v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting Note 26. Segment Reporting
The Company structures its segments based on a number of contributing factors, including customer base and nature of
loan program types, and reports its results of operations through the following two operating and reportable business
segments: i) LMM Commercial Real Estate and ii) Small Business Lending, which is in accordance with how the Chief
Operating Decision Maker (“CODM”), the Chief Executive Officer and Chief Investment Officer, evaluates financial
information for making decisions regarding business operations and assessing Company performance. The CODM's
financial considerations include an analysis of net interest income before provision for loan losses, provision for loan
losses and non-interest income and expenses. In addition, the CODM's analysis includes an evaluation of segment
performance with income (loss) before unallocated expenses and provision for (benefit from) income taxes being the
primary performance measure used for each reportable business segment.
LMM Commercial Real Estate
The Company originates LMM loans across the full life-cycle of an LMM property including construction, bridge,
stabilized and agency channels. As part of this segment, the Company services Freddie Mac multi-family loan products.
LMM originations include construction and permanent financing activities for the preservation and construction of
affordable housing, primarily utilizing tax-exempt bonds. This segment also reflects the impact of LMM securitization
activities. The Company acquires performing and non-performing LMM loans and intends to continue to acquire these
loans as part of the Company’s business strategy.
Small Business Lending
The Company acquires, originates and services loans guaranteed by the SBA under the SBA Section 7(a) Program,
originates and services small business loans and services government guaranteed loans focused on the USDA. This
segment also reflects the impact of SBA securitization activities.
Results of business segments and all other. The tables below present operating and reportable business segments, along
with remaining unallocated amounts primarily including interest expense relating to senior secured notes, allocated
employee compensation from the Manager, management and incentive fees paid to the Manager and other general
corporate overhead expenses. Unallocated assets were $439.8 million and $400.9 million as of June 30, 2026 and
June 30, 2025, respectively.
Three Months Ended June 30, 2026
(in thousands)
LMM Commercial
Real Estate
Small Business
Lending
Total
Interest income
$53,941
$23,460
$77,401
Interest expense
(65,245)
(17,608)
(82,853)
Net interest income (loss) before provision for loan losses
$(11,304)
$5,852
$(5,452)
Provision for loan losses
(13,689)
(7,865)
(21,554)
Net interest income (loss) after provision for loan losses
$(24,993)
$(2,013)
$(27,006)
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned
(31,965)
9,744
(22,221)
Net unrealized gain (loss) on financial instruments
(2,620)
(1,553)
(4,173)
Valuation (allowance) recovery, loans held for sale
2,447
—
2,447
Servicing income, net
1,374
(1,302)
72
Income (loss) on unconsolidated joint ventures
1,270
6
1,276
Other income
10,213
3,194
13,407
Total non-interest income (loss)
$(19,281)
$10,089
$(9,192)
Non-interest expense
Employee compensation and benefits
(6,217)
(14,065)
(20,282)
Allocated employee compensation and benefits from related party
(338)
—
(338)
Professional fees
(927)
(3,709)
(4,636)
Loan servicing expense
(2,104)
(1,335)
(3,439)
Impairment on real estate
(952)
—
(952)
Other operating expenses
(22,208)
(9,061)
(31,269)
Total non-interest expense
$(32,746)
$(28,170)
$(60,916)
Loss before unallocated expenses and provision for income taxes
$(77,020)
$(20,094)
$(97,114)
Unallocated corporate expenses
Employee compensation and benefits
(7,346)
Professional fees
(3,035)
Management fees – related party
(3,765)
Transaction related expenses
(512)
Other operating expenses - net
(1,192)
Total unallocated corporate expenses
$(15,850)
Loss before provision for income taxes
$(112,964)
Total assets
$4,107,690
$1,716,453
$5,824,143
Six Months Ended June 30, 2026
(in thousands)
LMM Commercial
Real Estate
Small Business
Lending
Total
Interest income
$112,834
$46,297
$159,131
Interest expense
(145,917)
(33,770)
(179,687)
Net interest income (loss) before provision for loan losses
$(33,083)
$12,527
$(20,556)
Provision for loan losses
(80,212)
(12,249)
(92,461)
Net interest income (loss) after provision for loan losses
$(113,295)
$278
$(113,017)
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned
