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholders; (ii) invest at least 75% of its assets in REIT qualifying assets, with additional restrictions with respect to asset concentration risk; and (iii) earn at least 95% of its gross income from qualifying sources of income, including at least 75% from qualifying real estate and real estate related sources. Regardless of the REIT election, the Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax as a U.S. C-Corporation, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The TRS is not subject to a distribution requirement with respect to its REIT owner. The TRS may retain earnings annually, resulting in an increase in the consolidated book equity of the Company and without a corresponding distribution requirement by the REIT. If the TRS generates net income, and declares dividends to the Company, such dividends will be included in its taxable income and necessitate a distribution to its stockholders in accordance with the REIT distribution requirements. |
Earnings per Share | Earnings per ShareThe Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. |
Stock-Based Compensation | Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the consolidated financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair-value based methodology prescribed by ASC 505, Equity ("ASC 505"), or ASC 718, Share-Based Payment |
Comprehensive Income (Loss) Attributable to Common Stockholders | Comprehensive Income (Loss) Attributable to Common Stockholders For the three months ended March 31, 2021 and 2020, comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. |
Recently Issued and/or Adopted Accounting Standards | Recently Issued and/or Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, which is a comprehensive amendment of credit losses on financial instruments. Currently GAAP requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The standard’s core principle is that an entity replaces the "incurred loss" impairment methodology in current GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates. For public business entities that are SEC filers, the amendment in this update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 which amended the effective dates for implementation of ASU 2016-13. ASU 2019-10 defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, public business entities that are not SEC filers and all other companies, including not-for-profit companies and employee benefit plans for fiscal years beginning after December 15 2022, including interim periods within those fiscal years. The Company is designated as a smaller reporting company and has deferred implementation of ASU 2016-13 pursuant to ASU 2019-10 and is continuing to assess the impact of this guidance. In February 2020, the FASB issued ASU 2020-02, amending SEC paragraphs in the Codification to reflect the issuance of SEC Staff Accounting Bulletin ("SAB") No. 119 related to the new credit losses standard and revised effective date of the new leases standard. SAB No. 119 provides interpretive guidance on methodologies and supporting documentation for measuring credit losses, with a focus on the documentation the staff would normally expect registrants engaged in lending transactions to prepare and maintain to support estimates of current expected credit losses for loan transactions. This new guidance is effective for fiscal years beginning after December 15, 2022 for smaller reporting companies such as the Company. The Company is assessing the impact of this guidance. Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This guidance eliminates certain exceptions to the general principles in Topic 740. This new guidance is effective for us on January 1, 2021, with early adoption permitted. The Company adopted ASU 2019-12 beginning with the first quarter of 2021, which had no material impact on the Company's financial condition or results of operations. Financial Instruments In March 2020, the FASB issued ASU 2020-03 which makes improvements to financial instruments guidance, including the current expected credit losses (CECL) guidance in ASU 2016-13. Only Issue 1, of the 7 improvement issues applies to the Company, which is effective upon issuance, requires all entities to provide fair value option disclosures. MSRs are reported at fair value as a result of the fair value election, as discussed in Mortgage Servicing Rights, at Fair Value above . Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 828): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The standard was issued to ease the accounting effects of reform to the London Interbank Offered Rate ("LIBOR") and other reference rates. The standard provides optional expedients and exceptions for applying GAAP to debt instruments, leases, derivatives and other contracts affected by reference rate reform. ASU 2020-04 generally considers contract modifications related to reference rate reform to be an event that does not require contract remeasurement at the modification date nor a reassessment of a previous accounting determination. The standard is effective for all entities as of March 12, 2020 through December 31, 2022 and may be elected over time as reference rate reform activities occur. We are currently evaluating the impact of this guidance on our consolidated financial statements. CARES Act On March 27, 2020, former President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Section 4013 of the CARES Act includes a provision that permits financial institutions an election to suspend temporarily troubled debt restructuring ("TDR") accounting under ASC Subtopic 310-40 in certain circumstances ("Section 4013 Elections"). Additionally, Section 4014 of the CARES Act includes a provision that permits deferral of the effective date of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), for insured depository institutions, bank holding companies, or any affiliates thereof ("Section 4014 Election"). The Company is not a financial institution, nor a depository institution, bank holding company or an affiliate of one and therefore would not be permitted to make Section 4013 or Section 4014 Elections. The Company is designated as a smaller reporting company for SEC filing purposes and has previously deferred implementation of ASU 2016-13 until January 1, 2023 pursuant to ASU 2019-10. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2021 December 31, 2020 Cash and cash equivalents $ 11,717,804 $ 11,375,960 Restricted cash CRE 2018-FL2, Ltd. $ 32,154,188 $ 57,999,396 Total cash, cash equivalents and restricted cash $ 43,871,992 $ 69,375,356 |
