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  • 10-Q (Nov 2, 2017)
  • 10-Q (Aug 4, 2017)
  • 10-Q (May 4, 2017)
  • 10-Q (Nov 3, 2016)
  • 10-Q (Aug 4, 2016)
  • 10-Q (May 3, 2016)

 
8-K

 
Other

IStar Financial 10-Q 2017

Documents found in this filing:

  1. 10-Q
  2. Ex-31.0
  3. Ex-32.0
  4. Graphic
  5. Graphic
Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________
FORM 10-Q
(Mark One)
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            
Commission File No. 1-15371
_______________________________________________________________________________
iStar Inc.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of
incorporation or organization)
 
95-6881527
(I.R.S. Employer
Identification Number)
1114 Avenue of the Americas, 39th Floor
 
 
New York, NY
(Address of principal executive offices)
 
10036
(Zip code)
Registrant's telephone number, including area code: (212) 930-9400
_______________________________________________________________________________
Indicate by check mark whether the registrant: (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports); and (ii) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý
 
Accelerated filer o
 
Non-accelerated filer o
 (Do not check if a
smaller reporting company)
 
Smaller reporting company o
 
Emerging growth company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o    
As of August 3, 2017, there were 72,190,312 shares, $0.001 par value per share, of iStar Inc. common stock outstanding.
 



TABLE OF CONTENTS

 
 
Page
 
 
 

 
 
 




PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1.    Financial Statements
iStar Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
 
As of
 
June 30, 2017 (unaudited)
 
December 31,
2016
ASSETS
 
 
 
Real estate
 
 
 
Real estate, at cost
$
1,710,915

 
$
1,740,893

Less: accumulated depreciation
(367,933
)
 
(353,619
)
Real estate, net
1,342,982

 
1,387,274

Real estate available and held for sale
68,045

 
237,531

Total real estate
1,411,027

 
1,624,805

Land and development, net
855,497

 
945,565

Loans receivable and other lending investments, net
1,170,565

 
1,450,439

Other investments
276,821

 
214,406

Cash and cash equivalents
954,279

 
328,744

Accrued interest and operating lease income receivable, net
10,501

 
11,254

Deferred operating lease income receivable, net
88,944

 
88,189

Deferred expenses and other assets, net
147,121

 
162,112

Total assets
$
4,914,755

 
$
4,825,514

LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Accounts payable, accrued expenses and other liabilities
$
230,259

 
$
211,570

Loan participations payable, net
107,442

 
159,321

Debt obligations, net
3,368,113

 
3,389,908

Total liabilities
3,705,814

 
3,760,799

Commitments and contingencies (refer to Note 11)

 

Redeemable noncontrolling interests (refer to Note 5)
3,585

 
5,031

Equity:
 
 
 
iStar Inc. shareholders' equity:
 
 
 
Preferred Stock Series D, E, F, G and I, liquidation preference $25.00 per share (refer to Note 13)
22

 
22

Convertible Preferred Stock Series J, liquidation preference $50.00 per share (refer to Note 13)
4

 
4

Common Stock, $0.001 par value, 200,000 shares authorized, 72,190 and 72,042 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
72

 
72

Additional paid-in capital
3,603,981

 
3,602,172

Retained earnings (deficit)
(2,431,123
)
 
(2,581,488
)
Accumulated other comprehensive income (loss) (refer to Note 13)
(3,678
)
 
(4,218
)
Total iStar Inc. shareholders' equity
1,169,278

 
1,016,564

Noncontrolling interests
36,078

 
43,120

Total equity
1,205,356

 
1,059,684

Total liabilities and equity
$
4,914,755

 
$
4,825,514

The accompanying notes are an integral part of the consolidated financial statements.

1


iStar Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Operating lease income
$
47,002

 
$
49,975

 
$
94,349

 
$
100,470

Interest income
28,645

 
34,400

 
57,703

 
67,620

Other income
139,510

 
10,096

 
151,374

 
21,636

Land development revenue
132,710

 
27,888

 
152,760

 
42,835

Total revenues
347,867

 
122,359

 
456,186

 
232,561

Costs and expenses:
 
 
 
 
 
 
 
Interest expense
48,807

 
56,047

 
99,952

 
113,068

Real estate expense
34,684

 
35,328

 
70,274

 
69,572

Land development cost of sales
122,466

 
17,262

 
138,376

 
28,838

Depreciation and amortization
13,171

 
13,673

 
25,451

 
27,581

General and administrative
27,218

 
19,665

 
52,392

 
42,768

(Recovery of) provision for loan losses
(600
)
 
700

 
(5,528
)
 
2,206

Impairment of assets
10,284

 
3,012

 
14,696

 
3,012

Other expense
16,276

 
3,182

 
18,145

 
3,922

Total costs and expenses
272,306

 
148,869

 
413,758

 
290,967

Income (loss) before earnings from equity method investments and other items
75,561

 
(26,510
)
 
