x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Maryland | 27-0467113 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller Reporting Company | ¨ |
Page | |
March 31, 2016 | December 31, 2015 | ||||||
Assets: | |||||||
Cash | $ | 23,035 | $ | 67,415 | |||
Restricted cash | 55,781 | 30,127 | |||||
Securities, at estimated fair value | 472,464 | 493,149 | |||||
Securities, held-to-maturity | 152,451 | 153,193 | |||||
Commercial mortgage loans, held for investment | 1,173,185 | 994,301 | |||||
Subordinate loans, held for investment | 930,401 | 931,351 | |||||
Investment in unconsolidated joint venture | 23,728 | 22,583 | |||||
Derivative assets | 1,938 | 3,327 | |||||
Interest receivable | 23,495 | 16,908 | |||||
Other assets | 18 | 236 | |||||
Total Assets | $ | 2,856,496 | $ | 2,712,590 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities: | |||||||
Borrowings under repurchase agreements (net of deferred financing costs of $7,651 and $7,353 in 2016 and 2015, respectively) | $ | 1,083,665 | $ | 918,421 | |||
Convertible senior notes, net | 248,617 | 248,173 | |||||
Participations sold | 116,952 | 118,201 | |||||
Accounts payable and accrued expenses | 8,562 | 9,246 | |||||
Payable to related party | 5,229 | 5,297 | |||||
Dividends payable | 36,421 | 37,828 | |||||
Total Liabilities | 1,499,446 | 1,337,166 | |||||
Commitments and Contingencies (see Note 16) | |||||||
Stockholders’ Equity: | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized: | |||||||
Series A Preferred stock, 3,450,000 shares issued and outstanding ($86,250 aggregate liquidation preference) in 2016 and 2015 | 35 | 35 | |||||
Series B Preferred stock, 8,000,000 shares issued and outstanding ($200,000 aggregate liquidation preference) in 2016 and 2015 | 80 | 80 | |||||
Common stock, $0.01 par value, 450,000,000 shares authorized, 67,385,255 and 67,195,252 shares issued and outstanding in 2016 and 2015, respectively | 674 | 672 | |||||
Additional paid-in-capital | 1,409,489 | 1,410,138 | |||||
Retained earnings (accumulated deficit) | (50,973 | ) | (32,328 | ) | |||
Accumulated other comprehensive loss | (2,255 | ) | (3,173 | ) | |||
Total Stockholders’ Equity | 1,357,050 | 1,375,424 | |||||
Total Liabilities and Stockholders’ Equity | $ | 2,856,496 | $ | 2,712,590 |
Three months ended March 31, | ||||||||
2016 | 2015 | |||||||
Net interest income: | ||||||||
Interest income from securities | $ | 8,049 | $ | 8,287 | ||||
Interest income from securities, held to maturity | 2,896 | 3,045 | ||||||
Interest income from commercial mortgage loans | 21,127 | 10,094 | ||||||
Interest income from subordinate loans | 29,375 | 18,610 | ||||||
Interest expense | (14,642 | ) | (11,482 | ) | ||||
Net interest income | 46,805 | 28,554 | ||||||
Operating expenses: | ||||||||
General and administrative expenses (includes $1,668 and $1,117 of equity based compensation in 2016 and 2015, respectively) | (8,185 | ) | (2,355 | ) | ||||
Management fees to related party | (5,229 | ) | (3,341 | ) | ||||
Total operating expenses | (13,414 | ) | (5,696 | ) | ||||
Income from unconsolidated joint venture | 68 | — | ||||||
Other income | 2 | 11 | ||||||
Realized loss on sale of securities | — | (443 | ) | |||||
Unrealized gain (loss) on securities | (15,074 | ) | 3,409 | |||||
Foreign currency gain (loss) | (4,474 | ) | (3,944 | ) | ||||
Gain (loss) on derivative instruments (includes unrealized gains (losses) of $(1,380) and $(3,044) in 2016 and 2015, respectively) | 4,703 | 3,622 | ||||||
Net income | 18,616 | 25,513 | ||||||
Preferred dividends | (5,815 | ) | (1,860 | ) | ||||
Net income available to common stockholders | $ | 12,801 | $ | 23,653 | ||||
Basic and diluted net income per share of common stock | $ | 0.18 | $ | 0.47 | ||||
Basic weighted average shares of common stock outstanding | 67,385,191 | 49,563,822 | ||||||
Diluted weighted average shares of common stock outstanding | 68,327,718 | 50,171,687 | ||||||
Dividend declared per share of common stock | $ | 0.46 | $ | 0.44 |
Three months ended March 31, | ||||||||
2016 | 2015 | |||||||
Net income available to common stockholders | $ | 12,801 | $ | 23,653 | ||||
Change in net unrealized gain (loss) on securities available-for-sale | — | 678 | ||||||
Foreign currency translation adjustment | 918 | (1,100 | ) | |||||
Comprehensive income | $ | 13,719 | $ | 23,231 |
Preferred Stock | Common Stock | Additional Paid In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | |||||||||||||||||||||||||
Shares | Par | Shares | Par | Total | |||||||||||||||||||||||||
Balance at January 1, 2016 | 11,450,000 | $ | 115 | 67,195,252 | $ | 672 | $ | 1,410,138 | $ | (32,328 | ) | $ | (3,173 | ) | $ | 1,375,424 | |||||||||||||
Capital decrease related to Equity Incentive Plan | — | — | 190,003 | 2 | (680 | ) | — | — | (678 | ) | |||||||||||||||||||
Offering costs | — | — | — | — | 31 | — | — | 31 | |||||||||||||||||||||
Net income | — | — | — | — | — | 18,616 | — | 18,616 | |||||||||||||||||||||
Change in other comprehensive loss | — | — | — | — | — | — | 918 | 918 | |||||||||||||||||||||
Dividends on common stock | — | — | — | — | — | (31,446 | ) | — | (31,446 | ) | |||||||||||||||||||
Dividends on preferred stock | — | — | — | — | — | (5,815 | ) | — | (5,815 | ) | |||||||||||||||||||
Balance at March 31, 2016 | 11,450,000 | $ | 115 | 67,385,255 | $ | 674 | $ | 1,409,489 | $ | (50,973 | ) | $ | (2,255 | ) | $ | 1,357,050 |
Three months ended March 31, 2016 | Three months ended March 31, 2015 | ||||||
Cash flows provided by operating activities: | |||||||
Net income | $ | 18,616 | $ | 25,513 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Premium amortization and (discount accretion), net | (1,983 | ) | (2,162 | ) | |||
Amortization of deferred financing costs | 907 | 684 | |||||
Equity-based compensation | (680 | ) | 996 | ||||
Unrealized (gain) loss on securities | 15,074 | (3,409 | ) | ||||
Income from unconsolidated joint venture | (68 | ) | — | ||||
Foreign currency (gain) loss | 4,517 | 3,801 | |||||
Realized gain on derivative instruments | (6,083 | ) | — | ||||
Unrealized loss on derivative instruments | 1,380 | 3,044 | |||||
Realized loss on sale of security | — | 443 | |||||
Changes in operating assets and liabilities: | |||||||
Accrued interest receivable, less purchased interest | (16,717 | ) | (7,687 | ) | |||
Other assets | 183 | 520 | |||||
Accounts payable and accrued expenses | (1,480 | ) | (4,433 | ) | |||
Payable to related party | (68 | ) | 101 | ||||
Net cash provided by operating activities | 13,598 | 17,411 | |||||
Cash flows used in investing activities: | |||||||
Funding of commercial mortgage loans | (178,574 | ) | (103,888 | ) | |||
Funding of subordinate loans | (27,600 | ) | (109,659 | ) | |||
Funding of unconsolidated joint venture | — | (3,929 | ) | ||||
Proceeds on settlements of derivative instruments | 6,083 | — | |||||
Increase in collateral held related to investing activities | 870 | — | |||||
Increase in restricted cash related to financing activities | (25,653 | ) | — | ||||
Proceeds from sale of securities available-for-sale | — | 17,291 | |||||
Proceeds from sale of securities at estimated fair value | — | 6,338 | |||||
Proceeds from sale of investment in unconsolidated joint venture | — | 20,794 | |||||
Principal payments received on securities at estimated fair value | 6,344 | 32 | |||||
Principal payments received on securities, held-to-maturity | 750 | — | |||||
Principal payments received on commercial mortgage loans | 14,824 | 727 | |||||
Principal payments received on subordinate loans | 19,829 | 666 | |||||
Principal payments received on other assets | 30 | 63 | |||||
Net cash used in investing activities | (183,097 | ) | (171,565 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock | — | 193,430 | |||||
Payment of offering costs | (43 | ) | (108 | ) | |||
Proceeds from repurchase agreement borrowings | 230,425 | 136,730 | |||||
Repayments of repurchase agreement borrowings | (64,883 | ) | (183,491 | ) | |||
Proceeds from participations sold | — | 30,484 | |||||
Repayments of participations sold | (507 | ) | — | ||||
Payment of deferred financing costs | (1,205 | ) | (2,330 | ) | |||
Dividends on common stock | (31,742 | ) | (19,380 | ) | |||
Dividends on preferred stock | (6,926 | ) | (1,860 | ) | |||
Net cash provided by financing activities | 125,119 | 153,475 | |||||
Net decrease in cash and cash equivalents | (44,380 | ) | (679 | ) | |||
Cash and cash equivalents, beginning of period | 67,415 | 40,641 | |||||
Cash and cash equivalents, end of period | $ | 23,035 | $ | 39,962 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | $ | 17,589 | $ | 14,399 | |||
Supplemental disclosure of non-cash financing activities: | |||||||
Dividend declared, not yet paid | $ | 36,421 | $ | 27,601 | |||
Offering costs payable | $ | 223 | $ | 207 |
Fair Value as of March 31, 2016 | Fair Value as of December 31, 2015 | ||||||||||||||||||||||||||||||
Level I | Level II | Level III | Total | Level I | Level II | Level III | Total | ||||||||||||||||||||||||
CMBS (Fair Value Option) | $ | — | $ | 472,464 | $ | — | $ | 472,464 | $ | — | $ | 493,149 | $ | — | $ | 493,149 | |||||||||||||||
Derivative instruments | — | 1,938 | — | 1,938 | — | 3,327 | — | 3,327 | |||||||||||||||||||||||
Total | $ | — | $ | 474,402 | $ | — | $ | 474,402 | $ | — | $ | 496,476 | $ | — | $ | 496,476 |
Security Description | Face Amount | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Carrying Value | ||||||||||||||
CMBS (Fair Value Option) | $ | 505,134 | $ | 498,630 | $ | 1,575 | $ | (27,741 | ) | $ | 472,464 | ||||||||
CMBS (Held-to-Maturity) | 152,500 | 152,451 | — | — | 152,451 | ||||||||||||||
Total | $ | 657,634 | $ | 651,081 | $ | 1,575 | $ | (27,741 | ) | $ | 624,915 |
Security Description | Face Amount | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | ||||||||||||||
CMBS (Fair Value Option) | $ | 511,482 | $ | 504,253 | $ | 2,614 | $ | (13,718 | ) | $ | 493,149 | ||||||||
CMBS (Held-to-Maturity) | 153,250 | 153,193 | — | — | 153,193 | ||||||||||||||
Total | $ | 664,732 | $ | 657,446 | $ | 2,614 | $ | (13,718 | ) | $ | 646,342 |
March 31, 2016 | December 31, 2015 | ||||
Credit Ratings * | BB-D | BB-D | |||
Coupon | 5.9 | % | 5.9 | % | |
Yield | 6.6 | % | 6.5 | % | |
Weighted Average Life | 1.4 years | 1.6 years |
* | Ratings per Fitch Ratings, Moody’s Investors Service or Standard & Poor's. |
Vintage | March 31, 2016 | December 31, 2015 | |||
2005 | 7.2 | % | 8.3 | % | |
2006 | 21.0 | 20.0 | |||
2007 | 62.6 | 62.4 | |||
2008 | 9.2 | 9.3 | |||
Total | 100.0 | % | 100.0 | % |
Property Type | March 31, 2016 | December 31, 2015 | |||
Office | 33.0 | % | 32.0 | % | |
Retail | 30.0 | 30.2 | |||
Multifamily | 13.3 | 13.5 | |||
Other * | 23.7 | 24.3 | |||
Total | 100.0 | % | 100.0 | % |
Location | March 31, 2016 | December 31, 2015 | |||
South Atlantic | 22.3 | % | 23.0 | % | |
Middle Atlantic | 18.6 | 18.1 | |||
Pacific | 17.7 | 17.8 | |||
East North Central | 12.2 | 12.5 | |||
Other * | 29.2 | 28.6 | |||
Total | 100.0 | % | 100.0 | % |
Description | Date of Investment | Maturity Date | Original Face Amount | Current Face Amount | Carrying Value | Coupon | Property Size | ||||||||||||
Condominium – New York, NY (1) | Aug-13 | Sept-16 | 33,000 | 24,114 | 24,319 | Floating | 40,000 sq. ft. | ||||||||||||
Condominium - Bethesda, MD (1)(2) | Feb-14 | Sept-16 | 80,000 | 53,260 | 53,388 | Floating | 50 units | ||||||||||||
Vacation Home Portfolio - Various | Apr-14 | Apr-19 | 101,000 | 92,243 | 91,394 | Fixed | 229 properties | ||||||||||||
Hotel - Philadelphia, PA (1)(3) | May-14 | May-17 | 34,000 | 34,000 | 33,987 | Floating | 301 rooms | ||||||||||||
Condo Construction - Bethesda, MD (4) | Jun-14 | Dec-16 | 50,000 | 50,000 | 50,158 | Floating | 40 units | ||||||||||||
Multifamily - Brooklyn, NY (1)(5) | Jul-14 | Aug-16 | 34,500 | 34,500 | 34,918 | Floating | 63 units | ||||||||||||
Mixed Use - Cincinnati, OH (1)(3) | Nov-14 | May-18 | 165,000 | 165,000 | 162,422 | Floating | 65 acres | ||||||||||||
Condo Conversion - New York, NY (1) | Nov-14 | Jun-16 | 67,300 | 67,300 | 67,026 | Floating | 86,000 sq. ft. | ||||||||||||
Multifamily - Williston, ND (1)(3) | Nov-14 | Nov-17 | 58,000 | 49,692 | 49,688 | Floating | 366 units/homes | ||||||||||||
Vacation Home Portfolio - Various U.S. (1)(3) | Nov-14 | Nov-19 | 50,000 | 50,000 | 49,618 | Fixed | 24 properties | ||||||||||||
Mixed Use - Brooklyn, NY (1)(8) | Feb-15 | Mar-17 | 85,770 | 85,770 | 85,821 | Floating | 330,000 sq. ft. | ||||||||||||
Retail redevelopment - Miami, FL (1)(7) | Jun-15 | Jan-17 | 45,000 | 45,000 | 45,071 | Floating | 63,300 sq. ft. | ||||||||||||
Retail - Brooklyn, NY (1) | Aug-15 | Mar-17 | 23,000 | 23,000 | 22,906 | Floating | 10,500 sq. ft. | ||||||||||||
Hotel - New York, NY (1)(9) | Sept-15 | Sept-18 | 97,807 | 98,854 | 98,119 | Floating | 317 rooms | ||||||||||||
Retail - Brooklyn, NY | Nov-15 | Mar-17 | 5,910 | 5,910 | 5,878 | Floating | 5,500 sq. ft. | ||||||||||||