COMMERCIAL MORTGAGE LOANS HEL_2
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Summary of Commercial Mortgage Loans | The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2021 and December 31, 2020: Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) March 31, 2021 Loans held-for-investment Senior secured loans (3) $ 484,165,249 $ 484,165,249 34 100.0 % 5.1 % 2.9 484,165,249 484,165,249 34 100.0 % 5.1 % 2.9 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) December 31, 2020 Loans held-for-investment Senior secured loans (3) $ 547,345,334 $ 547,345,334 40 100.0 % 5.1 % 3.1 547,345,334 547,345,334 40 100.0 % 5.1 % 3.1 (1) Weighted average coupon assumes applicable one-month LIBOR of 0.11% and 0.14% as of March 31, 2021 and December 31, 2020, respectively, inclusive of weighted average floors of 1.54% and 1.64%, respectively. (2) Weighted average remaining term assumes all extension options are exercised by the borrower, provided, however, that our loans may be repaid prior to such date. (3) As of March 31, 2021, $468,945,755 of the outstanding senior secured loans were held in VIEs and $15,219,494 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2020, $531,363,401 of the outstanding senior secured loans were held in VIEs and $15,981,933 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2021, the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2020 $ 547,345,334 Purchases and fundings 34,888,000 Proceeds from principal payments (98,068,085) Balance at March 31, 2021 $ 484,165,249 |
Summary of Loan Risk Ratings | The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — — — — 2 10 149,871,667 149,871,667 14 168,401,366 168,401,366 3 21 293,534,594 293,534,594 20 309,726,343 309,726,343 4 3 40,758,988 40,758,988 6 69,217,625 69,217,625 5 — — — — — — 34 $ 484,165,249 484,165,249 40 547,345,334 547,345,334 |
Geographic Concentrations | The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2021 and December 31, 2020: Loans Held-for-Investment March 31, 2021 December 31, 2020 Geography Southwest 39.0 % 38.7 % South 30.4 36.5 Midwest 19.0 16.8 Mid-Atlantic 7.0 6.2 West 4.6 1.8 Total 100.0 % 100.0 % March 31, 2021 December 31, 2020 Collateral Property Type Multifamily 88.2 % 89.5 % Retail 7.2 6.4 Office 3.7 3.3 Self-Storage 0.9 0.8 Total 100.0 % 100.0 % |
USE OF SPECIAL PURPOSE ENTITI_2
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Variable Interest Entity [Line Items] | |
Summary of Loan and Borrowing Characteristics | COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENTThe following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2021 and December 31, 2020: Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) March 31, 2021 Loans held-for-investment Senior secured loans (3) $ 484,165,249 $ 484,165,249 34 100.0 % 5.1 % 2.9 484,165,249 484,165,249 34 100.0 % 5.1 % 2.9 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Remaining Term (Years) (2) December 31, 2020 Loans held-for-investment Senior secured loans (3) $ 547,345,334 $ 547,345,334 40 100.0 % 5.1 % 3.1 547,345,334 547,345,334 40 100.0 % 5.1 % 3.1 (1) Weighted average coupon assumes applicable one-month LIBOR of 0.11% and 0.14% as of March 31, 2021 and December 31, 2020, respectively, inclusive of weighted average floors of 1.54% and 1.64%, respectively. (2) Weighted average remaining term assumes all extension options are exercised by the borrower, provided, however, that our loans may be repaid prior to such date. (3) As of March 31, 2021, $468,945,755 of the outstanding senior secured loans were held in VIEs and $15,219,494 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2020, $531,363,401 of the outstanding senior secured loans were held in VIEs and $15,981,933 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2021, the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2020 $ 547,345,334 Purchases and fundings 34,888,000 Proceeds from principal payments (98,068,085) Balance at March 31, 2021 $ 484,165,249 Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — — — — 2 10 149,871,667 149,871,667 14 168,401,366 168,401,366 3 21 293,534,594 293,534,594 20 309,726,343 309,726,343 4 3 40,758,988 40,758,988 6 69,217,625 69,217,625 5 — — — — — — 34 $ 484,165,249 484,165,249 40 547,345,334 547,345,334 As of March 31, 2021, the average risk rating of the commercial mortgage loan portfolio was 2.7 (Moderate Risk), weighted by investment carrying value, with 91.6% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. As of December 31, 2020, the average risk rating of the commercial mortgage loan portfolio was 3.1 (Moderate Risk), weighted by investment carrying value, with 84.4% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager. The decrease in average risk rating is primarily the result of commercial mortgage loans that paid off with a risk rating of "4" of $16.7 million, the purchase of $34.9 million of commercial mortgage loans with a risk rating of "2" and the migration of $31.1 million of commercial mortgage loans from a risk rating of "4" to a risk rating of "3" during the first quarter of 2021. Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2021 and December 31, 2020: Loans Held-for-Investment March 31, 2021 December 31, 2020 Geography Southwest 39.0 % 38.7 % South 30.4 36.5 Midwest 19.0 16.8 Mid-Atlantic 7.0 6.2 West 4.6 1.8 Total 100.0 % 100.0 % March 31, 2021 December 31, 2020 Collateral Property Type Multifamily 88.2 % 89.5 % Retail 7.2 6.4 Office 3.7 3.3 Self-Storage 0.9 0.8 Total 100.0 % 100.0 % We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of March 31, 2021 or December 31, 2020. |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Balance Sheets | The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at March 31, 2021 and December 31, 2020 included the following VIE assets and liabilities: ASSETS March 31, 2021 December 31, 2020 Cash, cash equivalents and restricted cash $ 32,154,188 $ 57,999,396 Accrued interest receivable (1) 2,110,781 1,955,709 Investment related receivable (2) 34,188,949 — Loans held for investment 468,945,755 531,363,401 Total Assets $ 537,399,673 $ 591,318,506 LIABILITIES Accrued interest payable $ 312,071 $ 351,877 Collateralized loan obligations (3) 409,404,872 463,060,090 Total Liabilities $ 409,716,943 $ 463,411,967 Equity 127,682,730 127,906,539 Total liabilities and equity $ 537,399,673 $ 591,318,506 (1) Accrued interest receivable includes $498,911 of interest and exit fees receivable, which were settled subsequent to March 31, 2021. (2) Investment related receivable relates to one loan in Hunt CRE 2017-FL1 with a principal amount due of 9,808,696 and two loans in Hunt CRE 2018-FL2 with principal amounts due of $24,380,253 which paid off in March 2021 after the March remittance and were received in April. The Hunt CRE 2017-FL1 repayment will be used to pay down the Class A Notes of the CLO in April 2021. (3) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. |
