v3.26.1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans and Allowance for Credit Losses Note 6. Loans and Allowance for Credit Losses
Loans includes (i) loans held for investment that are accounted for at amortized cost net of allowance for credit losses,
(ii) loans held at fair value under the fair value option, (iii) loans held for sale that are accounted for at the lower of cost
or fair value net of valuation allowance and (iv) loans held for sale at fair value under the fair value option. The
classification for a loan is based on product type and management’s strategy for the loan.
Loan portfolio
The table below summarizes the classification, unpaid principal balance (“UPB”), and carrying value of loans held by
the Company including loans of consolidated VIEs.
March 31, 2026
December 31, 2025
(in thousands)
Carrying Value
UPB
Carrying Value
UPB
Loans
Bridge
$1,885,704
$1,970,165
$2,024,033
$2,082,823
Fixed rate
79,591
80,374
93,002
93,828
Construction
398,064
527,060
388,042
509,085
Freddie Mac
3,945
3,756
3,945
3,756
SBA - 7(a)
899,588
949,576
908,714
958,755
Other
83,668
112,994
82,562
112,194
Total Loans, net
$3,350,560
$3,643,925
$3,500,298
$3,760,441
Loans in consolidated VIEs
Bridge
—
—
834,426
858,833
Fixed rate
530,757
532,849
558,119
560,230
SBA - 7(a)
130,265
140,521
134,761
145,185
Other
156,293
156,689
166,773
167,191
Total Loans, net, in consolidated VIEs
$817,315
$830,059
$1,694,079
$1,731,439
Loans, held for sale
Bridge
273,030
346,644
457,336
521,116
Fixed rate
—
—
55,390
58,000
Freddie Mac
8,490
8,414
16,555
16,425
SBA - 7(a)
70,258
65,503
52,598
49,203
Other
8,450
7,727
3,941
3,622
Total Loans, held for sale
$360,228
$428,288
$585,820
$648,366
Loans, held for sale in consolidated VIEs
Bridge
—
—
125,107
129,238
Total Loans, held for sale in consolidated VIEs
$—
$—
$125,107
$129,238
Total
$4,528,103
$4,902,272
$5,905,304
$6,269,484
In the table above, loans with the “Other” classification are generally LMM acquired loans that have nonconforming
characteristics for the Fixed rate, Bridge, Construction, or Freddie Mac classifications due to loan size, rate type,
collateral, or borrower criteria.
Loan vintage and credit quality indicators
The Company monitors the credit quality of its loan portfolio based on primary credit quality indicators, such as
delinquency rates. Loans that are 30 days or more past due, provide an indication of the borrower’s capacity and
willingness to meet its financial obligations.
The tables below summarize the classification, UPB, carrying value and gross write-offs of loans by year of origination.
Carrying Value by Year of Origination
(in thousands)
UPB
2026
2025
2024
2023
2022
Pre 2022
Total
March 31, 2026
Bridge
$1,970,165
$—
$13,912
$221,786
$102,324
$895,866
$651,816
$1,885,704
Fixed rate
613,223
—
—
—
—
25,791
584,557
610,348
Construction
527,060
—
43,430
90,900
19,300
109,901
134,533
398,064
Freddie Mac
3,756
—
—
2,568
—
1,377
—
3,945
SBA - 7(a)
1,090,097
25,675
147,160
157,605
106,463
235,881
357,069
1,029,853
Other
269,683
2,594
20,535
16,237
3,094
5,005
192,496
239,961
Total Loans, net
$4,473,984
$28,269
$225,037
$489,096
$231,181
$1,273,821
$1,920,471
$4,167,875
Gross write-offs
$—
$464
$2,498
$2,800
$23,464
$15,147
$44,373
UPB
2025
2024
2023
2022
2021
Pre 2021
Total
December 31, 2025
Bridge
$2,941,656
$86,350
$295,040
$186,723
$1,126,875
$1,089,802
$73,669
$2,858,459
Fixed rate
654,058
—
—
—
35,383
175,988
439,750
651,121
Construction
509,085
32,342
70,551
19,300
108,931
18,341
138,577
388,042
Freddie Mac
3,756
—
2,568
—
1,377
—
—
3,945
SBA - 7(a)
1,103,940
150,888
162,885
115,567
244,353
160,780
209,002
1,043,475
Other
279,385
21,197
16,220
3,130
5,026
581
203,181
249,335
Total Loans, net
$5,491,880
$290,777
$547,264
$324,720
$1,521,945
$1,445,492
$1,064,179
$5,194,377
Gross write-offs
$262
$4,515
$5,993
$1,438
$5,900
$184,402
$202,510
The tables below present delinquency information on loans, net by year of origination.
