Document
Document - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38124 | |
Entity Registrant Name | GRANITE POINT MORTGAGE TRUST INC. | |
Entity Central Index Key | 0001703644 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 61-1843143 | |
Entity Address, Address Line One | 3 Bryant Park, Suite 2400A | |
Entity Address, City or Town | New York, | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10036 | |
City Area Code | 212 | |
Local Phone Number | 364-5500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,205,082 | |
NEW YORK STOCK EXCHANGE, INC. [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | GPMT | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
ASSETS | |||
Loans held-for-investment | $ 4,366,757 | $ 4,226,212 | |
Allowance for credit losses | (76,710) | 0 | |
Loans held-for-investment, net | 4,290,047 | 4,226,212 | |
Available-for-sale securities, at fair value | 12,542 | 12,830 | |
Held-to-maturity securities | 10,788 | 18,076 | |
Cash and cash equivalents | 55,969 | 80,281 | |
Restricted cash | 3,497 | 79,483 | |
Accrued interest receivable | 11,649 | 11,323 | |
Other assets | 31,156 | 32,657 | |
Total Assets | [1] | 4,415,648 | 4,460,862 |
Liabilities | |||
Repurchase agreements | 2,030,916 | 1,924,021 | |
Securitized debt obligations | 983,521 | 1,041,044 | |
Asset-specific financings | 121,242 | 116,465 | |
Revolving credit facilities | 12,589 | 42,008 | |
Convertible senior notes | 270,437 | 269,634 | |
Dividends payable | 25 | 23,063 | |
Other liabilities | 31,582 | 24,491 | |
Total Liabilities | [1] | 3,450,312 | 3,440,726 |
10% cumulative redeemable preferred stock, par value $0.01 per share; 50,000,000 shares authorized and 1,000 and 1,000 shares issued and outstanding, respectively | 1,000 | 1,000 | |
Stockholders' Equity | |||
Common stock, par value $0.01 per share; 450,000,000 shares authorized and 55,205,082 and 54,853,205 shares issued and outstanding, respectively | 552 | 549 | |
Additional paid-in capital | 1,051,159 | 1,048,484 | |
Accumulated other comprehensive (loss) income | 0 | 32 | |
Cumulative earnings | 104,680 | 162,076 | |
Cumulative distributions to stockholders | 192,055 | 192,005 | |
Total Stockholders’ Equity | 964,336 | 1,019,136 | |
Total Liabilities and Stockholders’ Equity | $ 4,415,648 | $ 4,460,862 | |
[1] | The condensed consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of these VIEs, and liabilities of the consolidated VIEs for which creditors do not have recourse to Granite Point Mortgage Trust Inc. At June 30, 2020 and December 31, 2019, assets of the VIEs totaled $1,307,455 and $1,387,148, and liabilities of the VIEs totaled $984,230 and $1,042,122, respectively. See Note 3 - Variable Interest Entities for additional information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||
10% cumulative redeemable preferred stock par value per share (in usd per share) | $ 0.01 | $ 0.01 | |
10% cumulative redeemable preferred shares authorized (in shares) | 50,000,000 | 50,000,000 | |
10% cumulative redeemable preferred shares issued (in shares) | 1,000 | 1,000 | |
10% cumulative redeemable preferred shares outstanding (in shares) | 1,000 | 1,000 | |
Common stock par value per share (in usd per share) | $ 0.01 | $ 0.01 | |
Common shares authorized (in shares) | 450,000,000 | 450,000,000 | |
Common shares issued (in shares) | 55,205,082 | 54,853,205 | |
Common shares outstanding (in shares) | 55,205,082 | 54,853,205 | |
Assets of consolidated Variable Interest Entities | [1] | $ 4,415,648 | $ 4,460,862 |
Liabilities of consolidated Variable Interest Entities | [1] | 3,450,312 | 3,440,726 |
Variable Interest Entity, Primary Beneficiary [Member] | Assets, Total [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | 1,307,455 | 1,387,148 | |
Variable Interest Entity, Primary Beneficiary [Member] | Liabilities, Total [Member] | |||
Variable Interest Entity [Line Items] | |||
Liabilities of consolidated Variable Interest Entities | $ 984,230 | $ 1,042,122 | |
[1] | The condensed consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of these VIEs, and liabilities of the consolidated VIEs for which creditors do not have recourse to Granite Point Mortgage Trust Inc. At June 30, 2020 and December 31, 2019, assets of the VIEs totaled $1,307,455 and $1,387,148, and liabilities of the VIEs totaled $984,230 and $1,042,122, respectively. See Note 3 - Variable Interest Entities for additional information. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest income: | ||||
Loans held-for-investment | $ 60,299 | $ 58,133 | $ 123,558 | $ 114,798 |
Loans held-for-sale | 121 | 0 | 121 | 0 |
Available-for-sale securities | 247 | 311 | 527 | 619 |
Held-to-maturity securities | 236 | 613 | 546 | 1,274 |
Cash and cash equivalents | 41 | 907 | 367 | 1,418 |
Total interest income | 60,944 | 59,964 | 125,119 | 118,109 |
Interest expense: | ||||
Repurchase agreements | 14,276 | 13,529 | 33,951 | 30,518 |
Securitized debt obligations | 6,502 | 13,554 | 15,936 | 23,413 |
Convertible senior notes | 4,525 | 4,491 | 9,041 | 8,956 |
Asset-specific financings | 939 | 598 | 2,061 | 598 |
Revolving credit facilities | 320 | 165 | 562 | 860 |
Total interest expense | 26,562 | 32,337 | 61,551 | 64,345 |
Net interest income | 34,382 | 27,627 | 63,568 | 53,764 |
Other (loss) income: | ||||
Provision for credit losses | (14,205) | 0 | (67,541) | 0 |
Realized losses on sales | (6,894) | 0 | (6,894) | 0 |
Fee income | 0 | 202 | 522 | 1,115 |
Total other (loss) income | (21,099) | 202 | (73,913) | 1,115 |
Expenses: | ||||
Management fees | 3,959 | 3,763 | 7,866 | 7,212 |
Incentive fees | 0 | 0 | 0 | 244 |
Servicing expenses | 1,002 | 885 | 2,111 | 1,658 |
Other operating expenses | 10,060 | 5,006 | 18,613 | 10,622 |
Total expenses | 15,021 | 9,654 | 28,590 | 19,736 |
(Loss) income before income taxes | (1,738) | 18,175 | (38,935) | 35,143 |
Benefit from income taxes | (5) | (2) | (11) | (3) |
Net (loss) income | (1,733) | 18,177 | (38,924) | 35,146 |
Dividends on preferred stock | 25 | 25 | 50 | 50 |
Net (loss) income attributable to common stockholders | $ (1,758) | $ 18,152 | $ (38,974) | $ 35,096 |
Basic earnings per weighted average common share (in usd per share) | $ (0.03) | $ 0.34 | $ (0.71) | $ 0.68 |
Diluted earnings per weighted average common share (in usd per share) | (0.03) | 0.33 | (0.71) | 0.68 |
Dividends declared per common share (in usd per share) | $ 0 | $ 0.42 | $ 0 | $ 0.84 |
Weighted average basic common shares outstanding (in shares) | 55,158,283 | 53,953,634 | 55,107,347 | 51,292,318 |
Weighted average diluted common shares outstanding (in shares) | 55,158,283 | 67,624,395 | 55,107,347 | 51,292,318 |
Comprehensive (loss) income: | ||||
Net (loss) income attributable to common stockholders | $ (1,758) | $ 18,152 | $ (38,974) | $ 35,096 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized (loss) gain on available-for-sale securities | 3,712 | 32 | (32) | 224 |
Other comprehensive (loss) income | 3,712 | 32 | (32) | 224 |
Comprehensive (loss) income | $ 1,954 | $ 18,184 | $ (39,006) | $ 35,320 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative effect of adoption of new accounting principle | Stockholders' equity, adjusted balance | Common Stock | Common StockStockholders' equity, adjusted balance | Additional Paid-in Capital | Additional Paid-in CapitalCumulative effect of adoption of new accounting principle | Additional Paid-in CapitalStockholders' equity, adjusted balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Stockholders' equity, adjusted balance | Cumulative Earnings | Cumulative EarningsCumulative effect of adoption of new accounting principle | Cumulative EarningsStockholders' equity, adjusted balance | Cumulative Distributions to Stockholders | Cumulative Distributions to StockholdersStockholders' equity, adjusted balance |
Cumulative effect of adoption of new accounting principle | $ 827,531 | $ 0 | $ 827,531 | $ 436 | $ 436 | $ 836,288 | $ 13 | $ 836,301 | $ (192) | $ (192) | $ 91,875 | $ (13) | $ 91,862 | $ (100,876) | $ (100,876) |
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2018 | 43,621,174 | 43,621,174 | 43,621,174 | ||||||||||||
Net (loss) income | $ 16,969 | 16,969 | |||||||||||||
Other comprehensive income (loss) before reclassifications | 192 | 192 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |||||||||||||
Net other comprehensive income (loss) | 192 | 192 | |||||||||||||
Issuance of common stock, net of offering costs (in shares) | 8,291,829 | ||||||||||||||
Issuance of common stock, net of offering costs | 157,228 | $ 83 | 157,145 | ||||||||||||
Common dividends declared | (21,913) | (21,913) | |||||||||||||
Preferred dividends declared | (25) | (25) | |||||||||||||
Non-cash equity award compensation (in shares) | 258,918 | ||||||||||||||
Non-cash equity award compensation | 1,149 | $ 3 | 1,146 | ||||||||||||
Common shares outstanding at end of period (in shares) at Mar. 31, 2019 | 52,171,921 | ||||||||||||||
Stockholders’ equity at end of period at Mar. 31, 2019 | $ 981,131 | $ 522 | 994,592 | 0 | 108,831 | (122,814) | |||||||||
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2018 | 43,621,174 | 43,621,174 | 43,621,174 | ||||||||||||
Net (loss) income | $ 35,146 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 0 | ||||||||||||||
Net other comprehensive income (loss) | $ 224 | ||||||||||||||
Issuance of common stock, net of offering costs (in shares) | 10,954,924 | ||||||||||||||
Non-cash equity award compensation (in shares) | 277,107 | ||||||||||||||
Common shares outstanding at end of period (in shares) at Jun. 30, 2019 | 54,853,205 | 54,853,205 | |||||||||||||
Stockholders’ equity at end of period at Jun. 30, 2019 | $ 1,027,736 | $ 549 | 1,046,025 | 32 | 127,008 | (145,878) | |||||||||
Common shares outstanding at beginning of period (in shares) at Mar. 31, 2019 | 52,171,921 | ||||||||||||||
Stockholders’ equity at beginning of period at Mar. 31, 2019 | 981,131 | $ 522 | 994,592 | 0 | 108,831 | (122,814) | |||||||||
Net (loss) income | 18,177 | 18,177 | |||||||||||||
Other comprehensive income (loss) before reclassifications | 32 | 32 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |||||||||||||
Net other comprehensive income (loss) | 32 | 32 | |||||||||||||
Issuance of common stock, net of offering costs (in shares) | 2,663,095 | ||||||||||||||
Issuance of common stock, net of offering costs | 50,177 | $ 27 | 50,150 | ||||||||||||
Common dividends declared | (23,039) | (23,039) | |||||||||||||
Preferred dividends declared | (25) | (25) | |||||||||||||
Non-cash equity award compensation (in shares) | 18,189 | ||||||||||||||
Non-cash equity award compensation | $ 1,283 | $ 0 | 1,283 | ||||||||||||
Common shares outstanding at end of period (in shares) at Jun. 30, 2019 | 54,853,205 | 54,853,205 | |||||||||||||
Stockholders’ equity at end of period at Jun. 30, 2019 | $ 1,027,736 | $ 549 | 1,046,025 | 32 | 127,008 | (145,878) | |||||||||
Cumulative effect of adoption of new accounting principle | $ 1,019,136 | $ (18,472) | $ 1,000,664 | $ 549 | $ 549 | 1,048,484 | $ 1,048,484 | 32 | $ 32 | 162,076 | $ (18,472) | $ 143,604 | (192,005) | $ (192,005) | |
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2019 | 54,853,205 | 54,853,205 | |||||||||||||
Stockholders’ equity at beginning of period at Dec. 31, 2019 | $ 1,019,136 | ||||||||||||||
Net (loss) income | (37,191) | (37,191) | |||||||||||||
Other comprehensive income (loss) before reclassifications | (4,511) | (4,511) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | 767 | 767 | |||||||||||||
Net other comprehensive income (loss) | (3,744) | (3,744) | |||||||||||||
Preferred dividends declared | (25) | (25) | |||||||||||||
Non-cash equity award compensation (in shares) | 283,680 | ||||||||||||||
Non-cash equity award compensation | 1,355 | $ 3 | 1,352 | ||||||||||||
Common shares outstanding at end of period (in shares) at Mar. 31, 2020 | 55,136,885 | ||||||||||||||
Stockholders’ equity at end of period at Mar. 31, 2020 | $ 961,059 | $ 552 | 1,049,836 | (3,712) | 106,413 | (192,030) | |||||||||
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2019 | 54,853,205 | 54,853,205 | |||||||||||||
Stockholders’ equity at beginning of period at Dec. 31, 2019 | $ 1,019,136 | ||||||||||||||
Net (loss) income | (38,924) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 300 | ||||||||||||||
Net other comprehensive income (loss) | $ (32) | ||||||||||||||
Issuance of common stock, net of offering costs (in shares) | 0 | ||||||||||||||
Non-cash equity award compensation (in shares) | 351,877 | ||||||||||||||
Common shares outstanding at end of period (in shares) at Jun. 30, 2020 | 55,205,082 | 55,205,082 | |||||||||||||
Stockholders’ equity at end of period at Jun. 30, 2020 | $ 964,336 | $ 552 | 1,051,159 | 0 | 104,680 | (192,055) | |||||||||
Common shares outstanding at beginning of period (in shares) at Mar. 31, 2020 | 55,136,885 | ||||||||||||||
Stockholders’ equity at beginning of period at Mar. 31, 2020 | 961,059 | $ 552 | 1,049,836 | (3,712) | 106,413 | (192,030) | |||||||||
Net (loss) income | (1,733) | (1,733) | |||||||||||||
Other comprehensive income (loss) before reclassifications | 4,223 | 4,223 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | (511) | (511) | |||||||||||||
Net other comprehensive income (loss) | 3,712 | 3,712 | |||||||||||||
Preferred dividends declared | (25) | (25) | |||||||||||||
Non-cash equity award compensation (in shares) | 68,197 | ||||||||||||||
Non-cash equity award compensation | $ 1,323 | $ 0 | 1,323 | ||||||||||||
Common shares outstanding at end of period (in shares) at Jun. 30, 2020 | 55,205,082 | 55,205,082 | |||||||||||||
Stockholders’ equity at end of period at Jun. 30, 2020 | $ 964,336 | $ 552 | $ 1,051,159 | $ 0 | $ 104,680 | $ (192,055) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities: | ||
Net (loss) income | $ (38,924) | $ 35,146 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Accretion of discounts and net deferred fees on loans held-for-investment | (9,321) | (7,897) |
Amortization of deferred debt issuance costs on convertible senior notes and securitized debt obligations | 3,280 | 3,882 |
Provision for credit losses | 67,541 | 0 |
Realized losses on sales | 6,894 | 0 |
Equity based compensation | 2,678 | 2,432 |
Net change in assets and liabilities: | ||
(Increase) decrease in accrued interest receivable | (326) | 344 |
Decrease (increase) in other assets | 1,501 | (9,483) |
Increase in other liabilities | (1,018) | 4,238 |
Net cash provided by operating activities | 32,305 | 28,662 |
Cash Flows From Investing Activities: | ||
Originations, acquisitions and additional fundings of loans held-for-investment, net of deferred fees | (257,004) | (688,044) |
Proceeds from repayment of loans held-for-investment | 106,115 | 303,737 |
Principal payments on held-to-maturity securities | 6,350 | 4,676 |
Proceeds from sales of loans held-for-sale | 12,771 | 0 |
Net cash used in investing activities | (131,768) | (379,631) |
Cash Flows From Financing Activities: | ||
Proceeds from repurchase agreements | 310,471 | 500,127 |
Principal payments on repurchase agreements | (203,576) | (746,643) |
Proceeds from issuance of securitized debt obligations | 0 | 646,868 |
Principal payments on securitized debt obligations | (60,000) | (171,000) |
Proceeds from asset-specific financings | 4,777 | 75,060 |
Proceeds from revolving credit facilities | 38,361 | 48,697 |
Repayment of revolving credit facilities | (67,780) | (123,697) |
Proceeds from issuance of common stock, net of offering costs | 0 | 207,405 |
Dividends paid on preferred stock | (50) | (50) |
Dividends paid on common stock | (23,038) | (40,234) |
Net cash provided by financing activities | (835) | 396,533 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (100,298) | 45,564 |
Cash, cash equivalents and restricted cash at beginning of period | 159,764 | 123,423 |
Cash, cash equivalents and restricted cash at end of period | 59,466 | 168,987 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 63,350 | 64,534 |
Noncash Activities: | ||
Transfers of loans held-for-investment to loans held-for-sale | 19,665 | 0 |
Dividends declared but not paid at end of period | $ 25 | $ 23,064 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2020 | |
Organization and Operations [Abstract] | |
Organization and Operations | Organization and Operations Granite Point Mortgage Trust Inc., or the Company, is a Maryland corporation that focuses primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments. The Company is currently externally managed by Pine River Capital Management L.P., or the Manager. The Company’s common stock is listed on the New York Stock Exchange, or NYSE, under the symbol “GPMT.” On March 2, 2020, the Company announced that it has agreed to a process with the Manager to internalize the Company’s management function. If the internalization is completed, the Company will become a self-managed real estate investment trust, or REIT. There can be no assurance that the internalization will be consummated. The Company has elected to be treated as a REIT, as defined under the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes. As long as the Company continues to comply with a number of requirements under federal tax law and maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that the Company distributes its taxable income to its stockholders on an annual basis and does not engage in prohibited transactions. However, certain activities that the Company may perform may cause it to earn income which will not be qualifying income for REIT purposes. The Company has designated one of its subsidiaries as a taxable REIT subsidiary, or TRS, as defined in the Code, to engage in such activities. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Consolidation and Basis of Presentation The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted according to such SEC rules and regulations. However, management believes that the disclosures included in these interim condensed consolidated financial statements are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all normal and recurring adjustments necessary to present fairly the financial condition of the Company at June 30, 2020 and results of operations for all periods presented have been made. The results of operations for the three and six months ended June 30, 2020 should not be construed as indicative of the results to be expected for future periods or the full year. The unaudited condensed consolidated financial statements of the Company include the accounts of all subsidiaries; inter-company accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. All entities in which the Company holds investments that are considered VIEs for financial reporting purposes were reviewed for consolidation under the applicable consolidation guidance. Whenever the Company has both the power to direct the activities of an entity that most significantly impact the entity’s performance, and the obligation to absorb losses or the right to receive benefits of the entity that could be significant, the Company consolidates the entity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make a number of significant estimates. These include estimates of amount and timing of allowances for credit losses, fair value of certain assets and liabilities, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates ( e.g. , valuation changes to the underlying collateral of loans due to changes in market capitalization rates, leasing, credit worthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, overall economic and capital markets conditions, the broader commercial real estate market, local geographic sub-markets or other factors) will occur in the near term. Over the course of the first half of 2020, a global outbreak of a novel strain of coronavirus, or COVID-19, has taken place. The outbreak has spread around the world, including to every state in the United States. As a result of the pandemic, numerous countries, including the United States, have declared national emergencies. Such actions have created significant macroeconomic disruptions and adversely impacted many industries. The outbreak could have a continued adverse impact on macroeconomic and market conditions, and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on macroeconomic and market conditions. