FINANCING RECEIVABLES (Tables)

3 Months Ended

Mar. 31, 2026

The following table shows the activity in the allowance for credit losses for the three months ended March 31, 2026 and the year ended December 31, 2025 (in thousands):


	Three Months Ended March 31, 2026			Year Ended December 31, 2025
Allowance for credit losses at beginning of period	$	20,398		$	32,847
(Reversal of) provision for credit losses		(967	)		(7,749	)
Charge-offs		—			(4,700	)
Allowance for credit losses at end of period	$	19,431		$	20,398

Credit quality indicators for bank loans and commercial real estate loans

The criteria set forth below should be used as general guidelines and, therefore, not every loan will have all of the characteristics described in each category below.




Risk Rating		Risk Characteristics

1		• Property performance has surpassed underwritten expectations.
		• Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high-quality tenant mix.

2		• Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded.
		• Occupancy is stabilized, near stabilized or is on track with underwriting.

3		• Property performance lags behind underwritten expectations.
		• Occupancy is not stabilized and the property has some tenancy rollover.

4		• Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers.
		• Occupancy is not stabilized and the property has a large amount of tenancy rollover.

5		• Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity.
		• The property has a material vacancy rate and significant rollover of remaining tenants.
		• An updated appraisal is required upon designation and updated on an as-needed basis.

All CRE loans are evaluated for any credit deterioration by debt asset management and certain finance personnel on at least a quarterly basis. Mezzanine loans and preferred equity investments may experience greater credit risks due to their nature as subordinated investments.

For the purpose of calculating the quarterly provision for credit losses under CECL, the Company pools CRE loans based on the underlying collateral property type and utilizes a probability of default and loss given default methodology for approximately one year after which it immediately reverts to a historical mean loss ratio.

Credit risk profiles of CRE loans at amortized cost were as follows (in thousands, except amounts in the footnote):


	Rating 1		Rating 2		Rating 3		Rating 4		Rating 5		Total (1)
At March 31, 2026:
Whole loans	$	28,154	$	1,323,792	$	455,317	$	380,288	$	5,614	$	2,193,165
Preferred equity investment		—		9,672		—		—		—		9,672
Total	$	28,154	$	1,333,464	$	455,317	$	380,288	$	5,614	$	2,202,837


At December 31, 2025:
Whole loans	$	28,137	$	938,416	$	470,871	$	377,904	$	5,614	$	1,820,942
Preferred equity investment		—		9,425		—		—		—		9,425
Total	$	28,137	$	947,841	$	470,871	$	377,904	$	5,614	$	1,830,367

(1)

The total amortized cost of CRE loans excluded accrued interest receivable of $29.5 million and $27.2 million at March 31, 2026 and December 31, 2025, respectively.

Credit risk profiles of CRE loans by origination year at amortized cost were as follows (in thousands, except amounts in the footnotes):


	2026		2025 (1)		2024 (2)		2023		2022		Prior			Total (3)
At March 31, 2026:
Whole loans: (4)
Rating 1	$	—	$	—	$	—	$	—	$	—	$	28,154		$	28,154
Rating 2		406,943		625,955		27,021		29,359		—		234,514			1,323,792
Rating 3		16,605		10,286		—		—		202,888		225,538			455,317
Rating 4		—		139,700		87,786		15,996		91,718		45,088			380,288
Rating 5		—		—		—		—		—		5,614			5,614
Total whole loans		423,548		775,941		114,807		45,355		294,606		538,908			2,193,165
Preferred equity investment (rating 2)		—		9,672		—		—		—		—			9,672
Total loans	$	423,548	$	785,613	$	114,807	$	45,355	$	294,606	$	538,908		$	2,202,837
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—


	2025 (1)		2024 (2)		2023		2022		2021		Prior			Total (3)
At December 31, 2025:
Whole loans: (4)
Rating 1	$	—	$	—	$	—	$	—	$	28,137	$	—		$	28,137
Rating 2		649,712		22,249		49,376		—		203,263		13,816			938,416
Rating 3		10,283		—		—		235,271		214,356		10,961			470,871
Rating 4		137,906		87,370		15,991		91,675		—		44,962			377,904
Rating 5		—		—		—		—		—		5,614			5,614
Total whole loans		797,901		109,619		65,367		326,946		445,756		75,353			1,820,942
Preferred equity investment (rating 2)		9,425		—		—		—		—		—			9,425
Total loans	$	807,326	$	109,619	$	65,367	$	326,946	$	445,756	$	75,353		$	1,830,367
Current Period Gross Write-Offs	$	—	$	—	$	—	$	—	$	—	$	(4,700	)	$	(4,700	)

(1)

Includes two novated CRE whole loans that resulted from loan workouts.

(2)

Includes two novated CRE whole loans that resulted from loan workouts.

(3)

The total amortized cost of CRE loans excluded accrued interest receivable of $29.5 million and $27.2 million at March 31, 2026 and December 31, 2025, respectively.

(4)

Acquired CRE whole loans are grouped within each loan’s year of origination.

Loan portfolios aging analysis

The following table presents the CRE loan portfolio aging analysis at the dates indicated for CRE loans at amortized cost (in thousands, except amounts in footnotes):


	30-59 Days		60-89 Days		Greater than 90 Days (1)		Total Past Due		Current (2)		Total Loans Receivable (3)		Total Loans > 90 Days and Accruing
At March 31, 2026:
Whole loans	$	—	$	—	$	59,084	$	59,084	$	2,134,081	$	2,193,165	$	32,250
Preferred equity investment		—		—		—		—		9,672		9,672		—
Total	$	—	$	—	$	59,084	$	59,084	$	2,143,753	$	2,202,837	$	32,250

At December 31, 2025:
Whole loans	$	—	$	—	$	26,834	$	26,834	$	1,794,108	$	1,820,942	$	—
Preferred equity investment		—		—		—		—		9,425		9,425		—
Total	$	—	$	—	$	26,834	$	26,834	$	1,803,533	$	1,830,367	$	—

(1)

During the three months ended March 31, 2026, the Company recognized interest income of $602,000 on one CRE loan with a principal payment past due greater than 90 days at March 31, 2026.

(2)

Includes one CRE loan with an amortized cost of $24.4 million in maturity default at March 31, 2026. Includes one CRE loan with an amortized cost of $32.3 million in maturity default at December 31, 2025.

(3)

The total amortized cost of CRE loans excluded accrued interest receivable of $29.5 million and $27.2 million at March 31, 2026 and December 31, 2025, respectively.