Summary of Loan and Borrowing Characteristics | The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of March 31, 2021 and December 31, 2020: As of March 31, 2021 Collateralized Loan Obligations Count Principal Value Carrying Value (1) Wtd. Avg. Yield Collateral (loan investments) 34 $ 468,945,755 $ 468,945,755 L + 3.53% Financings provided 2 411,242,221 409,404,872 L + 1.50% As of December 31, 2020 Collateralized Loan Obligations Count Principal Value Carrying Value (1) Wtd. Avg. Yield Collateral (loan investments) 40 $ 531,363,401 $ 531,363,401 L + 3.50% Financing provided 2 465,316,126 463,060,090 L + 1.44% (1) The carrying value for Hunt CRE 2017-FL1, Ltd. is net of discount of $0 and $207,767 for March 31, 2021 and December 31, 2020, respectively and the carrying value for Hunt CRE 2018-FL2, Ltd. is net of debt issuance costs of $1,837,349 and $2,048,269 for March 31, 2021 and December 31, 2020, respectively. |
Condensed Consolidated Statements of Operations | The statement of operations related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for the three months ended March 31, 2021 and March 31, 2020 include the following income and expense items: Statements of Operations Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Interest income $ 7,263,861 $ 9,032,178 Interest expense (2,185,242) (4,237,889) Net interest income $ 5,078,619 $ 4,794,289 General and administrative fees (120,586) (145,986) Net income $ 4,958,033 $ 4,648,303 |
SECURED TERM LOAN (Tables)
SECURED TERM LOAN (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Credit Agreement | As of March 31, 2021 and December 31, 2020, the outstanding balance and total commitment under the Credit Agreement consisted of the following: March 31, 2021 December 31, 2020 Outstanding Balance Total Commitment Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 $ 40,250,000 $ 40,250,000 |
MSRs (Tables)
MSRs (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSR Activity | The following table presents the Company’s MSR activity for the three months ended March 31, 2021 and the three months ended March 31, 2020: March 31, 2021 March 31, 2020 Balance at beginning of period $ 919,678 $ 2,700,207 Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model 167,839 (728,585) Other changes to fair value (1) (188,294) (149,164) Balance at end of period $ 899,223 $ 1,822,458 Loans associated with MSRs (2) $ 152,465,708 $ 315,173,382 MSR values as percent of loans (3) 0.59 % 0.58 % (1) Amounts represent changes due to realization of expected cash flows and prepayment of principal of the underlying loan portfolio. (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at March 31, 2021 and March 31, 2020, respectively. (3) Amounts represent the carrying value of MSRs at March 31, 2021 and March 31, 2020, respectively divided by the outstanding balance of the loans associated with these MSRs |
Components of Servicing Income | The following table presents the servicing income recorded on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended Three Months Ended Servicing income, net $ 124,156 $ 194,147 Total servicing income $ 124,156 $ 194,147 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Carried at Fair Value on a Recurring Basis | The following tables summarize the valuation of the Company’s assets and liabilities carried at fair value on a recurring basis within the fair value hierarchy levels as of March 31, 2021 and December 31, 2020: March 31, 2021 Quoted prices in Significant Unobservable Balance as of March 31, 2021 Assets: Mortgage servicing rights — — 899,223 899,223 Total $ — $ — $ 899,223 $ 899,223 December 31, 2020 Quoted prices in Significant Unobservable Balance as of Assets: Mortgage servicing rights — — 919,678 919,678 Total $ — $ — $ 919,678 $ 919,678 |
Quantitative Information About the Significant Unobservable Inputs Used in the Fair Value Measurement of MSRs Classified as Level 3 | The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at March 31, 2021 and December 31, 2020: As of March 31, 2021 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 10.0 - 28.7% 18.5 % Discount rate 12.0 % 12.0 % As of December 31, 2020 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 12.4 - 28.0% 21.6 % Discount rate 12.0 % 12.0 % |
Fair Value Schedule of Financial Instruments | The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 2: March 31, 2021 Level in Fair Value Hierarchy Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 1 11,717,804 11,717,804 11,717,804 Restricted cash 1 32,154,188 32,154,188 32,154,188 Commercial mortgage loans held-for-investment 3 484,165,249 484,165,249 484,086,679 Total $ 528,037,241 $ 528,037,241 $ 527,958,671 Liabilities: Collateralized loan obligations 2 409,404,872 411,242,221 410,864,162 Secured Term Loan 3 39,598,532 40,250,000 44,361,328 Total $ 449,003,404 $ 451,492,221 $ 455,225,490 December 31, 2020 Level in Fair Value Hierarchy Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 1 11,375,960 11,375,960 11,375,960 Restricted cash 1 57,999,396 57,999,396 57,999,396 Commercial mortgage loans held-for-investment 3 547,345,334 547,345,334 547,134,755 Total $ 616,720,690 $ 616,720,690 $ 616,510,111 Liabilities: Collateralized loan obligations 2 463,060,090 465,316,126 458,094,412 Secured term loan 3 39,556,198 40,250,000 44,514,373 Total $ 502,616,288 $ 505,566,126 $ 502,608,785 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Restricted Common Stock Activity | The following table summarizes the activity related to restricted common stock for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended March 31, 2021 2021 2020 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 2.60 4,500 $ 3.33 Granted — — — — Vested — — — $ — Outstanding Unvested Shares at End of Period 4,500 $ 2.60 4,500 $ 3.33 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Cash Dividends Declared | The following table presents cash dividends declared by the Company on its common stock during the three months ended March 31, 2021: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 15, 2021 March 31, 2021 April 15, 2021 $ 2,244,904 $ 0.090 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following tables provide additional disclosure regarding the computation for the three months ended March 31, 2021 and March 31, 2020: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Net income $ 2,808,643 $ 1,551,671 Less dividends: Common stock $ 2,244,904 $ 1,870,416 Preferred stock 3,708 3,750 2,248,612 1,874,166 Undistributed earnings (deficit) $ 560,031 $ (322,495) Unvested Share-Based Common Stock Unvested Share-Based Common Stock Distributed earnings $ 0.09 $ 0.09 $ 0.08 $ 0.08 Undistributed earnings (deficit) 0.02 0.02 — (0.02) Total $ 0.11 $ 0.11 $ 0.08 $ 0.06 |