42,428

 
(58,406
)
Loss on early extinguishment of debt, net
(3,315
)
 
(1,457
)
 
(3,525
)
 
(1,582
)
Earnings from equity method investments
5,515

 
39,447

 
11,217

 
47,714

Income (loss) from continuing operations before income taxes
77,761

 
11,480

 
50,120

 
(12,274
)
Income tax (expense) benefit
(1,644
)
 
1,190

 
(2,251
)
 
1,604

Income (loss) from continuing operations
76,117

 
12,670

 
47,869

 
(10,670
)
Income from discontinued operations
173

 
3,633

 
4,939

 
7,214

Gain from discontinued operations
123,418

 

 
123,418

 

Income tax expense from discontinued operations
(4,545
)
 

 
(4,545
)
 

Income from sales of real estate(1)
844

 
43,484

 
8,954

 
53,943

Net income
196,007

 
59,787

 
180,635

 
50,487

Net (income) loss attributable to noncontrolling interests
(5,710
)
 
(8,825
)
 
(4,610
)
 
(7,883
)
Net income attributable to iStar Inc. 
190,297

 
50,962

 
176,025

 
42,604

Preferred dividends
(12,830
)
 
(12,830
)
 
(25,660
)
 
(25,660
)
Net (income) loss allocable to Participating Security holders(2)

 
(20
)
 

 
(11
)
Net income allocable to common shareholders
$
177,467

 
$
38,112

 
$
150,365

 
$
16,933

Per common share data:
 
 
 
 
 
 
 
Income attributable to iStar Inc. from continuing operations:
 
 
 
 
 
 
 
Basic
$
0.81

 
$
0.47

 
$
0.37

 
$
0.13

Diluted
$
0.69

 
$
0.34

 
$
0.35

 
$
0.13

Net income attributable to iStar Inc.:
 
 
 
 
 
 
 
Basic
$
2.46

 
$
0.52

 
$
2.09

 
$
0.22

Diluted
$
2.04

 
$
0.37

 
$
1.76

 
$
0.22

Weighted average number of common shares:
 
 
 
 
 
 
 
Basic
72,142

 
73,984

 
72,104

 
75,522

Diluted
88,195

 
118,510

 
88,156

 
75,872

_______________________________________________________________________________
(1)
Income from sales of real estate represents gains from sales of real estate that do not qualify as discontinued operations.
(2)
Participating Security holders are non-employee directors who hold common stock equivalents ("CSEs") and restricted stock awards granted under the Company's Long Term Incentive Plans that are eligible to participate in dividends (refer to Note 14 and Note 15).


The accompanying notes are an integral part of the consolidated financial statements.

2


iStar Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Net income
$
196,007

 
$
59,787

 
$
180,635

 
$
50,487

Other comprehensive income (loss):
 
 
 
 
 
 
 
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization(1)
(313
)
 
118

 
(191
)
 
375

Unrealized gains/(losses) on available-for-sale securities
583

 
446

 
566

 
465

Unrealized gains/(losses) on cash flow hedges
(146
)
 
(357
)
 
394

 
(1,319
)
Unrealized gains/(losses) on cumulative translation adjustment
172

 
30

 
(229
)
 
(10
)
Other comprehensive income (loss)
296

 
237


540

 
(489
)
Comprehensive income
196,303

 
60,024

 
181,175

 
49,998

Comprehensive (income) loss attributable to noncontrolling interests
(5,710
)
 
(8,825
)
 
(4,610
)
 
(7,883
)
Comprehensive income attributable to iStar Inc. 
$
190,593

 
$
51,199

 
$
176,565

 
$
42,115

_______________________________________________________________________________
(1)
Reclassified to "Interest expense" in the Company's consolidated statements of operations are $30 and $60 for the three and six months ended June 30, 2017, respectively, and $23 and $183 for the three and six months ended June 30, 2016, respectively. Reclassified to "Earnings from equity method investments" in the Company's consolidated statements of operations are $70 and $164 for the three and six months ended June 30, 2017, respectively, and $95 and $192 for the three and six months ended June 30, 2016, respectively.

The accompanying notes are an integral part of the consolidated financial statements.

3


iStar Inc.
Consolidated Statements of Changes in Equity
For the Six Months Ended June 30, 2017 and 2016
(In thousands)
(unaudited)




 
 
iStar Inc. Shareholders' Equity
 
 
 
 
 
 
Preferred
Stock(1)
 
Preferred Stock Series J(1)
 
Common
Stock at
Par
 
Additional
Paid-In
Capital
 
Retained
Earnings
(Deficit)
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Noncontrolling
Interests
 
Total
Equity
Balance as of December 31, 2016
 
$
22

 
$
4

 
$
72

 
$
3,602,172

 
$
(2,581,488
)
 
$
(4,218
)
 
$
43,120

 
$
1,059,684

Dividends declared—preferred
 

 

 

 

 
(25,660
)
 

 

 
(25,660
)
Issuance of stock/restricted stock unit amortization, net
 

 