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2020. However, the significant degree of uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of June 30, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19. The Company’s actual results could ultimately differ from its estimates and the differences may be material. Significant Accounting Policies Included in Note 2 to the Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 is a summary of the Company’s significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the Company’s consolidated financial condition and results of operations for the three and six months ended June 30, 2020. Loans Held-for-Sale The Company classifies certain loans as held-for-sale based on management’s intent to sell or otherwise dispose of them. Loans held-for-sale are reported at the lower of amortized cost or fair value. Fair value is determined under the guidance of ASC 820. Interest income on loans held-for-sale is recognized at the loan coupon rate and recorded on the consolidated statements of comprehensive income. Recently Issued and/or Adopted Accounting Standards Measurement of Credit Losses on Financial Instruments On January 1, 2020, the Company adopted Accounting Standard Update, or ASU, 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. ASU 2016-13 significantly changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the incurred loss model under existing guidance with a Current Expected Credit Loss, or CECL, model for instruments measured at amortized cost, and also require entities to record allowances for available-for-sale, or AFS, debt securities rather than reduce the amortized cost, as they did under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. In addition, the new model applies to off-balance sheet credit exposures, such as unfunded loan commitments. ASU 2016-13 was adopted by the Company through a cumulative-effect adjustment to cumulative earnings of $18.5 million as of January 1, 2020. The allowance for credit losses required under ASU 2016-13 is a valuation account that is deducted from the amortized cost basis of related loans and debt securities on the Company’s condensed consolidated balance sheets, and which reduces the Company’s total stockholders’ equity. The initial allowance for credit losses recorded on January 1, 2020 is reflected as a direct charge to cumulative earnings; however, going forward, changes to the allowance for credit losses are recognized through net income on the Company’s condensed consolidated statements of comprehensive (loss) income. While ASU 2016-13 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio, market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the CECL model have some amount of expected loss to reflect the GAAP principal underlying the CECL model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan. Those future funding commitments are also subject to an allowance for credit losses. The allowance for credit losses related to future loan fundings is recorded as a component of other liabilities on the Company’s condensed consolidated balance sheets, and not as an offset to the related loan balance. This allowance for credit losses is estimated using the same process outlined below for the Company’s outstanding loan balances, and changes in this component of the allowance for credit losses similarly flow through the Company’s condensed consolidated statement of comprehensive (loss) income. The Company elected not to measure an allowance for credit losses on accrued interest receivable when the accrued interest is due within 90 days. The Company generally writes off accrued interest receivable balance when interest is 90 days or more past due unless the loan is both well secured and in the process of collection. Write-offs of accrued interest receivable are recognized within provision for credit losses in the condensed consolidated statements of comprehensive income. Accrued interest receivable includes deferred interest that may be collected at the loan maturity or past 90 days, and an allowance for credit losses has been included as part of the loan’s amortized cost. The Company did not write-off any accrued interest receivable during the three and six months ended June 30, 2020. The Company’s implementation process included a selection of a credit loss analytical model, completion and documentation of policies and procedures, changes to internal reporting processes and related internal controls and additional disclosures. A control framework for governance, data, forecast, and model controls was developed to support the CECL process. The allowance for credit losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Company’s investment portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually. Estimating an allowance for credit losses is inherently subjective, as it requires management to exercise significant judgment in establishing appropriate factors used to determine the allowance and a variety of subjective assumptions, including (i) determination of relevant historical loan loss data sets, (ii) the expected timing and amount of future loan fundings and repayments, (iii) the current credit quality of loans and operating performance of loan collateral and the Company’s expectations of performance, (iv) selecting the forecast for macroeconomic conditions, and (v) determining the reasonable and supportable forecast period. Considering the lack of historical company data related to any realized loan losses since its inception, the Company elected to estimate its allowance for credit losses by using a probability-weighted analytical model that considers the likelihood of default and loss-given-default for each individual loan. The analytical model incorporates a third-party licensed database with historical loan losses from 1998 to 2019 for over 100,000 commercial real estate loans. At the time of adoption of ASU No. 2016-13, in determining its initial allowance for credit losses estimate, the Company employed a third-party licensed macroeconomic forecast that largely reflected management’s views at the time and projected a stable overall economic scenario over the reasonable projection period. Significant inputs to the Company’s estimate of the allowance for credit losses include the reasonable and supportable forecast period and loan specific factors such as DSCR, LTV, remaining contractual loan term, property type and others. In addition, the Company also considers relevant loan-specific qualitative factors to estimate its allowance for credit losses. In certain instances, for loans with unique risk characteristics, the Company may instead elect to employ different methods to estimate loan losses that also conform to ASU 2016-13 and related guidance. Upon adoption of ASU No. 2016-13 on January 1, 2020, based on the Company’s loan portfolio, pre-COVID-19 economic environment and management’s expectations for future economic and market conditions at the time, the Company recorded an initial allowance for credit losses, as a cumulative-effective adjustment to the cumulative earnings in its consolidated statement of equity, of approximately $18.5 million, or approximately $0.34 per share. The following table illustrates the day-one financial statement impact of the adoption of ASU 2016-13 on January 1, 2020: (in thousands) ASSETS Pre-ASU 2016-13 Adoption Cumulative Effect of Adoption As Reported Under ASU 2016-13 Loans and securities $ 4,257,086 $ — $ 4,257,086 Allowance for credit losses — (16,692) (16,692) Loans and securities, net $ 4,257,086 $ (16,692) $ 4,240,394 LIABILITIES Liability for off-balance sheet credit losses (1) $ — $ 1,780 $ 1,780 STOCKHOLDERS’ EQUITY Cumulative earnings $ 162,076 $ (18,472) $ 143,604 ____________________ (1) Represents expected loss on unfunded commitments. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest EntitiesThe Company finances pools of its commercial real estate loans through collateralized loan obligations, or CLOs, which are considered VIEs for financial reporting purposes and, thus, are reviewed for consolidation under the applicable consolidation guidance. The Company has both the power to direct the activities of the CLOs that most significantly impact the entities’ performance, and the obligation to absorb losses or the right to receive benefits of the entities that could be significant, therefore, the Company consolidates the CLOs. The following table presents a summary of the assets and liabilities of all VIEs consolidated on the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Loans held-for-investment $ 1,319,151 $ 1,301,369 Allowance for credit losses (20,674) — Loans held-for-investment, net 1,298,477 1,301,369 Restricted cash 192 76,093 Other assets 8,786 9,686 Total Assets $ 1,307,455 $ 1,387,148 Securitized debt obligations $ 983,521 $ 1,041,044 Other liabilities 709 1,078 Total Liabilities $ 984,230 $ 1,042,122 The Company is not required to consolidate VIEs for which it has concluded it does not have both the power to direct the activities of the VIEs that most significantly impact the entities’ performance, and the obligation to absorb losses or the right to receive benefits of the entities that could be significant. The Company’s investments in these unconsolidated VIEs include commercial mortgage-backed securities, or CMBS, which are classified within AFS securities, at fair value, and held-to-maturity, or HTM, securities on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the carrying value, net of allowance for credit losses, which also represents the maximum exposure to loss, of all CMBS in unconsolidated VIEs was $23.3 million and $30.9 million, respectively. |
Loans Held-for-Investment
Loans Held-for-Investment | 6 Months Ended |
Jun. 30, 2020 | |
Loans Held-for-Investment [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment, Net of Allowance for Credit Losses The Company originates and acquires commercial real estate debt and related instruments generally to be held as long-term investments. These assets are classified as “loans held-for-investment” on the condensed consolidated balance sheets. Loans held-for-investment are reported at cost, net of any unamortized acquisition premiums or discounts, loan fees, origination costs and allowance for credit losses as applicable. The following tables summarize the Company’s loans held-for-investment by asset type, property type and geographic location as of June 30, 2020 and December 31, 2019: June 30, (dollars in thousands) Senior Loans (1) Mezzanine Loans B-Notes Total Unpaid principal balance $ 4,364,056 $ 12,894 $ 14,343 $ 4,391,293 Unamortized (discount) premium (108) — — (108) Unamortized net deferred origination fees (24,431) 3 — (24,428) Allowance for credit losses (74,647) (1,776) (287) (76,710) Carrying value $ 4,264,870 $ 11,121 $ 14,056 $ 4,290,047 Unfunded commitments $ 677,674 $ — $ — $ 677,674 Number of loans 118 2 1 121 Weighted average coupon 5.1 % 10.4 % 8.0 % 5.1 % Weighted average years to maturity (2) 1.4 1.3 6.6 1.4 December 31, (dollars in thousands) Senior Loans (1) Mezzanine Loans B-Notes Total Unpaid principal balance $ 4,229,194 $ 13,503 $ 14,448 $ 4,257,145 Unamortized (discount) premium (124) — — (124) Unamortized net deferred origination fees (30,788) (21) — (30,809) Carrying value $ 4,198,282 $ 13,482 $ 14,448 $ 4,226,212 Unfunded commitments $ 748,878 $ — $ — $ 748,878 Number of loans 117 2 1 120 Weighted average coupon 5.4 % 11.7 % 8.0 % 5.4 % Weighted average years to maturity (2) 1.8 2.0 7.1 1.8 ____________________ (1) Loans primarily secured by a first priority lien on commercial real property and related personal property and also includes, when applicable, any companion subordinate loans. (2) Based on contractual maturity date. Certain loans are subject to contractual extension options with such conditions stipulated in the applicable loan documents. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment fee. The Company may also extend contractual maturities in connection with loan modifications. (dollars in thousands) June 30, December 31, Property Type Carrying Value % of Loan Portfolio Carrying Value % of Loan Portfolio Office $ 1,822,072 42.5 % $ 1,779,173 42.0 % Multifamily 1,082,763 25.2 % 1,058,708 25.1 % Hotel 642,342 15.0 % 640,503 15.2 % Retail 394,498 9.2 % 398,742 9.4 % Industrial 309,833 7.2 % 312,637 7.4 % Other 38,539 0.9 % 36,449 0.9 % Total $ 4,290,047 100.0 % $ 4,226,212 100.0 % (dollars in thousands) June 30, December 31, Geographic Location Carrying Value % of Loan Portfolio Carrying Value % of Loan Portfolio Northeast $ 1,164,887 27.2 % $ 1,196,767 28.4 % Southwest 882,459 20.6 % 923,519 21.8 % West 802,555 18.7 % 735,416 17.4 % Midwest 718,235 16.7 % 700,778 16.6 % Southeast 721,911 16.8 % 669,732 15.8 % Total $ 4,290,047 100.0 % $ 4,226,212 100.0 % At June 30, 2020 and December 31, 2019, the Company pledged loans held-for-investment with a carrying value, net of allowance for credit losses, of $4.2 billion and $4.1 billion, respectively, as collateral for repurchase agreements, an asset-specific financing facility, a revolving credit facility and securitized debt obligations. See Note 9 - Collateralized Borrowings and Note 10 - Securitized Debt Obligations. The following table summarizes activity related to loans held-for-investment, net of allowance for credit losses, for the three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended (in thousands) 2020 2019 2020 2019 Balance at beginning of period $ 4,251,251 $ 3,292,989 $ 4,226,212 $ 3,167,913 Originations, acquisitions and additional fundings 72,591 415,997 260,013 695,691 Repayments (3,976) (148,417) (106,115) (303,737) Transfers to loans held-for-sale (19,665) — (19,665) — Net discount accretion (premium amortization) 8 7 16 20 Increase in net deferred origination fees (556) (4,527) (3,009) (7,647) Amortization of net deferred origination fees 4,539 4,068 9,305 7,877 Allowance for credit losses (14,145) — (76,710) — Balance at end of period $ 4,290,047 $ 3,560,117 $ 4,290,047 $ 3,560,117 Subsequent to the adoption of ASU 2016-13 on January 1, 2020, to estimate and recognize an allowance for credit losses on loans held-for-investment and their related unfunded commitments, the Company continues to use a probability-weighted analytical model. Given the highly uncertain current macroeconomic environment and the lack of clarity on the near-term outlook for the overall U.S. economy as a result of the COVID-19 pandemic, in determining its allowance for credit losses estimate through June 30, 2020, the Company employed an updated third-party provided macroeconomic forecast over the reasonable projection period. This forecast is generally updated on a quarterly basis and reflects the impact of the COVID-19 pandemic on the overall U.S. economy, commercial real estate markets generally and is not specific to any loans in its portfolio. These estimates may change in future periods based on available future macro-economic data and might results in a material change in the Company’s future estimates of expected credit losses for its loan portfolio. Due to the COVID-19 pandemic and the dislocation it has caused to the national economy, the commercial real estate markets, and the capital markets, the Company’s ability to estimate key inputs for estimating the allowance for credit losses has been materially and adversely impacted. Estimates made by management are necessarily subject to change due to the lack of observable inputs and uncertainty regarding the duration of the COVID-19 pandemic and its aftereffects. See Note 2 - Use of Estimates for further discussion of COVID-19. Significant inputs to the Company’s estimate of the allowance for credit losses include loan specific factors such as DSCR, LTV, remaining contractual loan term, property type and others. In certain instances, for loans with unique risk characteristics, the Company may instead elect to employ different methods to estimate loan losses that also conform to ASU 2016-13 and related guidance. The allowance for credit losses related to the Company’s loans held-for-investment is deducted from the amortized cost basis of related loans, while the allowance for credit losses related to off-balance sheet future funding commitments is recorded as a component of other liabilities on the Company’s condensed consolidated balance sheets. As of June 30, 2020, the Company recognized $8.1 million in other liabilities related to the allowance for credit losses on unfunded commitments. Changes in the provision for credit losses for both loans held-for-investment and their related unfunded commitments are recognized through net income on the Company’s condensed consolidated statements of comprehensive (loss) income. The following table presents the changes for the three and six months ended June 30, 2020 in the allowance for credit losses on loans held-for-investment: Three Months Ended Six Months Ended (in thousands) 2020 2020 Balance at beginning of period $ 62,565 $ 16,692 Provision for credit losses 14,145 60,018 Writeoffs — — Recoveries of amounts previously written off — — Balance at end of period $ 76,710 $ 76,710 For the three months ended June 30, 2020, the Company’s estimate of expected credit losses further increased primarily due to the continued sharply recessionary macroeconomic forecast employed in the Company’s loss estimation model stemming from the ongoing impact of the COVID-19 pandemic. Generally, loans held-for-investment are placed on nonaccrual status when delinquent for more than 90 days or when determined not to be probable of full collection. Interest income recognition is suspended when loans are placed on nonaccrual status. No loan was placed on nonaccrual status during the quarters ended June 30, 2020 and March 31, 2020, and at December 31, 2019. With the passage of time and continuation of the COVID-19 pandemic, certain borrowers may become delinquent for more than 90 days which may result in certain loans being placed on nonaccrual status during the third quarter of 2020 and