Carrying Value by Year of Origination
(in thousands)
UPB
2026
2025
2024
2023
2022
Pre 2022
Total
March 31, 2026
Current
$3,526,286
$28,195
$218,150
$381,119
$220,910
$921,002
$1,559,717
$3,329,093
30 - 59 days past due
227,440
10
4,555
25,666
5,069
81,711
102,504
219,515
60+ days past due
720,258
64
2,332
82,311
5,202
271,108
258,250
619,267
Total Loans, net
$4,473,984
$28,269
$225,037
$489,096
$231,181
$1,273,821
$1,920,471
$4,167,875
UPB
2025
2024
2023
2022
2021
Pre 2021
Total
December 31, 2025
Current
$4,478,531
$286,900
$386,892
$293,829
$1,152,549
$1,171,991
$983,329
$4,275,490
30 - 59 days past due
392,885
1,788
126,870
9,336
147,167
92,247
11,691
389,099
60+ days past due
620,464
2,089
33,502
21,555
222,229
181,254
69,159
529,788
Total Loans, net
$5,491,880
$290,777
$547,264
$324,720
$1,521,945
$1,445,492
$1,064,179
$5,194,377
The table below presents delinquency information on loans, net by portfolio.
(in thousands)
Current
30 - 59 days
past due
60+ days past
due
Total
Non-Accrual
Loans
90+ days past
due and
Accruing
March 31, 2026
Bridge
$1,221,900
$132,530
$531,274
$1,885,704
$1,065,566
$—
Fixed rate
569,617
15,073
25,658
610,348
25,659
—
Construction
356,199
20,577
21,288
398,064
40,587
—
Freddie Mac
—
—
3,945
3,945
3,945
—
SBA - 7(a)
948,452
48,060
33,341
1,029,853
80,727
4,738
Other
232,925
3,275
3,761
239,961
4,115
69
Total Loans, net
$3,329,093
$219,515
$619,267
$4,167,875
$1,220,599
$4,807
Percentage of loans outstanding
79.8%
5.3%
14.9%
100%
29.3%
0.1%
December 31, 2025
Bridge
$2,099,318
$358,838
$400,303
$2,858,459
$1,151,022
$—
Fixed rate
621,708
3,279
26,134
651,121
20,738
—
Construction
343,450
1,496
43,096
388,042
62,395
—
Freddie Mac
—
—
3,945
3,945
3,945
—
SBA - 7(a)
971,069
20,669
51,737
1,043,475
84,795
90
Other
239,945
4,817
4,573
249,335
4,229
—
Total Loans, net
$4,275,490
$389,099
$529,788
$5,194,377
$1,327,124
$90
Percentage of loans outstanding
82.3%
7.5%
10.2%
100%
25.5%
—%
In addition to delinquency rates, the current estimated LTV ratio, geographic distribution of the loan collateral and
collateral concentration are primary credit quality indicators that provide insight into a borrower’s capacity and
willingness to meet its financial obligation. High LTV loans tend to have higher delinquency rates than loans where the
borrower has equity in the collateral. The geographic distribution of the loan collateral considers factors such as the
regional economy, property price changes and specific events such as natural disasters, which will affect credit quality.
The collateral concentration of the loan portfolio considers economic factors or events may have a more pronounced
impact on certain sectors or property types.
The table below presents quantitative information on the credit quality of loans, net.