 

 
1,699

 

 

 

 
1,699

Net income for the period(2)
 

 

 

 

 
176,025

 

 
5,946

 
181,971

Change in accumulated other comprehensive income (loss)
 

 

 

 

 

 
540

 

 
540

Change in additional paid in capital attributable to redeemable noncontrolling interest
 

 

 

 
110

 

 

 

 
110

Distributions to noncontrolling interest
 

 

 

 

 

 

 
(12,988
)
 
(12,988
)
Balance as of June 30, 2017
 
$
22

 
$
4

 
$
72

 
$
3,603,981

 
$
(2,431,123
)
 
$
(3,678
)
 
$
36,078

 
$
1,205,356

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2015
 
$
22

 
$
4

 
$
81

 
$
3,689,330

 
$
(2,625,474
)
 
$
(4,851
)
 
$
42,218

 
$
1,101,330

Dividends declared—preferred
 

 

 

 

 
(25,660
)
 

 

 
(25,660
)
Issuance of stock/restricted stock unit amortization, net
 

 

 

 
1,371

 

 

 

 
1,371

Net income for the period(2)
 

 

 

 

 
42,604

 

 
10,520

 
53,124

Change in accumulated other comprehensive income (loss)
 

 

 

 

 

 
(489
)
 

 
(489
)
Repurchase of stock
 

 

 
(9
)
 
(91,826
)
 

 

 

 
(91,835
)
Change in additional paid in capital attributable to redeemable noncontrolling interest
 

 

 

 
460

 

 

 

 
460

Contributions from noncontrolling interests
 

 

 

 

 

 

 
444

 
444

Change in noncontrolling interest(3)
 

 

 

 

 

 

 
(7,292
)
 
(7,292
)
Balance as of June 30, 2016
 
$
22

 
$
4

 
$
72

 
$
3,599,335

 
$
(2,608,530
)
 
$
(5,340
)
 
$
45,890

 
$
1,031,453

_______________________________________________________________________________
(1)
Refer to Note 13 for details on the Company's Preferred Stock.
(2)
For the six months ended June 30, 2017 and 2016, net income (loss) shown above excludes $(1,336) and $(2,637) of net loss attributable to redeemable noncontrolling interests.
(3)
Includes a payment to acquire a noncontrolling interest (refer to Note 5).
The accompanying notes are an integral part of the consolidated financial statements.

4


iStar Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
 
For the Six Months Ended June 30,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net income
$
180,635

 
$
50,487

Adjustments to reconcile net income to cash flows from operating activities:
 
 
 
(Recovery of) provision for loan losses
(5,528
)
 
2,206

Impairment of assets
14,696

 
3,012

Depreciation and amortization
26,352

 
29,182

Non-cash expense for stock-based compensation
9,796

 
6,211

Amortization of discounts/premiums and deferred financing costs on debt obligations, net
6,615

 
8,901

Amortization of discounts/premiums on loans, net
(6,978
)
 
(7,237
)
Deferred interest on loans, net
(1,290
)
 
4,631

Gain from discontinued operations
(123,418
)
 

Earnings from equity method investments
(11,217
)
 
(47,714
)
Distributions from operations of other investments
35,502

 
31,479

Deferred operating lease income
(3,204
)
 
(4,993
)
Income from sales of real estate
(9,462
)
 
(53,943
)
Land development revenue in excess of cost of sales
(14,384
)
 
(13,997
)
Loss on early extinguishment of debt, net
775

 
1,582

Debt discount on repayments of debt obligations

(5,745
)
 
(5,369
)
Other operating activities, net
9,770

 
2,651

Changes in assets and liabilities:
 
 
 
Changes in accrued interest and operating lease income receivable, net
2,881

 
4,436

Changes in deferred expenses and other assets, net
(6,821
)
 
1,677

Changes in accounts payable, accrued expenses and other liabilities
3,941

 
(13,052
)
Cash flows provided by operating activities
102,916

 
150

Cash flows from investing activities:
 
 
 
Originations and fundings of loans receivable, net
(130,701
)
 
(158,262
)
Capital expenditures on real estate assets
(16,346
)
 
(35,674
)
Capital expenditures on land and development assets
(53,894
)
 
(58,961
)
Acquisitions of real estate assets

 
(3,915
)
Repayments of and principal collections on loans receivable and other lending investments, net
367,028

 
202,014

Net proceeds from sales of real estate
154,291

 
247,956

Net proceeds from sales of land and development assets
146,713

 
33,660

Net proceeds from sales of other investments

 
39,810

Distributions from other investments
11,275

 
8,632

Contributions to other investments
(139,139
)
 
(8,283
)
Changes in restricted cash held in connection with investing activities
1,757

 
3,220

Other investing activities, net
5,317

 
(5,677
)
Cash flows provided by investing activities
346,301

 
264,520

Cash flows from financing activities:
 
 
 
Borrowings from debt obligations
854,637

 
646,401

Repayments and repurchases of debt obligations
(626,492
)
 