later periods. The Company’s primary credit quality indicators are its risk rankings. The Company evaluates the credit quality of each loan at least quarterly by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. Risk factors include property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, loan structure and exit plan, LTV, project sponsorship and other factors deemed necessary. Risk ratings are defined as follows: 1 – Lower Risk 2 – Average Risk 3 – Acceptable Risk 4 – Higher Risk: A loan that has exhibited material deterioration in cash flows and/or other credit factors, which, if negative trends continue, could be indicative of probability of default or principal loss. 5 – Loss Likely: A loan that has a significantly increased probability of default or principal loss. The following table presents the number of loans, unpaid principal balance and carrying value by risk rating for loans held-for-investment as of June 30, 2020 and December 31, 2019: (dollars in thousands) June 30, December 31, Risk Rating Number of Loans Unpaid Principal Balance Carrying Value Number of Loans Unpaid Principal Balance Carrying Value 1 6 $ 173,494 $ 172,186 9 $ 293,191 $ 292,270 2 70 2,508,630 2,475,443 100 3,661,077 3,632,528 3 27 890,835 865,772 9 243,127 241,901 4 18 818,334 776,646 2 59,750 59,513 5 — — — — — — Total 121 $ 4,391,293 $ 4,290,047 120 $ 4,257,145 $ 4,226,212 For the three months ended June 30, 2020, the Company downgraded 35 loans with a total principal balance of $1.5 billion in response to the continued adverse impact on the overall economy, commercial real estate and capital markets, as well as specific borrowers and their properties stemming from the ongoing COVID-19 pandemic. As of December 31, 2019 (prior to the adoption of ASU 2016-13), the Company had not identified any impaired loans and it had not recorded any allowances for losses as it was not deemed probable that the Company would not be able to collect all amounts due pursuant to the contractual terms of the loans. The following table presents the carrying value of loans held-for-investment as of June 30, 2020 by risk rating and year of origination: June 30, 2020 (dollars in thousands) Origination Year Risk Rating 2020 2019 2018 2017 2016 Prior Total 1 (Low Risk) $ — $ — $ 117,510 $ 21,393 $ 33,283 $ — $ 172,186 2 (Average Risk) 73,459 1,118,870 594,483 418,305 188,227 82,099 2,475,443 3 (Acceptable Risk) 11,823 346,911 257,580 238,337 — 11,121 865,772 4 (Higher Risk) 40,364 164,507 249,086 181,459 — 141,230 776,646 5 (Loss Likely) — — — — — — — Total $ 125,646 $ 1,630,288 $ 1,218,659 $ 859,494 $ 221,510 $ 234,450 $ 4,290,047 As of June 30, 2020 and December 31, 2019, the Company had not identified any loans that were past-due, in nonaccrual status, or in maturity default. Additionally, during the six months ended June 30, 2020, the Company did not enter into any loan modifications which were classified as troubled debt restructuring. |
Available-for-Sale Securities
Available-for-Sale Securities | 6 Months Ended |
Jun. 30, 2020 | |
Debt Securities, Available-for-sale [Abstract] | |
Available-for-Sale Securities, at Fair Value | Available-for-Sale Securities The following table presents the components of the carrying value of AFS securities as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Face value $ 12,798 $ 12,798 Unamortized premium (discount) — — Allowance for credit losses (256) — Gross unrealized gains — 32 Gross unrealized losses — — Carrying value $ 12,542 $ 12,830 On June 30, 2020, the Company’s AFS securities had contractual maturities of less than one year. At June 30, 2020 and December 31, 2019, the Company pledged AFS securities with a carrying value of $12.5 million and $12.8 million, respectively, as collateral for repurchase agreements. See Note 9 - Collateralized Borrowings . At both June 30, 2020 and December 31, 2019, none of the Company’s AFS securities were in an unrealized loss position. |
Held-to-Maturity Securities
Held-to-Maturity Securities | 6 Months Ended |
Jun. 30, 2020 | |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | |
Held-to-Maturity Securities | Held-to-Maturity Securities The following table presents the components of the carrying value of HTM securities as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Face value $ 11,726 $ 18,076 Unamortized premium (discount) — — Allowance for credit losses (938) — Carrying value $ 10,788 $ 18,076 On June 30, 2020, the Company’s HTM securities had contractual maturities of less than one year. At June 30, 2020 and December 31, 2019, the Company pledged HTM securities with a carrying value of $10.8 million and $18.1 million, respectively, as collateral for repurchase agreements. See Note 9 - Collateralized Borrowings . |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 6 Months Ended |
Jun. 30, 2020 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted CashCash and cash equivalents include cash held in bank accounts and cash held in money market funds on an overnight basis. The Company is required to maintain certain cash balances in restricted accounts as collateral for the Company’s repurchase agreements and with counterparties to support investment activities. As of June 30, 2020 and December 31, 2019, the Company had $3.3 million and $3.4 million, respectively, as collateral for repurchase agreements and by counterparties to support investment activities. In addition, as of June 30, 2020 and December 31, 2019, the Company held $0.2 million and $76.1 million, respectively, in restricted cash representing proceeds from principal paydowns of loans held in the CLOs. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 that sum to the total of the same such amounts shown in the statements of cash flows: (in thousands) June 30, December 31, Cash and cash equivalents $ 55,969 $ 80,281 Restricted cash 3,497 79,483 Total cash, cash equivalents and restricted cash $ 59,466 $ 159,764 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurements ASC 820, Fair Value Measurements , or ASC 820, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 clarifies that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices available in active markets ( i.e. , market-based or observable inputs) and the lowest priority to data lacking transparency ( i.e. , unobservable inputs) resulting in the use of management assumptions. Additionally, ASC 820 requires an entity to consider all aspects of nonperformance risk, including the entity’s own credit standing, when measuring fair value of a liability. ASC 820 establishes a three-level hierarchy to be used when measuring and disclosing fair value. An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. Following is a description of the three levels: Level 1 Inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date under current market conditions. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity. Level 2 Inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full-term of the assets or liabilities. Level 3 Unobservable inputs are supported by little or no market activity. The unobservable inputs represent the assumptions that market participants would use to price the assets and liabilities, including risk. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies or similar techniques that require significant judgment or estimation. Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models and significant assumptions utilized. Available-for-sale securities . The Company holds AFS securities that are carried at fair value on the condensed consolidated balance sheets and are comprised of CMBS. In determining the fair value of the Company’s CMBS AFS, management judgment may be used to arrive at fair value that considers prices obtained from third-party pricing providers or broker quotes received using the bid price, which are both deemed indicative of market activity and other applicable market data. The third-party pricing providers and brokers use pricing models that generally incorporate credit and cash flow factors including, but not limited to, required market yields for comparable investments, coupons, expected life of the security, property type, LTV and debt yield. If observable market prices are not available or insufficient to determine fair value due principally to illiquidity in the marketplace, then fair value is based upon internally developed models that are primarily based on observable market-based inputs but also include unobservable market data inputs (including prepayment speeds, delinquency levels and credit losses). Recurring Fair Value The following tables display the Company’s assets measured at fair value on a recurring basis. The Company does not hold any liabilities measured at fair value on its condensed consolidated balance sheets. Recurring Fair Value Measurements June 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Available-for-sale securities $ — $ 12,542 $ — $ 12,542 Total assets $ — $ 12,542 $ — $ 12,542 Recurring Fair Value Measurements December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Assets Available-for-sale securities $ — $ 12,830 $ — $ 12,830 Total assets $ — $ 12,830 $ — $ 12,830 Transfers between Levels are deemed to take place on the first day of the reporting period in which the transfer has taken place. The Company did not incur transfers between Levels for the three and six months ended June 30, 2020 and 2019. Nonrecurring Fair Value The Company may be required to measure certain assets or liabilities at fair value from time to time. These periodic fair value measures typically result from application of certain impairment measures under GAAP. These items would constitute nonrecurring fair value measures under ASC 820. As of June 30, 2020 and December 31, 2019, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis in the periods presented. Fair Value of Financial Instruments In accordance with ASC 820, the Company is required to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized in the condensed consolidated balance sheets, for which fair value can be estimated. The following describes the Company’s methods for estimating the fair value for financial instruments: • Loans held-for-investment are carried at cost, net of any unamortized acquisition premiums or discounts, loan fees, origination costs and allowance for credit losses, as applicable. The Company estimates the fair value of its loans held-for-investment by assessing any changes in market interest rates, credit spreads for loans of comparable risk as corroborated by inquiry of other market participants, shifts in credit profiles and actual operating results for mezzanine loans and senior loans, taking into consideration such factors as underlying property type, property competitive position within its market, market and submarket fundamentals, tenant mix, nature of business plan, sponsorship, extent of leverage and other loan terms. The Company categorizes the fair value measurement of these assets as Level 3. • AFS securities are recurring fair value measurements; carrying value equals fair value. See discussion of valuation methods and assumptions within the Fair Value Measurements section of this footnote. • HTM securities, which are comprised of CMBS, are carried at cost, net of any unamortized acquisition premiums or discounts and allowance for credit losses. In determining the fair value of the Company’s CMBS HTM, management judgment may be used to arrive at fair value that considers prices obtained from third-party pricing providers or broker quotes received using the bid price, which are both deemed indicative of market activity, and other applicable market data. The third-party pricing providers and brokers use pricing models that generally incorporate such factors as coupons, primary and secondary mortgage rates, rate reset period, issuer, prepayment speeds, credit enhancements and expected life of the security. The Company categorizes the fair value measurement of these assets as Level 2. • Cash and cash equivalents and restricted cash have a carrying value which approximates fair value because of the short maturities of these instruments. The Company categorizes the fair value measurement of these assets as Level 1. • The carrying value of repurchase agreements, asset-specific financings and revolving credit facilities that mature in less than one year generally approximates fair value due to the short maturities. The Company’s long-term repurchase agreements and asset-specific financings have floating rates based on an index plus a credit spread and the credit spread is typically consistent with those demanded in the market. Accordingly, the interest rates on these borrowings are at market and, thus, carrying value approximates fair value. The Company categorizes the fair value measurement of these liabilities as Level 2. • Securitized debt obligations are recorded at outstanding principal, net of any unamortized deferred debt issuance costs. In determining the fair value of its securitized debt obligations, management judgment may be used to arrive at fair value that considers prices obtained from third-party pricing providers, broker quotes received and other applicable market data. If observable market prices are not available or insufficient to determine fair value due principally to illiquidity in the marketplace, then fair value is based upon internally developed models that are primarily based on observable market-based inputs but also include unobservable market data inputs (including prepayment speeds, delinquency levels and credit losses). The Company categorizes the fair value measurement of these liabilities as Level 2. • Convertible senior notes are carried at their unpaid principal balance, net of any unamortized deferred issuance costs. The Company estimates the fair value of its convertible senior notes using the market transaction price nearest to June 30, 2020. The Company categorizes the fair value measurement of these assets as Level 2. The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 (in thousands) Carrying Value Fair Value Carrying Value Fair Value Assets Loans held-for-investment, net of allowance for credit losses $ 4,290,047 $ 4,250,847 $ 4,226,212 $ 4,261,612 Available-for-sale securities $ 12,542 $ 12,542 $ 12,830 $ 12,830 Held-to-maturity securities $ 10,788 $ 11,374 $ 18,076 $ 18,076 Cash and cash equivalents $ 55,969 $ 55,969 $ 80,281 $ 80,281 Restricted cash $ 3,497 $ 3,497 $ 79,483 $ 79,483 Liabilities Repurchase agreements $ 2,030,916 $ 2,030,916 $ 1,924,021 $ 1,924,021 Securitized debt obligations $ 983,521 $ 941,262 $ 1,041,044 $ 1,050,912 Asset-specific financings $ 121,242 $ 121,242 $ 116,465 $ 116,465 Revolving credit facilities $ 12,589 $ 12,589 $ 42,008 $ 42,008 Convertible senior notes $ 270,437 $ 205,983 $ 269,634 $ 283,332 |
Collateralized Borrowings
Collateralized Borrowings | 6 Months Ended |
Jun. 30, 2020 | |
Collateralized Borrowings [Abstract] | |
Borrowings | To finance its loans held-for-investment, AFS securities and HTM securities, the Company has entered into a variety of financing arrangements, including repurchase agreements, an asset-specific financing facility and a revolving credit facility. The Company’s repurchase agreements are collateralized by loans held-for-investment, AFS and HTM securities (CMBS) and certain cash balances. Although the transactions under repurchase agreements represent committed borrowings until maturity, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets due to collateral-specific credit events, or, with respect to a limited number of the Company’s repurchase agreements, capital market events, would require the Company to fund margin calls. The Company’s asset-specific financing facility is collateralized by loans held-for-investment. The Company does not typically retain similar rights for the Company to make margin calls on its underlying borrowers as a result of a determination by the Company and/or its financing counterparty that there has been a decrease in the market value of the underlying pledged collateral. The Company’s revolving credit facility is collateralized by a borrowing base of loans held-for-investment and provides intermediate-term bridge or transitional financing for typically approximately 90 days per loan. The following tables summarize details of the Company’s collateralized borrowings outstanding as of June 30, 2020 and December 31, 2019: June 30, 2020 (in thousands) Maturity Date (1) Amount Outstanding Unused Capacity Total Capacity Carrying Value of Collateral Weighted Average Borrowing Rate Repurchase agreements: Morgan Stanley Bank June 28, 2021 $ 535,482 $ 64,518 $ 600,000 $ 743,836 2.4 % Goldman Sachs Bank May 2, 2021 468,741 31,259 500,000 653,298 2.5 % JPMorgan Chase Bank June 28, 2022 421,626 28,374 450,000 584,566 2.2 % Citibank January 9, 2023 416,688 83,312 500,000 526,310 1.9 % Wells Fargo Bank (2) June 28, 2021 176,526 98,474 275,000 243,810 2.0 % JPMorgan Chase Bank July 8, 2020 11,853 NA NA 23,330 4.5 % Total/Weighted Average $ 2,030,916 $ 305,937 $ 2,325,000 $ 2,775,150 Asset-specific financings: Canadian Imperial Bank of Commerce Various $ 121,242 $ 28,758 $ 150,000 $ 149,880 2.0 % Revolving credit facilities: Citibank (3) July 26, 2021 $ 12,589 $ 62,411 $ 75,000 $ 42,164 2.4 % December 31, 2019 (in thousands) Maturity Date (1) Amount Outstanding Unused Capacity Total Capacity Carrying Value of Collateral Weighted Average Borrowing Rate Repurchase agreements: Morgan Stanley Bank June 28, 2021 $ 556,887 $ 43,113 $ 600,000 $ 740,791 3.9 % Goldman Sachs Bank May 2, 2020 405,057 94,943 500,000 541,640 3.8 % JPMorgan Chase Bank June 28, 2022 408,819 41,181 450,000 553,020 3.7 % Citibank July 15, 2022 339,888 60,112 400,000 432,867 3.4 % Wells Fargo Bank (2) June 28, 2021 194,113 80,887 275,000 286,672 3.5 % JPMorgan Chase Bank February 10, 2020 19,257 NA NA 30,906 4.1 % Total/Weighted Average $ 1,924,021 $ 320,236 $ 2,225,000 $ 2,585,896 Asset-specific financings: Canadian Imperial Bank of Commerce Various $ 116,465 $ 33,535 $ 150,000 $ 144,322 3.5 % Revolving credit facilities: Citibank (3) July 26, 2021 $ 42,008 $ 32,992 $ 75,000 $ 80,473 4.0 % ____________________ (1) The facilities are set to mature on the stated maturity date, unless extended pursuant to their terms. (2) As of June 30, 2020, the Company retained an option to increase the maximum facility capacity amount up to $350 million, subject to customary terms and conditions. (3) As of June 30, 2020, the Company retained an option to increase the maximum facility capacity amount up to $150 million, subject to customary terms and conditions. At June 30, 2020, the Company’s collateralized borrowings outstanding had the following remaining maturities: June 30, 2020 (dollars in thousands) Repurchase Agreements Asset-Specific Financings Revolving Credit Facilities Total Amount Outstanding Within one year $ 1,192,602 $ — $ 12,589 $ 1,205,191 One to three years 838,314 121,242 — 959,556 Three to five years — — — — Five years and over — — — — Total $ 2,030,916 $ 121,242 $ 12,589 $ 2,164,747 The following table summarizes certain characteristics of the Company’s repurchase agreements and counterparty concentration at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 (dollars in thousands) Amount Outstanding Net Counterparty Exposure (1) Percent of Equity Weighted Average Years to Maturity Amount Outstanding Net Counterparty Exposure (1) Percent of Equity Weighted Average Years to Maturity Morgan Stanley Bank $ 535,482 $ 215,466 22 % 0.99 $ 556,887 $ 185,022 18 % 1.49 JPMorgan Chase Bank 433,479 184,124 19 % 1.94 428,076 156,764 15 % 2.39 Goldman Sachs Bank 468,741 190,731 20 % 0.84 405,057 137,326 13 % 0.34 Citibank 416,688 113,880 12 % 2.53 339,888 93,553 9 % 2.54 Wells Fargo Bank 176,526 69,141 7 % 0.99 194,113 93,004 9 % 1.49 Total $ 2,030,916 $ 773,342 $ 1,924,021 $ 665,669 ____________________ (1) Represents the excess of the carrying amount or market value of the loans held-for-investment, AFS securities and HTM securities pledged as collateral for repurchase agreements, including accrued interest plus any cash on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. The Company does not anticipate any defaults by its financing counterparties, although there can be no assurance that one or more defaults will not occur. |