LTV(1)
(in thousands)
0.0 – 20.0%
20.1 – 40.0%
40.1 – 60.0%
60.1 – 80.0%
80.1 – 100.0%
Greater than
100.0%
Total
March 31, 2026
Bridge
$—
$17,833
$129,827
$642,859
$693,135
$402,050
$1,885,704
Fixed rate
437
22,309
284,626
277,316
17,335
8,325
610,348
Construction
2,582
13,344
111,582
127,082
63,637
79,837
398,064
Freddie Mac
—
—
—
3,945
—
—
3,945
SBA - 7(a)
12,943
59,329
147,501
302,793
154,831
352,456
1,029,853
Other
62,542
74,929
61,549
24,618
13,663
2,660
239,961
Total Loans, net
$78,504
$187,744
$735,085
$1,378,613
$942,601
$845,328
$4,167,875
Percentage of loans outstanding
1.9%
4.5%
17.6%
33.1%
22.6%
20.3%
100%
December 31, 2025
Bridge
$1,463
$29,207
$188,215
$1,235,997
$906,428
$497,149
$2,858,459
Fixed rate
19
23,042
294,209
308,158
17,368
8,325
651,121
Construction
11,162
14,708
84,525
147,776
49,540
80,331
388,042
Freddie Mac
—
—
—
3,945
—
—
3,945
SBA - 7(a)
13,516
58,812
148,369
305,993
158,710
358,075
1,043,475
Other
66,133
77,651
63,158
28,114
11,347
2,932
249,335
Total Loans, net
$92,293
$203,420
$778,476
$2,029,983
$1,143,393
$946,812
$5,194,377
Percentage of loans outstanding
1.8%
3.9%
15.0%
39.1%
22.0%
18.2%
100%
(1)LTV is calculated by dividing the current UPB by the most recent collateral value received. The most recent value for performing loans is often the third-party as-is
valuation utilized during the original underwriting process.
The table below presents the geographic concentration of loans, net, secured by real estate.
Geographic Concentration (% of UPB)
March 31, 2026
December 31, 2025
Texas
25.4%
25.8%
California
11.0
12.7
Arizona
10.4
9.2
Florida
7.6
8.9
Georgia
5.8
6.0
New York
4.2
3.7
Washington
3.8
3.1
North Carolina
2.2
2.0
Ohio
2.2
1.8
New Jersey
2.2
1.8
Other
25.2
25.0
Total
100%
100%
The table below presents the collateral type concentration of loans, net.
Collateral Concentration (% of UPB)
March 31, 2026
December 31, 2025
Multi-family
49.9%
56.6%
SBA
24.4
20.1
Land
5.6
4.3
Retail
5.4
4.7
Industrial
4.7
4.0
Office
3.2
3.2
Mixed Use
2.6
3.0
Other
4.2
4.1
Total
100%
100%
The table below presents the collateral type concentration of SBA loans within loans, net.
Collateral Concentration (% of UPB)
March 31, 2026
December 31, 2025
Lodging
20.7%
21.2%
Grocery Stores
8.4
8.7
Eating Places
7.6
7.6
Child Day Care Services
4.9
5.2
General Freight Trucking, Local
4.4
4.4
Gasoline Service Stations
2.9
2.8
Offices of Physicians
2.3
2.3
Coin-Operated Laundries and Drycleaners
2.1
2.1
Car Washes
1.8
1.7
Funeral Service & Crematories
0.9
0.9
Other
44.0
43.1
Total
100%
100%
Allowance for credit losses
The allowance for credit losses consists of the allowance for losses on loans and lending commitments accounted for at
amortized cost. Such loans and lending commitments are reviewed quarterly considering credit quality indicators,
including probable and historical losses, collateral values, LTV ratios, and economic conditions.
The table below presents the allowance for loan losses by loan product and impairment methodology.
(in thousands)
Bridge
Fixed rate
Construction
SBA - 7(a)
Other
Total
March 31, 2026
General
$1,782
$1,239
$982
$28,674
$1,448
$34,125
Specific
81,046
1,838
27,273
10,161
10,091
130,409
PCD
—
—
71,133
—
—
71,133
Ending balance
$82,828
$3,077
$99,388
$38,835
$11,539
$235,667
December 31, 2025
General
$7,921
$1,749
$587
$28,615
$1,427
$40,299
Specific
72,714
1,596
22,917
10,039
10,091
117,357
PCD
—
—
60,861
—
—
60,861
Ending balance
$80,635
$3,345
$84,365
$38,654
$11,518
$218,517
The table below presents a summary of the changes in the allowance for loan losses.
