3. MORTGAGE LOAN RECEIVABLES

June 30, 2016 ($ in thousands)



	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)		Remaining Maturity (years)

Mortgage loan receivables held for investment, at amortized cost	$	1,553,562	$	1,547,883		7.38	%	1.51
Provision for loan losses	N/A		(4,000		)
Total mortgage loan receivables held for investment, at amortized cost	1,553,562		1,543,883
Mortgage loan receivables held for sale	583,089		583,453			4.39	%	7.38
Total	$	2,136,651	$	2,127,336

(1) June 30, 2016 London Interbank Offered Rate (“LIBOR”) rates are used to calculate weighted average yield for floating rate loans.

As of June 30, 2016, $315.0 million, or 20.4%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at fixed interest rates and $1.2 billion, or 79.6%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at variable interest rates, linked to LIBOR, some of which include interest rate floors. As of June 30, 2016, $583.5 million, or 100.0%, of the carrying value of our mortgage loan receivables held for sale, were at fixed interest rates.

December 31, 2015 ($ in thousands)



	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)		Remaining Maturity (years)

Mortgage loan receivables held for investment, at amortized cost	$	1,749,556	$	1,742,345		7.56	%	1.38
Provision for loan losses	N/A		(3,700		)
Total mortgage loan receivables held for investment, at amortized cost	1,749,556		1,738,645
Mortgage loan receivables held for sale	571,638		571,764			4.56	%	6.20
Total	2,321,194		2,310,409

(1) December 31, 2015 LIBOR rates are used to calculate weighted average yield for floating rate loans.

As of December 31, 2015, $343.2 million, or 19.7%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at fixed interest rates and $1.4 billion, or 80.3%, of the carrying value of our mortgage loan receivables held for investment, at amortized cost, were at variable interest rates, linked to LIBOR, some of which include interest rate floors. As of December 31, 2015, $571.8 million, or 100%, of the carrying value of our mortgage loan receivables held for sale, were at fixed interest rates.

The following table summarizes mortgage loan receivables by loan type ($ in thousands):



	June 30, 2016					December 31, 2015
	Outstanding Face Amount		Carrying Value			Outstanding Face Amount		Carrying Value

Mortgage loan receivables held for investment, at amortized cost
First mortgage loans	$	1,389,095	$	1,384,280		$	1,462,228	$	1,456,212
Mezzanine loans	164,467		163,603			287,328		286,133
Total mortgage loan receivables held for investment, at amortized cost	1,553,562		1,547,883			1,749,556		1,742,345
Mortgage loan receivables held for sale
First mortgage loans	583,089		583,453			571,638		571,764
Total mortgage loan receivables held for sale	583,089		583,453			571,638		571,764

Provision for loan losses	N/A		(4,000		)	N/A		(3,700		)
Total	$	2,136,651	$	2,127,336		$	2,321,194	$	2,310,409

For the six months ended June 30, 2016 and 2015, the activity in our loan portfolio was as follows ($ in thousands):



	Mortgage loan receivables held for investment, at amortized cost				Mortgage loan receivables held for sale

Balance, December 31, 2015	$	1,738,645			$	571,764
Origination of mortgage loan receivables	211,359			(1)	361,324
Repayment of mortgage loan receivables	(410,735		)	(1)	(699		)
Proceeds from sales of mortgage loan receivables	—				(359,561		)
Realized gain on sale of mortgage loan receivables	—				10,625
Accretion/amortization of discount, premium and other fees	4,914				—
Loan loss provision	(300		)		—
Balance, June 30, 2016	$	1,543,883			$	583,453

(1) Includes $36.9 million of non-cash originations and repayments.



	Mortgage loan receivables held for investment, at amortized cost			Mortgage loan receivables held for sale

Balance, December 31, 2014	$	1,521,054		$	417,955
Origination of mortgage loan receivables	653,662			1,132,259
Repayment of mortgage loan receivables	(439,216		)	(542		)
Proceeds from sales of mortgage loan receivables	—			(1,086,513		)
Realized gain on sale of mortgage loan receivables	—			44,551
Accretion/amortization of discount, premium and other fees	5,608			—
Loan loss provision	(300		)	—
Balance, June 30, 2015	$	1,740,808		$	507,710

During the six months ended June 30, 2016 and 2015, the transfers of financial assets via sales of loans have been treated as sales under ASC Topic 860 — Transfers and Servicing.

At June 30, 2016 and December 31, 2015, there was $0.6 million and $0.7 million, respectively, of unamortized discounts included in our mortgage loan receivables held for investment, at amortized cost on our combined consolidated balance sheets.

The Company evaluates each of its loans for potential losses at least quarterly. Its loans are typically collateralized by real estate directly or indirectly. As a result, 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. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan at maturity, 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 collateral property is located. Such impairment analyses are completed and reviewed by asset management personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data. As a result of this analysis, the Company has concluded that none of its loans are individually impaired as of June 30, 2016 and December 31, 2015.

However, based on the inherent risks shared among the loans as a group, it is probable that the loans had incurred an impairment due to common characteristics and inherent risks in the portfolio. Therefore, the Company has recorded a reserve, based on a targeted percentage level which it seeks to maintain over the life of the portfolio, as disclosed in the tables below. Historically, the Company has not incurred losses on any originated loans.

As of June 30, 2016, two of the Company’s loans, which were originated simultaneously as part of a single transaction, with a carrying value of $26.9 million were in default. The Company determined that no impairment was necessary and continues to accrue interest on these loans because the loans’ collateral value was in excess of the outstanding balances.

At June 30, 2016 and December 31, 2015 there were no loans on non-accrual status.

Provision for Loan Losses ($ in thousands)



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015

Provision for loan losses at beginning of period	$	3,850	$	3,250	$	3,700	$	3,100
Provision for loan losses	150		150		300		300
Provision for loan losses at end of period	$	4,000	$	3,400	$	4,000	$	3,400