Hotel - U.S. Virgin Islands (1)(10) | Dec-15 | Jan-18 | 42,000 | 42,000 | 41,656 | Floating | 180 rooms | ||||||||||||
Office - Richmond, VA (1)(11) | Dec-15 | Jan-18 | 54,000 | 54,000 | 53,571 | Floating | 262,000 sq. ft. | ||||||||||||
Retail redevelopment - Miami, FL (1)(12) | Jan-16 | Jan-18 | 177,500 | 177,500 | 175,043 | Floating | 113,000 sq. ft. | ||||||||||||
Office - Boston, MA (6) | Mar-16 | Mar-18 | 28,500 | 28,500 | 28,202 | Floating | 114,000 sq. ft. | ||||||||||||
Total/Weighted Average | $ | 1,232,287 | $ | 1,180,643 | $ | 1,173,185 |
(1) | At March 31, 2016, this loan was pledged to secure borrowings under the Company’s master repurchase facilities entered into with JPMorgan Chase Bank, N.A. (the “JPMorgan Facility”) or Goldman Sachs Bank USA (the “Goldman Loan”). See "Note 8 – Borrowings Under Repurchase Agreements" for a description of these facilities. |
(2) | This loan includes a six-month extension option subject to certain conditions and the payment of a fee. |
(3) | This loan includes two one-year extension options subject to certain conditions and the payment of a fee. |
(4) | This loan includes a six -month extension option subject to certain conditions and the payment of a fee. At March 31, 2016, the Company had $15,100 of unfunded loan commitments related to this loan. |
(5) | This loan includes three one-year extension options subject to certain conditions and the payment of a fee. |
(6) | This loan includes one six-month extension option subject to certain conditions and the payment of a fee. At March 31, 2016, the Company had $2,500 of unfunded loan commitments related to this loan. |
(7) | This loan includes two six- month extension options subject to certain conditions and the payment of a fee for each extension. |
(8) | At March 31, 2016, the Company had $6,730 of unfunded loan commitments related to this loan. |
(9) | This loan includes two one-year extension options subject to certain conditions and the payment of a fee. At March 31, 2016, the Company had $39,553 of unfunded loan commitments related to this loan. |
(10) | This loan includes three one-year extension options subject to certain conditions and the payment of a fee for such extension. At March 31, 2016, the Company had $1,500 of unfunded loan commitments related to this loan. |
(11) | This loan includes two one-year extension options subject to certain conditions and the payment of a fee. At March 31, 2016, the Company had $1,000 of unfunded loan commitments related to this loan. |
(12) | This loan includes a one -year extension option subject to certain conditions and the payment of a fee. At March 31, 2016, the Company had $42,500 of unfunded loan commitments related to this loan. |
Description | Date of Investment | Maturity Date | Original Face Amount | Current Face Amount | Carrying Value | Coupon | Property Size | |||||||||||||
Condominium – New York, NY (1) | Aug-13 | Sept-16 | $ | 33,000 | $ | 24,114 | $ | 24,289 | Floating | 40,000 sq. ft. | ||||||||||
Condominium- Bethesda, MD (2) | Feb-14 | Sept-16 | 80,000 | 65,125 | 65,087 | Floating | 50 units | |||||||||||||
Vacation Home Portfolio - Various (1) | Apr-14 | Apr-19 | 101,000 | 94,147 | 93,277 | Fixed | 229 properties | |||||||||||||
Hotel - Philadelphia, PA (1)(3) | May-14 | May-17 | 34,000 | 34,000 | 33,994 | Floating | 301 rooms | |||||||||||||
Condo Construction - Bethesda, MD (4) | Jun-14 | Dec-16 | 50,000 | 50,000 | 49,960 | Floating | 40 units | |||||||||||||
Multifamily - Brooklyn, NY (1)(5) | Jul-14 | Aug-16 | 34,500 | 34,500 | 34,886 | Floating | 63 units | |||||||||||||
Mixed Use - Cincinnati, OH (1)(3) | Nov-14 | May-18 | 165,000 | 165,000 | 163,173 | Floating | 65 acres | |||||||||||||
Condo Conversion - New York, NY (1) | Nov-14 | Jun-16 | 67,300 | 67,300 | 67,038 | Floating | 86,000 sq. ft. | |||||||||||||
Multifamily - Williston, ND (1)(3) | Nov-14 | Nov-17 | 58,000 | 49,691 | 49,665 | Floating | 366 units/homes | |||||||||||||
Vacation Home Portfolio - Various U.S. (1)(3) | Nov-14 | Nov-19 | 50,000 | 50,000 | 49,595 | Fixed | 24 properties | |||||||||||||
Mixed Use - Brooklyn, NY (1)(6) | Feb-15 | Mar-17 | 85,770 | 85,770 | 85,658 | Floating | 330,000 sq. ft. | |||||||||||||
Retail redevelopment - Miami, FL (1)(7) | Jun-15 | Jan-17 | 45,000 | 45,000 | 44,925 | Floating | 63,300 sq. ft. | |||||||||||||
Retail redevelopment - Miami, FL (1) | Jun-15 | Jul-17 | 33,000 | 33,000 | 32,804 | Floating | 16,600 sq. ft. | |||||||||||||
Retail - Brooklyn, NY (1)(8) | Aug-15 | Mar-17 | 1,653 | 1,653 | 1,636 | Floating | 10,500 sq. ft. | |||||||||||||
Hotel - New York, NY (1)(9) | Sept-15 | Sept-18 | 97,807 | 98,373 | 97,381 | Floating | 317 rooms | |||||||||||||
Retail - Brooklyn, NY (1) | Nov-15 | Mar-17 | 5,910 | 5,910 | 5,858 | Floating | 5,500 sq. ft. | |||||||||||||
Hotel - U.S. Virgin Islands (10) | Dec-15 | Jan-18 | 42,000 | 42,000 | 41,600 | Floating | 180 rooms | |||||||||||||
Office - Richmond, VA (11) | Dec-15 | Jan-18 | 54,000 | 54,000 | 53,475 | Floating | 262,000 sq. ft. | |||||||||||||
Total/Weighted Average | $ | 1,037,940 | $ | 999,583 | $ | 994,301 | 7.08 | % |
(1) | At December 31, 2015, this loan was pledged to secure borrowings under the JPMorgan Facility or the Goldman Loan. See "Note 8 – Borrowings Under Repurchase Agreements" for a description of these facilities. |
(2) | This loan includes a six-month extension option subject to certain conditions and the payment of a fee. |
(3) | This loan includes two one-year extension options subject to certain conditions and the payment of a fee. |
(4) | This loan includes a six-month extension option subject to certain conditions and the payment of a fee. At December 31, 2015 , the Company had $15,100 of unfunded loan commitments related to this loan. |
(5) | This loan includes three one-year extension options subject to certain conditions and the payment of a fee for each extension. |
(6) | At December 31, 2015, the Company had $6,730 of unfunded loan commitments related to this loan. |
(7) | This loan includes two six-month extension options subject to certain conditions and the payment of a fee. |
(8) | At December 31, 2015, the Company had $9,000 of unfunded loan commitments related to this loan. |
(9) | This loan includes two one-year extension options subject to certain conditions and the payment of a fee for each extension. At December 31, 2015, the Company had $40,034 of unfunded loan commitments related to this loan. |
(10) | This loan includes three one-year extension options subject to certain conditions and the payment of a fee. At December 31, 2015, the Company had $1,500 of unfunded loan commitments related to this loan. |
(11) | This loan includes a two one-year extension options subject to certain conditions and the payment of a fee. At December 31, 2015, the Company had $1,000 of unfunded loan commitments related to this loan. |
Description | Date of Investment | Maturity Date | Original Face Amount | Current Face Amount | Carrying Value | Coupon | |||||||||||
Subordinate to the Company's commercial mortgage loans | |||||||||||||||||
Condominium – New York, NY (10) | Aug-13 | Sept-16 | $ | 29,400 | $ | 6,385 | $ | 6,449 | Floating | ||||||||
Hotel - New York, NY (1) | Sept-15 | Sept-18 | 5,166 | 5,166 | 5,029 | Floating | |||||||||||
Multifamily - Williston, ND (2)(10) | Dec-15 | Nov-17 | 5,000 | 5,014 | 5,014 | Floating | |||||||||||
Total - Subordinate to the Company's commercial mortgage loans | $ | 39,566 | $ | 16,565 | $ | 16,492 | |||||||||||
Subordinate to third party commercial mortgage loans | |||||||||||||||||
Office - Michigan | May-10 | Jun-20 | 9,000 | 8,736 | 8,736 | Fixed | |||||||||||
Mixed Use – North Carolina | Jul-12 | Aug-22 | 6,525 | 6,525 | 6,525 | Fixed | |||||||||||
Office Complex - Missouri | Sept-12 | Oct-22 | 10,000 | 9,528 | 9,528 | Fixed | |||||||||||
Hotel Portfolio – Rochester, MN | Jan-13 | Feb-18 | 25,000 | 24,102 | 24,102 | Fixed | |||||||||||
Warehouse Portfolio - Various | May-13 | May-23 | 32,000 | 32,000 | 32,000 | Fixed | |||||||||||
Office Condo - New York, NY | Jul-13 | Jul-22 | 14,000 | 14,000 | 13,641 | Fixed | |||||||||||
Mixed Use - London, England | Apr-14 | Jan-16 | 49,383 | 49,383 | 49,383 | Fixed | |||||||||||
Healthcare Portfolio - Various (3) | Jun-14 | Jun-16 | 50,000 | 39,223 | 39,223 | Floating | |||||||||||
Ski Resort - Big Sky, MT | Aug-14 | Sept-20 | 15,000 | 15,000 | 14,883 | Fixed | |||||||||||
Mixed Use - New York, NY (2) | Dec-14 | Dec-17 | 82,500 | 91,605 | 91,199 | Floating | |||||||||||
Senior Housing - United Kingdom (2) | Jan-15 | Dec-17 | 81,838 | 77,504 | 77,504 | Floating | |||||||||||
Hotel - Burbank, CA | Feb-15 | Jan-20 | 20,000 | 20,000 | 20,000 | Fixed | |||||||||||
Multifamily Portfolio - Florida (3) | Apr-15 | May-17 | 22,000 | 22,000 | 21,914 | Floating | |||||||||||
Multifamily Portfolio - Florida (3) | Apr-15 | May-17 | 15,500 | 15,500 | 15,439 | Floating | |||||||||||
Mixed Use - Various (3) | Jun-15 | May-17 | 45,000 | 45,000 | 44,887 | Floating | |||||||||||
Hotel - Phoenix, AZ | Jun-15 | Jul-25 | 25,000 | 25,000 | 25,000 | Fixed | |||||||||||
Hotel - Washington, DC (2) | Jun-15 | Jul-17 | 20,000 | 20,000 | 19,949 | Floating | |||||||||||
Condo Development - New York, NY (6) | Jun-15 | Jul-19 | 38,424 | 39,044 | 38,501 | Floating | |||||||||||
Condo Conversion - New York, NY (2) | Jul-15 | Aug-18 | 50,000 | 54,125 | 53,750 | Floating | |||||||||||
Mixed Use - New York, NY (7) | Sept-15 | Oct-18 | 30,000 | 30,000 | 29,887 | Floating | |||||||||||
Destination Resort - Various (8) | Sept-15 | May-18 | 75,000 | 75,000 | 71,751 | Floating | |||||||||||
Multifamily - New York, NY (9) | Oct-15 | Nov-18 | 55,000 | 55,000 | 54,617 | Floating | |||||||||||
Hotel - New York, NY (4) | Dec-15 | Mar-17 | 50,000 | 50,000 | 49,631 | Floating | |||||||||||
Condo Pre-development - United Kingdom (4) | Dec-15 | Sept-16 | 81,994 | 78,980 | 78,980 | Floating | |||||||||||
Condo Conversion - New York, NY (5) | Jan-16 | Jul-19 | 23,434 | 23,633 | 22,879 | Floating | |||||||||||
Total - Subordinate to third party commercial mortgage loans | $ | 926,598 | $ | 920,888 | $ | 913,909 | |||||||||||
Total/Weighted Average | $ | 966,164 | $ | 937,453 | $ | 930,401 |
(1) | Includes two one-year extension options subject to certain conditions and the payment of an extension fee. At March 31, 2016, the Company had $9,907 of unfunded loan commitments related to this loan. |
(2) | Includes two one-year extension options subject to certain conditions and the payment of a fee for each extension. |
(3) | Includes three one-year extension options subject to certain conditions and the payment of an extension fee. |
(4) | Includes a three-month extension option subject to certain conditions and the payment of a fee. |
(5) | Includes a one-year extension option subject to certain conditions and the payment of an extension fee. At March 31, 2016, the Company had $53,367 of unfunded loan commitments related to this loan. |
(6) | Includes a one-year extension option subject to certain conditions and the payment of a fee for each extension. At March 31, 2016, the Company had $36,576 of unfunded loan commitments related to this loan. |
(7) | Includes a one-year extension option subject to certain conditions and the payment of an extension fee. |
(8) | Includes four one-year extension options subject to certain conditions and the payment of an extension fee. |
(9) | Includes a six-month extension option subject to certain conditions and the payment of a fee. |
(10) | At March 31, 2016, this loan was pledged to secure borrowings under the JPMorgan Facility or the Goldman Loan. See "Note 8 - Borrowings Under Repurchase Agreements" for a description of these facilities. |
Description | Date of Investment | Maturity Date | Original Face Amount | Current Face Amount | Carrying Value | Coupon | ||||||||||||
Subordinate to the Company's commercial mortgage loans | ||||||||||||||||||
Condominium – New York, NY (1) | Aug-13 | Sept-16 | $ | 29,400 | $ | 6,386 | $ | 6,415 | Floating | |||||||||
Mixed Use - Brooklyn, NY (1) | Aug-15 | Mar-17 | 12,347 | 12,347 | 12,222 | Floating | ||||||||||||
Hotel - New York, NY (1)(2) | Sept-15 | Sept-18 | 2,562 | 2,595 | 2,458 | Floating | ||||||||||||
Multifamily - Williston, ND (1)(3) | Dec-15 | Nov-17 | 5,000 | 5,000 | 5,000 | Floating | ||||||||||||
Total - Subordinate to the Company's commercial mortgage loans | $ | 49,309 | $ | 26,328 | $ | 26,095 | ||||||||||||
Subordinate to third party commercial mortgage loans | ||||||||||||||||||
Office - Michigan | May-10 | Jun-20 | $ | 9,000 | $ | 8,753 | $ | 8,753 | Fixed | |||||||||
Mixed Use – North Carolina | Jul-12 | Aug-22 | 6,525 | 6,525 | 6,525 | Fixed | ||||||||||||
Office Complex - Missouri | Sept-12 | Oct-22 | 10,000 | 9,566 | 9,566 | Fixed | ||||||||||||
Hotel Portfolio – Rochester, MN | Jan-13 | Feb-18 | 25,000 | 24,182 | 24,182 | Fixed | ||||||||||||