(in thousands)
Bridge
Fixed rate
Construction
SBA - 7(a)
Other
Total
Three Months Ended March 31, 2026
Beginning balance
$80,635
$3,345
$84,365
$38,654
$11,518
$218,517
Provision for (recoveries of) loan losses
41,157
(268)
12,902
4,386
21
58,198
Time value of money adjustment
—
—
3,127
—
—
3,127
Charge-offs and sales
(38,964)
—
(1,006)
(4,403)
—
(44,373)
Recoveries
—
—
—
198
—
198
Ending balance
$82,828
$3,077
$99,388
$38,835
$11,539
$235,667
Three Months Ended March 31, 2025
Beginning balance
$170,445
$5,114
$140,139
$22,087
$2,154
$339,939
Provisions for (recoveries of) loan losses
(139,396)
5,116
10,490
8,088
701
(115,001)
PCD
—
—
16,626
—
—
16,626
Charge-offs and sales
—
(1,000)
(1,204)
(226)
—
(2,430)
Recoveries
—
—
—
86
—
86
Ending balance
$31,049
$9,230
$166,051
$30,035
$2,855
$239,220
The table above excludes $8.0 million and $2.9 million of allowance for loan losses on unfunded lending commitments
as of March 31, 2026 and March 31, 2025, respectively. Refer to Note 3 – Summary of Significant Accounting Policies
for more information on accounting policies, methodologies and judgment applied to determine the allowance for loan
losses and lending commitments.
Non-accrual loans
A loan is placed on nonaccrual status when it is probable that principal and interest will not be collected under the
original contractual terms. At that time, interest income is no longer accrued.
The table below presents information on non-accrual loans.
(in thousands)
March 31, 2026
December 31, 2025
Non-accrual loans
With an allowance
$1,198,578
$1,290,859
Without an allowance
22,021
36,265
Total carrying value of non-accrual loans
$1,220,599
$1,327,124
Allowance for loan losses related to non-accrual loans
$(146,652)
$(133,750)
UPB of non-accrual loans
$1,373,876
$1,466,969
March 31, 2026
March 31, 2025
Interest income on non-accrual loans for the three months ended
$9,128
$3,214
Loan modifications made to borrowers experiencing financial difficulty
In certain situations, the Company may provide loan modifications to borrowers experiencing financial difficulty. These
modifications may include interest rate reductions, principal forgiveness, term extensions, and other-than-insignificant
payment delays intended to minimize the Company’s economic loss and to avoid foreclosure or repossession of
collateral.Three months ended March 31, 2026. During the three months ended March 31, 2026, the Company entered into 50 loan
modifications with an aggregate carrying value of $232.2 million, or 5.6% of total loans, net. These modified loans
include a combination of changes to the contractual terms which were in the form of interest rate reductions, term
extensions and other-than-insignificant payment delays.
There were 5 loans with an aggregate carrying value of $145.4 million, or 3.5% of loans, net, that were modified to
include both term extensions which ranged between 2 and 60 months with a weighted average of 14 months added to the
original loan term and interest payment deferrals which ranged between 2 and 9 months with a weighted average of 3
months. There were 44 loans with an aggregate carrying value of $86.7 million, or 2.1% of loans, net that were modified
to include interest payment deferrals which ranged between 3 and 23 months with a weighted average of 4 months and
include payments for periods before the modification date. There was 1 loan with a carrying value of $0.1 million, or
less than 0.1% of loans, net that was modified to include both a 14 month interest payment deferral and an interest rate
reduction from Prime + 2.75% to a fixed rate of 9.00% from February 2026 to May 2033. Interest payment deferral
payment modifications include the reduction of interest payments to equal excess net operating income with the
difference between the original rate and the interest collected due at maturity. In most cases, default interest is waived.
During the three months ended March 31, 2026, no capital was invested by the borrowers.