Schedule of Weighted Average Number of Shares | For the three months ended March 31, 2021 2020 Basic weighted average shares of common stock 24,938,883 24,906,983 Weighted average of non-vested restricted stock 4,500 4,500 Diluted weighted average shares of common stock outstanding 24,943,383 24,911,483 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Feb. 14, 2019 | Jan. 15, 2019 | Dec. 15, 2015 | |
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Non-accrual status | $ 0 | |||||
Recognized impairment | 0 | |||||
Allowance for loan losses | 0 | |||||
Principal amount | 40,250,000 | $ 40,250,000 | ||||
Deferred financing costs amortized | $ 1,017,419 | |||||
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common stock, shares issued (in shares) | 24,943,383 | 24,943,383 | ||||
Common stock, shares outstanding (in shares) | 24,943,383 | 24,943,383 | ||||
Stock repurchase program, authorized amount | $ 10,000,000 | |||||
Other Operating Income (Expense) | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Reclassification of deferred financing costs from other assets to other operating expenses | $ 624,816 | |||||
Redeemable Preferred Stock | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||
Delayed Draw Facility | Credit Agreement | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Principal amount | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 | |||
Collateralized Loan Obligations | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Maximum exposure to loss from consolidated trusts | $ 124,046,671 | $ 124,046,671 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | [1] | $ 11,717,804 | $ 11,375,960 | ||
Restricted cash | [1] | 32,154,188 | 57,999,396 | ||
Total cash, cash equivalents and restricted cash | 43,871,992 | 69,375,356 | $ 18,248,414 | $ 16,011,830 | |
Hunt CRE 2018-FL2, Ltd | |||||
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | $ 32,154,188 | $ 57,999,396 | |||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
COMMERCIAL MORTGAGE LOANS HEL_3
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Commercial Mortgage Loans (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)mortgage_loan | Dec. 31, 2020USD ($)mortgage_loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
One Month LIBOR Rate | $ 0.0011 | $ 0.0014 | |
Weighted Average LIBOR Floor Rate | 0.0154 | 0.0164 | |
Commercial mortgage loans held-for-investment, at amortized cost | 484,165,249 | [1] | 547,345,334 |
Commercial real estate portfolio segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unpaid Principal Balance | 484,165,249 | 547,345,334 | |
Carrying Value | $ 484,165,249 | $ 547,345,334 | |
Loan Count | mortgage_loan | 34 | 40 | |
Weighted average, floating rate loan, percentage | 100.00% | 100.00% | |
Weighted average coupon rate, percentage | 5.10% | 5.10% | |
Weighted average, life (in years) | 2 years 10 months 24 days | 3 years 1 month 6 days | |
Commercial mortgage loans held-for-investment, at amortized cost | $ 484,165,249 | $ 547,345,334 | |
Outstanding senior secured loans from loan participations | 15,219,494 | 15,981,933 | |
Hunt CMT | Commercial real estate portfolio segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Commercial mortgage loans held-for-investment, at amortized cost | $ 468,945,755 | $ 531,363,401 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
COMMERCIAL MORTGAGE LOANS HEL_4
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Loan Portfolio Activity (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Loans Receivable Held-For-Investment, Net, Reconciliation To Cash Flow [Roll Forward] | |||
Balance at December 31, 2020 | $ 547,345,334 | ||
Purchases and fundings | 34,888,000 | $ 38,613,756 | |
Proceeds from principal payments | (98,068,085) | $ (34,507,879) | |
Balance at March 31, 2021 | [1] | 484,165,249 | |
Commercial real estate portfolio segment | |||
Loans Receivable Held-For-Investment, Net, Reconciliation To Cash Flow [Roll Forward] | |||
Balance at December 31, 2020 | 547,345,334 | ||
Purchases and fundings | 34,888,000 | ||
Proceeds from principal payments | (98,068,085) | ||
Balance at March 31, 2021 | $ 484,165,249 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
COMMERCIAL MORTGAGE LOANS HEL_5
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Commercial Loan Risk Ratings (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021USD ($)mortgage_loan | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)mortgage_loan | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Commercial mortgage loans held-for-investment, at amortized cost | $ 484,165,249 | [1] | $ 547,345,334 | |
Average risk rating, moderate | 2.7 | 3.1 | ||
Principal payments from commercial mortgage loans held-for-investment | $ 98,068,085 | $ 34,507,879 | ||
Purchase of commercial loans held for investment | $ 34,888,000 | $ 38,613,756 | ||
Commercial real estate portfolio segment | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 34 | 40 | ||
Unpaid Principal Balance | $ 484,165,249 | $ 547,345,334 | ||
Commercial mortgage loans held-for-investment, at amortized cost | 484,165,249 | $ 547,345,334 | ||
Principal payments from commercial mortgage loans held-for-investment | 98,068,085 | |||
Purchase of commercial loans held for investment | $ 34,888,000 | |||
Commercial real estate portfolio segment | Risk rating, 1 | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 0 | 0 | ||
Unpaid Principal Balance | $ 0 | $ 0 | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 0 | $ 0 | ||
Commercial real estate portfolio segment | Risk rating, 2 | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 10 | 14 | ||
Unpaid Principal Balance | $ 149,871,667 | $ 168,401,366 | ||