Warehouse Portfolio - Various | May-13 | May-23 | 32,000 | 32,000 | 32,000 | Fixed | ||||||||||||
Office Condo - New York, NY | Jul-13 | Jul-22 | 14,000 | 14,000 | 13,631 | Fixed | ||||||||||||
Mixed Use - Various (3) | Dec-13 | Dec-16 | 17,000 | 19,500 | 19,377 | Fixed | ||||||||||||
Mixed Use - London, England | Apr-14 | Jan-16 | 50,009 | 50,676 | 50,676 | Fixed | ||||||||||||
Healthcare Portfolio - Various (4) | Jun-14 | Jun-16 | 50,000 | 39,223 | 39,223 | Floating | ||||||||||||
Ski Resort - Big Sky, MT | Aug-14 | Sept-20 | 15,000 | 15,000 | 14,878 | Fixed | ||||||||||||
Mixed Use - New York, NY (5) | Dec-14 | Dec-17 | 81,715 | 88,368 | 87,818 | Floating | ||||||||||||
Senior Housing - United Kingdom (3) | Jan-15 | Dec-17 | 82,063 | 79,735 | 79,735 | Floating | ||||||||||||
Hotel - Burbank, CA | Feb-15 | Jan-20 | 20,000 | 20,000 | 20,000 | Fixed | ||||||||||||
Multifamily Portfolio - Florida (4) | Apr-15 | May-17 | 22,000 | 22,000 | 21,895 | Floating | ||||||||||||
Multifamily Portfolio - Florida (4) | Apr-15 | May-17 | 15,500 | 15,500 | 15,426 | Floating | ||||||||||||
Mixed Use - Various (4) | Jun-15 | May-17 | 45,000 | 45,000 | 44,854 | Floating | ||||||||||||
Hotel - Phoenix, AZ | Jun-15 | Jul-25 | 25,000 | 25,000 | 25,000 | Fixed | ||||||||||||
Hotel - Washington, DC (3) | Jun-15 | Jul-17 | 20,000 | 20,000 | 19,934 | Floating | ||||||||||||
Condo Development - New York, NY (6) | Jun-15 | Jul-19 | 33,840 | 34,184 | 33,567 | Floating | ||||||||||||
Condo Conversion - New York, NY (3) | Jul-15 | Aug-18 | 50,000 | 52,418 | 51,941 | Floating | ||||||||||||
Mixed Use - New York, NY (7) | Sept-15 | Oct-18 | 30,000 | 30,000 | 29,785 | Floating | ||||||||||||
Destination Resort - Various (8) | Sept-15 | May-18 | 75,000 | 75,000 | 71,362 | Floating | ||||||||||||
Multifamily - New York, NY (9) | Oct-15 | Nov-18 | 55,000 | 55,000 | 54,558 | Floating | ||||||||||||
Hotel - New York, NY (10) | Dec-15 | Mar-17 | 50,000 | 50,000 | 49,522 | Floating | ||||||||||||
Condo Pre-development - United Kingdom (10) | Dec-15 | Sept-16 | 81,994 | 81,048 | 81,048 | Floating | ||||||||||||
Total - Subordinate to third party commercial mortgage loans | $ | 915,646 | $ | 912,678 | $ | 905,256 | ||||||||||||
Total/Weighted Average | $ | 964,955 | $ | 939,006 | $ | 931,351 | 11.34 | % |
(1) | At December 31, 2015, this loan was pledged to secure borrowings under the JPMorgan Facility. See "Note 8 –Borrowings Under Repurchase Agreements" for a description of this facility. |
(2) | Includes two one-year extension options subject to certain conditions and the payment of an extension fee. As of December 31, 2015, the Company had $12,478 of unfunded loan commitments related to this loan. |
(3) | Includes two one-year extension options subject to certain conditions and the payment of an extension fee. |
(4) | Includes three one-year extension options subject to certain conditions and the payment of an extension fee. |
(5) | Includes two one-year extension options subject to certain conditions and the payment of an extension fee. As of December 31, 2015, the Company had $785 of unfunded loan commitments related to this loan. |
(6) | Includes a one-year extension option subject to certain conditions and the payment of an extension fee. As of December 31, 2015, the Company had $41,160 of unfunded loan commitments related to this loan. |
(7) | Includes a one-year extension option subject to certain conditions and the payment of an extension fee. |
(8) | Includes four one-year extension options subject to certain conditions and the payment of an extension fee. |
(9) | Includes a six-month extension option subject to certain conditions and the payment of a fee. |
(10) | Includes a three-month extension option subject to certain conditions and the payment of a fee. |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||
Debt Balance | Weighted Average Remaining Maturity | Weighted Average Rate | Debt Balance | Weighted Average Remaining Maturity | Weighted Average Rate | ||||||||||||||
UBS Facility borrowings | 133,899 | 2.5 years | * | 2.8 | % | 133,899 | 2.7 years | * | 2.8 | % | Fixed | ||||||||
DB Facility borrowings | 276,868 | 2.0 years | 3.7 | % | 300,005 | 2.3 years | 3.7 | % | ** | ||||||||||
JPMorgan Facility borrowings*** | 635,676 | 2.8 years | 2.6 | % | 445,942 | 3.1 years | 2.6 | % | L+225 - 350 | ||||||||||
Goldman Loan | 44,873 | 3.1 years | 4.0 | % | 45,928 | 3.3 years | 3.8 | % | L+350 | ||||||||||
Total borrowings | $ | 1,091,316 | 2.5 years | 2.9 | % | $ | 925,774 | 2.7 years | 2.9 | % |
Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | |||||||||||||||
UBS Facility borrowings * | $ | 5,004 | $ | 128,895 | $ | — | $ | — | $ | 133,899 | |||||||||
DB Facility borrowings | 74,819 | 202,049 | — | — | 276,868 | ||||||||||||||
JPMorgan Facility borrowings | 154,266 | 481,410 | — | — | 635,676 | ||||||||||||||
Goldman Loan | 4,569 | 10,581 | 29,723 | — | 44,873 | ||||||||||||||
Total | $ | 238,658 | $ | 822,935 | $ | 29,723 | $ | — | $ | 1,091,316 |
For the three months ended March 31, 2016 | ||||||||||
Balance at March 31, 2016 | Maximum Month-End Balance | Average Month-End Balance | ||||||||
UBS Facility borrowings | 133,899 | 133,899 | $ | 133,899 | ||||||
DB Facility borrowings | 276,868 | 300,005 | 290,076 | |||||||
JPMorgan Facility borrowings | 635,676 | 635,676 | 556,124 | |||||||
Goldman Loan | 44,873 | 45,928 | 45,665 | |||||||
Total | $ | 1,091,316 |
Principal Amount | Coupon Rate | Effective Rate (1) | Conversion Rate (2) | Maturity Date | Remaining Period of Amortization | ||||||
March 2019 Notes | $ | 143,750 | 5.50 | % | 6.25 | % | 55.9411 | 3/15/2019 | 2.96 years | ||
August 2019 Notes | $ | 111,000 | 5.50 | % | 6.50 | % | 55.9411 | 3/15/2019 | 2.96 years |
(1) | Effective rate includes the effect of the adjustment for the conversion option (see footnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital. |
(2) | The Company has the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of 2019 Notes converted. The if-converted value of the 2019 Notes does not exceed their principal amount at March 31, 2016 since the |
Three months ended March 31, | |||||||||
Location of Loss Recognized in Income | 2016 | 2015 | |||||||
Forward currency contract | Gain (loss) on derivative instruments - unrealized | (1,310 | ) | (3,044 | ) | ||||
Forward currency contract | Gain (loss) on derivative instruments - realized | 6,083 | 6,666 | ||||||
Interest rate caps | Loss on derivative instruments - unrealized | (70 | ) | — | |||||
Total | $ | 4,703 | $ | 3,622 |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
Gross Amount of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | Gross Amount of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | ||||||||||||||||||
Interest rate caps | $ | 36 | $ | — | 36 | $ | 106 | $ | — | 106 | |||||||||||||
Forward currency contract | $ | 2,586 | $ | (684 | ) | 1,902 | $ | 3,221 | $ | — | 3,221 | ||||||||||||
Total derivative instruments | $ | 2,622 | $ | (684 | ) | $ | 1,938 | $ | 3,327 | $ | — | $ | 3,327 |
Type | Date | Restricted Stock | RSUs | Estimate Fair Value on Grant Date | Initial Vesting | Final Vesting | ||||||||
Outstanding at December 31, 2015 | 340,064 | 1,242,810 | ||||||||||||
Cancelled upon delivery | January 2016 | — | (318,160 | ) | n/a | n/a | n/a | |||||||
Forfeiture | January 2016 | — | (1,667 | ) | n/a | n/a | n/a | |||||||
Grant | February 2016 | — | 47,028 | $729 | (1) | (1) | ||||||||
Grant | March 2016 | — | 5,095 | $81 | December 2016 | December 2017 | ||||||||
Outstanding at March 31, 2016 | 340,064 | 975,106 |
Vesting Date | Shares Vesting | RSU Vesting | Total Awards | |||||
April 2016 | 4,627 | — | 4,627 | |||||
June 2016 | — | 543 | 543 | |||||
July 2016 | 4,158 | — | 4,158 | |||||
October 2016 | 4,158 | — | 4,158 | |||||
December 2016 | 28,920 | 351,244 | 380,164 | |||||
January 2017 | 3,737 | — | 3,737 | |||||
April 2017 | 3,745 | — | 3,745 | |||||
June 2017 | — | 544 | 544 | |||||
July 2017 | 2,580 | — | 2,580 | |||||
October 2017 | 2,577 | — | 2,577 | |||||
December 2017 | 28,923 | 347,846 | 376,769 | |||||
January 2018 | 1,330 | — | 1,330 | |||||
April 2018 | 1,331 | — | 1,331 | |||||
June 2018 | — | 544 | 544 | |||||
December 2018 | 16,670 | 220,521 | 237,191 | |||||
102,756 | 921,242 | 1,023,998 |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.46 |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.5391 |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.5000 |
March 31, 2016 | December 31, 2015 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Cash and cash equivalents | $ | 23,035 | $ | 23,035 | $ | 67,415 | $ | 67,415 | |||||||
Restricted cash | 55,781 | 55,781 | 30,127 | 30,127 | |||||||||||
Securities, held-to-maturity | 152,451 | 152,483 | 153,193 | 153,230 | |||||||||||
Commercial first mortgage loans | 1,173,185 | 1,180,472 | 994,301 | 999,517 | |||||||||||
Subordinate loans | 930,401 | 937,922 | 931,351 | 939,545 | |||||||||||
Borrowings under repurchase agreements | (1,083,665 | ) | (1,084,091 | ) | (918,421 | ) | (918,567 | ) | |||||||
Convertible senior notes, net | (248,617 | ) | (257,147 | ) | (248,173 | ) | (253,986 | ) | |||||||
Participations sold | (116,952 | ) | (116,970 | ) | (118,201 | ) | (118,226 | ) |
For the three months ended March 31, | |||||||
2016 | 2015 | ||||||
Numerator: | |||||||
Net income | $ | 18,616 | $ | 25,513 | |||
Preferred dividends | (5,815 | ) | (1,860 | ) | |||
Net income available to common stockholders | 12,801 | 23,653 | |||||
Dividends declared on common stock | (30,997 | ) | (25,702 | ) | |||
Dividends on participating securities | (449 | ) | (261 | ) | |||
Net income (loss) attributable to common stockholders | $ | (18,645 | ) | $ | (2,310 | ) | |
Denominator: | |||||||
Basic weighted average shares of common stock outstanding | 67,385,191 | 49,563,822 | |||||
Diluted weighted average shares of common stock outstanding | 68,327,718 | 50,171,687 | |||||
Basic and diluted net income per weighted average share of common stock | |||||||
Distributable Earnings | $ | 0.46 | $ | 0.52 | |||
Undistributed income (loss) | $ | (0.28 | ) | $ | (0.05 | ) | |
Basic and diluted net income per share of common stock | $ | 0.18 | $ | 0.47 |
Description | Face Amount | Amortized Cost | Weighted Average Yield | Remaining Weighted Average Life (years) | Debt | Cost of Funds | Remaining Debt Term (years) (1) | Equity at cost (2) | Current Weighted Average Underwritten IRR (3) | Levered Weighted Average Underwritten IRR (3) | |||||||||||||||||||||||
First mortgages | $ | 1,180,643 | $ | 1,173,185 | 8.0 | % | 2.9 | $ | 680,549 | 2.7 | % | 2.8 | $ | 492,636 | 17.4 | % | 18.2 | % | |||||||||||||||
Subordinate loans (4) | 909,021 | 901,969 | 11.6 | 3.7 | — | — | — | 901,969 | 13.0 | 13.2 | |||||||||||||||||||||||
CMBS, held-to-maturity (5) | 63,952 | 63,931 | 11.5 | 3.1 | — | — | — | 63,931 | 11.5 | 11.5 | |||||||||||||||||||||||
CMBS | 505,134 | 498,630 | 6.6 | 1.4 | 410,767 | 3.4 | 2.2 | 143,644 | 12.0 | 12.0 | |||||||||||||||||||||||
Total/Weighted Average | $ | 2,658,750 | $ | 2,637,715 | 9.1 | % | 2.9 | $ | 1,091,316 | 2.9 | % | 2.5 | $ | 1,602,180 | 14.2 | % | 14.5 | % |
(1) | Assumes extension options are exercised. See “—Liquidity and Capital Resources - Borrowings Under Various Financing Arrangements” below for a discussion of the Company's repurchase agreements. |
(2) | CMBS includes $55,781 of restricted cash related to the UBS Facility. |
(3) | Internal rate of return ("IRR") is the annualized effective compounded return rate that accounts for the time-value of money and represents the rate of return on an investment over a holding period expressed as a percentage of the investment. It is the discount rate that makes the net present value of all cash outflows (the costs of investment) equal to the net present value of cash inflows (returns on investment). It is derived from the negative and positive cash flows resulting from or produced by each transaction (or for a transaction involving more than one investment, cash flows resulting from or produced by each of the investments), whether positive, such as investment returns, or negative, such as transaction expenses or other costs of investment, taking into account the dates on which such cash flows occurred or are expected to occur, and compounding interest accordingly. The underwritten IRR for the investments shown in the above table reflect the returns underwritten by the Manager, taking into account leverage and calculated on a weighted average basis assuming no dispositions, early prepayments or defaults but assuming that extension options are exercised and that the cost of borrowings remains constant over the remaining term. With respect to certain loans, the underwritten IRR calculation assumes certain estimates with respect to the timing and magnitude of future fundings for the remaining commitments and associated loan repayments, and assumes no defaults. IRR is the annualized effective compounded return rate that accounts for the time-value of money and represents the rate of return on an investment over a holding period expressed as a percentage of the investment. It is the discount rate that makes the net present value of all cash outflows (the costs of investment) equal to the net present value of cash inflows (returns on investment). It is derived from the negative and positive cash flows resulting from or produced by each transaction (or for a transaction involving more than one investment, cash flows resulting from or produced by each of the investments), whether positive, such as investment returns, or negative, such as transaction expenses or other costs of investment, taking into account the dates on which such cash flows occurred or are expected to occur, and compounding interest accordingly. There can be no assurance that the actual IRRs will equal the underwritten IRRs shown in the table. See “Item 1A-Risk Factors-The Company may not achieve its underwritten internal rate of return on its investments which may lead to future returns that may be significantly lower than anticipated” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for a discussion of some of the factors that could adversely impact the returns received by the Company from the investments shown in the table or elsewhere in this quarterly report over time. |