Three months ended March 31, 2025. During the three months ended March 31, 2025, the Company entered into 23 loan
modifications with an aggregate carrying value of $166.0 million, or 2.2% of total loans, net. These modified loans
include a combination of changes to the contractual terms which were in the form of term extensions and other-than-
insignificant payment delays.
There were 2 loans with an aggregate carrying value of $66.4 million, or 0.9% of loans, net that were assumed by new
borrowers and modified to include both term extensions and interest payment deferrals. The term extensions ranged
between 19 and 32 months with a weighted average of 25 months added to the original loan term. Interest payment
deferrals ranged between 12 and 24 months with a weighted average of 17 months. There was 1 loan with a carrying
value of $44.2 million, or 0.5% of loans, net that was assumed by a new borrower with a 35 months term extension
added to the original loan term. There were 4 loans with an aggregate carrying value of $29.6 million, or 0.4% of loans,
net that were modified to include both term extensions and interest payment deferrals. The term extensions ranged
between 12 and 60 months with a weighted average of 14 months added to the original loan term. Interest payment
deferrals ranged between 6 and 24 months with a weighted average of 15 months and include payments for periods
before the modification date. There were 6 loans with an aggregate carrying value of $21.1 million, or 0.3% of loans, net
that were modified to include term extensions which ranged between 5 and 60 months with a weighted average of 16
months added to the original loan term. There were 10 loans with an aggregate carrying value of $4.7 million, or 0.1% of
loans, net that were modified to include interest payment deferrals which ranged between 6 and 16 months with a
weighted average of 6 months and include payments for periods before the modification date. Interest payment deferral
payment modifications include the reduction of interest payments to equal excess net operating income with the
difference between the original rate and the interest collected due at maturity. In most cases, default interest is waived.
During the three months ended March 31, 2025, $10.2 million of total capital was invested by the borrowers,
substantially all in the form of payments in contribution to reserve accounts.
The remaining elements of the Company’s modification programs are generally considered insignificant and do not have
a material impact on financial results.
Allowance for loan losses. The Company’s allowance for loan losses reflects estimates of expected life-time loan losses,
which considers historical loan losses including losses from modified loans to borrowers experiencing financial
difficulty. The Company continues to estimate the allowance for loan losses after modification using loan-specific
inputs. A majority of the modified loans during the three months ended March 31, 2026 were performing in accordance
with the modified contractual terms however, $232.2 million were on nonaccrual status regarding the ultimate
collectability of the contractually due principal and interest. Substantially all of the modified loans during the three
months ended March 31, 2025 were on accrual status and performing in accordance with the modified contractual terms.
Loans with modifications disclosed in the previous twelve months are performing in accordance with their modified
terms as of March 31, 2026, except for 52 loans with a carrying value of $185.8 million which did not make payments in
accordance with their modified terms during the three months ended March 31, 2026.
On loans for which the Company determines foreclosure of the collateral is probable, expected losses are measured
based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the
measurement date. As of March 31, 2026 and December 31, 2025, the Company’s total carrying amount of loans in the
foreclosure process was $25.7 million and $17.9 million, respectively.
Lending commitments. For the three months ended March 31, 2026 and March 31, 2025, lending commitments to
borrowers experiencing financial difficulty for which the Company has modified the loan terms were $2.2 million and
$6.8 million, respectively.
PCD loans
On March 13, 2025, the Company acquired PCD loans in connection with the UDF IV Merger. Subsequent to the
determination of the preliminary purchase price allocation, based on updated valuations obtained, the Company recorded
a measurement period adjustment of $36.3 million to increase the PCD allowance. Refer to Note 5 for further details on
assets acquired and liabilities assumed in connection with the UDF IV Merger. The table below presents a reconciliation
of the Company’s purchase price with the par value of the purchased loans.
(in thousands)
Preliminary Purchase
Price Allocation
Measurement Period
Adjustments
Updated Purchase Price
Allocation
UPB
$200,729
$(37,205)
$163,524
Allowance for credit losses
(16,626)
(36,291)
(52,917)
Non-credit discount
(87,141)
48,456
(38,685)
Purchase price of loans classified as PCD
$96,962
$(25,040)
$71,922
The Company did not acquire any PCD loans during the three months ended March 31, 2026.