Commercial mortgage loans held-for-investment, at amortized cost | 149,871,667 | $ 168,401,366 | ||
Purchase of commercial loans held for investment | $ 34,900,000 | |||
Commercial real estate portfolio segment | Risk rating, 3 | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 21 | 20 | ||
Unpaid Principal Balance | $ 293,534,594 | $ 309,726,343 | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 293,534,594 | $ 309,726,343 | ||
Average risk rating, percentage | 91.60% | 84.40% | ||
Transition of commercial loans from a risk rating of 4 to a risk rating of 3 | $ 31,100,000 | |||
Commercial real estate portfolio segment | Risk rating, 4 | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 3 | 6 | ||
Unpaid Principal Balance | $ 40,758,988 | $ 69,217,625 | ||
Commercial mortgage loans held-for-investment, at amortized cost | 40,758,988 | $ 69,217,625 | ||
Principal payments from commercial mortgage loans held-for-investment | $ 16,700,000 | |||
Commercial real estate portfolio segment | Risk rating, 5 | ||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||
Number of Loans | mortgage_loan | 0 | 0 | ||
Unpaid Principal Balance | $ 0 | $ 0 | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 0 | $ 0 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
COMMERCIAL MORTGAGE LOANS HEL_6
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Concentration of Credit Risk (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Multifamily | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 88.20% | 89.50% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Retail | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 7.20% | 6.40% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Office | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 3.70% | 3.30% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Self-Storage | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 0.90% | 0.80% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Southwest | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 39.00% | 38.70% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | South | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 30.40% | 36.50% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Midwest | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 19.00% | 16.80% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Mid-Atlantic | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 7.00% | 6.20% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | West | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 4.60% | 1.80% |
USE OF SPECIAL PURPOSE ENTITI_3
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Narrative (Details) | Apr. 30, 2018Loan_Participation |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of loan participations | 8 |
USE OF SPECIAL PURPOSE ENTITI_4
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Condensed Consolidated Balance Sheets (Details) | 3 Months Ended | |||||
Mar. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |||
Variable Interest Entity [Line Items] | ||||||
Cash, cash equivalents and restricted cash | $ 43,871,992 | $ 69,375,356 | $ 18,248,414 | $ 16,011,830 | ||
Accrued interest receivable | [1] | 2,173,007 | 2,015,617 | |||
Investment related receivable | [1] | 34,539,187 | 0 | |||
Loans held for investment | 484,165,249 | [1] | 547,345,334 | |||
Total Assets | [1] | 567,406,572 | 621,489,779 | |||
Accrued interest payable | [1] | 393,130 | 432,936 | |||
Collateralized loan obligations | [1] | 409,404,872 | 463,060,090 | |||
Total Liabilities | [1] | 453,140,504 | 507,786,627 | |||
Equity | [1] | 114,166,568 | 113,603,652 | |||
Total liabilities and equity | [1] | 567,406,572 | 621,489,779 | |||
Principal amount | 40,250,000 | 40,250,000 | ||||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||||
Variable Interest Entity [Line Items] | ||||||
Cash, cash equivalents and restricted cash | 32,154,188 | 57,999,396 | ||||
Accrued interest receivable | 2,110,781 | 1,955,709 | ||||
Investment related receivable | 34,188,949 | 0 | ||||
Loans held for investment | 468,945,755 | 531,363,401 | ||||
Total Assets | 537,399,673 | 591,318,506 | ||||
Accrued interest payable | 312,071 | 351,877 | ||||
Collateralized loan obligations | 409,404,872 | 463,060,090 | ||||
Total Liabilities | 409,716,943 | 463,411,967 | ||||
Equity | 127,682,730 | 127,906,539 | ||||
Total liabilities and equity | $ 537,399,673 | $ 591,318,506 | ||||
Hunt CRE 2017-FL1, Ltd. | ||||||
Variable Interest Entity [Line Items] | ||||||
Number of loans | loan | 1 | |||||
Principal amount | $ 9,808,696 | |||||
Hunt CRE 2018-FL2, Ltd | ||||||
Variable Interest Entity [Line Items] | ||||||
Number of loans | loan | 2 | |||||
Principal amount | $ 24,380,253 | |||||
Hunt CRE 2018-FL2, Ltd | Credit Agreement | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest and exit fees receivable | $ 498,911 | |||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
USE OF SPECIAL PURPOSE ENTITI_5
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Summary of Loan and Borrowing Characteristics (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)insturmentmortgage_loancontract | Jun. 30, 2020 | Dec. 31, 2020USD ($)insturmentcontractmortgage_loan | ||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations | [1] | $ 409,404,872 | $ 463,060,090 | |
Commercial real estate portfolio segment | ||||
Variable Interest Entity [Line Items] | ||||
Number of Loans | mortgage_loan | 34 | 40 | ||
Carrying Value | $ 484,165,249 | $ 547,345,334 | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Number of notes issued | insturment | 2 | 2 | ||
Collateralized loan obligations | $ 409,404,872 | $ 463,060,090 | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | London Interbank Offered Rate (LIBOR) | ||||
Variable Interest Entity [Line Items] | ||||
Weighted Average Yield (as a percentage) | 3.53% | 3.50% | ||
Interest fixed rate | 1.50% | 1.44% | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | Commercial real estate portfolio segment | ||||
Variable Interest Entity [Line Items] | ||||
Number of Loans | contract | 34 | 40 | ||
Face Amount | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations | $ 465,316,126 | |||
Face Amount | Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Carrying Value | $ 468,945,755 | 531,363,401 | ||
Collateralized loan obligations | 411,242,221 | 465,316,126 | ||
Carrying Value | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations | 463,060,090 | |||