(991,184
)
Proceeds from loan participations payable

 
22,844

Preferred dividends paid
(25,660
)
 
(25,660
)
Repurchase of stock

 
(90,481
)
Payments for deferred financing costs
(12,243
)
 
(8,003
)
Payments for withholding taxes upon vesting of stock-based compensation
(511
)
 
(1,203
)
Other financing activities, net
(13,420
)
 
(7,144
)
Cash flows provided by (used in) financing activities
176,311

 
(454,430
)
Effect of exchange rate changes on cash
7

 
22

Changes in cash and cash equivalents
625,535

 
(189,738
)
Cash and cash equivalents at beginning of period
328,744

 
711,101

Cash and cash equivalents at end of period
$
954,279

 
$
521,363

Supplemental disclosure of non-cash investing and financing activity:
 
 
 
Fundings and repayments of loan receivables and loan participations, net

$
(52,406
)
 
$
12,267

Accounts payable for capital expenditures on land and development assets
2,984

 
5,575

Accounts payable for capital expenditures on real estate assets
1,488

 

Receivable from sales of real estate and land parcels

3,139

 
1,741

Developer fee payable

 
6,438

Accruals for repurchase of stock

 
2,260

The accompanying notes are an integral part of the consolidated financial statements.

5

iStar Inc.
Notes to Consolidated Financial Statements
(unaudited)





Note 1—Business and Organization

Business—iStar Inc. (the "Company"), doing business as "iStar," finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. The Company also provides management services for its ground lease and net lease equity method investments (refer to Note 7). The Company has invested more than $35 billion over the past two decades and is structured as a real estate investment trust ("REIT") with a diversified portfolio focused on larger assets located in major metropolitan markets. The Company's primary business segments are real estate finance, net lease, operating properties and land and development (refer to Note 17).

Organization—The Company began its business in 1993 through the management of private investment funds and became publicly traded in 1998. Since that time, the Company has grown through the origination of new investments, as well as through corporate acquisitions.

Note 2—Basis of Presentation and Principles of Consolidation
Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Annual Report").
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year. Certain prior year amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation.
Principles of Consolidation—The consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, controlled partnerships and variable interest entities ("VIEs") for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company's involvement with VIEs affects its financial performance and cash flows primarily through amounts recorded in "Operating lease income," "Interest income," "Earnings from equity method investments," "Real estate expense" and "Interest expense" in the Company's consolidated statements of operations. The Company has not provided financial support to those VIEs that it was not previously contractually required to provide.    
Consolidated VIEs—As of June 30, 2017, the Company consolidates VIEs for which it is considered the primary beneficiary. As of June 30, 2017, the total assets of these consolidated VIEs were $326.9 million and total liabilities were $68.9 million. The classifications of these assets are primarily within "Land and development, net" and "Real estate, net" on the Company's consolidated balance sheets. The classifications of liabilities are primarily within "Accounts payable, accrued expenses and other liabilities" and "debt obligations, net" on the Company's consolidated balance sheets. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE's respective assets. The Company did not have any unfunded commitments related to consolidated VIEs as of June 30, 2017.

Unconsolidated VIEs—As of June 30, 2017, the Company has investments in VIEs where it is not the primary beneficiary and accordingly the VIEs have not been consolidated in the Company's consolidated financial statements. As of June 30, 2017, the Company's maximum exposure to loss from these investments does not exceed the sum of the $56.6 million carrying value of the investments, which are classified in "Other investments" and "Loans receivable and other lending investments, net" on the Company's consolidated balance sheets, and $53.8 million of related unfunded commitments.


6

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


Note 3—Summary of Significant Accounting Policies

On January 1, 2017, the Company adopted Accounting Standards Update ("ASU") 2016-09, Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") which was issued to simplify several aspects of the accounting for share-based payment transactions, including income tax, classification of awards as either equity or liabilities and classification on the statement of cash flows. The adoption of ASU 2016-09 did not have a material impact on the Company's consolidated financial statements.
As of June 30, 2017, the remainder of the Company's significant accounting policies, which are detailed in the Company's 2016 Annual Report, have not changed materially.
New Accounting PronouncementsIn February 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05") to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The amendments in ASU 2017-05 simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses. The amendments in ASU 2017-05 require an entity to initially measure a retained noncontrolling interest in a nonfinancial asset at fair value consistent with how a retained noncontrolling interest in a business is measured. Also, if an entity transfers ownership interests in a consolidated subsidiary that is within the scope of ASC 610-20 and continues to have a controlling financial interest in that subsidiary, ASU 2017-05 requires the entity to account for the transaction as an equity transaction, which is consistent with how changes in ownership interests in a consolidated subsidiary that is a business are recorded when a parent retains a controlling financial interest in the business. ASU 2017-05 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company's consolidated financial statements and expects to adopt the retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. The Company expects that transactions in assets and businesses in which the Company retains an ownership interest, such as the sale of a controlling interest in its GL business (refer to Note 4), will be impacted by this guidance. As a result, under the retrospective approach, in 2018, the Company expects to record an incremental gain of $55.5 million in its consolidated statements of operations for the three and six months ended June 30, 2017, bringing the Company's full gain on the sale of its GL business to approximately $178.9 million.
In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01") to provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The Company's real estate acquisitions have historically been accounted for as a business combination or an asset acquisition. Under ASU 2017-01, certain transactions previously accounted for as business combinations under the existing guidance would be accounted for as asset acquisitions under the new guidance. As a result, the Company expects more transaction costs to be capitalized under real estate acquisitions and less transaction costs to be expensed under business combinations. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted under certain conditions. Management is evaluating the impact of the guidance on the Company's consolidated financial statements.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18") which requires that restricted cash be included with cash and cash equivalents when reconciling beginning and ending cash and cash equivalents on the statement of cash flows. In addition, ASU 2016-18 requires disclosure of what is included in restricted cash. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") which was issued to reduce diversity in practice in how certain cash receipts and cash payments, including debt prepayment or debt extinguishment costs, distributions from equity method investees, and other separately identifiable cash flows, are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the

