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Derivatives and Hedging Activity
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activity Derivatives and Hedging Activity
Risk Management Objective of Using Derivatives
We are exposed to certain risks arising from both our business operations and economic conditions. Refer to Note 14 to the consolidated financial statements included in our Form 10-K for further discussion of our risk management objectives and policies.
Designated Hedges
The Company does not generally elect to apply the hedge accounting designation to its hedging instruments. As of March 31, 2026 and December 31, 2025, the Company did not have any designated hedges.
Non-designated Hedges and Derivatives
We have entered into the following types of non-designated hedges and derivatives:
•Foreign exchange (“Fx”) forwards whereby we agree to buy or sell a specified amount of foreign currency for a specified amount of USD at a future date, economically fixing the USD amounts of foreign denominated cash flows we expect to receive or pay related to certain foreign denominated loan investments;
•Interest rate contracts which hedge a portion of our exposure to changes in interest rates; and
•Credit instruments which hedge a portion of our exposure to the credit risk of our commercial loans held-for-sale.
The following table summarizes our non-designated derivatives as of March 31, 2026 (notional amounts in thousands):

Type of DerivativeNumber of ContractsAggregate Notional AmountNotional CurrencyMaturity
Fx contracts – Buy Euros (“EUR”)1168,640 EURApril 2026 - September 2027
Fx contracts – Buy Pounds Sterling (“GBP”)53,922 GBPApril 2026 - September 2027
Fx contracts – Buy Australian dollar (“AUD”)7407,563 AUDApril 2026 - October 2029
Fx contracts – Sell EUR151496,588 EURApril 2026 - December 2030
Fx contracts – Sell GBP234437,146 GBPApril 2026 - November 2029
Fx contracts – Sell AUD751,111,559 AUDApril 2026 - October 2029
Fx contracts – Sell Swiss Franc (“CHF”)511,443 CHFMay 2026 - May 2027
Fx contracts – Sell Swedish Kronas (“SEK”)
35364,058 SEKMay 2026 - February 2029
Interest rate swaps – Paying fixed rates241,580,284 USDJuly 2026 - December 2033
Interest rate swaps – Receiving fixed rates83,313,380 USDJanuary 2027 - January 2031
Interest rate futures
8128,000 USDMay 2026
Interest rate caps3509,000 USDMay 2026 - June 2030
Credit instruments290,000 USDJuly 2030 - December 2030
Total568

The above table excludes certain interest rate derivatives which serve as an economic hedge related to our residential loan portfolio. In 2024, we entered into a series of derivative transactions related to this loan portfolio in an effort to extend hedge duration. The current high interest rate environment has caused these loans to experience lower prepayment speeds than was originally anticipated at the time of their origination. In order to minimize volatility in future earnings and cash flows while minimizing the current cash outflow, we: (i) entered into a series of reverse swap trades to offset approximately 100% of the dollar duration of our existing interest rate swaps through the end of 2024 and approximately 80% between 2025 through their termination in the second quarter of 2027; and (ii) entered into a forward starting swap from June 2027 for four years which pays fixed and receives floating in order to replace the swaps reversed. Given the volume of these hedges and their sequential nature, the notional value of these new swaps is not representative of the notional value of our portfolio, and they were thus excluded from the table above. The notional value of the swaps described in (i) above that were effective and included as of March 31, 2026 totaled $1.6 billion. The notional value of the swaps described in (i) above that were not yet effective and not included as of March 31, 2026 totaled $3.2 billion. Because the reverse swaps and the forward starting swap are not specifically designated to assets or liabilities, changes in their respective fair values are recorded currently in earnings. The above table also excludes $3.1 billion notional amount of certain other interest rate swaps we entered into prior to March 31, 2026, but that were not yet effective.

The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 (amounts in thousands):
Fair Value of Derivatives
in an Asset Position (1) as of		Fair Value of Derivatives
in a Liability Position (2) as of
March 31,
2026
December 31, 2025
March 31,
2026
December 31, 2025
Foreign exchange contracts$23,454 $26,770 $63,970 $72,351 
Interest rate contracts8,176 18,657 14,211 10,060 
Credit instruments621 386 1,249 1,572 
Total derivatives$32,251 $45,813 $79,430 $83,983 
___________________________________________________
(1)Classified as derivative assets in our condensed consolidated balance sheets.
(2)Classified as derivative liabilities in our condensed consolidated balance sheets.
The table below presents the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 (amounts in thousands):

Derivatives Not Designated
as Hedging Instruments		Location of Gain (Loss) 
Recognized in Income
Amount of Gain (Loss)
Recognized in Income for the
Three Months Ended March 31,
20262025
Foreign exchange contractsLoss on derivative financial instruments, net$6,819 $(32,300)
Interest rate contractsLoss on derivative financial instruments, net(9,626)(7,286)
Credit instrumentsLoss on derivative financial instruments, net344 (103)
$(2,463)$(39,689)