Carrying Value | Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Carrying Value | 468,945,755 | 531,363,401 | ||
Collateralized loan obligations | 409,404,872 | 463,060,090 | ||
Carrying Value | Hunt CRE 2017-FL1, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations | 0 | 207,767 | ||
Carrying Value | Hunt CRE 2018-FL2, Ltd | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations | $ 1,837,349 | $ 2,048,269 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
USE OF SPECIAL PURPOSE ENTITI_6
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Condensed Consolidated Statement of Operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Variable Interest Entity [Line Items] | ||
Net interest income | $ 4,517,310 | $ 4,175,642 |
General and administrative fees | (680,314) | (765,892) |
Net income | 2,808,643 | 1,551,671 |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||
Variable Interest Entity [Line Items] | ||
Interest income | 7,263,861 | 9,032,178 |
Interest expense | (2,185,242) | (4,237,889) |
Net interest income | 5,078,619 | 4,794,289 |
General and administrative fees | (120,586) | (145,986) |
Net income | $ 4,958,033 | $ 4,648,303 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Hunt CRE 2018-FL2, Ltd | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Reinvestment period | 36 months |
SECURED TERM LOAN - Narrative (
SECURED TERM LOAN - Narrative (Details) - USD ($) | Jan. 15, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Feb. 14, 2019 |
Debt Instrument [Line Items] | ||||
Principal amount | $ 40,250,000 | $ 40,250,000 | ||
Collateralized loan obligation, discount | $ 39,200,000 | |||
Collateralized loan obligation, deferred financing costs | 651,468 | $ 693,802 | ||
Delayed Draw Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 | |
Maturity term | 6 years | |||
Stated interest rate (as a percentage) | 7.25% | |||
Five year period following initial draw | Delayed Draw Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Maturity term | 5 years | |||
First four months after fifth anniversary | Delayed Draw Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Weighted Average Yield (as a percentage) | 0.25% | |||
Second four months after fifth anniversary | Delayed Draw Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Weighted Average Yield (as a percentage) | 0.375% | |||
Last four months until maturity | Delayed Draw Facility | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Weighted Average Yield (as a percentage) | 0.50% |
SECURED TERM LOAN - Summary of
SECURED TERM LOAN - Summary of Credit Agreement (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Outstanding Balance | $ 40,250,000 | $ 40,250,000 |
Total Commitment | $ 40,250,000 | $ 40,250,000 |
MSRs - Narrative (Details)
MSRs - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2021USD ($)numberOfMortgageSub-servicers | Mar. 31, 2020USD ($) | |
Mortgage Servicing Rights MSR [Line Items] | ||
Number of licensed sub-servicers | numberOfMortgageSub-servicers | 2 | |
Mortgage servicing rights | ||
Mortgage Servicing Rights MSR [Line Items] | ||
Loans associated with MSRs | $ | $ 152,465,708 | $ 315,173,382 |
MSRs - MSR Activity (Details)
MSRs - MSR Activity (Details) - Mortgage Servicing Rights - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Movement in Mortgage Service Rights | ||
Balance at beginning of period | $ 919,678 | $ 2,700,207 |
Changes in fair value due to: | ||
Changes in valuation inputs or assumptions used in valuation model | 167,839 | (728,585) |
Other changes to fair value | (188,294) | (149,164) |
Balance at end of period | 899,223 | 1,822,458 |
Loans associated with MSRs | $ 152,465,708 | $ 315,173,382 |
MSR values as percent of loans | 0.59% | 0.58% |
MSRs - Components of Servicing
MSRs - Components of Servicing Income (Details) - Mortgages - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule Of Components Of Servicing Income [Line Items] | ||
Servicing income, net | $ 124,156 | $ 194,147 |
Total servicing income | $ 124,156 | $ 194,147 |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities at Fair Value (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Total assets | $ 899,223 | $ 919,678 |
Quoted prices in active markets for identical assets Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Significant other observable inputs Level 2 | ||
Assets: | ||
Total assets | 0 | 0 |
Unobservable inputs Level 3 | ||
Assets: | ||
Total assets | 899,223 | 919,678 |
Mortgage servicing rights | ||
Assets: | ||
Total assets | 899,223 | 919,678 |
Mortgage servicing rights | Quoted prices in active markets for identical assets Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Mortgage servicing rights | Significant other observable inputs Level 2 | ||
Assets: | ||
Total assets | 0 | 0 |
Mortgage servicing rights | Unobservable inputs Level 3 | ||
Assets: | ||
Total assets | $ 899,223 | $ 919,678 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 899,223 | $ 919,678 |
Unobservable inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 899,223 | 919,678 |
Mortgage Servicing Rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 899,223 | 919,678 |
Mortgage Servicing Rights | Unobservable inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 899,223 | $ 919,678 |
FAIR VALUE - Unobservable Input
FAIR VALUE - Unobservable Inputs Information (Details) - Mortgage servicing rights - Discounted cash flow - Unobservable inputs Level 3 | Mar. 31, 2021 | Dec. 31, 2020 |
Constant prepayment rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.100 | 0.124 |
Constant prepayment rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.287 | 0.280 |
Constant prepayment rate | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.185 | 0.216 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
Discount rate | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
FAIR VALUE - Fair Value Informa
FAIR VALUE - Fair Value Information on Financial Instruments (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | [1] | $ 11,717,804 | $ 11,375,960 |
Restricted cash | [1] | 32,154,188 | 57,999,396 |
Total Assets | [1] | 567,406,572 | 621,489,779 |
Collateralized loan obligations | [1] | 409,404,872 | 463,060,090 |
Secured Term Loan | [1] | 39,598,532 | 39,556,198 |
Total Liabilities | [1] | 453,140,504 | 507,786,627 |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,375,960 | ||
Restricted cash | 57,999,396 | ||
Commercial mortgage loans held-for-investment | [1] | 547,345,334 | |
Total Assets | 528,037,241 | 616,720,690 | |
Collateralized loan obligations | 463,060,090 | ||