(100,207)
17,901
(82,306)
Net unrealized gain (loss) on financial instruments
(11,416)
323
(11,093)
Valuation allowance, loans held for sale
(4,110)
—
(4,110)
Servicing income, net
2,971
2,522
5,493
Income (loss) on unconsolidated joint ventures
3,324
11
3,335
Other income
22,153
8,385
30,538
Total non-interest income (loss)
$(87,285)
$29,142
$(58,143)
Non-interest expense
Employee compensation and benefits
(13,866)
(29,388)
(43,254)
Allocated employee compensation and benefits from related party
(698)
—
(698)
Professional fees
(2,403)
(7,185)
(9,588)
Loan servicing expense
(16,677)
(2,436)
(19,113)
Impairment on real estate
(483)
—
(483)
Other operating expenses
(39,558)
(18,373)
(57,931)
Total non-interest expense
$(73,685)
$(57,382)
$(131,067)
Loss before unallocated expenses and provision for income taxes
$(274,265)
$(27,962)
$(302,227)
Unallocated corporate expenses
Employee compensation and benefits
(11,462)
Professional fees
(4,738)
Management fees – related party
(7,841)
Transaction related expenses
(847)
Other operating expenses - net
(2,610)
Total unallocated corporate expenses
$(27,498)
Loss before provision for income taxes
$(329,725)
Total assets
$4,107,690
$1,716,453
$5,824,143
Three Months Ended June 30, 2025
(in thousands)
LMM Commercial
Real Estate
Small Business
Lending
Total
Interest income
$122,268
$30,467
$152,735
Interest expense
(116,088)
(19,749)
(135,837)
Net interest income before provision for loan losses
$6,180
$10,718
$16,898
Provision for loan losses
(5,146)
(3,494)
(8,640)
Net interest income after provision for loan losses
$1,034
$7,224
$8,258
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned
2,766
15,448
18,214
Net unrealized gain (loss) on financial instruments
(4,128)
3,380
(748)
Valuation allowance, loans held for sale
(39,746)
—
(39,746)
Servicing income, net
1,931
(2,235)
(304)
Income (loss) on unconsolidated joint ventures
(155)
11
(144)
Other income
2,775
7,522
10,297
Total non-interest income (loss)
$(36,557)
$24,126
$(12,431)
Non-interest expense
Employee compensation and benefits
(6,479)
(14,435)
(20,914)
Allocated employee compensation and benefits from related party
(360)
—
(360)
Professional fees
(929)
(3,291)
(4,220)
Loan servicing expense
(11,013)
(25)
(11,038)
Impairment on real estate
(4,268)
—
(4,268)
Other operating expenses
(4,472)
(9,972)
(14,444)
Total non-interest expense
$(27,521)
$(27,723)
$(55,244)
Income (loss) before unallocated expenses and provision for income taxes
$(63,044)
$3,627
$(59,417)
Unallocated corporate expenses
Loss on bargain purchase
(14,381)
Employee compensation and benefits
(5,485)
Professional fees
(2,148)
Management fees – related party
(5,072)
Transaction related expenses
(639)
Other operating expenses - net
(1,548)
Total unallocated corporate expenses
$(29,273)
Loss before provision for income taxes
$(88,690)
Total assets
$7,377,104
$1,530,810
$8,907,914
Six Months Ended June 30, 2025
(in thousands)
LMM Commercial
Real Estate
Small Business
Lending
Total
Interest income
$247,241
$60,461
$307,702
Interest expense
(236,442)
(39,861)
(276,303)
Net interest income before recovery of (provision for) loan losses
$10,799
$20,600
$31,399
Recovery of (provision for) loan losses
112,795
(11,867)
100,928
Net interest income after recovery of (provision for) loan losses
$123,594
$8,733
$132,327
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned
(11,834)
40,717
28,883
Net unrealized gain (loss) on financial instruments
(4,732)
2,234
(2,498)
Valuation allowance, loans held for sale
(139,464)
—
(139,464)
Servicing income, net
3,346
2,806
6,152
Income (loss) on unconsolidated joint ventures
(4,160)
34
(4,126)
Other income
5,812
14,784
20,596
Total non-interest income (loss)
$(151,032)
$60,575
$(90,457)
Non-interest expense
Employee compensation and benefits
(12,350)
(29,739)
(42,089)
Allocated employee compensation and benefits from related party
(688)
—
(688)
Professional fees
(1,747)
(6,196)
(7,943)
Loan servicing expense
(26,077)
(805)
(26,882)
Impairment on real estate
(6,614)
—
(6,614)
Other operating expenses
(7,808)
(21,043)
(28,851)
Total non-interest expense
$(55,284)
$(57,783)
$(113,067)
Income (loss) before unallocated expenses and provision for income taxes
$(82,722)
$11,525
$(71,197)
Unallocated corporate income (expenses)
Gain on bargain purchase
88,090
Employee compensation and benefits
(8,512)
Professional fees
(3,913)
Management fees – related party
(10,649)
Transaction related expenses
(3,333)
Other operating expenses - net
(1,973)
Total unallocated corporate income
$59,710
Income before provision for income taxes
$(11,487)
Total assets
$7,377,104
$1,530,810
$8,907,914