(4) | Subordinate loans are net of a participation sold during February 2015. The Company presents the participation sold as both assets and non-recourse liabilities because the participation does not qualify as a sale according to GAAP. At March 31, 2016, the Company had one such participation sold with a carrying amount of £19,799 (or $28,432). |
(5) | CMBS (Held-to-Maturity) are net of a participation sold during June 2014. The Company presents the participation sold as both assets and non-recourse liabilities because the participation does not qualify as a sale according to GAAP. At March 31, 2016, the Company had one such participation sold with a face amount of $88,548 and a carrying amount of $88,520. |
Three months ended March 31, | ||||||||||||||
2016 | 2015 | Change (amount) | Change (%) | |||||||||||
Interest income from: | ||||||||||||||
Securities | $ | 8,049 | $ | 8,287 | $ | (238 | ) | (2.9 | )% | |||||
Securities, held to maturity | 2,896 | 3,045 | (149 | ) | (4.9 | )% | ||||||||
Commercial mortgage loans | 21,127 | 10,094 | 11,033 | 109.3 | % | |||||||||
Subordinate loans | 29,375 | 18,610 | 10,765 | 57.8 | % | |||||||||
Interest expense | (14,642 | ) | (11,482 | ) | (3,160 | ) | 27.5 | % | ||||||
Net interest income | $ | 46,805 | $ | 28,554 | $ | 18,251 | 63.9 | % |
Three months ended March 31, | ||||||||||||||
2016 | 2015 | Change (amount) | Change (%) | |||||||||||
General and administrative expense | $ | 6,517 | $ | 1,238 | $ | 5,279 | 426.4 | % | ||||||
Stock-based compensation expense | 1,668 | 1,117 | 551 | 49.3 | % | |||||||||
Management fee expense | 5,229 | 3,341 | 1,888 | 56.5 | % | |||||||||
Total operating expense | $ | 13,414 | $ | 5,696 | $ | 7,718 | 135.5 | % |
Three months ended March 31, | ||||||||
Location of Gain (Loss) Recognized in Income | 2016 | 2015 | ||||||
Securities | Unrealized gain (loss) on securities | $(15,074) | $3,409 | |||||
Foreign currency | Foreign currency gain (loss) | (4,474 | ) | (3,944 | ) | |||
Forward currency contract | Gain (loss) on derivative instruments - unrealized | (1,310) | (3,044 | ) | ||||
Interest rate caps | Loss on derivative instruments - unrealized | $ | (70 | ) | $ | — | ||
Total | $ | (20,928 | ) | $ | (3,579 | ) |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.46 |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.5391 |
Declaration Date | Record Date | Payment Date | Amount | ||
March 15, 2016 | March 31, 2016 | April 15, 2016 | $ | 0.5000 |
• | no investment will be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes; |
• | no investment will be made that would cause the Company to register as an investment company under the Investment Company Act of 1940; |
• | investments will be predominantly in the Company’s target assets; |
• | no more than 20% of the Company’s cash equity (on a consolidated basis) will be invested in any single investment at the time of the investment; |
• | until appropriate investments can be identified, the Manager may invest the proceeds of any offering in interest bearing, short-term investments, including money market accounts and/or funds, that are consistent with the Company’s intention to qualify as a REIT. |
Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | |||||||||||||||
UBS Facility borrowings ** | 8,692 | 130,368 | — | — | 139,060 | ||||||||||||||
DB Facility borrowings | 83,812 | 206,563 | — | — | 290,375 | ||||||||||||||
JPMorgan Facility borrowings * | 169,364 | 497,810 | — | — | 667,174 | ||||||||||||||
Goldman Loan * | 6,263 | 13,334 | 29,723 | — | 49,320 | ||||||||||||||
Total | $ | 268,131 | $ | 848,075 | $ | 29,723 | $ | — | $ | 1,145,929 |
* | Assumes current LIBOR of 0.176% for interest payments due under the JPMorgan Facility and the Goldman Loan. |
For the three months ended March 31, | |||||||
2016 | 2015 | ||||||
Net income available to common stockholders | $ | 12,801 | $ | 23,653 | |||
Adjustments: | |||||||
Income from unconsolidated joint venture | (68 | ) | — | ||||
Equity-based compensation expense | 1,668 | 1,117 | |||||
Unrealized (gain) loss on securities | 15,074 | (3,409 | ) | ||||
Unrealized (gain) loss on derivative instruments | (4,703 | ) | (3,622 | ) | |||
Foreign currency (gain) loss | 4,474 | 3,944 | |||||
Amortization of the 2019 Notes related to equity reclassification | 573 | 539 | |||||
Total adjustments: | 17,018 | (1,431 | ) | ||||
Operating Earnings | $ | 29,819 | $ | 22,222 | |||
Basic and diluted Operating Earnings per share of common stock | $ | 0.44 | $ | 0.44 | |||
Basic weighted average shares of common stock outstanding | 67,385,191 | 49,563,822 | |||||
Diluted weighted average shares of common stock outstanding | 68,327,718 | 50,171,687 |
• | attempting to structure its financing agreements to have a range of different maturities, terms, amortizations and interest rate adjustment periods; |
• | using hedging instruments, interest rate swaps and interest rate caps; and |
• | to the extent available, using securitization financing to better match the maturity of the Company’s financing with the duration of its assets. |
Exhibit No. | Description | |
2.1 | Agreement and Plan of Merger, dated as of February 26, 2016, by and among Apollo Commercial Real Estate Finance, Inc., Arrow Merger Sub, Inc. and Apollo Residential Mortgage, Inc., incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
2.2 | Asset Purchase and Sale Agreement, dated as of February 26, 2016, by and among Apollo Commercial Real Estate Finance, Inc., Athene Annuity & Life Assurance Company and Athene Annuity and Life Company, incorporated by reference to Exhibit 2.2 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
3.1 | Articles of Amendment and Restatement of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533). | |
3.2 | Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.3 of the Registrant’s Form 8-A filed on July 30, 2012 (File No.: 001-34452). | |
3.3 | Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on September 23, 2015 (File No.: 001-34452). | |
3.4 | By-laws of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.2 of the Registrant’s Form S-4 (Registration No. 333-210632). | |
4.1 | Specimen Stock Certificate of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 4.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533). | |
4.2 | Form of stock certificate evidencing the 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation reference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-A filed on July 30, 2012 (File No.: 001-34452). | |
4.3 | Form of stock certificate evidencing the 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation reference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on September 23, 2015 (File No.: 001-34452). | |
4.4 | Indenture, dated as of March 17, 2014, between the Company and Wells Fargo Bank, National Association, as Trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on March 21, 2014. | |
4.5 | First Supplemental Indenture, dated as of March 17, 2014, between the Company and Wells Fargo Bank, National Association, as Trustee (including the form of 5.50% Convertible Senior Note due 2019), incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed on March 21, 2014. | |
10.1 | Stock Purchase Agreement, dated as of February 26, 2016, by and between Apollo Commercial Real Estate Finance, Inc. and Athene USA Corporation, incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
10.2 | Commitment Letter, dated as of February 26, 2016, by and among Athene USA Corporation, Apollo Commercial Real Estate Finance, Inc. and Arrow Merger Sub, Inc., incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
10.3 | Letter Agreement, dated as of February 26, 2016 by and among Apollo Commercial Real Estate Finance, Inc., ACREFI Operating, LLC and ACREFI Management, LLC, incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002. |
101.INS * | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed herewith. |
APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. | |||
April 27, 2016 | |||
By: | /s/ Stuart A. Rothstein | ||
Stuart A. Rothstein | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
By: | /s/ Megan B. Gaul | ||
Megan B. Gaul | |||
Chief Financial Officer, Treasurer and Secretary | |||
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No. | Description | |
2.1 | Agreement and Plan of Merger, dated as of February 26, 2016, by and among Apollo Commercial Real Estate Finance, Inc., Arrow Merger Sub, Inc. and Apollo Residential Mortgage, Inc., incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
2.2 | Asset Purchase and Sale Agreement, dated as of February 26, 2016, by and among Apollo Commercial Real Estate Finance, Inc., Athene Annuity & Life Assurance Company and Athene Annuity and Life Company, incorporated by reference to Exhibit 2.2 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
3.1 | Articles of Amendment and Restatement of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533). | |
3.2 | Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.3 of the Registrant’s Form 8-A filed on July 30, 2012 (File No.: 001-34452). | |
3.3 | Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.’s 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on September 23, 2015 (File No.: 001-34452). | |
3.4 | By-laws of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.2 of the Registrant’s Form S-4 (Registration No. 333-210632). | |
4.1 | Specimen Stock Certificate of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 4.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533). | |
4.2 | Form of stock certificate evidencing the 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock, liquidation reference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-A filed on July 30, 2012 (File No.: 001-34452). | |
4.3 | Form of stock certificate evidencing the 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock, liquidation reference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on September 23, 2015 (File No.: 001-34452). | |
4.4 | Indenture, dated as of March 17, 2014, between the Company and Wells Fargo Bank, National Association, as Trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on March 21, 2014. | |
4.5 | First Supplemental Indenture, dated as of March 17, 2014, between the Company and Wells Fargo Bank, National Association, as Trustee (including the form of 5.50% Convertible Senior Note due 2019), incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed on March 21, 2014. | |
10.1 | Stock Purchase Agreement, dated as of February 26, 2016, by and between Apollo Commercial Real Estate Finance, Inc. and Athene USA Corporation, incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
10.2 | Commitment Letter, dated as of February 26, 2016, by and among Athene USA Corporation, Apollo Commercial Real Estate Finance, Inc. and Arrow Merger Sub, Inc., incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
10.3 | Letter Agreement, dated as of February 26, 2016 by and among Apollo Commercial Real Estate Finance, Inc., ACREFI Operating, LLC and ACREFI Management, LLC, incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed on February 26, 2016 (File No.: 001-34452). | |
31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed herewith. |
1. | I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 27, 2016 | By: | /s/ Stuart A. Rothstein | |
Name: | Stuart A. Rothstein | ||
Title: | President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 27, 2016 | By: | /s/ Megan B. Gaul | |