Securitized Debt Obligations
Securitized Debt Obligations | 6 Months Ended |
Jun. 30, 2020 | |
Securitized Debt Obligations [Abstract] | |
Securitized Debt Obligations | Securitized Debt Obligations The Company finances pools of its commercial real estate loans through CLOs, which are consolidated on the Company’s condensed consolidated financial statements. See Note 3 - Variable Interest Entities for additional information regarding consolidation of the CLOs. The securitized debt obligations issued by the CLOs are recorded at outstanding principal, net of any unamortized deferred debt issuance costs, on the Company’s condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the outstanding amount due on securitized debt obligations was $983.5 million and $1.0 billion, net of deferred issuance costs, respectively, with a weighted average interest rate of 1.81% and 3.32%, respectively. |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2020 | |
Convertible Debt [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In December 2017, the Company closed a private placement of $125.0 million aggregate principal amount of convertible senior notes due 2022. In January 2018, an additional $18.8 million in notes were issued by the Company in connection with the exercise of the initial purchaser’s option. The net proceeds from the offering were approximately $139.5 million after deducting underwriting discounts and expenses. The notes are unsecured, pay interest semiannually at a rate of 5.625% per annum and are convertible at the option of the holder into shares of the Company’s common stock. The notes will mature in December 2022, unless earlier converted or repurchased in accordance with their terms. The Company does not have the right to redeem the notes prior to maturity, but may be required to repurchase the notes from holders under certain circumstances. As of June 30, 2020, the notes had a conversion rate of 50.7073 shares of common stock per $1,000 principal amount of the notes . In October 2018, the Company closed an underwritten public offering of $131.6 million aggregate principal amount of convertible senior notes due 2023. The net proceeds from the offering were approximately $127.7 million after deducting underwriting discounts and expenses. The notes are unsecured, pay interest semiannually at a rate of 6.375% per annum and are convertible at the option of the holder into shares of the Company’s common stock. The notes will mature in October 2023, unless earlier converted or repurchased in accordance with their terms. The Company does not have the right to redeem the notes prior to maturity, but may be required to repurchase the notes from holders under certain circumstances. As of June 30, 2020, the notes had a conversion rate of 48.8496 shares of common stock per $1,000 principal amount of the notes . The consolidated amount outstanding due on convertible senior notes as of June 30, 2020 and December 31, 2019 was $270.4 million and $269.6 million, respectively, net of deferred issuance costs. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The following represent the material commitments and contingencies of the Company as of June 30, 2020: Impact of COVID-19. Due to the current COVID-19 pandemic in the United States and globally, the Company’s borrowers and their tenants, property sponsors, the properties securing our investments and the overall economy have been, and will continue to be, adversely affected. The magnitude and duration of the COVID-19 pandemic and the full extent of its impact on the global economy generally, and the Company’s borrowers and their tenants, cash flows and future results of operations could be significant, and will largely depend on future developments, which are highly uncertain and unpredictable, including new information, which may emerge, concerning the severity of the COVID-19 pandemic, the success of actions taken to contain or treat the pandemic, and reactions by consumers, businesses, governments and capital markets. As of June 30, 2020, no contingencies have been recorded on the Company’s condensed 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 the Company’s financial condition, results of operations and cash flows. See Note 2 - Use of Estimates for further discussion of COVID-19. Management Agreement. Upon closing its initial public offering, or IPO, on June 28, 2017, the Company entered into a management agreement with the Manager. The Company pays the Manager a base management fee equal to 1.5% of the Company’s equity on an annualized basis, as defined in the management agreement. For purposes of calculating the management fee, equity means the sum of the net proceeds received by the Company from all issuances of its equity securities, plus its cumulative “core earnings” at the end of the most recently completed calendar quarter, less any distributions to stockholders, any amount that the Company has paid to repurchase its stock and any incentive fees earned by the Manager, but excluding the incentive fee earned in the current quarter. As a result, equity for purposes of calculating the management fee may differ from the amount of stockholders’ equity shown in the Company’s financial statements. Incentive fees, if earned, are payable to the Manager, as defined in the management agreement. The incentive fee is the excess of (1) the product of (a) 20% and (b) the result of (i) the Company’s “core earnings” for the previous 12-month period, minus (ii) the product of (A) the Company’s equity in the previous 12-month period, and (B) 8% per annum, less (2) the sum of any incentive fees paid to the Manager with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fees are payable with respect to any calendar quarter unless “core earnings” for the 12 most recently completed calendar quarters in the aggregate is greater than zero. In addition, under the terms of an amendment to the management agreement entered into in the fourth quarter of 2018, the Manager agreed to reimburse the Company an amount related to the compensation payable to the sales agents under the Company’s equity distribution agreement by netting such amount from the base management fee payable to the Manager for the applicable quarterly period. For purposes of calculating base management and incentive fees, “core earnings” means net income (loss) attributable to common stockholders, excluding non-cash equity compensation expense, incentive fees earned by the Manager, depreciation and amortization, any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable period (regardless of whether such items are included in other comprehensive income or loss or in net income), and one-time events pursuant to changes in GAAP and certain material non-cash income or expense items, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the Company’s independent directors. The initial term of the management agreement expired on June 28, 2020, and now automatically renews for successive one On March 2, 2020, the Company announced that it has agreed to a process with the Manager to internalize the Company’s management function. In connection with this process, the Company and the Manager have entered into a confidential, binding arbitration to determine any amounts payable by the Company to the Manager in consideration of the Manager’s agreement to terminate the management agreement and the Manager’s undertaking of other obligations pursuant to an internalization agreement to be entered into between the Company and the Manager following the conclusion of the arbitration process. The arbitral hearing has been delayed based on the COVID-19 pandemic, and the Company currently expects that the hearing will take place during the third or fourth quarter of 2020. Due to the ongoing arbitration process, the Company and the Manager have not yet executed and delivered a final agreement and definitive documentation, nor has the arbitration panel determined any amounts payable by the Company to the Manager, and the Company and the Manager have not yet agreed on a date by which the internalization may be completed. The Company cannot provide any assurance that the internalization will be consummated. As of June 30, 2020, the Company’s consolidated financial statements do not recognize a contingency liability under ASC 450 because, given the inherent uncertainty of the arbitration process, management does not believe the amount of the loss or expense related to the internalization is reasonably estimable. Once the loss or expense may be reasonably estimable and management believes the internalization is a “probable” future event that may result in a loss or expense to the Company, the Company may recognize in the consolidated financial statements a contingency liability and resulting loss in such period. If the internalization is completed, the management agreement will be terminated and therefore the Company will no longer pay a management fee or reimburse expenses. Employment contracts. The Company does not directly employ any personnel. Instead, the Company relies on the resources of the Manager and its affiliates to conduct the Company’s operations. See Management Agreement above. Legal and regulatory. From time to time, the Company may be subject to liability under laws and government regulations and various claims and legal actions arising in the ordinary course of business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company’s consolidated financial statements and, therefore, no accrual is required as of June 30, 2020. Unfunded commitments on loans held-for-investment. Certain of the Company’s commercial real estate loan agreements contain provisions and obligations to extend credit to its borrowers through its unfunded loan commitments over the contractual period of its loans. As of June 30, 2020 and December 31, 2019, the Company had unfunded loan commitments of $677.7 million and $748.9 million, respectively, on loans held-for-investment, which it expects to fund, subject to the satisfaction of any conditions precedent to such commitments, over the tenure of these loans, which have a weighted average future funding period of approximately three |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2020 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Preferred Stock | Preferred Stock The Company’s preferred stock ranks senior to the rights of holders of the Company’s common stock, but junior to all other classes or series of preferred stock that may be issued. The holders of the preferred stock are entitled to receive, when, as and if authorized and declared by the Company, cumulative cash dividends at the rate of 10% per annum of the $1,000 liquidation preference per share of the preferred stock. Such dividends accrue on a daily basis and are cumulative from and including the initial issue date of the preferred stock. The Company has the option at any time after five years from the initial issue date to redeem the preferred stock at a redemption price of $1,000 per share, plus any accrued and unpaid dividends. At any time after six years from the initial issue date, the Company will, at the request of any preferred stockholder, repurchase the holder’s preferred stock at a price of $1,000 per share, plus any accrued and unpaid dividends. During the three and six months ended June 30, 2020, the Company declared dividends to the preferred stockholder of $25,000 and $50,000, respectively. During the three and six months ended June 30, 2019, the Company declared dividends to the preferred stockholder of $25,000 and $50,000, respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock On February 5, 2019, the Company closed an underwritten public offering of 6,850,000 shares of its common stock. The Company received total proceeds from the offering of approximately $130.2 million. In addition, the Company granted the underwriters a thirty-day option to purchase up to an additional 1,027,500 shares of its common stock, which was exercised in full on March 6, 2019 resulting in proceeds of $19.5 million from exercise of the underwriters option. In connection with this offering, the Manager agreed to pay approximately $1.6 million of the underwriting fees and discounts. As of June 30, 2020, the Company had 55,205,082 shares of common stock outstanding. The following table presents a reconciliation of the common shares outstanding for the six months ended June 30, 2020 and 2019: Number of common shares Common shares outstanding, December 31, 2018 43,621,174 Issuance of common stock 10,954,924 Issuance of restricted stock (1) 277,107 Common shares outstanding, June 30, 2019 54,853,205 Common shares outstanding, December 31, 2019 54,853,205 Issuance of common stock — Issuance of restricted stock (1) 351,877 Common shares outstanding, June 30, 2020 55,205,082 ____________________ (1) Represents shares of restricted stock granted under the Company’s 2017 Equity Incentive Plan, net of forfeitures. See Note 15 - Equity Incentive Plan for additional information. Distributions to Stockholders As a result of the unprecedented market conditions and uncertainty caused by the COVID-19 pandemic, the Company has temporarily suspended the payment of dividends on its common stock in order to conserve available liquidity. The Company will continue to evaluate its dividend policy in respect of future quarters based upon customary considerations, including market conditions and distribution requirements to maintain REIT status. The following table presents cash dividends declared by the Company on its common stock from December 31, 2018 through June 30, 2020: Declaration Date Record Date Payment Date Cash Dividend Per Share December 18, 2019 December 31, 2019 January 17, 2020 $ 0.42 September 18, 2019 October 3, 2019 October 18, 2019 $ 0.42 June 20, 2019 July 5, 2019 July 19, 2019 $ 0.42 March 20, 2019 April 1, 2019 April 18, 2019 $ 0.42 Share Repurchase Program The Company’s Share Repurchase Program allows for the repurchase of up to an aggregate of 2,000,000 shares of the Company’s common stock. The shares are expected to be repurchased from time to time through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, or by any combination of such methods. The manner, price, number and timing of share repurchases will be subject to a variety of factors, including market conditions and applicable SEC rules. The Company has not repurchased any of its common stock since the program was authorized. At-the-Market Offering The Company is party to an equity distribution agreement under which the Company may sell up to an aggregate of 8,000,000 shares of its common stock from time to time in any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act. As of June 30, 2020, 3,242,364 shares of common stock had been sold under the equity distribution agreement for total accumulated net proceeds of approximately $61.2 million, of which 2,663,095 and 3,077,424 shares were sold for net proceeds of $50.3 million and $58.1 million during the three and six months ended June 30, 2019, respectively. Additionally, the Company received a base management fee reimbursement from the Manager of $0.1 million and $0.1 million for stock sold under the equity distribution agreement during the three and six months ended June 30, 2019, respectively. No shares were sold during the three and six months ended June 30, 2020. Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income at June 30, 2020 and December 31, 2019 was as follows: (in thousands) June 30, December 31, Available-for-sale securities Unrealized gains $ — $ 32 Unrealized losses — — Accumulated other comprehensive (loss) income $ — $ 32 Reclassifications out of Accumulated Other Comprehensive (Loss) Income The Company reclassifies unrealized gains and losses on AFS securities in accumulated other comprehensive (loss) income to net (loss) income upon the recognition of any provision for credit losses as the allowance for credit losses on individual AFS securities is increased or decreased. For the three and six months ended June 30, 2020, the Company reclassified $0.5 million and $0.3 million, respectively, of unrealized losses on AFS securities out of accumulated other comprehensive (loss) income to provision for credit losses on the condensed consolidated statement of comprehensive (loss) income. The Company did not record any reclassifications out of accumulated other comprehensive (loss) income during the three and six months ended June 30, 2019. |
Equity Incentive Plan
