Mortgage Loans

3 Months Ended

Mar. 31, 2023

The Company has invested in Separately Managed Accounts (“SMA1” and “SMA2”), managed by Arena Investors, LP (“Arena”), which is affiliated with The Westaim Corporation (“Westaim”) who, directly and through Westaim HIIG LP (a limited partnership controlled by Westaim), is the Company’s largest shareholder. As of March 31, 2023 and December 31, 2022, the Company held direct investments in mortgage loans from various creditors through SMA1 and SMA2.

The Company’s mortgage loan portfolios are primarily senior loans on real estate across the U.S. The loans earn interest at a fixed rate above a prime rate, mature in approximately 1 to 2 years from loan origination and the principal amounts of the loans range between 40% to 80% property’s appraised value at the time the loans were made. Mortgage loan participations are carried at cost adjusted for unamortized premiums, discounts, and loan fees.

The carrying value of the Company’s mortgage loans as of March 31, 2023 and December 31, 2022 were as follows:


($ in thousands)	March 31, 2023		December 31, 2022
Retail	$	15,568	$	16,516
Industrial	—		6,329
Commercial	16,086		15,309
Multi-family	2,596		5,593
Office	3,210		3,197
Hospitality	4,875		4,915
	$	42,335	$	51,859

The Company’s gross investment income for mortgage loans for the three months ended March 31, 2023 and 2022 were as follows:



($ in thousands)	2023		2022
Retail	$	595	$	359

Commercial	494		210
Multi-family	117		69
Office	106		166

Hospitality	161		14
	$	1,473	$	818

The uncollectible amounts on loans, on an individual loan basis, are determined based upon consultations and advice from the Company’s specialized investment manager and consideration of any adverse situations that could affect the borrower’s ability to repay, the estimated value of underlying collateral, and other relevant factors. The Company writes off the uncollectible amount in the period it was determined to be uncollectible. There was no write-off for uncollectible amounts during the three months ended March 31, 2023 and 2022.

As of March 31, 2023 and December 31, 2022, approximately $0.0 million and $6.4 million of mortgage loans, respectively, were in the process of foreclosure. The carrying value of the mortgage loans in foreclosure is the lower of cost adjusted for unamortized premiums, discounts, and loan fees or the fair value of the collateral less costs to sell.