7

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company currently records a general reserve that covers performing loans and reserves for loan losses are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The formula-based general reserve is derived from estimated principal default probabilities and loss severities applied to groups of loans based upon risk ratings assigned to loans with similar risk characteristics during our quarterly loan portfolio assessment. The Company estimates loss rates based on historical realized losses experienced within its portfolio and take into account current economic conditions affecting the commercial real estate market when establishing appropriate time frames to evaluate loss experience. The Company believes this general reserve component of its total loan loss reserves should minimize the impact of ASU 2016-13. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. For operating leases, a lessee will be required to do the following: (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position; (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (iii) classify all cash payments within operating activities in the statement of cash flows. For operating lease arrangements for which the Company is the lessee, primarily the lease of office space, the Company expects the impact of ASU 2016-02 to be the recognition of a right-of-use asset and lease liability on its consolidated balance sheets. The accounting applied by the Company as a lessor will be largely unchanged from that applied under previous GAAP. However, in certain instances, a new long-term lease of land subsequent to adoption could be classified as a sales-type lease, which could result in the Company derecognizing the underlying asset from its books and recording a profit or loss on sale and the net investment in the lease. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management is evaluating the impact of the guidance on the Company's consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is not permitted. Management is evaluating the impact of the guidance on the Company's consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") which supersedes existing industry-specific guidance, including ASC 360-20, Real Estate Sales. The new standard is principles-based and requires more estimates and judgment than current guidance. Certain contracts with customers, including lease contracts and financial instruments and other contractual rights, are not within the scope of the new guidance. Although most of the Company's revenue is operating lease income generated from lease contracts and interest income generated from financial instruments, certain other of the Company's revenue streams will be impacted by the new guidance. The Company currently expects that income from the sale of residential condominiums, land development revenue and other income will be impacted by ASU 2014-09. The Company does not expect income from the sales of net lease or commercial operating properties to be impacted by ASU 2014-09. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date, to defer the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company’s consolidated financial statements and expects to adopt the full retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard.


8

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


Note 4—Real Estate
The Company's real estate assets were comprised of the following ($ in thousands):
 
Net Lease(1)
 
Operating
Properties
 
Total
As of June 30, 2017
 
 
 
 
 
Land, at cost
$
227,231

 
$
211,057

 
$
438,288

Buildings and improvements, at cost
950,548

 
322,079

 
1,272,627

Less: accumulated depreciation
(314,373
)
 
(53,560
)
 
(367,933
)
Real estate, net
863,406

 
479,576

 
1,342,982

Real estate available and held for sale (2)
924

 
67,121

 
68,045

Total real estate
$
864,330

 
$
546,697

 
$
1,411,027

As of December 31, 2016
 
 
 
 
 
Land, at cost
$
231,506

 
$
211,054

 
$
442,560

Buildings and improvements, at cost
987,050

 
311,283

 
1,298,333

Less: accumulated depreciation
(307,444
)
 
(46,175
)
 
(353,619
)
Real estate, net
911,112

 
476,162

 
1,387,274

Real estate available and held for sale (2)
155,051

 
82,480

 
237,531

Total real estate
$
1,066,163

 
$
558,642

 
$
1,624,805

_______________________________________________________________________________
(1)
In 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the "Net Lease Venture") and gave a right of first refusal to the Net Lease Venture on all new net lease investments (refer to Note 7 for more information on the Net Lease Venture). The Company is responsible for sourcing new opportunities and managing the Net Lease Venture and its assets in exchange for a promote and management fee.
(2)
As of December 31, 2016, net lease includes the Company's ground lease ("GL") assets that were reclassified to "Real estate available and held for sale" (refer to "Dispositions" below). As of December 31, 2016, the carrying value of the Company's GL assets were previously classified as $104.5 million in "Real estate, net," $37.5 million in "Deferred expenses and other assets, net," $8.2 million in "Deferred operating lease income receivable, net" and $3.5 million in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheet. As of June 30, 2017 and December 31, 2016, the Company had $67.1 million and $82.5 million, respectively, of residential properties available for sale in its operating properties portfolio.