Equity Incentive Plan | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plan | Equity Incentive Plan The Company’s 2017 Equity Incentive Plan, or the Plan, provides incentive compensation to attract and retain qualified directors, officers, advisors, consultants and other personnel, including certain personnel of the Manager and its affiliates. The Plan is administered by the compensation committee of the Company’s board of directors. The compensation committee has the full authority to administer and interpret the Plan, to authorize the granting of awards, to determine the eligibility of directors, officers, advisors, consultants and other personnel, including personnel of the Manager and its affiliates, to receive an award, to determine the number of shares of common stock to be covered by each award (subject to the individual participant limitations provided in the Plan), to determine the terms, provisions and conditions of each award (which may not be inconsistent with the terms of the Plan), to prescribe the form of instruments evidencing awards and to take any other actions and make all other determinations that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof. In connection with this authority, the compensation committee may, among other things, establish performance goals that must be met in order for awards to be granted or to vest, or for the restrictions on any such awards to lapse. The Plan provides for grants of restricted common stock, phantom shares, dividend equivalent rights and other equity-based awards, subject to a ceiling of 3,242,306 shares available for issuance under the Plan. The Plan allows for the Company’s board of directors to expand the types of awards available under the Plan to include long-term incentive plan units in the future. If an award granted under the Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Unless earlier terminated by the Company’s board of directors, no new award may be granted under the Plan after the tenth anniversary of the effective date of the Plan. No award may be granted under the Plan to any person who, assuming payment of all awards held by such person, would own or be deemed to own more than 9.8% of the outstanding shares of the Company’s common stock. During the six months ended June 30, 2020 and 2019, the Company granted 69,720 and 18,189 shares of common stock, respectively, to its independent directors as compensation for their service on the Company’s board of directors, pursuant to the terms of the Plan. The estimated fair value of these awards was $5.02 and $19.24 per share, respectively, on the grant date, based on the closing price of the Company’s common stock on the NYSE on such date. The shares have a one Additionally, during the six months ended June 30, 2020 and 2019, the Company granted 297,769 and 258,918 shares of restricted common stock, respectively, to key employees of the Manager and its affiliates pursuant to the terms of the Plan and the associated award agreements. The estimated fair value of these awards was $18.47 and $19.31 per share, respectively, on the grant date, based on the closing market price of the Company’s common stock on the NYSE on such date. The shares underlying the grants to such employees of the Manager vest in three The following table summarizes the activity related to restricted common stock for the six months ended June 30, 2020 and 2019: Six Months Ended June 30, 2020 2019 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding at Beginning of Period 461,371 $ 18.75 321,134 $ 18.04 Granted 367,489 15.92 277,107 19.31 Vested (221,616) (18.75) (136,870) (18.20) Forfeited (15,612) (18.68) — — Outstanding at End of Period 591,632 $ 16.99 461,371 $ 18.75 For the three and six months ended June 30, 2020, the Company recognized compensation related to restricted common stock of $1.3 million and $2.7 million, respectively. For the three and six months ended June 30, 2019, the Company recognized compensation related to restricted common stock of $1.3 million and $2.4 million, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on that portion of its income that it distributes to its stockholders if it annually distributes at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and does not engage in prohibited transactions. While the Company currently intends to distribute 100% of its REIT taxable income for the taxable year ending December 31, 2020 and comply with all requirements to continue to qualify as a REIT, the Company will continue to evaluate its capital and liquidity needs in light of the significant uncertainties created by the COVID-19 pandemic, including the potential for a continued and prolonged adverse impact on economic and market conditions. The majority of states also recognize the Company’s REIT status. The Company’s TRS files a separate federal tax return and is fully taxed as a standalone U.S. C-corporation. It is assumed that the Company will retain its REIT status and will incur no REIT level taxation as it intends to comply with the REIT regulations and annual distribution requirements. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s condensed consolidated financial statements of a contingent tax liability for uncertain tax positions. Additionally, there were no amounts accrued for penalties or interest as of or during the periods presented in these condensed consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents a reconciliation of the earnings and shares used in calculating basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share data) 2020 2019 2020 2019 Numerator: Net (loss) income attributable to common stockholders - basic $ (1,758) $ 18,152 $ (38,974) $ 35,096 Interest expense attributable to convertible notes (1) — 4,474 — — Net (loss) income attributable to common stockholders - diluted $ (1,758) $ 22,626 $ (38,974) $ 35,096 Denominator: Weighted average common shares outstanding 54,559,798 53,446,531 54,529,399 50,810,687 Weighted average restricted stock shares 598,485 507,103 577,948 481,631 Basic weighted average shares outstanding 55,158,283 53,953,634 55,107,347 51,292,318 Effect of dilutive shares issued in an assumed conversion of the convertible senior notes — 13,670,761 — — Diluted weighted average shares outstanding 55,158,283 67,624,395 55,107,347 51,292,318 (Loss) earnings per share Basic $ (0.03) $ 0.34 $ (0.71) $ 0.68 Diluted $ (0.03) $ 0.33 $ (0.71) $ 0.68 ____________________ (1) Includes a nondiscretionary adjustment for the assumed change in the management fee calculation. For the three and six months ended June 30, 2020, excluded from the calculation of diluted earnings per share is the effect of adding back $4.5 million and $9.0 million, respectively, of interest expense, net of nondiscretionary adjustment for the assumed change in the management fee calculation, and 13,717,782 and 13,717,782 weighted average common share equivalents, respectively, related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would be antidilutive. For the six months ended June 30, 2019, excluded from the calculation of diluted earnings per share is the effect of adding back $9.0 million of interest expense, net of nondiscretionary adjustment for the assumed change in the management fee calculation, and 13,663,006 weighted average common share equivalents related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would be antidilutive. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company does not have any employees and is currently externally managed by the Manager under the terms of a management agreement. Under the management agreement, the Manager and its affiliates provide the Company with the personnel and resources necessary to operate the Company’s business. In exchange, the Company pays the Manager a base management fee that is equal to 1.5% of the Company’s equity, as defined in the management agreement, on an annualized basis. The Company incurred $4.0 million and $7.9 million, respectively, as a management fee to the Manager for the three and six months ended June 30, 2020, and $3.8 million and $7.2 million, respectively, as a management fee to the Manager for the three and six months ended June 30, 2019. In addition, incentive fees, if earned, are payable to the Company’s Manager, as defined in the management agreement. No incentive fees were incurred for the three and six months ended June 30, 2020 or the three months ended June 30, 2019. The Company incurred $0.2 million as an incentive fee to the Manager for the six months ended June 30, 2019. See further discussion of the base management fee and incentive fee calculations in Note 12 - Commitments and Contingencies and further discussion of base management fee reimbursements for common stock sold under the Company’s equity distribution agreement in Note 14 - Stockholder’s Equity . On March 2, 2020, the Company announced that it has agreed to a process with the Manager to internalize the Company’s management function. If the internalization is completed, the management agreement will be terminated and therefore the Company will no longer pay a management fee or reimburse expenses. See further discussion of the related arbitration in Note 12 - Commitments and Contingencies. The Company reimburses the Manager for certain direct and allocated costs incurred by the Manager on behalf of the Company. During the three and six months ended June 30, 2020, direct and allocated costs totaled approximately $1.5 million and $9.3 million, respectively. During the three and six months ended June 30, 2019, direct and allocated costs totaled approximately $1.7 million and $8.3 million, respectively. In addition, during the six months ended June 30, 2019, the Manager paid the underwriters an amount equal to $0.20 per share for each share issued in connection with the Company’s underwritten public offering of its common stock and the related option exercised by the underwriters to purchase additional shares of the Company’s common stock. The Company has contractual relationships with a majority of its third-party vendors and pays those vendors directly. The Company will continue to have certain costs allocated to it by the Manager under the management agreement for compensation, data services, technology and certain office lease payments. The Company recognized $1.3 million and $2.7 million of compensation during the three and six months ended June 30, 2020, respectively, and $1.3 million and $2.4 million of compensation during the three and six months ended June 30, 2019, respectively, related to restricted common stock issued to employees of the Manager and the Company’s independent directors pursuant to the Plan. See Note 15 - Equity Incentive Plan for additional information. The terms of these transactions may have been different had they been transacted with an unrelated third-party. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In order to enhance the Company’s liquidity position given the current highly uncertain macroeconomic and capital markets environment caused by the COVID-19 pandemic, the Company engaged in the following transactions subsequent to June 30, 2020: Investment Portfolio Activity On July 30, 2020, the Company sold senior floating rate loans with aggregate total loan commitments of approximately $206.3 million and total unpaid principal balance of approximately $190.9 million, for a total sale price of approximately $181.4 million. The total amortized cost, net of allowance for credit losses, of these loans held-for-investment was $188.8 million as of June 30, 2020. Financing Activity On July 2, 2020, the Company entered into an amendment to the repurchase financing facility with JPMorgan Chase Bank, N.A. This amendment, among other things, increased the maximum facility amount by approximately $54.1 million to a total maximum facility amount of $504.1 million during an upsize period that ends on November 2, 2020, with an option to extend such upsize to December 31, 2020, subject to the terms and conditions of the amendment. Events subsequent to June 30, 2020 were evaluated through the date these financial statements were issued and no other additional events were identified requiring further disclosure in these condensed consolidated financial statements. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation The interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted according to such SEC rules and regulations. However, management believes that the disclosures included in these interim condensed consolidated financial statements are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all normal and recurring adjustments necessary to present fairly the financial condition of the Company at June 30, 2020 and results of operations for all periods presented have been made. The results of operations for the three and six months ended June 30, 2020 should not be construed as indicative of the results to be expected for future periods or the full year. The unaudited condensed consolidated financial statements of the Company include the accounts of all subsidiaries; inter-company accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. All entities in which the Company holds investments that are considered VIEs for financial reporting purposes were reviewed for consolidation under the applicable consolidation guidance. Whenever the Company has both the power to direct the activities of an entity that most significantly impact the entity’s performance, and the obligation to absorb losses or the right to receive benefits of the entity that could be significant, the Company consolidates the entity. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make a number of significant estimates. These include estimates of amount and timing of allowances for credit losses, fair value of certain assets and liabilities, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates ( e.g. , valuation changes to the underlying collateral of loans due to changes in market capitalization rates, leasing, credit worthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, overall economic and capital markets conditions, the broader commercial real estate market, local geographic sub-markets or other factors) will occur in the near term. Over the course of the first half of 2020, a global outbreak of a novel strain of coronavirus, or COVID-19, has taken place. The outbreak has spread around the world, including to every state in the United States. As a result of the pandemic, numerous countries, including the United States, have declared national emergencies. Such actions have created significant macroeconomic disruptions and adversely impacted many industries. The outbreak could have a continued adverse impact on macroeconomic and market conditions, and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on macroeconomic and market conditions. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2020. However, the significant degree of uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of June 30, 2020 |
Loans Held-for-Sale | Loans Held-for-Sale The Company classifies certain loans as held-for-sale based on management’s intent to sell or otherwise dispose of them. Loans held-for-sale are reported at the lower of amortized cost or fair value. Fair value is determined under the guidance of ASC 820. Interest income on loans held-for-sale is recognized at the loan coupon rate and recorded on the consolidated statements of comprehensive income. |
Recently Issued and/or Adopted Accounting Standards | Recently Issued and/or Adopted Accounting Standards Measurement of Credit Losses on Financial Instruments On January 1, 2020, the Company adopted Accounting Standard Update, or ASU, 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. ASU 2016-13 significantly changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the incurred loss model under existing guidance with a Current Expected Credit Loss, or CECL, model for instruments measured at amortized cost, and also require entities to record allowances for available-for-sale, or AFS, debt securities rather than reduce the amortized cost, as they did under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. In addition, the new model applies to off-balance sheet credit exposures, such as unfunded loan commitments. ASU 2016-13 was adopted by the Company through a cumulative-effect adjustment to cumulative earnings of $18.5 million as of January 1, 2020. The allowance for credit losses required under ASU 2016-13 is a valuation account that is deducted from the amortized cost basis of related loans and debt securities on the Company’s condensed consolidated balance sheets, and which reduces the Company’s total stockholders’ equity. The initial allowance for credit losses recorded on January 1, 2020 is reflected as a direct charge to cumulative earnings; however, going forward, changes to the allowance for credit losses are recognized through net income on the Company’s condensed consolidated statements of comprehensive (loss) income. While ASU 2016-13 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio, market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the CECL model have some amount of expected loss to reflect the GAAP principal underlying the CECL model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan. Those future funding commitments are also subject to an allowance for credit losses. The allowance for credit losses related to future loan fundings is recorded as a component of other liabilities on the Company’s condensed consolidated balance sheets, and not as an offset to the related loan balance. This allowance for credit losses is estimated using the same process outlined below for the Company’s outstanding loan balances, and changes in this component of the allowance for credit losses similarly flow through the Company’s condensed consolidated statement of comprehensive (loss) income. The Company elected not to measure an allowance for credit losses on accrued interest receivable when the accrued interest is due within 90 days. The Company generally writes off accrued interest receivable balance when interest is 90 days or more past due unless the loan is both well secured and in the process of collection. Write-offs of accrued interest receivable are recognized within provision for credit losses in the condensed consolidated statements of comprehensive income. Accrued interest receivable includes deferred interest that may be collected at the loan maturity or past 90 days, and an allowance for credit losses has been included as part of the loan’s amortized cost. The Company did not write-off any accrued interest receivable during the three and six months ended June 30, 2020. The Company’s implementation process included a selection of a credit loss analytical model, completion and documentation of policies and procedures, changes to internal reporting processes and related internal controls and additional disclosures. A control framework for governance, data, forecast, and model controls was developed to support the CECL process. The allowance for credit losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Company’s investment portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually. Estimating an allowance for credit losses is inherently subjective, as it requires management to exercise significant judgment in establishing appropriate factors used to determine the allowance and a variety of subjective assumptions, including (i) determination of relevant historical loan loss data sets, (ii) the expected timing and amount of future loan fundings and repayments, (iii) the current credit quality of loans and operating performance of loan collateral and the Company’s expectations of performance, (iv) selecting the forecast for macroeconomic conditions, and (v) determining the reasonable and supportable forecast period. Considering the lack of historical company data related to any realized loan losses since its inception, the Company elected to estimate its allowance for credit losses by using a probability-weighted analytical model that considers the likelihood of default and loss-given-default for each individual loan. The analytical model incorporates a third-party licensed database with historical loan losses from 1998 to 2019 for over 100,000 commercial real estate loans. At the time of adoption of ASU No. 2016-13, in determining its initial allowance for credit losses estimate, the Company employed a third-party licensed macroeconomic forecast that largely reflected management’s views at the time and projected a stable overall economic scenario over the reasonable projection period. Significant inputs to the Company’s estimate of the allowance for credit losses include the reasonable and supportable forecast period and loan specific factors such as DSCR, LTV, remaining contractual loan term, property type and others. In addition, the Company also considers relevant loan-specific qualitative factors to estimate its allowance for credit losses. In certain instances, for loans with unique risk characteristics, the Company may instead elect to employ different methods to estimate loan losses that also conform to ASU 2016-13 and related guidance. Upon adoption of ASU No. 2016-13 on January 1, 2020, based on the Company’s loan portfolio, pre-COVID-19 economic environment and management’s expectations for future economic and market conditions at the time, the Company recorded an initial allowance for credit losses, as a cumulative-effective adjustment to the cumulative earnings in its consolidated statement of equity, of approximately $18.5 million, or approximately $0.34 per share. The following table illustrates the day-one financial statement impact of the adoption of ASU 2016-13 on January 1, 2020: (in thousands) ASSETS Pre-ASU 2016-13 Adoption Cumulative Effect of Adoption As Reported Under ASU 2016-13 Loans and securities $ 4,257,086 $ — $ 4,257,086 Allowance for credit losses — (16,692) (16,692) Loans and securities, net $ 4,257,086 $ (16,692) $ 4,240,394 LIABILITIES Liability for off-balance sheet credit losses (1) $ — $ 1,780 $ 1,780 STOCKHOLDERS’ EQUITY Cumulative earnings $ 162,076 $ (18,472) $ 143,604 ____________________ (1) Represents expected loss on unfunded commitments. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Schedule of Impact of Adoption of ASU 2016-13 | The following table illustrates the day-one financial statement impact of the adoption of ASU 2016-13 on January 1, 2020: (in thousands) ASSETS Pre-ASU 2016-13 Adoption Cumulative Effect of Adoption As Reported Under ASU 2016-13 Loans and securities $ 4,257,086 $ — $ 4,257,086 Allowance for credit losses — (16,692) (16,692) Loans and securities, net $ 4,257,086 $ (16,692) $ 4,240,394 LIABILITIES Liability for off-balance sheet credit losses (1) $ — $ 1,780 $ 1,780 STOCKHOLDERS’ EQUITY Cumulative earnings $ 162,076 $ (18,472) $ 143,604 ____________________ (1) Represents expected loss on unfunded commitments. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The following table presents a summary of the assets and liabilities of all VIEs consolidated on the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Loans held-for-investment $ 1,319,151 $ 1,301,369 Allowance for credit losses (20,674) — Loans held-for-investment, net 1,298,477 1,301,369 Restricted cash 192 76,093 Other assets 8,786 9,686 Total Assets $ 1,307,455 $ 1,387,148 Securitized debt obligations $ 983,521 $ 1,041,044 Other liabilities 709 1,078 Total Liabilities $ 984,230 $ 1,042,122 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans Held-for-Investment [Abstract] | |