Secured Term Loan | 39,556,198 | ||
Total Liabilities | 449,003,404 | 502,616,288 | |
Carrying Value | Quoted prices in active markets for identical assets Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,717,804 | 11,375,960 | |
Restricted cash | 32,154,188 | 57,999,396 | |
Carrying Value | Significant other observable inputs Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateralized loan obligations | 409,404,872 | 463,060,090 | |
Carrying Value | Unobservable inputs Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans held-for-investment | 484,165,249 | 547,345,334 | |
Secured Term Loan | 39,598,532 | 39,556,198 | |
Face Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,375,960 | ||
Restricted cash | 57,999,396 | ||
Commercial mortgage loans held-for-investment | 547,345,334 | ||
Total Assets | 528,037,241 | 616,720,690 | |
Collateralized loan obligations | 465,316,126 | ||
Secured Term Loan | 40,250,000 | ||
Total Liabilities | 451,492,221 | 505,566,126 | |
Face Amount | Quoted prices in active markets for identical assets Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,717,804 | 11,375,960 | |
Restricted cash | 32,154,188 | 57,999,396 | |
Face Amount | Significant other observable inputs Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateralized loan obligations | 411,242,221 | 465,316,126 | |
Face Amount | Unobservable inputs Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans held-for-investment | 484,165,249 | 547,345,334 | |
Secured Term Loan | 40,250,000 | 40,250,000 | |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,375,960 | ||
Restricted cash | 57,999,396 | ||
Commercial mortgage loans held-for-investment | 547,134,755 | ||
Total Assets | 527,958,671 | 616,510,111 | |
Collateralized loan obligations | 458,094,412 | ||
Secured Term Loan | 44,514,373 | ||
Total Liabilities | 455,225,490 | 502,608,785 | |
Fair Value | Quoted prices in active markets for identical assets Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 11,717,804 | 11,375,960 | |
Restricted cash | 32,154,188 | 57,999,396 | |
Fair Value | Significant other observable inputs Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateralized loan obligations | 410,864,162 | 458,094,412 | |
Fair Value | Unobservable inputs Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans held-for-investment | 484,086,679 | 547,134,755 | |
Secured Term Loan | $ 44,361,328 | $ 44,514,373 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | Jan. 03, 2020 | Mar. 18, 2019USD ($) | Jan. 18, 2019 | Mar. 31, 2021USD ($)contract | Mar. 31, 2020USD ($)contract | Dec. 31, 2019 | Dec. 31, 2020USD ($) |
Related Party Transaction [Line Items] | |||||||
Management fee percentage | 1.50% | ||||||
Quarterly management fee percentage | 0.375% | ||||||
Management fee expense | $ 588,767 | $ 584,821 | |||||
Management fee payable | 588,000 | 566,000 | |||||
Incentive fees | 132,232 | 0 | |||||
Incentive fees payable | 132,232 | 0 | |||||
Reimbursable expenses | 312,454 | 461,121 | |||||
Reimbursable expenses payable | $ 311,879 | 447,000 | |||||
Percentage reduced of amount of waived exit fee | 50.00% | ||||||
Reimbursable expenses waived | $ 129,120 | 0 | |||||
Unfunded commitment related to loans held-for-investment | 10,200,000 | ||||||
Funded participation interests | 6,900,000 | ||||||
Hunt CRE 2017-FL1, Ltd. | |||||||
Related Party Transaction [Line Items] | |||||||
Unfunded commitment related to loans held-for-investment | 10,200,000 | $ 24,600,000 | |||||
Funded participation interests | $ 6,900,000 | $ 5,600,000 | |||||
Manager Equity Plan | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum shares issued, percentage of issued and outstanding shares of common stock | 3.00% | ||||||
Manager Equity Plan | Restricted Stock Units (RSUs) | |||||||
Related Party Transaction [Line Items] | |||||||
Compensation expense | $ 2,885 | 7,882 | |||||
Unrecognized compensation expense | $ 2,468 | $ 6,063 | |||||
Weighted average period for compensation expense not yet recognized | 2 months 18 days | ||||||
Hunt Investment Management, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Quarterly management fee percentage | 0.375% | ||||||
Quarterly incentive fee percentage | 20.00% | 20.00% | |||||
Hurdle rate percentage | 8.00% | 8.00% | |||||
Annual management fee percentage | 1.50% | ||||||
Hunt Investment Management, LLC | Support Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum reduction of expense reimbursement per annum (percent) | 25.00% | ||||||
Maximum expense reimbursement reduction per annum | $ 568,000 | ||||||
Aggregate reduction of expense reimbursement | $ 1,960,000 | ||||||
OREC Structured Finance, LLC | Hunt CRE 2017-FL1, Ltd. | |||||||
Related Party Transaction [Line Items] | |||||||
Number of loans purchased | contract | 3 | 2 | |||||
Unpaid principal balance of purchased loans | $ 34,900,000 | $ 31,900,000 | |||||
Lument Structured Finance | Hunt CRE 2017-FL1, Ltd. | |||||||
Related Party Transaction [Line Items] | |||||||
Unfunded commitment related to loans held-for-investment | $ 17,100,000 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Shares | ||
Outstanding Unvested Shares at Beginning of Period (in shares) | 4,500 | 4,500 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | 0 | 0 |
Outstanding Unvested Shares at End of Period (in shares) | 4,500 | 4,500 |
Weighted Average Grant Date Fair Market Value | ||
Outstanding Unvested Shares at Beginning of Period (in dollars per share) | $ 2.60 | $ 3.33 |
Granted (in usd per share) | 0 | 0 |
Vested (in usd per share) | 0 | 0 |
Outstanding Unvested Shares at End of Period (in dollars per share) | $ 2.60 | $ 3.33 |
GUARANTEES (Details)
GUARANTEES (Details) - USD ($) | Jun. 15, 2016 | Mar. 31, 2021 | Dec. 31, 2020 |
Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Representation and warranty breach, threshold period for likely occurrence | 5 years | ||
Minimum adjusted tangible new worth | $ 20,000,000 | ||
Minimum available liquidity | $ 5,000,000 | $ 5,000,000 | |
Minimum available liquidity, percentage of aggregate unpaid principal balance | 0.10% | 0.10% | |
Maximum amount of estimated future payments under the backstop guarantees | $ 724,100,000 | $ 860,500,000 | |
Indemnification Agreement | |||
Guarantor Obligations [Line Items] | |||
Maximum amount of estimated future payments under the backstop guarantees | $ 0 | ||
Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Minimum available liquidity, percentage of aggregate unpaid principal balance | 0.01% | ||