Real Estate Available and Held for Sale—During the six months ended June 30, 2017, the Company transferred one net lease asset with a carrying value of $0.9 million to held for sale due to an executed contract with a third party. During the six months ended June 30, 2016, the Company transferred one net lease asset with a carrying value of $0.7 million and one commercial operating property with a carrying value of $16.1 million to held for sale due to executed contracts with a third parties.

Acquisitions—During the six months ended June 30, 2016, the Company acquired land for $3.9 million and simultaneously entered into a 99 year ground lease with the seller.
Disposition of Ground Lease Business—In April 2017, institutional investors acquired a controlling interest in the Company's GL business through the merger of a Company subsidiary and related transactions (the "Acquisition Transactions"). The Company's GL business was a component of the Company's net lease segment and consisted of 12 properties subject to long-term net leases including seven GLs and one master lease (covering five properties). The acquiring entity was a newly formed unconsolidated entity named Safety, Income and Growth, Inc. ("SAFE"). The carrying value of the Company's GL assets was approximately $161.1 million. Shortly before the Acquisition Transactions, the Company completed the $227.0 million 2017 Secured Financing on its GL assets (refer to Note 10). The Company received all of the proceeds of the 2017 Secured Financing. The Company received an additional $113.0 million of proceeds in the Acquisition Transactions, including $55.5 million that the Company contributed to SAFE in its initial capitalization. As a result of the Acquisition Transactions, the Company deconsolidated the 12 properties and the associated 2017 Secured Financing. The Company accounts for its investment in SAFE as an equity method investment (refer to Note 7). The Company accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of the Company's retained interest in SAFE (refer to Note 2 - Summary of Significant Accounting Policies). The carrying value of the 12 properties is classified in "Real estate available and held for sale" on the Company's consolidated balance sheet as of December 31, 2016 and the gain was recorded in "Gain from discontinued operations" in the Company's consolidated statements of operations.

9

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


Discontinued Operations—The transactions described above involving the Company's GL business qualified for discontinued operations and the following table summarizes income from discontinued operations for the three and six months ended June 30, 2017 and 2016 ($ in thousands)(1)(2):
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
2017
 
2016
 
2017
 
2016
Revenues
 
$
678

 
$
4,543

 
$
6,430

 
$
8,986

Expenses
 
(505
)
 
(910
)
 
(1,491
)
 
(1,772
)
Income from discontinued operations
 
$
173

 
$
3,633

 
$
4,939

 
$
7,214

_______________________________________________________________________________
(1)
The transactions closed on April 14, 2017 and revenues, expenses and income from discontinued operations excludes the period from April 14, 2017 to June 30, 2017. Revenues primarily consisted of operating lease income and expenses primarily consisted of depreciation and amortization and real estate expense.
(2)
For the six months ended June 30, 2017, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was $5.7 million and $0.5 million, respectively. For the six months ended June 30, 2016, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was $9.4 million and $4.6 million, respectively.

Other Dispositions—During the six months ended June 30, 2017 and 2016, the Company sold residential condominiums for total net proceeds of $17.6 million and $59.2 million, respectively, and recorded income from sales of real estate totaling $2.7 million and $18.8 million, respectively. During the six months ended June 30, 2017 and 2016, the Company sold net lease assets for net proceeds of $19.5 million and $30.2 million, respectively, resulting in gains of $6.2 million and $9.2 million, respectively. During the six months ended June 30, 2016, the Company also sold three commercial operating properties for net proceeds of $158.9 million resulting in gains of $25.9 million. The gains are recorded in "Income from sales of real estate" in the Company's consolidated statements of operations.
Impairments—During the six months ended June 30, 2017, the Company recorded an impairment of $4.4 million on a real estate asset held for sale due to shifting demand in the local condominium market along with a change in the Company's exit strategy. During the six months ended June 30, 2016, the Company recorded an impairment of $3.0 million on a residential operating property resulting from a slowdown in the local condominium real estate market.
Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements were $5.2 million and $10.7 million for the three and six months ended June 30, 2017, respectively. Tenant expense reimbursements were $5.9 million and $12.1 million for the three and six months ended June 30, 2016, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.
Allowance for Doubtful Accounts—As of June 30, 2017 and December 31, 2016, the allowance for doubtful accounts related to real estate tenant receivables was $1.4 million and $1.3 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.1 million and $1.3 million as of June 30, 2017 and December 31, 2016, respectively. These amounts are included in "Accrued interest and operating lease income receivable, net" and "Deferred operating lease income receivable, net," respectively, on the Company's consolidated balance sheets.
Note 5—Land and Development