Name: | Megan B. Gaul | ||
Title: | Chief Financial Officer, Treasurer and Secretary |
Date: April 27, 2016 | By: | /s/ Stuart A. Rothstein | |
Name: | Stuart A. Rothstein | ||
Title: | President and Chief Executive Officer |
Date: April 27, 2016 | By: | /s/ Megan B. Gaul | |
Name: | Megan B. Gaul | ||
Title: | Chief Financial Officer, Treasurer and Secretary |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 27, 2016 |
|
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ARI | |
Entity Registrant Name | Apollo Commercial Real Estate Finance, Inc. | |
Entity Central Index Key | 0001467760 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 67,402,311 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 67,385,255 | 67,195,252 |
Common stock, shares outstanding | 67,385,255 | 67,195,252 |
Deferred financing costs | $ 7,651,000 | $ 7,353,000 |
Series A Preferred stock [Member] | ||
Preferred stock, shares issued | 3,450,000 | 3,450,000 |
Preferred stock, shares outstanding | 3,450,000 | 3,450,000 |
Preferred stock, aggregate liquidation preference, value | $ 86,250,000 | $ 86,250,000 |
Series B Preferred stock [Member] | ||
Preferred stock, shares issued | 8,000,000 | 8,000,000 |
Preferred stock, shares outstanding | 8,000,000 | 8,000,000 |
Preferred stock, aggregate liquidation preference, value | $ 200,000,000 | $ 200,000,000 |
Condensed Consolidated Statement of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Statement [Abstract] | ||
General and administrative expenses, equity-based compensation | $ 1,668 | $ 1,117 |
Unrealized gains (losses) on derivative instruments | $ (1,380) | $ (3,044) |
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income available to common stockholders | $ 12,801 | $ 23,653 |
Change in net unrealized gain (loss) on securities available-for-sale | 0 | 678 |
Foreign currency translation adjustment | 918 | (1,100) |
Comprehensive income | $ 13,719 | $ 23,231 |
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands |
Total |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid In Capital [Member] |
Returned Earnings/ (Accumulated Deficit) [Member] |
Accumulated Other Comprehensive Income [Member] |
---|---|---|---|---|---|---|
Beginning balance, Shares at Dec. 31, 2015 | 11,450,000 | 67,195,252 | ||||
Beginning balance at Dec. 31, 2015 | $ 1,375,424 | $ 115 | $ 672 | $ 1,410,138 | $ (32,328) | $ (3,173) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Capital decrease related to Equity Incentive Plan (shares) | 190,003 | |||||
Capital decrease related to Equity Incentive Plan | (678) | $ 2 | (680) | |||
Offering costs | 31 | 31 | ||||
Net income | 18,616 | 18,616 | ||||
Change in other comprehensive loss | 918 | 918 | ||||
Dividends on common stock | (31,446) | (31,446) | ||||
Dividends on preferred stock | (5,815) | (5,815) | ||||
Ending balance, Shares at Mar. 31, 2016 | 11,450,000 | 67,385,255 | ||||
Ending balance at Mar. 31, 2016 | $ 1,357,050 | $ 115 | $ 674 | $ 1,409,489 | $ (50,973) | $ (2,255) |
Organization |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the “Company,” “ARI,” “we,” “us” and “our”) is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, commercial mortgage-backed securities (“CMBS”) and other commercial real estate-related debt investments. These asset classes are referred to as the Company’s target assets. |
Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements include the Company’s accounts and those of its consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s most significant estimates include the fair value of financial instruments and loan loss reserve. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. The Company's results of operations for the quarterly period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year or any other future period. The Company currently operates in one business segment. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance which broadly amends the accounting guidance for revenue recognition. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017; early application is not permitted. The Company is currently assessing the impact that this accounting guidance will have on the Company's condensed consolidated financial statements when adopted. In August 2014, the FASB issued guidance regarding management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new guidance requires that management evaluate each annual and interim reporting period whether conditions exist that give rise to substantial doubt about the entity’s ability to continue as a going concern within one year from the financial statement issuance date, and if so, provide related disclosures. Disclosures are only required if conditions give rise to substantial doubt, whether or not the substantial doubt is alleviated by management’s plans. No disclosures are required specific to going concern uncertainties if an assessment of the conditions does not give rise to substantial doubt. Substantial doubt exists when conditions and events, considered in the aggregate, indicate that it is probable that a company will be unable to meet its obligations as they become due within one year after the financial statement issuance date. If substantial doubt is alleviated as a result of the consideration of management’s plans, a company should disclose information that enables users of financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes): (1) principal conditions that initially give rise to substantial doubt, (2) management’s evaluation of the significance of those conditions in relation to the company’s ability to meet its obligations, and (3) management’s plans that alleviated substantial doubt. If substantial doubt is not alleviated after considering management’s plans, disclosures should enable investors to understand the underlying conditions, and include the following: (1) a statement indicating that there is substantial doubt about the company’s ability to continue as a going concern within one year after the issuance date, (2) the principal conditions that give rise to substantial doubt, (3) management’s evaluation of the significance of those conditions in relation to the company’s ability to meet its obligations, and (4) management's plans that are intended to mitigate the adverse conditions. The new guidance applies to all companies. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company does not anticipate that the adoption of this guidance will have a material impact on the Company's condensed consolidated financial statements. In February 2015, the FASB issued guidance which amends the guidance related to accounting for the consolidation of certain legal entities. The modifications impacts limited partnerships and similar legal entities, the evaluation of (i) fees paid to a decision maker or a service provider as a variable interest, (ii) fee arrangements, and (iii) related parties on the primary beneficiary determination. The Company adopted this guidance and determined there was no material impact on the Company's condensed consolidated financial statements. In April 2015, the FASB issued guidance that simplifies the presentation of debt issuance costs by amending the accounting guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. The amendments are consistent with the accounting guidance related to debt discounts. The Company adopted this guidance and applied its provisions retrospectively. This resulted in the reclassification of unamortized deferred financing costs from deferred financing costs, net to reductions in borrowings under repurchase agreements of $7,651and $7,353 for the period ended March 31, 2016 and December 31, 2015 respectively. Other than this reclassification, the adoption of this guidance did not have an impact on the Company's condensed consolidated financial statements. |
Fair Value Disclosure |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosure | Fair Value Disclosure GAAP establishes a hierarchy of valuation techniques based on observable inputs utilized in measuring financial instruments at fair values. Market based or observable inputs are the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: Level I — Quoted prices in active markets for identical assets or liabilities. Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. While the Company anticipates that its valuation methods will be appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced. The estimated fair value of the CMBS portfolio is determined by reference to market prices provided by certain dealers who make a market in these financial instruments. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management performs additional analysis on prices received based on broker quotes to validate the prices and adjustments are made as deemed necessary by management to capture current market information. The estimated fair values of the Company’s securities are based on observable market parameters and are classified as Level II in the fair value hierarchy. In accordance with GAAP, the Company elects the fair value option for these securities at the date of purchase in order to allow the Company to measure these securities at fair value with the change in estimated fair value included as a component of earnings in order to reflect the performance of investment in a timely manner. The estimated fair values of the Company’s derivative instruments are determined using a discounted cash flow analysis on the expected cash flows of each derivative. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The fair values of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected cash flows are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. The fair values of foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries. The Company’s derivative instruments are classified as Level II in the fair value hierarchy. The following table summarizes the levels in the fair value hierarchy into which the Company’s financial instruments were categorized as of March 31, 2016 and December 31, 2015:
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Debt Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities | Debt Securities At March 31, 2016, all of the Company's CMBS (Fair Value Option) were pledged to secure borrowings under the Company’s master repurchase agreements with UBS AG, London Branch ("UBS") (the "UBS Facility") and Deutsche Bank AG ("DB") (the "DB Facility"). See "Note 8 - Borrowings Under Repurchase Agreements" for further information regarding these facilities. CMBS (Held-to-Maturity) represents a loan the Company closed during May 2014 that was subsequently contributed to a securitization during August 2014. During May 2014, the Company closed a $155,000 floating-rate whole loan secured by the first mortgage and equity interests in an entity that owns a resort hotel in Aruba. The property consists of 442 hotels rooms, 114 timeshare units, two casinos and approximately 131,500 square feet of retail space. During June 2014, the Company syndicated a $90,000 senior participation in the loan and retained a $65,000 junior participation. The Company evaluated this transaction and concluded due to its continuing involvement the transaction should not be accounted for as a sale. During August 2014, both the $90,000 senior participation and the Company's $65,000 junior participation were contributed to a CMBS securitization. In exchange for contributing its $65,000 junior participation, the Company received a CMBS secured solely by the $65,000 junior participation. The whole loan has a three-year term with two one-year extension options and an appraised loan-to-value ("LTV") of approximately 60%. The amortized cost and estimated fair value of the Company’s debt securities at March 31, 2016 are summarized as follows:
The amortized cost and estimated fair value of the Company’s debt securities at December 31, 2015 are summarized as follows:
During February 2015, the Company sold CMBS with an amortized cost of $24,038 resulting in a net realized loss of $443, which was comprised of realized gains of $43 and realized losses of $486. As a result of the sale, $678 was reclassified out of accumulated other comprehensive income. The sale generated proceeds of $1,341 after the repayment of $22,254 of borrowings under the Company's master repurchase agreement with Wells Fargo Bank, N.A. ("Wells Fargo") (the "Wells Facility"). The overall statistics for the Company’s CMBS (Fair Value Option) investments calculated on a weighted average basis assuming no early prepayments or defaults as of March 31, 2016 and December 31, 2015 are as follows:
The percentage vintage, property type and location of the collateral securing the CMBS (Fair Value Option) investments calculated on a weighted average basis as of March 31, 2016 and December 31, 2015 are as follows:
* No other individual category comprises more than 10% of the total.