Oak Circle Capital Partners, LLC | Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Alternative backstop fee | $ 426,770 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||
Funded participation interests | $ 6,900,000 | |
Unfunded commitment related to loans held-for-investment | 10,200,000 | |
Hunt CRE 2017-FL1, Ltd. | ||
Loss Contingencies [Line Items] | ||
Funded participation interests | 6,900,000 | $ 5,600,000 |
Unfunded commitment related to loans held-for-investment | 10,200,000 | 24,600,000 |
Hunt CRE 2018-FL2, Ltd | ||
Loss Contingencies [Line Items] | ||
Unfunded commitment related to loans held-for-investment | $ 23,800,000 | $ 25,800,000 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) | Jan. 03, 2020USD ($)$ / sharesshares | Nov. 29, 2018USD ($)shares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 15, 2015USD ($) | |||
Stockholders' Equity Note [Line Items] | |||||||||
Common stock, shares authorized (in shares) | shares | 450,000,000 | 450,000,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||
Common stock, shares outstanding (in shares) | shares | 24,943,383 | 24,943,383 | |||||||
Common stock, shares issued (in shares) | shares | 24,943,383 | 24,943,383 | |||||||
Stock repurchase program, authorized amount | $ 10,000,000 | ||||||||
Dividends payable | $ 2,248,612 | [1] | $ 1,874,166 | $ 3,242,640 | [1] | ||||
Noncontrolling interests | [1] | 99,500 | $ 99,500 | ||||||
Dividends on the HCMT Preferred Shares | $ 3,708 | $ 3,750 | |||||||
Stock Repurchase Program | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Number of shares repurchased (in shares) | shares | 126,856 | ||||||||
Weighted average share price of common stock repurchased (in dollars per share) | $ / shares | $ 5.09 | ||||||||
Common stock repurchase activity (in shares) | shares | 0 | ||||||||
Stock repurchase program, remaining authorized amount | $ 9,400,000 | ||||||||
Preferred Stock | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Dividends payable | $ 3,708 | ||||||||
Redeemable Preferred Stock | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | |||||||
Preferred stock, shares outstanding (in shares) | shares | 0 | 0 | |||||||
Common Stock | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Issuance of common stock (in shares) | shares | 1,246,719 | 1,246,719 | |||||||
Dividends payable | $ 2,244,904 | ||||||||
Dividends payable, amount per share (in dollars per share) | $ / shares | $ 0.09 | ||||||||
Noncontrolling interests | Preferred Stock | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Number of shares issued (in shares) | shares | 125 | ||||||||
Noncontrolling interests | $ 99,500 | ||||||||
Equity raised | 125,000 | ||||||||
Non-controlling interests expenses | $ 25,500 | ||||||||
Dividend rate percentage | 12.00% | ||||||||
Redemption price ratio | 1.1 | ||||||||
Dividends on the HCMT Preferred Shares | $ 15,000 | ||||||||
Hunt | Private Placement | |||||||||
Stockholders' Equity Note [Line Items] | |||||||||
Common stock, shares issued (in dollars per share) | $ / shares | $ 4.61 | ||||||||
Aggregate capital raise | $ 5,700,000 | ||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
EQUITY - Dividends Declared (De
EQUITY - Dividends Declared (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | [1] | Mar. 31, 2020 | |
Dividends [Line Items] | |||||
Dividend Amount | $ 2,248,612 | [1] | $ 3,242,640 | $ 1,874,166 | |
Common Stock | |||||
Dividends [Line Items] | |||||
Dividend Amount | $ 2,244,904 | ||||
Cash Dividend Per Weighted Average Share (in dollars per share) | $ 0.09 | ||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of March 31, 2021 and December 31, 2020, assets of consolidated VIEs related to Hunt CRE 2017-F1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $537,399,673 and $591,318,506, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd totaled $409,716,943 and $463,411,967 respectively. See Note 4 for further discussion. |
EARNINGS PER SHARE - Earnings p
EARNINGS PER SHARE - Earnings per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income | $ 2,808,643 | $ 1,551,671 |
Less dividends: | ||
Common stock | 2,244,904 | 1,870,416 |
Preferred stock | 3,708 | 3,750 |
Dividends | 2,248,612 | 1,874,166 |
Undistributed earnings (deficit) | $ 560,031 | $ (322,495) |
Common Stock | ||
Less dividends: | ||
Distributed earnings (in dollars per share) | $ 0.09 | $ 0.08 |
Undistributed earnings (deficit) (in dollars per share) | 0.02 | (0.02) |
Total (in dollars per share) | 0.11 | 0.06 |
Unvested Share-Based Payment Awards | ||
Less dividends: | ||
Distributed earnings (in dollars per share) | 0.09 | 0.08 |
Undistributed earnings (deficit) (in dollars per share) | 0.02 | 0 |
Total (in dollars per share) | $ 0.11 | $ 0.08 |
EARNINGS PER SHARE - Weighted A
EARNINGS PER SHARE - Weighted Average Number of Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares of common stock (in shares) | 24,938,883 | 24,906,983 |
Weighted average of non-vested restricted stock (in shares) | 4,500 | 4,500 |
Weighted Average Number of Shares Outstanding, Diluted, Total | 24,943,383 | 24,911,483 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 07, 2021 | Apr. 21, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||||
Principal amount | $ 40,250,000 | $ 40,250,000 | ||
Series A Cumulative Redeemable Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Subsequent Event | Delayed Draw Facility | Incremental Secured Term Loan | ||||
Subsequent Event [Line Items] | ||||
Principal amount | $ 7,500,000 | |||
Stated interest rate (as a percentage) | 7.25% | |||
Subsequent Event | Delayed Draw Facility | Incremental Secured Term Loan | First four months after fifth anniversary | ||||
Subsequent Event [Line Items] | ||||
Interest fixed rate | 0.25% | |||
Subsequent Event | Delayed Draw Facility | Incremental Secured Term Loan | Second four months after fifth anniversary | ||||
Subsequent Event [Line Items] | ||||
Interest fixed rate | 0.375% | |||
Subsequent Event | Delayed Draw Facility | Incremental Secured Term Loan | Last four months until maturity | ||||
Subsequent Event [Line Items] | ||||
Interest fixed rate | 0.50% | |||
Subsequent Event | Series A Cumulative Redeemable Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, shares issued (in shares) | 2,400,000 | |||
Preferred stock, dividend rate, percentage | 7.875% | |||
Preferred stock, issuance costs | $ 58,100,000 | |||
Preferred stock, liquidation preference (in dollars per share) | $ 25 |