The Company's land and development assets were comprised of the following ($ in thousands):
 
As of
 
June 30,
 
December 31,
 
2017
 
2016
Land and land development, at cost
$
862,774

 
$
952,051

Less: accumulated depreciation
(7,277
)
 
(6,486
)
Total land and development, net
$
855,497

 
$
945,565



10

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


Dispositions—During the six months ended June 30, 2017, the Company sold one land parcel totaling 1,250 acres (see following paragraph) and residential lots and units and recognized land development revenue of $152.8 million from its land and development portfolio. During the six months ended June 30, 2016, the Company sold residential lots and units and recognized land development revenue of $42.8 million from its land and development portfolio. During the six months ended June 30, 2017 and 2016, the Company recognized land development cost of sales of $138.4 million and $28.8 million, respectively, from its land and development portfolio.

In connection with the resolution of litigation involving a dispute over the purchase and sale of approximately 1,250 acres of land in Prince George’s County, Maryland ("Bevard"), during the three and six months ended June 30, 2017, the Company recognized $114.0 million of land development revenue and $106.3 million of land development cost of sales (refer to Note 11). In 2016, the Company acquired an additional 10.7% interest in Bevard for $10.8 million and owns 95.7% of Bevard as of June 30, 2017.

Impairments—During the six months ended June 30, 2017, the Company recorded an impairment of $10.1 million on a land and development asset due to a change in the Company's exit strategy.
Redeemable Noncontrolling Interest—The Company has a majority interest in a strategic venture that provides the third party minority partner an option to redeem its interest at fair value. The Company has reflected the partner's noncontrolling interest in this venture as a component of redeemable noncontrolling interest within its consolidated balance sheets. Changes in fair value are being accreted over the term from the date of issuance of the redemption option to the earliest redemption date using the interest method. As of June 30, 2017 and December 31, 2016, this interest had a carrying value of zero and $1.3 million, respectively. As of June 30, 2017 and December 31, 2016, this interest did not have a redemption value.
Note 6—Loans Receivable and Other Lending Investments, net

The following is a summary of the Company's loans receivable and other lending investments by class ($ in thousands):
 
As of
Type of Investment
June 30,
2017
 
December 31,
2016
Senior mortgages
$
597,335

 
$
940,738

Corporate/Partnership loans
543,589

 
490,389

Subordinate mortgages
22,841

 
24,941

Total gross carrying value of loans
1,163,765

 
1,456,068

Reserves for loan losses
(78,789
)
 
(85,545
)
Total loans receivable, net
1,084,976

 
1,370,523

Other lending investments—securities
85,589

 
79,916

Total loans receivable and other lending investments, net
$
1,170,565

 
$
1,450,439


Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
2017
 
2016
 
2017
 
2016
Reserve for loan losses at beginning of period
 
$
79,389

 
$
109,671

 
$
85,545

 
$
108,165

(Recovery of) provision for loan losses
 
(600
)
 
700

 
(5,528
)
 
2,206

Charge-offs
 

 

 
(1,228
)
 

Reserve for loan losses at end of period
 
$
78,789

 
$
110,371

 
$
78,789

 
$
110,371


11

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)



The Company's recorded investment in loans (comprised of a loan's carrying value plus accrued interest) and the associated reserve for loan losses were as follows ($ in thousands):
 
Individually
Evaluated for
Impairment(1)
 
Collectively
Evaluated for
Impairment(2)
 
Total
As of June 30, 2017
 
 
 
 
 
Loans
$
249,659

 
$
919,793

 
$
1,169,452

Less: Reserve for loan losses
(60,989
)
 
(17,800
)
 
(78,789
)
Total(3)
$
188,670

 
$
901,993

 
$
1,090,663

As of December 31, 2016
 
 
 
 
 
Loans
$
253,941

 
$
1,209,062

 
$
1,463,003

Less: Reserve for loan losses
(62,245
)
 
(23,300
)
 
(85,545
)
Total(3)
$
191,696

 
$
1,185,762

 
$
1,377,458

_______________________________________________________________________________
(1)
The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of $0.7 million and $0.4 million as of June 30, 2017 and December 31, 2016, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and therefore, the unamortized amounts associated with these loans are not currently being amortized into income.
(2)
The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net premiums of $4.5 million and $1.9 million as of June 30, 2017 and December 31, 2016, respectively.
(3)
The Company's recorded investment in loans as of June 30, 2017 and December 31, 2016 includes accrued interest of $5.7 million and $6.9 million, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of June 30, 2017 and December 31, 2016, the total excludes $85.6 million and $79.9 million, respectively, of securities that are evaluated for impairment under ASC 320.

Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain and there can be no assurance that actual performance will be similar to current expectation. The Company designates loans as non-performing at such time as: (1) the loan becomes 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt.