* No other individual category comprises more than 10% of the total. |
Commercial Mortgage Loans |
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Commercial Mortgage Loans | Commercial Mortgage Loans The Company’s commercial mortgage loan portfolio was comprised of the following at March 31, 2016:
The Company’s commercial mortgage loan portfolio was comprised of the following at December 31, 2015:
The Company evaluates its loans for possible impairment on a quarterly basis. The Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations are sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such loan loss analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. An allowance for loan loss is established when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan. The Company has determined that an allowance for loan losses was not necessary at March 31, 2016 or December 31, 2015. |
Subordinate Loans |
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Mortgage Loans on Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinate Loans | Subordinate Loans The Company’s subordinate loan portfolio was comprised of the following at March 31, 2016:
During February 2016, the Company received the full repayment from a $19,500 preferred equity investment secured by multifamily properties in Florida. The Company’s subordinate loan portfolio was comprised of the following at December 31, 2015:
The Company evaluates its loans for possible impairment on a quarterly basis. See “Note 5 – Commercial Mortgage Loans” for a summary of the metrics reviewed. The Company has determined that an allowance for loan loss was not necessary at March 31, 2016 or December 31, 2015. |
Unconsolidated Joint Venture |
3 Months Ended |
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Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Unconsolidated Joint Venture | Unconsolidated Joint Venture In September 2014, the Company, through a wholly owned subsidiary, acquired a 59% ownership interest in Champ Limited Partnership (“Champ LP”) following which a wholly-owned subsidiary of Champ LP then acquired a 35% ownership interest in KBC Bank Deutschland AG, the German subsidiary of Belgian KBC Group NV. Following the closing of the transaction, KBC Bank was renamed Bremer Kreditbank AG and operates under the name BKB Bank ("BKB Bank"). The Company acquired its ownership interest in Champ LP for an initial purchase price paid at closing of approximately €30,724 (or $39,477). The Company committed to invest up to approximately €38,000 ($50,000). The Company together with certain other affiliated investors and unaffiliated third party investors, in aggregate, own 100% of Champ LP. Champ LP together with certain unaffiliated third party investors, in aggregate, own 100% of BKB Bank. BKB Bank specializes in corporate banking and financial services for medium-sized German companies. It also provides professional real estate financing, acquisition finance, institutional asset management and private wealth management services for German high-net-worth individuals. In January 2015, the Company funded an additional investment of €3,331 (or $3,929) related to its investment in Champ LP. In February 2015, the Company sold approximately 48% of its ownership interest in Champ LP at cost to an investment fund managed by Apollo Global Management, LLC (together with its subsidiaries, "Apollo") for €16,314 (or $20,794) (of which $2,614 related to foreign exchange losses which were previously included in accumulated other comprehensive loss), reducing its unfunded commitment to Champ LP to €3,229 (or $3,675). Through its interest in Champ LP, the Company now holds an indirect ownership interest of approximately 11% in BKB Bank. The Company determined that Champ LP met the definition of a variable interest entity ("VIE") and that it was not the primary beneficiary; therefore, the Company did not consolidate the assets and liabilities of the partnership. Additionally, Champ LP is an Investment Company under GAAP, and is therefore reflected at fair value. Our investment in Champ LP is accounted for as an equity method investment and therefore we record our proportionate share of the net asset value. |
Borrowings Under Repurchase Agreements |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings Under Repurchase Agreements | Borrowings Under Repurchase Agreements At March 31, 2016 and December 31, 2015, the Company’s borrowings had the following debt balances, weighted average maturities and interest rates:
*Assumes extension options are exercised. ** Advances under the DB Facility accrue interest at a per annum pricing rate based on the rate implied by the fixed rate bid under a fixed for floating interest rate swap for the receipt of payments indexed to three-month U.S. dollar LIBOR, plus a financing spread ranging from 1.80% to 2.32% based on the rating of the collateral pledged. ***The debt balance as of March 31, 2016, includes $115,375 of borrowings that do not count toward the total maximum capacity under the JPMorgan Facility. At March 31, 2016, the Company’s borrowings had the following remaining maturities:
*Assumes extension option is exercised. At March 31, 2016, the Company’s collateralized financings were comprised of borrowings outstanding under the UBS Facility, the DB Facility, the JPMorgan Facility and the Goldman Loan. The table below summarizes the outstanding balances at March 31, 2016, as well as the maximum and average balances for the three months ended March 31, 2016 for the Company's borrowings under repurchase agreements.
The Company was in compliance with the financial covenants under its repurchase agreements at March 31, 2016 and December 31, 2015. |
Convertible Senior Notes |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | Convertible Senior Notes On March 17, 2014, the Company issued $143,750 aggregate principal amount of 5.50% Convertible Senior Notes due 2019 (the "March 2019 Notes"), for which the Company received net proceeds, after deducting the underwriting discount and estimated offering expense payable by the Company of approximately $139,037. At March 31, 2016, the March 2019 Notes had a carrying value of $140,845 and an unamortized discount of $2,905. On August 18, 2014, the Company issued an additional $111,000 aggregate principal amount of 5.50% Convertible Senior Notes due 2019 (the "August 2019 Notes", and together with the March 2019 Notes, the "2019 Notes"), for which the Company received net proceeds, after deducting the underwriting discount and estimated offering expense payable by the Company of approximately $109,615. At March 31, 2016, the August 2019 Notes had a carrying value of $107,772 and an unamortized discount of $3,228. The following table summarizes the terms of the 2019 Notes.
GAAP requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the 2019 Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. The Company measured the fair value of the debt components of the 2019 Notes as of their issuance date based on effective interest rates. As a result, the Company attributed approximately $11,445 of the proceeds to the equity component of the 2019 Notes, which represents the excess proceeds received over the fair value of the liability component of the 2019 Notes at the date of issuance. The equity component of the 2019 Notes has been reflected within additional paid-in capital in the condensed consolidated balance sheet as of March 31, 2016. The resulting debt discount is being amortized over the period during which the 2019 Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the 2019 Notes will increase in subsequent reporting periods through the maturity date as the 2019 Notes accrete to their par value over the same period. The aggregate contractual interest expense was approximately $3,503 and $3,503 for the three months ended March 31, 2016 and 2015, respectively. With respect to the amortization of the discount on the liability component of the 2019 Notes as well as the amortization of deferred financing costs, the Company reported additional non-cash interest expense of approximately $876 and $844 for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, potential shares of common stock contingently issuable upon the conversion of the 2019 Notes were excluded from the calculation of diluted income per share of common stock because it is management's intent and the Company currently has the ability to settle the obligation in cash. |
Federal Home Loan Bank of Indianapolis Membership |
3 Months Ended |
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Mar. 31, 2016 | |
Banking and Thrift [Abstract] | |
Federal Home Loan Bank of Indianapolis Membership | Federal Home Loan Bank of Indianapolis Membership In February 2015, the Company's wholly owned subsidiary, ACREFI Insurance Services, LLC, was accepted for membership in the Federal Home Loan Bank of Indianapolis (“FHLBI”). As a member of the FHLBI, ACREFI Insurance Services, LLC has access to a variety of products and services offered by the FHLBI, including secured advances. As of March 31, 2016, ACREFI Insurance Services, LLC had not requested any advances from the FHLBI. On January 12, 2016, the Federal Housing Finance Agency (“FHFA”) adopted a final rule revising its regulations governing Federal Home Loan Bank membership. As a result, the FHLBI may not make any advances to ACREFI Insurance Services, LLC and is required to terminate the membership of ACREFI Insurance Services, LLC no later than February 19, 2017 (one year after the effective date of the final rule). Upon termination of ACREFI Insurance Services, LLC's membership, FHLBI will be required to redeem at par value the FHLBI stock that had been purchased and held by ACREFI Insurance Services, LLC as a condition to membership in the FHLBI. At March 31, 2016, the Company had stock in the FHLBI totaling $8, which is included in other assets on the condensed consolidated balance sheet at March 31, 2016. |
Participations Sold |
3 Months Ended |
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Mar. 31, 2016 | |
Participating Mortgages [Member] | |
Mortgage Loans on Real Estate [Line Items] | |
Participations Sold | Participations Sold Participations sold represent the interests in loans the Company originated and subsequently partially sold. The Company presents the participations sold as both assets and non-recourse liabilities because the participation does not qualify as a sale according to GAAP. The income earned on the participation sold is recorded as interest income and an identical amount is recorded as interest expense on the Company's condensed consolidated statements of operations. During January 2015, the Company closed a £34,519 (or $51,996) floating-rate mezzanine loan secured by a portfolio of 44 senior housing facilities located throughout the United Kingdom. During February 2015, closed an additional £20,000 (or $30,672) and participated that balance to an investment fund affiliated with Apollo. At March 31, 2016, the participation had a face amount of £19,799 (or $28,432), a carrying amount of £19,799 (or $28,432) and a cash coupon of LIBOR plus 825 basis points. During May 2014, the Company closed a $155,000 floating-rate whole loan secured by the first mortgage and equity interests in an entity that owns a resort hotel in Aruba. During June 2014, the Company syndicated a $90,000 senior participation in the loan and retained a $65,000 junior participation in the loan. During August 2014, both the $90,000 senior participation and the Company's $65,000 junior participation were contributed to a CMBS securitization. In exchange for contributing its $65,000 junior participation, the Company received a CMBS secured solely by the $65,000 junior participation and classified it as CMBS (Held-to-Maturity) on its condensed consolidated financial statements. At March 31, 2016, the participation had a face amount of $88,548, a carrying amount of $88,520 and a cash coupon of LIBOR plus 440 basis points. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The Company uses forward currency contracts to economically hedge interest and principal payments due under its loans denominated in currencies other than U.S. dollars. The Company has not designated any of its derivative instruments as hedges under GAAP and therefore, changes in the fair value of the Company's derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on the condensed consolidated statements of operations related to the Company’s derivatives for the three months ended March 31, 2016 and 2015.