Schedule of Loans Held-for-Investment | The following tables summarize the Company’s loans held-for-investment by asset type, property type and geographic location as of June 30, 2020 and December 31, 2019: June 30, (dollars in thousands) Senior Loans (1) Mezzanine Loans B-Notes Total Unpaid principal balance $ 4,364,056 $ 12,894 $ 14,343 $ 4,391,293 Unamortized (discount) premium (108) — — (108) Unamortized net deferred origination fees (24,431) 3 — (24,428) Allowance for credit losses (74,647) (1,776) (287) (76,710) Carrying value $ 4,264,870 $ 11,121 $ 14,056 $ 4,290,047 Unfunded commitments $ 677,674 $ — $ — $ 677,674 Number of loans 118 2 1 121 Weighted average coupon 5.1 % 10.4 % 8.0 % 5.1 % Weighted average years to maturity (2) 1.4 1.3 6.6 1.4 December 31, (dollars in thousands) Senior Loans (1) Mezzanine Loans B-Notes Total Unpaid principal balance $ 4,229,194 $ 13,503 $ 14,448 $ 4,257,145 Unamortized (discount) premium (124) — — (124) Unamortized net deferred origination fees (30,788) (21) — (30,809) Carrying value $ 4,198,282 $ 13,482 $ 14,448 $ 4,226,212 Unfunded commitments $ 748,878 $ — $ — $ 748,878 Number of loans 117 2 1 120 Weighted average coupon 5.4 % 11.7 % 8.0 % 5.4 % Weighted average years to maturity (2) 1.8 2.0 7.1 1.8 ____________________ (1) Loans primarily secured by a first priority lien on commercial real property and related personal property and also includes, when applicable, any companion subordinate loans. (2) Based on contractual maturity date. Certain loans are subject to contractual extension options with such conditions stipulated in the applicable loan documents. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment fee. The Company may also extend contractual maturities in connection with loan modifications. |
Schedule of Loans Held-for-Investment by Property Type | (dollars in thousands) June 30, December 31, Property Type Carrying Value % of Loan Portfolio Carrying Value % of Loan Portfolio Office $ 1,822,072 42.5 % $ 1,779,173 42.0 % Multifamily 1,082,763 25.2 % 1,058,708 25.1 % Hotel 642,342 15.0 % 640,503 15.2 % Retail 394,498 9.2 % 398,742 9.4 % Industrial 309,833 7.2 % 312,637 7.4 % Other 38,539 0.9 % 36,449 0.9 % Total $ 4,290,047 100.0 % $ 4,226,212 100.0 % |
Schedule of Loans Held-for-Investment by Geographic Location | (dollars in thousands) June 30, December 31, Geographic Location Carrying Value % of Loan Portfolio Carrying Value % of Loan Portfolio Northeast $ 1,164,887 27.2 % $ 1,196,767 28.4 % Southwest 882,459 20.6 % 923,519 21.8 % West 802,555 18.7 % 735,416 17.4 % Midwest 718,235 16.7 % 700,778 16.6 % Southeast 721,911 16.8 % 669,732 15.8 % Total $ 4,290,047 100.0 % $ 4,226,212 100.0 % |
Rollforward of Loans Held-for-Investment | The following table summarizes activity related to loans held-for-investment, net of allowance for credit losses, for the three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended (in thousands) 2020 2019 2020 2019 Balance at beginning of period $ 4,251,251 $ 3,292,989 $ 4,226,212 $ 3,167,913 Originations, acquisitions and additional fundings 72,591 415,997 260,013 695,691 Repayments (3,976) (148,417) (106,115) (303,737) Transfers to loans held-for-sale (19,665) — (19,665) — Net discount accretion (premium amortization) 8 7 16 20 Increase in net deferred origination fees (556) (4,527) (3,009) (7,647) Amortization of net deferred origination fees 4,539 4,068 9,305 7,877 Allowance for credit losses (14,145) — (76,710) — Balance at end of period $ 4,290,047 $ 3,560,117 $ 4,290,047 $ 3,560,117 |
Rollforward of Allowance for Credit Losses | The following table presents the changes for the three and six months ended June 30, 2020 in the allowance for credit losses on loans held-for-investment: Three Months Ended Six Months Ended (in thousands) 2020 2020 Balance at beginning of period $ 62,565 $ 16,692 Provision for credit losses 14,145 60,018 Writeoffs — — Recoveries of amounts previously written off — — Balance at end of period $ 76,710 $ 76,710 |
Schedule of Loans Held-for-Investment by Internal Risk Rating | The following table presents the number of loans, unpaid principal balance and carrying value by risk rating for loans held-for-investment as of June 30, 2020 and December 31, 2019: (dollars in thousands) June 30, December 31, Risk Rating Number of Loans Unpaid Principal Balance Carrying Value Number of Loans Unpaid Principal Balance Carrying Value 1 6 $ 173,494 $ 172,186 9 $ 293,191 $ 292,270 2 70 2,508,630 2,475,443 100 3,661,077 3,632,528 3 27 890,835 865,772 9 243,127 241,901 4 18 818,334 776,646 2 59,750 59,513 5 — — — — — — Total 121 $ 4,391,293 $ 4,290,047 120 $ 4,257,145 $ 4,226,212 For the three months ended June 30, 2020, the Company downgraded 35 loans with a total principal balance of $1.5 billion in response to the continued adverse impact on the overall economy, commercial real estate and capital markets, as well as specific borrowers and their properties stemming from the ongoing COVID-19 pandemic. As of December 31, 2019 (prior to the adoption of ASU 2016-13), the Company had not identified any impaired loans and it had not recorded any allowances for losses as it was not deemed probable that the Company would not be able to collect all amounts due pursuant to the contractual terms of the loans. The following table presents the carrying value of loans held-for-investment as of June 30, 2020 by risk rating and year of origination: June 30, 2020 (dollars in thousands) Origination Year Risk Rating 2020 2019 2018 2017 2016 Prior Total 1 (Low Risk) $ — $ — $ 117,510 $ 21,393 $ 33,283 $ — $ 172,186 2 (Average Risk) 73,459 1,118,870 594,483 418,305 188,227 82,099 2,475,443 3 (Acceptable Risk) 11,823 346,911 257,580 238,337 — 11,121 865,772 4 (Higher Risk) 40,364 164,507 249,086 181,459 — 141,230 776,646 5 (Loss Likely) — — — — — — — Total $ 125,646 $ 1,630,288 $ 1,218,659 $ 859,494 $ 221,510 $ 234,450 $ 4,290,047 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Securities, Available-for-sale [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The following table presents the components of the carrying value of AFS securities as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Face value $ 12,798 $ 12,798 Unamortized premium (discount) — — Allowance for credit losses (256) — Gross unrealized gains — 32 Gross unrealized losses — — Carrying value $ 12,542 $ 12,830 |
Held-to-Maturity Securities (Ta
Held-to-Maturity Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | |
Held-to-maturity Securities | The following table presents the components of the carrying value of HTM securities as of June 30, 2020 and December 31, 2019: (in thousands) June 30, December 31, Face value $ 11,726 $ 18,076 Unamortized premium (discount) — — Allowance for credit losses (938) — Carrying value $ 10,788 $ 18,076 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 that sum to the total of the same such amounts shown in the statements of cash flows: (in thousands) June 30, December 31, Cash and cash equivalents $ 55,969 $ 80,281 Restricted cash 3,497 79,483 Total cash, cash equivalents and restricted cash $ 59,466 $ 159,764 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Measurement Inputs, Disclosure | The following tables display the Company’s assets measured at fair value on a recurring basis. The Company does not hold any liabilities measured at fair value on its condensed consolidated balance sheets. Recurring Fair Value Measurements June 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Available-for-sale securities $ — $ 12,542 $ — $ 12,542 Total assets $ — $ 12,542 $ — $ 12,542 Recurring Fair Value Measurements December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Assets Available-for-sale securities $ — $ 12,830 $ — $ 12,830 Total assets $ — $ 12,830 $ — $ 12,830 |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 (in thousands) Carrying Value Fair Value Carrying Value Fair Value Assets Loans held-for-investment, net of allowance for credit losses $ 4,290,047 $ 4,250,847 $ 4,226,212 $ 4,261,612 Available-for-sale securities $ 12,542 $ 12,542 $ 12,830 $ 12,830 Held-to-maturity securities $ 10,788 $ 11,374 $ 18,076 $ 18,076 Cash and cash equivalents $ 55,969 $ 55,969 $ 80,281 $ 80,281 Restricted cash $ 3,497 $ 3,497 $ 79,483 $ 79,483 Liabilities Repurchase agreements $ 2,030,916 $ 2,030,916 $ 1,924,021 $ 1,924,021 Securitized debt obligations $ 983,521 $ 941,262 $ 1,041,044 $ 1,050,912 Asset-specific financings $ 121,242 $ 121,242 $ 116,465 $ 116,465 Revolving credit facilities $ 12,589 $ 12,589 $ 42,008 $ 42,008 Convertible senior notes $ 270,437 $ 205,983 $ 269,634 $ 283,332 |
Collateralized Borrowings (Tabl
Collateralized Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Collateralized Borrowings [Abstract] | |
Schedule of Collateralized Borrowings | The following tables summarize details of the Company’s collateralized borrowings outstanding as of June 30, 2020 and December 31, 2019: June 30, 2020 (in thousands) Maturity Date (1) Amount Outstanding Unused Capacity Total Capacity Carrying Value of Collateral Weighted Average Borrowing Rate Repurchase agreements: Morgan Stanley Bank June 28, 2021 $ 535,482 $ 64,518 $ 600,000 $ 743,836 2.4 % Goldman Sachs Bank May 2, 2021 468,741 31,259 500,000 653,298 2.5 % JPMorgan Chase Bank June 28, 2022 421,626 28,374 450,000 584,566 2.2 % Citibank January 9, 2023 416,688 83,312 500,000 526,310 1.9 % Wells Fargo Bank (2) June 28, 2021 176,526 98,474 275,000 243,810 2.0 % JPMorgan Chase Bank July 8, 2020 11,853 NA NA 23,330 4.5 % Total/Weighted Average $ 2,030,916 $ 305,937 $ 2,325,000 $ 2,775,150 Asset-specific financings: Canadian Imperial Bank of Commerce Various $ 121,242 $ 28,758 $ 150,000 $ 149,880 2.0 % Revolving credit facilities: Citibank (3) July 26, 2021 $ 12,589 $ 62,411 $ 75,000 $ 42,164 2.4 % December 31, 2019 (in thousands) Maturity Date (1) Amount Outstanding Unused Capacity Total Capacity Carrying Value of Collateral Weighted Average Borrowing Rate Repurchase agreements: Morgan Stanley Bank June 28, 2021 $ 556,887 $ 43,113 $ 600,000 $ 740,791 3.9 % Goldman Sachs Bank May 2, 2020 405,057 94,943 500,000 541,640 3.8 % JPMorgan Chase Bank June 28, 2022 408,819 41,181 450,000 553,020 3.7 % Citibank July 15, 2022 339,888 60,112 400,000 432,867 3.4 % Wells Fargo Bank (2) June 28, 2021 194,113 80,887 275,000 286,672 3.5 % JPMorgan Chase Bank February 10, 2020 19,257 NA NA 30,906 4.1 % Total/Weighted Average $ 1,924,021 $ 320,236 $ 2,225,000 $ 2,585,896 Asset-specific financings: Canadian Imperial Bank of Commerce Various $ 116,465 $ 33,535 $ 150,000 $ 144,322 3.5 % Revolving credit facilities: Citibank (3) July 26, 2021 $ 42,008 $ 32,992 $ 75,000 $ 80,473 4.0 % ____________________ (1) The facilities are set to mature on the stated maturity date, unless extended pursuant to their terms. (2) As of June 30, 2020, the Company retained an option to increase the maximum facility capacity amount up to $350 million, subject to customary terms and conditions. (3) As of June 30, 2020, the Company retained an option to increase the maximum facility capacity amount up to $150 million, subject to customary terms and conditions. |
Schedule of Collateralized Borrowings by Maturity | At June 30, 2020, the Company’s collateralized borrowings outstanding had the following remaining maturities: June 30, 2020 (dollars in thousands) Repurchase Agreements Asset-Specific Financings Revolving Credit Facilities Total Amount Outstanding Within one year $ 1,192,602 $ — $ 12,589 $ 1,205,191 One to three years 838,314 121,242 — 959,556 Three to five years — — — — Five years and over — — — — Total $ 2,030,916 $ 121,242 $ 12,589 $ 2,164,747 |
Schedule of Repurchase Agreement Counterparties with Whom Repurchase Agreements Exceed 10 Percent of Stockholders' Equity | The following table summarizes certain characteristics of the Company’s repurchase agreements and counterparty concentration at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 (dollars in thousands) Amount Outstanding Net Counterparty Exposure (1) Percent of Equity Weighted Average Years to Maturity Amount Outstanding Net Counterparty Exposure (1) Percent of Equity Weighted Average Years to Maturity Morgan Stanley Bank $ 535,482 $ 215,466 22 % 0.99 $ 556,887 $ 185,022 18 % 1.49 JPMorgan Chase Bank 433,479 184,124 19 % 1.94 428,076 156,764 15 % 2.39 Goldman Sachs Bank 468,741 190,731 20 % 0.84 405,057 137,326 13 % 0.34 Citibank 416,688 113,880 12 % 2.53 339,888 93,553 9 % 2.54 Wells Fargo Bank 176,526 69,141 7 % 0.99 194,113 93,004 9 % 1.49 Total $ 2,030,916 $ 773,342 $ 1,924,021 $ 665,669 ____________________ (1) Represents the excess of the carrying amount or market value of the loans held-for-investment, AFS securities and HTM securities pledged as collateral for repurchase agreements, including accrued interest plus any cash on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Rollforward of Common Stock | As of June 30, 2020, the Company had 55,205,082 shares of common stock outstanding. The following table presents a reconciliation of the common shares outstanding for the six months ended June 30, 2020 and 2019: Number of common shares Common shares outstanding, December 31, 2018 43,621,174 Issuance of common stock 10,954,924 Issuance of restricted stock (1) 277,107 Common shares outstanding, June 30, 2019 54,853,205 Common shares outstanding, December 31, 2019 54,853,205 Issuance of common stock — Issuance of restricted stock (1) 351,877 Common shares outstanding, June 30, 2020 55,205,082 ____________________ (1) Represents shares of restricted stock granted under the Company’s 2017 Equity Incentive Plan, net of forfeitures. See Note 15 - Equity Incentive Plan |
Schedule of Dividends Declared | The following table presents cash dividends declared by the Company on its common stock from December 31, 2018 through June 30, 2020: Declaration Date Record Date Payment Date Cash Dividend Per Share December 18, 2019 December 31, 2019 January 17, 2020 $ 0.42 September 18, 2019 October 3, 2019 October 18, 2019 $ 0.42 June 20, 2019 July 5, 2019 July 19, 2019 $ 0.42 March 20, 2019 April 1, 2019 April 18, 2019 $ 0.42 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive (loss) income at June 30, 2020 and December 31, 2019 was as follows: (in thousands) June 30, December 31, Available-for-sale securities Unrealized gains $ — $ 32 Unrealized losses — — Accumulated other comprehensive (loss) income $ — $ 32 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the activity related to restricted common stock for the six months ended June 30, 2020 and 2019: Six Months Ended June 30, 2020 2019 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding at Beginning of Period 461,371 $ 18.75 321,134 $ 18.04 Granted 367,489 15.92 277,107 19.31 Vested (221,616) (18.75) (136,870) (18.20) Forfeited (15,612) (18.68) — — Outstanding at End of Period 591,632 $ 16.99 461,371 $ 18.75 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents a reconciliation of the earnings and shares used in calculating basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share data) 2020 2019 2020 2019 Numerator: Net (loss) income attributable to common stockholders - basic $ (1,758) $ 18,152 $ (38,974) $ 35,096 Interest expense attributable to convertible notes (1) — 4,474 — — Net (loss) income attributable to common stockholders - diluted $ (1,758) $ 22,626 $ (38,974) $ 35,096 Denominator: Weighted average common shares outstanding 54,559,798 53,446,531 54,529,399 50,810,687 Weighted average restricted stock shares 598,485 507,103 577,948 481,631 Basic weighted average shares outstanding 55,158,283 53,953,634 55,107,347 51,292,318 Effect of dilutive shares issued in an assumed conversion of the convertible senior notes — 13,670,761 — — Diluted weighted average shares outstanding 55,158,283 67,624,395 55,107,347 51,292,318 (Loss) earnings per share Basic $ (0.03) $ 0.34 $ (0.71) $ 0.68 Diluted $ (0.03) $ 0.33 $ (0.71) $ 0.68 ____________________ (1) Includes a nondiscretionary adjustment for the assumed change in the management fee calculation. |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies Measurement of Credit Losses on Financial Instruments (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Jun. 30, 2020USD ($)loan | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of adoption of ASU 2016-13 | $ 1,019,136 | $ 827,531 | ||
Threshold period when delinquent loans are placed on nonaccrual status | 90 days | |||