The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands):
 
As of June 30, 2017
 
As of December 31, 2016
 
Performing
Loans
 
Weighted
Average
Risk Ratings
 
Performing
Loans
 
Weighted
Average
Risk Ratings
Senior mortgages
$
518,362

 
2.53

 
$
859,250

 
3.12

Corporate/Partnership loans
389,550

 
3.03

 
335,677

 
3.09

Subordinate mortgages
11,881

 
2.55

 
14,135

 
3.00

  Total
$
919,793

 
2.74

 
$
1,209,062

 
3.11



12

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


The Company's recorded investment in loans, aged by payment status and presented by class, were as follows ($ in thousands):
 
Current
 
Less Than
and Equal
to 90 Days
 
Greater
Than
90 Days(1)
 
Total
Past Due
 
Total
As of June 30, 2017
 
 
 
 
 
 
 
 
 
Senior mortgages
$
524,362

 
$

 
$
76,282

 
$
76,282

 
$
600,644

Corporate/Partnership loans
389,550

 

 
156,375

 
156,375

 
545,925

Subordinate mortgages
22,883

 

 

 

 
22,883

Total
$
936,795

 
$

 
$
232,657

 
$
232,657

 
$
1,169,452

As of December 31, 2016
 
 
 
 
 
 
 
 
 
Senior mortgages
$
868,505

 
$

 
$
76,677

 
$
76,677

 
$
945,182

Corporate/Partnership loans
335,677

 

 
157,146

 
157,146

 
492,823

Subordinate mortgages
24,998

 

 

 

 
24,998

Total
$
1,229,180

 
$

 
$
233,823

 
$
233,823

 
$
1,463,003

_______________________________________________________________________________
(1)
As of June 30, 2017, the Company had four loans which were greater than 90 days delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from 1.0 to 8.0 years outstanding. As of December 31, 2016, the Company had four loans which were greater than 90 days delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from 1.0 to 8.0 years outstanding.

Impaired Loans—The Company's recorded investment in impaired loans, presented by class, were as follows ($ in thousands)(1):
 
As of June 30, 2017
 
As of December 31, 2016
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Subordinate mortgages
$
11,002

 
$
10,985

 
$

 
$
10,862

 
$
10,846

 
$

Subtotal
11,002

 
10,985

 

 
10,862

 
10,846

 

With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
Senior mortgages
82,282

 
82,390

 
(48,518
)
 
85,933

 
85,780

 
(49,774
)
Corporate/Partnership loans
156,375

 
145,849

 
(12,471
)
 
157,146

 
146,783

 
(12,471
)
Subtotal
238,657

 
228,239

 
(60,989
)
 
243,079

 
232,563

 
(62,245
)
Total:
 
 
 
 
 
 
 
 
 
 
 
Senior mortgages
82,282

 
82,390

 
(48,518
)
 
85,933

 
85,780

 
(49,774
)
Corporate/Partnership loans
156,375

 
145,849

 
(12,471
)
 
157,146

 
146,783

 
(12,471
)
Subordinate mortgages
11,002

 
10,985

 

 
10,862

 
10,846

 

Total
$
249,659

 
$
239,224

 
$
(60,989
)
 
$
253,941

 
$
243,409

 
$
(62,245
)
____________________________________________________________
(1)
All of the Company's non-accrual loans are considered impaired and included in the table above.


13

iStar Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


The Company's average recorded investment in impaired loans and interest income recognized, presented by class, were as follows ($ in thousands):
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior mortgages
$

 
$

 
$
9,150

 
$
111

 
$

 
$

 
$
6,100

 
$
111

Subordinate mortgages
11,023

 

 
5,785

 

 
10,970

 

 
3,857

 

Subtotal
11,023

 

 
14,935

 
111

 
10,970

 

 
9,957

 
111

With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior mortgages
82,368

 

 
126,978

 

 
83,556

 

 
126,903

 

Corporate/Partnership loans
156,839

 

 
5,224

 

 
156,941

 

 
5,396

 

Subtotal
239,207

 

 
132,202

 

 
240,497

 

 
132,299

 

Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior mortgages
82,368

 

 
136,128

 
111

 
83,556

 

 
133,003

 
111

Corporate/Partnership loans
156,839

 

 
5,224

 

 
156,941

 

 
5,396

 

Subordinate mortgages
11,023

 

 
5,785

 

 
10,970

 

 
3,857

 

Total
$
250,230

 
$

 
$
147,137

 
$
111

 
$
251,467

 
$

 
$
142,256

 
$
111


Securities—Other lending investments—securities includes the following ($ in thousands):
 
Face
Value
 
Amortized Cost Basis
 
Net Unrealized Gain (Loss)
 
Estimated Fair Value
 
Net Carrying Value
As of June 30, 2017
 
 
 
 
 
 
 
 
 
Available-for-Sale Securities
 
 
 
 
 
 
 
 
 
Municipal debt securities
$
21,230

 
$
21,230

 
$
992

 
$
22,222

 
$
22,222

Held-to-Maturity Securities
 
 
 
 
 
 
 
 
 
Debt securities
63,418

 
63,367