The following table summarizes the gross asset amounts related to the Company's derivative instruments at March 31, 2016 and December 31, 2015.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Agreement In connection with the Company’s initial public offering in September 2009, the Company entered into a management agreement (the “Management Agreement”) with ACREFI Management, LLC (the “Manager”), which describes the services to be provided by the Manager and its compensation for those services. The Manager is responsible for managing the Company’s day-to-day operations, subject to the direction and oversight of the Company’s board of directors. Pursuant to the terms of the Management Agreement, the Manager is paid a base management fee equal to 1.5% per annum of the Company’s stockholders’ equity (as defined in the Management Agreement), calculated and payable (in cash) quarterly in arrears. The current term of the Management Agreement expires on September 29, 2016 and is automatically renewed for successive one-year terms on each anniversary thereafter. The Management Agreement may be terminated upon expiration of the one-year extension term only upon the affirmative vote of at least two-thirds of the Company’s independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to the Company or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of the Company’s independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Following a meeting by the Company’s independent directors in February 2016, which included a discussion of the Manager’s performance and the level of the management fees thereunder, the Company determined not to seek termination of the Management Agreement. As described in "Note 16 - Commitments and Contingencies", the Company also made payments to the Manager in accordance with its letter agreement with the Manager. For the three months ended March 31, 2016, the Company incurred approximately $5,229 in base management fees. For the three months ended March 31, 2015, the Company incurred approximately $3,341 in base management fees. In addition to the base management fee, the Company is also responsible for reimbursing the Manager for certain expenses paid by the Manager on behalf of the Company or for certain services provided by the Manager to the Company. For the three months ended March 31, 2016, the Company recorded expenses totaling $798 related to reimbursements for certain expenses paid by the Manager on behalf of the Company. For the three months ended March 31, 2015, the Company recorded expenses totaling $636 related to reimbursements for certain expenses paid by the Manager on behalf of the Company. Expenses incurred by the Manager and reimbursed by the Company are reflected in the respective condensed consolidated statement of operations expense category or the condensed consolidated balance sheet based on the nature of the item. Included in payable to related party on the condensed consolidated balance sheet at March 31, 2016 and December 31, 2015, respectively, are approximately $5,229 and $5,297 for base management fees incurred but not yet paid. Unconsolidated Joint Venture In September 2014, the Company, through a wholly owned subsidiary, acquired a 59% ownership interest in Champ LP following which a wholly-owned subsidiary of Champ LP then acquired a 35% ownership interest in KBC Bank, the German subsidiary of Belgian KBC Group NV. KBC Bank was subsequently renamed Bremer Kreditbank AG. The Company acquired its ownership interest in Champ LP for an initial purchase price paid at closing of approximately €30,724 (or $39,477). The Company committed to invest up to approximately €38,000 (or $50,000). In January 2015, the Company funded an additional investment of €3,331 (or $3,929) related to its investment in Champ LP. In February 2015, the Company sold approximately 48% of its ownership interest in Champ LP at cost to an account managed by Apollo for approximately €16,314 (or $20,794), reducing its unfunded commitment to Champ LP to €3,229 (or $3,675). Through its interest in Champ LP, the Company now holds an indirect ownership interest of approximately 11% in Bremer Kreditbank AG, which operates under the name BKB Bank. The Company together with certain other affiliated investors and unaffiliated third party investors, in aggregate, own 100% of BKB Bank. |
Share-Based Payments |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payments | Share-Based Payments On September 23, 2009, the Company’s board of directors approved the Apollo Commercial Real Estate Finance, Inc., 2009 Equity Incentive Plan (the “LTIP”). The LTIP provides for grants of restricted common stock, restricted stock units ("RSUs") and other equity-based awards up to an aggregate of 7.5% of the issued and outstanding shares of the Company’s common stock (on a fully diluted basis). The LTIP is administered by the compensation committee of the Company’s board of directors (the “Compensation Committee”) and all grants under the LTIP must be approved by the Compensation Committee. The Company recognized stock-based compensation expense of $1,668 for the three months ended March 31, 2016, related to restricted stock and RSU vesting. The Company recognized stock-based compensation expense of $1,117 for the three months ended March 31, 2015, related to restricted stock and RSU vesting. The following table summarizes the activity related to restricted common stock and RSUs during the three months ended March 31, 2016:
(1) These awards vest based upon the achievement of certain conditions. Below is a summary of expected restricted common stock and RSU vesting dates as of March 31, 2016.
At March 31, 2016, the Company had unrecognized compensation expense of approximately $1,564 and $14,297, respectively, related to the vesting of restricted stock awards and RSUs noted in the table above. RSU Deliveries During the three months ended March 31, 2016, the Company delivered 190,003 shares of common stock for 318,160 vested RSUs. The Company allows holders of RSUs to settle their tax liabilities with a reduction of their share delivery from the originally granted and vested RSUs. The amount, when agreed to by the holder, results in a cash payment to the Manager related to this tax liability and a corresponding adjustment to additional paid-in-capital on the condensed consolidated statement of changes in stockholders' equity. The adjustment was $2,348 for the three months ended March 31, 2016, and is included as a component of the capital decrease related to the Company's equity incentive plan in the condensed consolidated statement of changes in stockholders’ equity. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Common Stock Offerings. During the first quarter of 2015, the Company completed a follow-on public offering of 11,500,000 shares of its common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price of $16.82 per share. The aggregate net proceeds from the offering, including proceeds from the sale of the additional shares, were approximately $193,148 after deducting estimated offering expenses payable by the Company. Dividends. For 2016, the Company declared the following dividends on its common stock:
For 2016, the Company declared the following dividends on its 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”):
For 2016, the Company declared the following dividends on its 8.00% Fixed to Floating Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”):
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Commitments and Contingencies |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Merger agreement. On February 26, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Apollo Residential Mortgage, Inc., a Maryland corporation (“AMTG”), and Arrow Merger Sub, Inc., a Maryland corporation and a wholly-owned subsidiary of the Company (the “Merger Sub”), pursuant to which the Company will acquire AMTG for an aggregate purchase price equal to 89.25% of AMTG’s book value as of a future determination date, plus the assumption of $172,500 of AMTG’s 8.0% Series A Cumulative Redeemable Perpetual Preferred Stock (the “AMTG Preferred Stock”). The book value of AMTG, and therefore the actual purchase price payable, will be determined as of the date that is three business days prior to the date on which the definitive proxy statement relating to the merger transaction is mailed to the stockholders of AMTG (the “Pricing Date”), and will be subject to adjustment under certain circumstances. Upon the closing, holders of AMTG common stock will receive a combination of cash and shares of Company common stock. The aggregate number of shares of Company common stock issuable under the Merger Agreement is limited to 13,400,000 shares at a value of $16.75 per share, and the remainder of the consideration will be paid in cash. In addition, each share of AMTG Preferred Stock will be converted into one share of preferred stock, par value $0.01 per share, of a newly-designated series of the Company’s preferred stock, which the Company expects will be designated as 8.00% Series C Cumulative Redeemable Perpetual Preferred Stock. The Merger Agreement and related transactions were approved by all of the members of the Company's Board of Directors (with the exception of Mark Biderman, who recused himself). Consummation of the merger transaction is subject to the satisfaction of customary closing conditions, including the registration and listing of the shares of ARI stock that will be issued in the merger transaction and the approval and adoption of the Merger Agreement by the holders of a majority of the shares of AMTG common stock entitled to vote on the transaction, including a majority of the votes entitled to be cast by persons unaffiliated with Apollo Global Management, LLC. Company stockholder approval will not be required in connection with the transaction. On April 6, 2016, the Company filed with the SEC a registration statement on Form S-4 that includes a preliminary proxy statement/prospectus relating to the proposed transaction. Arrangements with Athene. In connection with financing the transactions contemplated by the Merger Agreement, on February 26, 2016 the Company entered into certain arrangements with certain subsidiaries of Athene Holding Ltd., an insurance holding company whose operating subsidiaries’ business is primarily issuing and reinsuring retirement savings products (collectively, “Athene”). The arrangements include (i) a bridge loan commitment from Athene USA Corporation, pursuant to which Athene has committed to provide the Company with up to $200,000 of term loans to consummate the merger transaction, (ii) an asset purchase agreement which provides that, promptly following the closing of the merger transaction, the Company will sell to Athene up to approximately $1,200,000 (subject to increase or decrease in certain circumstances) of primarily non-Agency Residential Mortgage Backed Securities at a price to be set (based on a pre-agreed methodology) as of the Pricing Date, and (iii) a stock purchase agreement, under which Athene has committed to purchase, during a specified period of time following the closing of the merger transaction, up to $20,000 (subject to reduction in certain circumstances) of Company common stock in the open market at the then-current market price if the quoted price of a share of Company common stock on the New York Stock Exchange at any time during such period is less than $16.75 (which is the value per share at which the Company common stock is to be issued to holders of AMTG common stock in the merger). Letter Agreement with the Manager. Concurrently with the execution of the Merger Agreement, the Company entered into a Letter Agreement with the Manager, pursuant to which the Manager has agreed to perform such services and activities as may be necessary to enable the Company to consummate the merger transaction. In consideration of the services provided and to be provided to the Company by the Manager in connection with the merger transaction and the process leading to the merger transaction, the Company agreed to pay the Manager an aggregate amount of up to $500, in monthly installments of $150 payable on the first of each calendar month between the execution of the Merger Agreement and the closing of the merger transaction. Upon consummation of the merger transaction, an additional amount (based on an agreed formula) will be added to Stockholders’ Equity (as defined in the Management Agreement) for purposes of calculating the amount of the management fee payable to the Manager under the Management Agreement. In addition, the Manager acknowledged that, as a result of the merger transaction, the management agreement between AMTG and its manager, ARM Manager, LLC (the “AMTG Management Agreement”), will be assigned to the Company and, following the merger transaction, any management fees paid by the Company to ARM Manager, LLC pursuant to the AMTG Management Agreement will offset, and therefore reduce (but not below zero), the Company’s obligation to pay corresponding management fees to the Manager. For additional details regarding the terms and conditions of the Merger Agreement, the arrangements with Athene and related matters, refer to the registration statement on Form S-4, which includes the preliminary proxy statement/prospectus filed with the SEC on April 6, 2016, and to the Merger Agreement and other documentation filed as exhibits thereto. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be filed and mailed to each AMTG stockholder. The proxy statement/prospectus contains additional information regarding the proposed transaction, including risks associated with the proposed transaction. Legal Proceedings. From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. After the announcement of the execution of the Merger Agreement, two putative class action lawsuits challenging the proposed merger, captioned Aivasian v. Apollo Residential Mortgage, Inc., et al., No. 24-C-16-001532 and Wiener v. Apollo Residential Mortgage, Inc., et al., No. 24-C-16-001837, were filed in the Circuit Court for Baltimore City, Maryland on March 7 and March 21, 2016, respectively. The complaints name as defendants the Company, Merger Sub, AMTG, the board of directors of AMTG (the “AMTG Board”), and Apollo Global Management, LLC and allege, among other things, that the members of the AMTG Board breached their fiduciary duties to AMTG’s stockholders. The complaints further allege, among other things, that the proposed merger involves inadequate consideration, was the result of an inadequate and conflicted sales process, and includes unreasonable deal protection devices that purportedly preclude competing offers. The complaints also allege that the Company, Merger Sub, and Apollo Global Management, LLC aided and abetted those alleged breaches of fiduciary duty. The complaints seek, among other things, certification of the proposed class, declaratory relief, preliminary and permanent injunctive relief, including enjoining or rescinding the mergers, unspecified damages, and an award of other unspecified attorneys’ and other fees and costs. On April 12, 2016, counsel for the parties filed with the Court a stipulation and proposed order of consolidation and appointment of interim lead counsel in both actions, which provides that plaintiffs will file an amended complaint by April 20, 2016. On April 20, 2016, counsel for the parties filed an amended stipulation and proposed order, which provides that plaintiffs will file an amended complaint by April 27, 2016. The defendants believe that the claims asserted in the complaints are without merit and intend to vigorously defend the lawsuits. KBC Bank Deutschland AG. In September 2013, the Company, together with other affiliates of Apollo, reached an agreement to make an investment in an entity that has agreed to acquire a minority participation in KBC Bank. The Company committed to invest up to approximately €38,000 (or $50,000), representing approximately 21% of the ownership in KBC Bank. In September 2014, the Company, through a wholly owned subsidiary, acquired a 59% ownership interest in Champ LP following which a wholly-owned subsidiary of Champ LP then acquired a 35% ownership interest in KBC Bank, which was subsequently renamed Bremer Kreditbank AG. In February 2015, the Company sold approximately 48% of its ownership interest in Champ LP at cost to an account managed by Apollo for approximately €16,314 (or $20,794), reducing its unfunded commitment to Champ LP to €3,229 (or $3,675). Through its interest in Champ LP, the Company now holds an indirect ownership interest of approximately 11% in BKB Bank. Loan Commitments. As described in "Note 5 - Commercial Mortgage Loans" and "Note 6 - Subordinate Loans", respectively, at March 31, 2016, the Company had $108,883 of unfunded commitments related to its commercial mortgage loan portfolio and $99,850 of unfunded commitments related to its subordinate loan portfolio. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the condensed consolidated balance sheet at March 31, 2016 and December 31, 2015:
To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, are used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. The Company’s securities, held-to-maturity, commercial first mortgage loans, subordinate loans, borrowings under repurchase agreements, convertible senior notes and participations sold are carried at amortized cost on the condensed consolidated financial statements and are classified as Level III in the fair value hierarchy. |
Net Income per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Share | Net Income per Share GAAP requires use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity. The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock. The table below presents basic and diluted net (loss) income per share of common stock using the two-class method for the three months ended March 31, 2016 and 2015:
For the three months ended March 31, 2016 and 2015, respectively, 942,526 and 607,865 unvested RSUs were excluded from the calculation of diluted net income per share because the effect was anti-dilutive. |
Subsequent Events |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Investment Activity. During April 2016, the Company funded $7,388 related to previously closed loans. |
Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the Company’s accounts and those of its consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s most significant estimates include the fair value of financial instruments and loan loss reserve. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. The Company's results of operations for the quarterly period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year or any other future period. The Company currently operates in one business segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance which broadly amends the accounting guidance for revenue recognition. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017; early application is not permitted. The Company is currently assessing the impact that this accounting guidance will have on the Company's condensed consolidated financial statements when adopted. In August 2014, the FASB issued guidance regarding management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new guidance requires that management evaluate each annual and interim reporting period whether conditions exist that give rise to substantial doubt about the entity’s ability to continue as a going concern within one year from the financial statement issuance date, and if so, provide related disclosures. Disclosures are only required if conditions give rise to substantial doubt, whether or not the substantial doubt is alleviated by management’s plans. No disclosures are required specific to going concern uncertainties if an assessment of the conditions does not give rise to substantial doubt. Substantial doubt exists when conditions and events, considered in the aggregate, indicate that it is probable that a company will be unable to meet its obligations as they become due within one year after the financial statement issuance date. If substantial doubt is alleviated as a result of the consideration of management’s plans, a company should disclose information that enables users of financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes): (1) principal conditions that initially give rise to substantial doubt, (2) management’s evaluation of the significance of those conditions in relation to the company’s ability to meet its obligations, and (3) management’s plans that alleviated substantial doubt. If substantial doubt is not alleviated after considering management’s plans, disclosures should enable investors to understand the underlying conditions, and include the following: (1) a statement indicating that there is substantial doubt about the company’s ability to continue as a going concern within one year after the issuance date, (2) the principal conditions that give rise to substantial doubt, (3) management’s evaluation of the significance of those conditions in relation to the company’s ability to meet its obligations, and (4) management's plans that are intended to mitigate the adverse conditions. The new guidance applies to all companies. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company does not anticipate that the adoption of this guidance will have a material impact on the Company's condensed consolidated financial statements. In February 2015, the FASB issued guidance which amends the guidance related to accounting for the consolidation of certain legal entities. The modifications impacts limited partnerships and similar legal entities, the evaluation of (i) fees paid to a decision maker or a service provider as a variable interest, (ii) fee arrangements, and (iii) related parties on the primary beneficiary determination. The Company adopted this guidance and determined there was no material impact on the Company's condensed consolidated financial statements. In April 2015, the FASB issued guidance that simplifies the presentation of debt issuance costs by amending the accounting guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. The amendments are consistent with the accounting guidance related to debt discounts. The Company adopted this guidance and applied its provisions retrospectively. This resulted in the reclassification of unamortized deferred financing costs from deferred financing costs, net to reductions in borrowings under repurchase agreements of $7,651and $7,353 for the period ended March 31, 2016 and December 31, 2015 respectively. Other than this reclassification, the adoption of this guidance did not have an impact on the Company's condensed consolidated financial statements. |
Fair Value Disclosure (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Levels in Fair Value Hierarchy of Financial Instruments | The following table summarizes the levels in the fair value hierarchy into which the Company’s financial instruments were categorized as of March 31, 2016 and December 31, 2015:
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Debt Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Debt Securities | The amortized cost and estimated fair value of the Company’s debt securities at December 31, 2015 are summarized as follows:
The amortized cost and estimated fair value of the Company’s debt securities at March 31, 2016 are summarized as follows:
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Overall Statistics for Company's AAA-Rated CMBS Investments Calculated on Weighted Average Basis | The overall statistics for the Company’s CMBS (Fair Value Option) investments calculated on a weighted average basis assuming no early prepayments or defaults as of March 31, 2016 and December 31, 2015 are as follows:
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Percentage Vintage, Property Type, and Location of Collateral Securing Company's AAA-Rated CMBS Investments Calculated on Weighted Average Basis | The percentage vintage, property type and location of the collateral securing the CMBS (Fair Value Option) investments calculated on a weighted average basis as of March 31, 2016 and December 31, 2015 are as follows:
* No other individual category comprises more than 10% of the total.
* No other individual category comprises more than 10% of the total. |
Commercial Mortgage Loans (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans on Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Loans on Real Estate | The Company’s commercial mortgage loan portfolio was comprised of the following at December 31, 2015:
The Company’s commercial mortgage loan portfolio was comprised of the following at March 31, 2016:
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Subordinate Loans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinate loans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans on Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Loans on Real Estate | The Company’s subordinate loan portfolio was comprised of the following at March 31, 2016:
During February 2016, the Company received the full repayment from a $19,500 preferred equity investment secured by multifamily properties in Florida. The Company’s subordinate loan portfolio was comprised of the following at December 31, 2015:
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Borrowings Under Repurchase Agreements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Maturities and Interest Rates of Borrowings | At March 31, 2016 and December 31, 2015, the Company’s borrowings had the following debt balances, weighted average maturities and interest rates:
*Assumes extension options are exercised. ** Advances under the DB Facility accrue interest at a per annum pricing rate based on the rate implied by the fixed rate bid under a fixed for floating interest rate swap for the receipt of payments indexed to three-month U.S. dollar LIBOR, plus a financing spread ranging from 1.80% to 2.32% based on the rating of the collateral pledged. ***The debt balance as of March 31, 2016, includes $115,375 of borrowings that do not count toward the total maximum capacity under the JPMorgan Facility. |
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Remaining Maturities of Borrowings | At March 31, 2016, the Company’s borrowings had the following remaining maturities:
*Assumes extension option is exercised. |
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Schedule of Outstanding, Maximum and Average Balances of Debt | The table below summarizes the outstanding balances at March 31, 2016, as well as the maximum and average balances for the three months ended March 31, 2016 for the Company's borrowings under repurchase agreements.
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Convertible Senior Notes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Convertible Senior Notes | The following table summarizes the terms of the 2019 Notes.
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Derivative Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amounts Recognized on Consolidated Statements of Operations Related to Company's Derivatives | The following table summarizes the amounts recognized on the condensed consolidated statements of operations related to the Company’s derivatives for the three months ended March 31, 2016 and 2015.
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Summary of Gross Derivative Assets Related to Derivatives | The following table summarizes the gross asset amounts related to the Company's derivative instruments at March 31, 2016 and December 31, 2015.
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Share-Based Payments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following table summarizes the activity related to restricted common stock and RSUs during the three months ended March 31, 2016:
(1) These awards vest based upon the achievement of certain conditions. |
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Summary of Grants, Exchanges and Forfeitures of Restricted Stock and RSUs | Below is a summary of expected restricted common stock and RSU vesting dates as of March 31, 2016.
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Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Dividends. For 2016, the Company declared the following dividends on its common stock:
For 2016, the Company declared the following dividends on its 8.625% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”):
For 2016, the Company declared the following dividends on its 8.00% Fixed to Floating Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”):
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Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Estimated Fair Value of Company's Financial Instruments | The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the condensed consolidated balance sheet at March 31, 2016 and December 31, 2015:
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Net Income per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income per Share of Common Stock Using Two-Class Method | The table below presents basic and diluted net (loss) income per share of common stock using the two-class method for the three months ended March 31, 2016 and 2015:
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Summary of Significant Accounting Policies (Detail) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
Segment
|
Dec. 31, 2015
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of business segments | Segment | 1 | |
Debt issuance costs | $ 7,651 | $ 7,353 |
Accounting Standards Update 2015-03 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs | (7,651) | (7,353) |
Borrowings under repurchase agreements [Member] | Accounting Standards Update 2015-03 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs | $ 7,651 | $ 7,353 |
Debt Securities - Overall Statistics for Company's AAA-Rated CMBS Investments Calculated on Weighted Average Basis (Detail) - Commercial Mortgage Backed Securities [Member] |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | ||
Coupon | 5.90% | 5.90% |
Yield | 6.60% | 6.50% |
Weighted Average Life | 1 year 4 months 24 days | 1 year 7 months 6 days |
Convertible Senior Notes - Summary of 2019 Notes (Detail) - Convertible Debt [Member] |
Aug. 18, 2014
USD ($)
|
Mar. 17, 2014
USD ($)
|
---|---|---|
March 2019 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 143,750,000 | |
Coupon Rate | 5.50% | |
Effective rate | 6.25% | |
Conversion rate | 55.9411 | |
Remaining Period of Amortization | 2 years 11 months 15 days | |
August 2019 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 111,000,000 | |
Coupon Rate | 5.50% | |
Effective rate | 6.50% | |
Conversion rate | 55.9411 | |
Remaining Period of Amortization | 2 years 11 months 15 days |
Federal Home Loan Bank of Indianapolis Membership (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Other Assets [Member] | Federal Home Loan Bank of Indianapolis [Member] | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |
Federal Home Loan Bank stock, value | $ 8 |
Derivative Instruments - Summary of Derivatives (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized gains (loss) on derivative instruments | $ (1,380) | $ (3,044) |
Total | 4,703 | 3,622 |
Foreign Currency Contract [Member] | Gain (Loss) on Derivative Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized gains (loss) on derivative instruments | (1,310) | (3,044) |
Realized gain (loss) on derivative instruments | 6,083 | 6,666 |
Interest Rate Cap [Member] | Gain (Loss) on Derivative Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized gains (loss) on derivative instruments | $ (70) | $ 0 |
Derivative Instruments - Summary of Derivative Gross Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | $ 2,622 | $ 3,327 |
Gross Amounts Offset in the Consolidated Balance Sheet | (684) | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 1,938 | 3,327 |
Interest Rate Cap [Member] | ||
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | 36 | 106 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 36 | 106 |
Foreign Currency Contract [Member] | ||
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | 2,586 | 3,221 |
Gross Amounts Offset in the Consolidated Balance Sheet | (684) | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | $ 1,902 | $ 3,221 |
Subsequent Events (Detail) $ in Thousands |
Apr. 27, 2016
USD ($)
|
---|---|
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Loans funded, amount | $ 7,388 |
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