Number of commercial real estate loans included in third-party historical loan loss database | loan | 100,000 | |||
Loans and securities | 4,257,086 | |||
Allowance for credit losses | 0 | |||
Loans and securities, net | 4,257,086 | |||
Liability for off balance sheet credit losses | $ 8,100 | 0 | ||
Cumulative earnings | $ 104,680 | 162,076 | ||
Cumulative effect of adoption of new accounting principle | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of adoption of ASU 2016-13 | $ 18,500 | $ (18,472) | 0 | |
Cumulative effect of adoption of ASU 2016-13 per share (in usd per share) | $ / shares | $ 0.34 | |||
Loans and securities | $ 0 | |||
Allowance for credit losses | 16,692 | |||
Loans and securities, net | (16,692) | |||
Liability for off balance sheet credit losses | 1,780 | |||
Cumulative earnings | (18,472) | |||
Stockholders' equity, adjusted balance | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of adoption of ASU 2016-13 | 1,000,664 | $ 827,531 | ||
Loans and securities | 4,257,086 | |||
Allowance for credit losses | (16,692) | |||
Loans and securities, net | 4,240,394 | |||
Liability for off balance sheet credit losses | 1,780 | |||
Cumulative earnings | $ 143,604 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | [1] | $ (4,415,648) | $ (4,460,862) |
Liabilities of consolidated Variable Interest Entities | [1] | 3,450,312 | 3,440,726 |
Variable Interest Entity, Not Primary Beneficiary [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (23,300) | (30,900) | |
Maximum exposure to loss of nonconsolidated Variable Interest Entities | 23,330 | 30,906 | |
Variable Interest Entity, Primary Beneficiary [Member] | Loans Held-for-Investment [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (1,319,151) | (1,301,369) | |
Variable Interest Entity, Primary Beneficiary [Member] | Allowance for Credit Losses [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (20,674) | 0 | |
Variable Interest Entity, Primary Beneficiary [Member] | Loans Held-for-Investment, Net [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (1,298,477) | (1,301,369) | |
Variable Interest Entity, Primary Beneficiary [Member] | Restricted Cash and Cash Equivalents [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (192) | (76,093) | |
Variable Interest Entity, Primary Beneficiary [Member] | Other Assets [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (8,786) | (9,686) | |
Variable Interest Entity, Primary Beneficiary [Member] | Assets, Total [Member] | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated Variable Interest Entities | (1,307,455) | (1,387,148) | |
Variable Interest Entity, Primary Beneficiary [Member] | Securitized Debt Obligations [Member] | |||
Variable Interest Entity [Line Items] | |||
Liabilities of consolidated Variable Interest Entities | 983,521 | 1,041,044 | |
Variable Interest Entity, Primary Beneficiary [Member] | Other Liabilities [Member] | |||
Variable Interest Entity [Line Items] | |||
Liabilities of consolidated Variable Interest Entities | 709 | 1,078 | |
Variable Interest Entity, Primary Beneficiary [Member] | Liabilities, Total [Member] | |||
Variable Interest Entity [Line Items] | |||
Liabilities of consolidated Variable Interest Entities | $ 984,230 | $ 1,042,122 | |
[1] | The condensed consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of these VIEs, and liabilities of the consolidated VIEs for which creditors do not have recourse to Granite Point Mortgage Trust Inc. At June 30, 2020 and December 31, 2019, assets of the VIEs totaled $1,307,455 and $1,387,148, and liabilities of the VIEs totaled $984,230 and $1,042,122, respectively. See Note 3 - Variable Interest Entities for additional information. |
Loans Held-for-Investment (Deta
Loans Held-for-Investment (Details) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2020USD ($)loan | Jun. 30, 2019 | Mar. 31, 2020USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Unpaid principal balance | $ 4,391,293 | $ 4,257,145 | |||
Unamortized (discount) premium | (108) | (124) | |||
Unamortized net deferred origination fees | (24,428) | (30,809) | |||
Allowance for credit losses | (76,710) | $ (62,565) | $ (16,692) | 0 | |
Loans held-for-investment | 4,290,047 | 4,226,212 | |||
Unfunded commitments | $ 677,674 | $ 748,878 | |||
Loans (in number of loans) | loan | 121 | 120 | |||
Weighted average coupon | 5.10% | 5.40% | |||
Weighted average years to maturity | 1 year 4 months 24 days | 1 year 9 months 18 days | |||
First Mortgage [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Unpaid principal balance | $ 4,364,056 | $ 4,229,194 | |||
Unamortized (discount) premium | (108) | (124) | |||
Unamortized net deferred origination fees | (24,431) | (30,788) | |||
Allowance for credit losses | (74,647) | ||||
Loans held-for-investment | 4,264,870 | 4,198,282 | |||
Unfunded commitments | $ 677,674 | $ 748,878 | |||
Loans (in number of loans) | loan | 118 | 117 | |||
Weighted average coupon | 5.10% | 5.40% | |||
Weighted average years to maturity | 1 year 4 months 24 days | 1 year 9 months 18 days | |||
Second Mortgage [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Unpaid principal balance | $ 12,894 | $ 13,503 | |||
Unamortized (discount) premium | 0 | 0 | |||
Unamortized net deferred origination fees | 3 | (21) | |||
Allowance for credit losses | (1,776) | ||||
Loans held-for-investment | 11,121 | 13,482 | |||
Unfunded commitments | $ 0 | $ 0 | |||
Loans (in number of loans) | loan | 2 | 2 | |||
Weighted average coupon | 10.40% | 11.70% | |||
Weighted average years to maturity | 1 year 3 months 18 days | 2 years | |||
Junior Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Unpaid principal balance | $ 14,343 | $ 14,448 | |||
Unamortized (discount) premium | 0 | 0 | |||
Unamortized net deferred origination fees | 0 | 0 | |||
Allowance for credit losses | (287) | ||||
Loans held-for-investment | 14,056 | 14,448 | |||
Unfunded commitments | $ 0 | $ 0 | |||
Loans (in number of loans) | loan | 1 | 1 | |||
Weighted average coupon | 8.00% | 8.00% | |||
Weighted average years to maturity | 6 years 7 months 6 days | 7 years 1 month 6 days |
Loans Held-for-Investment by Pr
Loans Held-for-Investment by Property Type (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 4,290,047 | $ 4,226,212 |
Percentage of total loans held-for-investment | 100.00% | 100.00% |
Office Building [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 1,822,072 | $ 1,779,173 |
Percentage of total loans held-for-investment | 42.50% | 42.00% |
Multifamily [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 1,082,763 | $ 1,058,708 |
Percentage of total loans held-for-investment | 25.20% | 25.10% |
Hotel [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 642,342 | $ 640,503 |
Percentage of total loans held-for-investment | 15.00% | 15.20% |
Retail Site [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 394,498 | $ 398,742 |
Percentage of total loans held-for-investment | 9.20% | 9.40% |
Industrial Property [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 309,833 | $ 312,637 |
Percentage of total loans held-for-investment | 7.20% | 7.40% |
Other Property [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 38,539 | $ 36,449 |
Percentage of total loans held-for-investment | 0.90% | 0.90% |
Loans Held-for-Investment by Ge
Loans Held-for-Investment by Geographic Location (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 4,290,047 | $ 4,226,212 |
Percentage of total loans held-for-investment | 100.00% | 100.00% |
United States, Northeastern Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 1,164,887 | $ 1,196,767 |
Percentage of total loans held-for-investment | 27.20% | 28.40% |
United States, Western Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 802,555 | $ 735,416 |
Percentage of total loans held-for-investment | 18.70% | 17.40% |
United States, Southwestern Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 882,459 | $ 923,519 |
Percentage of total loans held-for-investment | 20.60% | 21.80% |
United States, Southeastern Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 721,911 | $ 669,732 |
Percentage of total loans held-for-investment | 16.80% | 15.80% |
United States, Midwestern Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment | $ 718,235 | $ 700,778 |
Percentage of total loans held-for-investment | 16.70% | 16.60% |
Rollforward of Loans Held-for-I
Rollforward of Loans Held-for-Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Loans Held-for-Investment [Abstract] | |||||
Loans held-for-investment pledged as collateral for borrowings | $ 4,200,000 | $ 4,200,000 | $ 4,100,000 | ||
Loans Held-for-Investment [Roll Forward] | |||||
Loans held-for-investment, net of allowance for credit losses, at beginning of period | 4,251,251 | $ 3,292,989 | 4,226,212 | $ 3,167,913 | |
Originations, acquisitions and additional fundings | 72,591 | 415,997 | 260,013 | 695,691 | |
Repayments | (3,976) | (148,417) | (106,115) | (303,737) | |
Transfers to loans held-for-sale | (19,665) | 0 | (19,665) | 0 | |
Net discount accretion (premium amortization) | 8 | 7 | 16 | 20 | |
Increase in net deferred origination fees | (556) | (4,527) | (3,009) | (7,647) | |
Accretion of discounts and net deferred fees on loans held-for-investment | 4,539 | 4,068 | 9,305 | 7,877 | |
Allowance for loan losses | (14,145) | 0 | (76,710) | 0 | |
Loans held-for-investment, net of allowance for credit losses, at end of period | $ 4,290,047 | $ 3,560,117 | $ 4,290,047 | $ 3,560,117 |
Loans Held-for-Investment Rollf
Loans Held-for-Investment Rollforward of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Loans Held-for-Investment [Abstract] | |||
Liability for off balance sheet credit losses | $ 8,100 | $ 8,100 | $ 0 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for loan losses | 62,565 | 0 | |
Provision for credit losses | 14,145 | 60,018 | |
Writeoffs | 0 | 0 | |
Recoveries of amounts previously written off | 0 | 0 | |
Allowance for loan losses | $ 76,710 | $ 76,710 |
Nonaccrual Loans (Details)
Nonaccrual Loans (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Threshold period when delinquent loans are placed on nonaccrual status | 90 days |
Loans Held-for-Investment by In
Loans Held-for-Investment by Internal Risk Rating (Details) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 121 | 120 |
Unpaid principal balance | $ 4,391,293 | $ 4,257,145 |
Loans held-for-investment | $ 4,290,047 | $ 4,226,212 |
Loans downgraded during the priod (in number of loans) | loan | 35 | |
Unpaid principal balance of loans downgraded during the period | $ 1,500,000 | |
Loans held-for investment, originated in current fiscal year | 125,646 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 1,630,288 | |
Loans held-for investment, originated two years before latest fiscal year | 1,218,659 | |
Loans held-for investment, originated three years before latest fiscal year | 859,494 | |
Loans held-for investment, originated four years before latest fiscal year | 221,510 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 234,450 | |
Risk Rating 1 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 6 | 9 |
Unpaid principal balance | $ 173,494 | $ 293,191 |
Loans held-for-investment | 172,186 | $ 292,270 |
Loans held-for investment, originated in current fiscal year | 0 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 0 | |
Loans held-for investment, originated two years before latest fiscal year | 117,510 | |
Loans held-for investment, originated three years before latest fiscal year | 21,393 | |
Loans held-for investment, originated four years before latest fiscal year | 33,283 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 0 | |
Risk Rating 2 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 70 | 100 |
Unpaid principal balance | $ 2,508,630 | $ 3,661,077 |
Loans held-for-investment | 2,475,443 | $ 3,632,528 |
Loans held-for investment, originated in current fiscal year | 73,459 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 1,118,870 | |
Loans held-for investment, originated two years before latest fiscal year | 594,483 | |
Loans held-for investment, originated three years before latest fiscal year | 418,305 | |
Loans held-for investment, originated four years before latest fiscal year | 188,227 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 82,099 | |
Risk Rating 3 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 27 | 9 |
Unpaid principal balance | $ 890,835 | $ 243,127 |
Loans held-for-investment | 865,772 | $ 241,901 |
Loans held-for investment, originated in current fiscal year | 11,823 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 346,911 | |
Loans held-for investment, originated two years before latest fiscal year | 257,580 | |
Loans held-for investment, originated three years before latest fiscal year | 238,337 | |
Loans held-for investment, originated four years before latest fiscal year | 0 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 11,121 | |
Risk Rating 4 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 18 | 2 |
Unpaid principal balance | $ 818,334 | $ 59,750 |
Loans held-for-investment | 776,646 | $ 59,513 |
Loans held-for investment, originated in current fiscal year | 40,364 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 164,507 | |
Loans held-for investment, originated two years before latest fiscal year | 249,086 | |
Loans held-for investment, originated three years before latest fiscal year | 181,459 | |
Loans held-for investment, originated four years before latest fiscal year | 0 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 141,230 | |
Risk Rating 5 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans (in number of loans) | loan | 0 | 0 |
Unpaid principal balance | $ 0 | $ 0 |
Loans held-for-investment | 0 | $ 0 |
Loans held-for investment, originated in current fiscal year | 0 | |
Loans held-for investment, originated in fiscal year before latest fiscal year | 0 | |
Loans held-for investment, originated two years before latest fiscal year | 0 | |
Loans held-for investment, originated three years before latest fiscal year | 0 | |
Loans held-for investment, originated four years before latest fiscal year | 0 | |
Loans held-for investment, originated five or more years before latest fiscal year | $ 0 |
Schedule of Available-for-sale
Schedule of Available-for-sale Securities Reconciliation (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Abstract] | ||
Face value | $ 12,798 | $ 12,798 |
Unamortized premium (discount) | 0 | 0 |
Allowance for credit losses | (256) | 0 |
Gross unrealized gains | 0 | 32 |
Gross unrealized losses | 0 | 0 |
Available-for-sale securities, at fair value | 12,542 | 12,830 |
Available-for-sale securities pledged as collateral for borrowings | $ 12,500 | $ 12,800 |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Held-to-Maturity Securities, Face Value | $ 11,726 | $ 18,076 |
Held-to-Maturity Securities, Unamortized Premium (Discount) | 0 | 0 |
Held-to-maturity Securities, Allowance for Credit Losses | (938) | 0 |
Held-to-maturity securities | 10,788 | 18,076 |
Held-to-maturity securities pledged as collateral for borrowings | $ 10,800 | $ 18,100 |
Schedule of Total Cash, Cash Eq
Schedule of Total Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Variable Interest Entity [Line Items] | ||||
Cash collateral for repurchase agreements and securities activity | $ 3,300 | $ 3,400 | ||
Cash and cash equivalents | 55,969 | 80,281 | ||
Restricted cash | 3,497 | 79,483 | ||
Cash, cash equivalents and restricted cash | 59,466 | 159,764 | $ 168,987 | $ 123,423 |
Restricted Cash and Cash Equivalents [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Cash collateral for repurchase agreements and securities activity | $ 200 | $ 76,100 |
Fair Value, Measurement Inputs,
Fair Value, Measurement Inputs, Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | $ 12,542 | $ 12,830 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 12,542 | 12,830 |
Total assets | 12,542 | 12,830 |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | 0 |
Total assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 12,542 | 12,830 |
Total assets | 12,542 | 12,830 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | 0 |
Total assets | $ 0 | $ 0 |
Fair Value by Balance Sheet Gro
Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||||||
Loans held-for-investment, net of allowance for credit losses | $ 4,290,047 | $ 4,251,251 | $ 4,226,212 | $ 3,560,117 | $ 3,292,989 | $ 3,167,913 |
Loans held-for-investment, at fair value | 4,250,847 | 4,261,612 | ||||
Loans held-for-investment | 4,366,757 | 4,226,212 | ||||
Available-for-sale securities, at fair value | 12,542 | 12,830 | ||||
Held-to-maturity securities | 10,788 | 18,076 | ||||
Held-to-maturity securities, at fair value | 11,374 | 18,076 | ||||
Cash and cash equivalents | 55,969 | 80,281 | ||||
Restricted cash | 3,497 | 79,483 | ||||
Repurchase agreements | 2,030,916 | 1,924,021 | ||||
Securitized debt obligations | 983,521 | 1,041,044 | ||||
Securitized debt obligations, at fair value | 941,262 | 1,050,912 | ||||
Asset-specific financings | 121,242 | 116,465 | ||||
Revolving credit facilities | 12,589 | 42,008 | ||||
Convertible senior notes | 270,437 | 269,634 | ||||
Convertible senior notes, at fair value | $ 205,983 | $ 283,332 |
Collateralized Borrowings (Deta
Collateralized Borrowings (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||
Typical term per loan of revolving credit facility financing | 90 days | |
Repurchase agreements | $ 2,030,916 | $ 1,924,021 |
Asset-specific financings | 121,242 | 116,465 |
Revolving credit facilities | 12,589 | 42,008 |
Unused capacity under collateralized borrowings | 305,937 | 320,236 |
Total capacity under collateralized borrowings | 2,325,000 | 2,225,000 |
Carrying value of assets pledged as collateral for repurchase agreements | 2,775,150 | 2,585,896 |
Loans held-for-investment pledged as collateral for borrowings | 4,200,000 | 4,100,000 |
Lender, Citibank [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facilities | 12,589 | 42,008 |
Unused capacity under collateralized borrowings | 62,411 | 32,992 |
Total capacity under collateralized borrowings | 75,000 | 75,000 |
Maximum capacity under collateralized borrowings upon exercise of option to increase | 150,000 | |
Lender, Citibank [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans held-for-investment pledged as collateral for borrowings | $ 42,164 | $ 80,473 |
Weighted average borrowing rate of facility | 2.40% | 4.00% |
Lender, Canadian Imperial Bank of Commerce [Member] | ||
Line of Credit Facility [Line Items] | ||
Asset-specific financings | $ 121,242 | $ 116,465 |
Unused capacity under collateralized borrowings | 28,758 | 33,535 |
Total capacity under collateralized borrowings | 150,000 | 150,000 |
Lender, Canadian Imperial Bank of Commerce [Member] | Secured Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans held-for-investment pledged as collateral for borrowings | $ 149,880 | $ 144,322 |
Weighted average borrowing rate of facility | 2.00% | 3.50% |
Loans Held-for-Investment [Member] | Lender, Morgan Stanley Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | $ 535,482 | $ 556,887 |
Unused capacity under collateralized borrowings | 64,518 | 43,113 |
Total capacity under collateralized borrowings | 600,000 | 600,000 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 743,836 | $ 740,791 |
Weighted average borrowing rate of repurchase agreements | 2.40% | 3.90% |
Loans Held-for-Investment [Member] | Lender, Goldman Sachs Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | $ 468,741 | $ 405,057 |
Unused capacity under collateralized borrowings | 31,259 | 94,943 |
Total capacity under collateralized borrowings | 500,000 | 500,000 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 653,298 | $ 541,640 |
Weighted average borrowing rate of repurchase agreements | 2.50% | 3.80% |
Loans Held-for-Investment [Member] | Lender, JPMorgan Chase Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | $ 421,626 | $ 408,819 |
Unused capacity under collateralized borrowings | 28,374 | 41,181 |
Total capacity under collateralized borrowings | 450,000 | 450,000 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 584,566 | $ 553,020 |
Weighted average borrowing rate of repurchase agreements | 2.20% | 3.70% |
Loans Held-for-Investment [Member] | Lender, Citibank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | $ 416,688 | $ 339,888 |
Unused capacity under collateralized borrowings | 83,312 | 60,112 |
Total capacity under collateralized borrowings | 500,000 | 400,000 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 526,310 | $ 432,867 |
Weighted average borrowing rate of repurchase agreements | 1.90% | 3.40% |
Loans Held-for-Investment [Member] | Lender, Wells Fargo Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | $ 176,526 | $ 194,113 |
Unused capacity under collateralized borrowings | 98,474 | 80,887 |
Total capacity under collateralized borrowings | 275,000 | 275,000 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 243,810 | $ 286,672 |
Weighted average borrowing rate of repurchase agreements | 2.00% | 3.50% |
Maximum capacity under collateralized borrowings upon exercise of option to increase | $ 350,000 | |
Commercial Mortgage Backed Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Asset-specific financings | 121,242 | |
Commercial Mortgage Backed Securities [Member] | Lender, JPMorgan Chase Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Repurchase agreements | 11,853 | $ 19,257 |
Carrying value of assets pledged as collateral for repurchase agreements | $ 23,330 | $ 30,906 |
Weighted average borrowing rate of repurchase agreements | 4.50% | 4.10% |
Schedule of Collateralized Borr
Schedule of Collateralized Borrowings by Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets Sold under Agreements to Repurchase [Line Items] | ||
Repurchase agreements | $ 2,030,916 | $ 1,924,021 |
Asset-specific financings | 121,242 | 116,465 |
Revolving credit facilities | 12,589 | $ 42,008 |
Total collateralized borrowings | 2,164,747 | |
Maturity Within One Year [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Repurchase agreements | 1,192,602 | |
Asset-specific financings | 0 | |
Revolving credit facilities | 12,589 | |
Total collateralized borrowings | 1,205,191 | |
Maturity One to Three Years [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Repurchase agreements | 838,314 | |
Asset-specific financings | 121,242 | |
Revolving credit facilities | 0 | |
Total collateralized borrowings | 959,556 | |
Maturity Three to Five Years [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Repurchase agreements | 0 | |
Asset-specific financings | 0 | |
Revolving credit facilities | 0 | |
Total collateralized borrowings | 0 | |
Maturity Over Five Years [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Repurchase agreements | 0 | |
Asset-specific financings | 0 | |
Revolving credit facilities | 0 | |
Total collateralized borrowings | $ 0 |
Schedule of Repurchase Agreemen
Schedule of Repurchase Agreement Counterparties with Whom Repurchase Agreements Exceed 10 Percent of Stockholders' Equity (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | $ 2,030,916 | $ 1,924,021 | |
Net counterparty exposure | 773,342 | 665,669 | |
Repurchase Agreement Counterparty, Morgan Stanley Bank [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | 535,482 | 556,887 | |
Net counterparty exposure | $ 215,466 | $ 185,022 | |
Percent of equity | 22.00% | 18.00% | |
Weighted average years to maturity | 11 months 26 days | 1 year 5 months 26 days | |
Repurchase Agreement Counterparty, JPMorgan Chase Bank [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | $ 433,479 | $ 428,076 | |
Net counterparty exposure | $ 184,124 | $ 156,764 | |
Percent of equity | 19.00% | 15.00% | |
Weighted average years to maturity | 1 year 11 months 8 days | 2 years 4 months 20 days | |
Repurchase Agreement Counterparty, Goldman Sachs Bank [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | $ 468,741 | $ 405,057 | |
Net counterparty exposure | $ 190,731 | $ 137,326 | |
Percent of equity | 20.00% | 13.00% | |
Weighted average years to maturity | 10 months 2 days | 4 months 2 days | |
Repurchase Agreement Counterparty, Citibank [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | $ 416,688 | $ 339,888 | |
Net counterparty exposure | $ 113,880 | $ 93,553 | |
Percent of equity | 12.00% | 9.00% | |
Weighted average years to maturity | 2 years 6 months 10 days | 2 years 6 months 14 days | |
Repurchase Agreement Counterparty, Wells Fargo Bank [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase agreements | $ 176,526 | $ 194,113 | |
Net counterparty exposure | $ 69,141 | $ 93,004 | |
Percent of equity | 7.00% | 9.00% | |
Weighted average years to maturity | 11 months 26 days | 1 year 5 months 26 days |
Securitized Debt Obligations (D
Securitized Debt Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Securitized Debt Obligations [Abstract] | ||
Securitized debt obligations | $ 983,521 | $ 1,041,044 |
Weighted average interest rate of securitized debt obligations outstanding | 1.81% | 3.32% |
Convertible Senior Notes (Detai
Convertible Senior Notes (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes | $ 270,437 | $ 269,634 | ||
Convertible Debt, 2017 Issuance [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Proceeds from convertible senior notes | $ 139,500 | |||
Convertible senior notes conversion ratio | 0.0507073 | |||
Convertible Debt, 2017 Issuance [Member] | Convertible Debt [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes interest rate per annum | 5.625% | |||
Convertible Debt, 2017 Issuance [Member] | Convertible Debt [Member] | Private Placement [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes aggregate principal amount | $ 125,000 | |||
Convertible Debt, 2017 Issuance [Member] | Convertible Debt [Member] | Over-Allotment Option [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes aggregate principal amount | $ 18,800 | |||
Convertible Debt, 2018 Issuance [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Proceeds from convertible senior notes | $ 127,700 | |||
Convertible senior notes conversion ratio | 0.0488496 | |||
Convertible Debt, 2018 Issuance [Member] | Convertible Debt [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes interest rate per annum | 6.375% | |||
Convertible Debt, 2018 Issuance [Member] | Convertible Debt [Member] | Private Placement [Member] | ||||
Debt Instrument, Redemption [Line Items] | ||||
Convertible senior notes aggregate principal amount | $ 131,600 |
Commitments and Contingencies M
Commitments and Contingencies Management Agreement (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Percent per annum of equity used to calculate management fees | 1.50% |
Incentive fee calculation, core earnings multiplication factor | 20.00% |
Incentive fee calculation, rolling period | 12 months |
Incentive fee calculation, equity multiplication factor | 8.00% |
Incentive fee calculation, period incentive fee paid | 9 months |
Incentive fee, rolling period for threshold | 3 years |
Incentive fee, threshold amount of core earnings | $ 0 |
Management agreement, renewal term | 1 year |
Management agreement, termination fee factor | 3 |
Management agreement, termination fee period | 24 months |
Commitments and Contingencies U
Commitments and Contingencies Unfunded Commitments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Unfunded commitments | $ 677,674 | $ 748,878 |
Weighted average future funding period on unfunded commitments | 3 years |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||||
Preferred stock dividend rate | 10.00% | |||
Preferred stock liquidation preference (in usd per share) | $ 1,000 | $ 1,000 | ||
Period after which the company may redeem preferred stock | 5 years | |||
Preferred stock, redemption price per share (in usd per share) | $ 1,000 | $ 1,000 | ||
Period after which the holder may redeem preferred stock | 6 years | |||
Preferred dividends declared | $ 25,000 | $ 25,000 | $ 50,000 | $ 50,000 |
Stockholders' Equity Common Sto
Stockholders' Equity Common Stock Rollforward (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Mar. 06, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | |||
Common stock issued during period (in shares) | 0 | 10,954,924 | |
Proceeds from issuance of common stock, net of offering costs | $ 130,200 | $ 0 | $ 207,405 |
Issuance costs incurred in common stock offering | 1,600 | ||
Increase (Decrease) in Common Stock Outstanding [Roll Forward] | |||
Common shares outstanding at beginning of period (in shares) | 54,853,205 | 43,621,174 | |
Common stock issued during period (in shares) | 0 | 10,954,924 | |
Restricted stock issued during period (in shares) | 351,877 | 277,107 | |
Common shares outstanding at end of period (in shares) | 55,205,082 | 54,853,205 | |
Over-Allotment Option [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from issuance of common stock, net of offering costs | $ 19,500 | ||
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Common stock issued during period (in shares) | 6,850,000 | ||
Increase (Decrease) in Common Stock Outstanding [Roll Forward] | |||
Common stock issued during period (in shares) | 6,850,000 | ||
Common shares outstanding at end of period (in shares) | 55,205,082 | ||
Common Stock [Member] | Over-Allotment Option [Member] | |||
Class of Stock [Line Items] | |||
Common stock issued during period (in shares) | 1,027,500 | ||
Increase (Decrease) in Common Stock Outstanding [Roll Forward] | |||
Common stock issued during period (in shares) | 1,027,500 |
Stockholders' Equity Schedule o
Stockholders' Equity Schedule of Common Dividends Declared (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | |||||||
Dividends declared per common share (in usd per share) | $ 0 | $ 0.42 | $ 0 | $ 0.84 | |||
Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Declaration Date | Dec. 18, 2019 | Sep. 18, 2019 | Jun. 20, 2019 | Mar. 20, 2019 | |||
Record Date | Dec. 31, 2019 | Oct. 3, 2019 | Jul. 5, 2019 | Apr. 1, 2019 | |||
Payment Date | Jan. 17, 2020 | Oct. 18, 2019 | Jul. 19, 2019 | Apr. 18, 2019 | |||
Dividends declared per common share (in usd per share) | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.42 |
Stockholders' Equity Share Repu
Stockholders' Equity Share Repurchase Program (Details) | Jun. 30, 2020shares |
Stockholders' Equity Attributable to Parent [Abstract] | |
Number of shares authorized to be repurchased under stock repurchase program (in shares) | 2,000,000 |
Stockholders' Equity At-the-Mar
Stockholders' Equity At-the-Market Offering (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | |||||
Number of shares authorized to be sold under equity distribution agreement (in shares) | 8,000,000 | 8,000,000 | |||
Number of common shares issued under equity distribution agreement and outstanding as of period-end (in shares) | 3,242,364 | 3,242,364 | |||
Accumulated proceeds from issuance of common shares under equity distribution agreement | $ 61,200 | $ 61,200 | |||
Common stock issued during period (in shares) | 0 | 10,954,924 | |||
Issuance of common stock, net of offering costs | $ 50,177 | $ 157,228 | |||
Management fee reimbursements for stock sold | $ 0 | $ 100 | $ 0 | $ 100 | |
At the Market Offering [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock issued during period (in shares) | 0 | 2,663,095 | 0 | 3,077,424 | |
Issuance of common stock, net of offering costs | $ 0 | $ 50,300 | $ 0 | $ 58,100 |
Stockholders' Equity Schedule_2
Stockholders' Equity Schedule of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Stockholders' Equity Attributable to Parent [Abstract] | |||||||
Unrealized gains | $ 0 | $ 0 | $ 32 | ||||
Unrealized losses | 0 | 0 | 0 | ||||
Accumulated other comprehensive income | 0 | 0 | $ 32 | ||||
Amounts reclassified from accumulated other comprehensive income | $ (511) | $ 767 | $ 0 | $ 0 | $ 300 | $ 0 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of restricted common shares reserved for issuance under equity incentive plan (in shares) | 3,242,306 | |
Maximum number of shares that an individual may be granted as a proportion of outstanding common stock | 9.80% | |
Number of restricted common shares granted during period under equity incentive plan (in shares) | 367,489 | 277,107 |
Weighted average grant date fair value of restricted common shares granted during period under equity incentive plan (in usd per share) | $ 15.92 | $ 19.31 |
Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of restricted common shares granted during period under equity incentive plan (in shares) | 69,720 | 18,189 |
Weighted average grant date fair value of restricted common shares granted during period under equity incentive plan (in usd per share) | $ 5.02 | $ 19.24 |
Award vesting period of restricted common shares granted during period under equity incentive plan | 1 year | |
Key Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of restricted common shares granted during period under equity incentive plan (in shares) | 297,769 | 258,918 |
Weighted average grant date fair value of restricted common shares granted during period under equity incentive plan (in usd per share) | $ 18.47 | $ 19.31 |
Award vesting period of restricted common shares granted during period under equity incentive plan | 3 years |
Schedule of Share-based Compens
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Number of nonvested restricted common shares outstanding at beginning of period (in shares) | 461,371 | 321,134 | ||
Weighted average grant date fair value of nonvested restricted common shares outstanding at beginning of period (in usd per share) | $ 18.75 | $ 18.04 | ||
Number of restricted common shares granted during period under equity incentive plan (in shares) | 367,489 | 277,107 | ||
Weighted average grant date fair value of restricted common shares granted during period under equity incentive plan (in usd per share) | $ 15.92 | $ 19.31 | ||
Number of restricted common shares vested during period (in shares) | (221,616) | (136,870) | ||
Weighted average grant date fair value of restricted common shares vested during period (in usd per share) | $ (18.75) | $ (18.20) | ||
Number of restricted common shares forfeited during period (in shares) | (15,612) | 0 | ||
Weighted average grant date fair value of restricted common shares forfeited during period (in usd per share) | $ (18.68) | $ 0 | ||
Number of nonvested restricted common shares outstanding at end of period (in shares) | 591,632 | 461,371 | 591,632 | 461,371 |
Weighted average grant date fair value of nonvested restricted common shares outstanding at end of period (in usd per share) | $ 16.99 | $ 18.75 | $ 16.99 | $ 18.75 |
Equity based compensation | $ 1.3 | $ 1.3 | $ 2.7 | $ 2.4 |
Income Taxes (Details)
Income Taxes (Details) | Jun. 30, 2020 |
Income Tax Disclosure [Abstract] | |
Percent of REIT taxable income the company is required to distribute | 90.00% |
Percentage of REIT taxable income the company currently intends to distribute | 100.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common stockholders - basic | $ (1,758) | $ 18,152 | $ (38,974) | $ 35,096 |
Interest expense attributable to convertible notes | 0 | 4,474 | 0 | 0 |
Net (loss) income attributable to common stockholders - diluted | $ (1,758) | $ 22,626 | $ (38,974) | $ 35,096 |
Weighted average common shares outstanding (in shares) | 54,559,798 | 53,446,531 | 54,529,399 | 50,810,687 |
Weighted average restricted stock shares (in shares) | 598,485 | 507,103 | 577,948 | 481,631 |
Weighted average basic common shares outstanding (in shares) | 55,158,283 | 53,953,634 | 55,107,347 | 51,292,318 |
Effect of dilutive shares issued in an assumed conversion of the convertible senior notes (in shares) | 0 | 13,670,761 | 0 | 0 |
Weighted average diluted common shares outstanding (in shares) | 55,158,283 | 67,624,395 | 55,107,347 | 51,292,318 |
Basic earnings per weighted average common share (in usd per share) | $ (0.03) | $ 0.34 | $ (0.71) | $ 0.68 |
Diluted earnings per weighted average common share (in usd per share) | $ (0.03) | $ 0.33 | $ (0.71) | $ 0.68 |
Interest expense attributable to antidilutive convertible notes excluded from computation of earnings per share | $ 4,500 | $ 9,000 | $ 9,000 | |
Antidilutive convertible notes excluded from computation of earnings per share (in shares) | 13,717,782 | 13,717,782 | 13,663,006 |
Schedule of Related Party Trans
Schedule of Related Party Transactions, by Related Party (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | ||||
Percent per annum of equity used to calculate management fees | 1.50% | |||
Management fees | $ 3,959 | $ 3,763 | $ 7,866 | $ 7,212 |
Incentive fees | 0 | 0 | 0 | 244 |
Equity based compensation | 1,300 | 1,300 | $ 2,700 | 2,400 |
Pine River Capital Management L.P. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Percent per annum of equity used to calculate management fees | 1.50% | |||
Management fees | 4,000 | 3,800 | $ 7,900 | 7,200 |
Incentive fees | 0 | 0 | 0 | 200 |
Direct and allocated costs incurred by manager | $ 1,500 | $ 1,700 | $ 9,300 | $ 8,300 |
Cost incurred by manager per share issued | $ 0.20 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 02, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||
Proceeds from sales of loans held-for-sale | $ 12,771 | $ 0 | |||
Increased capacity under collateralized borrowings | 305,937 | $ 320,236 | |||
Total capacity under collateralized borrowings | 2,325,000 | 2,225,000 | |||
Loans Held-for-Investment [Member] | Lender, JPMorgan Chase Bank [Member] | |||||
Subsequent Event [Line Items] | |||||
Increased capacity under collateralized borrowings | 28,374 | 41,181 | |||
Total capacity under collateralized borrowings | $ 450,000 | $ 450,000 | |||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Total commitments of loans sold | $ 206,300 | ||||
Principal balance of loans sold | 190,900 | ||||
Proceeds from sales of loans held-for-sale | 181,400 | ||||
Amortized cost, net of allowance for credit losses, of loans sold | $ 188,800 | ||||
Subsequent Event [Member] | Loans Held-for-Investment [Member] | Lender, JPMorgan Chase Bank [Member] | |||||
Subsequent Event [Line Items] | |||||
Increased capacity under collateralized borrowings | $ 54,100 | ||||
Total capacity under collateralized borrowings | $ 504,100 |