v3.26.3
Segment Reporting
 9 Months Ended
Sep. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting
24. Segment Reporting

As of September 30, 2026, the Company operates in two reportable segments: (i) investment portfolio and (ii) Constructive. The Company's reportable segments are differentiated by the nature of their business activities, which is consistent with the Company's internal reporting structure and the financial information regularly provided to the Company's chief operating decision maker ("CODM"). No operating segments have been aggregated to form the Company's reportable segments.

The Company is in the business of acquiring, investing in, financing and managing primarily mortgage-related residential assets (the “investment portfolio”), which includes residential loans, investment securities, multi-family loans and equity investments and single-family rental properties. The investment portfolio segment derives revenues from interest income, net income (loss) from real estate and other income. On July 15, 2025, the Company acquired the outstanding 50% ownership interests in Constructive through the consummation of a membership interest purchase agreement. Constructive is a business purpose loan lender specializing in rental and transitional loans for real estate investors that derives revenues from the origination and sale of loans.

The Company's CODM is its Chief Executive Officer. The CODM evaluates the performance of each reportable segment, and allocates capital and resources among the segments, based upon segment income (loss) from operations before income taxes and segment assets. The CODM uses segment income (loss) from operations before income taxes to determine the allocation of capital between the investment portfolio and Constructive's origination platform, to benchmark segment results against those of peers and to monitor actual results against budgeted and projected performance. Segment income (loss) from operations before income taxes is also a significant input to the Company's book value per common share, a consolidated measure (calculated as the Company’s stockholders’ equity attributable to common stockholders divided by outstanding shares of common stock) the CODM uses to evaluate overall Company performance relative to peers and which is a component of the calculation of management's compensation.

The accounting policies applied to the segments are the same as those described in Note 2 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, except that certain corporate expenses are not assigned or allocated to either reportable segment. There have been no changes in the measurement methods used to determine segment income (loss) from operations before income taxes from those used in the prior period, and no asymmetrical allocations are made to either reportable segment. In the normal course of business, business purpose loans originated by Constructive may subsequently be transferred to the investment portfolio segment as whole loans. All business purpose loans are accounted for under the fair value option, and amounts transferred between reportable segments are accounted for at fair value at the time of transfer.

Activities that are not allocated to either reportable segment are reconciling items to the condensed consolidated financial statements and primarily consist of general and administrative expenses not directly attributable to the investment portfolio or Constructive, interest expense on senior unsecured notes and subordinated debentures (see Note 14), unrealized gains or losses on senior unsecured notes accounted for at fair value, interest income, gains or losses on derivative instruments, other income or loss and income or losses from equity investments not allocated to a segment and financing transaction costs unrelated to securitizations. There are no other differences between the total of the reportable segments' income (loss) from operations before income taxes and the Company's income (loss) from operations before income taxes.

The expense categories presented in the tables below represent the significant segment expenses regularly provided to the CODM and included within segment income (loss) from operations before income taxes.

The following tables present financial information by the Company's two reportable segments for the three and nine months ended September 30, 2026 and 2025, respectively, which, with the inclusion of unallocated amounts, in total reconciles to the same data for the Company on a consolidated basis (dollar amounts in thousands):
For the Three Months Ended September 30,
20262025
Investment Portfolio
Constructive
Total Reportable SegmentsInvestment PortfolioConstructiveTotal Reportable Segments
NET INTEREST INCOME:
Interest income$178,563 $2,655 $181,218 $158,421 $2,192 $160,613 
Interest expense120,048 2,186 122,234 113,398 2,068 115,466 
Total net interest income58,515 469 58,984 45,023 124 45,147 
NET LOSS FROM REAL ESTATE:
Rental income11,263 — 11,263 16,600 — 16,600 
Other real estate income1,995 — 1,995 2,504 — 2,504 
Total income from real estate13,258 — 13,258 19,104 — 19,104 
Interest expense, mortgages payable on real estate3,281 — 3,281 5,409 — 5,409 
Depreciation expense
4,503 — 4,503 5,936 — 5,936 
Other real estate expenses8,235 — 8,235 11,637 — 11,637 
Total expenses related to real estate16,019 — 16,019 22,982 — 22,982 
Total net loss from real estate(2,761)— (2,761)(3,878)— (3,878)
OTHER (LOSS) INCOME:
Realized losses, net
(6,063)— (6,063)(5,610)— (5,610)
Unrealized (losses) gains, net(474,805)— (474,805)60,024 — 60,024 
Gains (losses) on derivative instruments, net298,974 (13)298,961 (10,912)(1,941)(12,853)
Mortgage banking activities, net— 10,856 10,856 — 14,103 14,103 
Loss from equity investments(3,196)— (3,196)(1,642)— (1,642)
Impairment of real estate
(98)— (98)(1,619)— (1,619)
Other income1,721 1,462 3,183 1,479 — 1,479 
Total other (loss) income(183,467)12,305 (171,162)41,720 12,162 53,882 
GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES:
General and administrative expenses
6,263 10,472 16,735 463 12,274 12,737 
Portfolio operating expenses5,835 — 5,835 6,040 — 6,040 
Loan origination costs
— 4,198 4,198 — 3,788 3,788 
Financing transaction costs
2,226 — 2,226 4,306 — 4,306 
Total general, administrative and operating expenses
14,324 14,670 28,994 10,809 16,062 26,871 
(LOSS) INCOME FROM OPERATIONS BEFORE INCOME TAXES$(142,037)$(1,896)$(143,933)$72,056 $(3,776)$68,280 
For the Three Months Ended September 30,
Reconciliation of (loss) income from operations before income taxes20262025
Total (loss) income from operations before income taxes for reportable segments$(143,933)$68,280 
Unallocated amounts:
Interest income16 20 
Interest expense(10,203)(8,581)
Unrealized gains (losses), net2,930 (5,172)
Losses on derivative instruments, net— (153)
Income from equity investments— 47 
General and administrative expenses(7,527)(10,612)
Portfolio operating expenses— (707)
Financing transaction costs(3,435)(3,635)
Total unallocated amounts(18,219)(28,793)
Consolidated (loss) income from operations before income taxes$(162,152)$39,487 
For the Nine Months Ended September 30,
20262025
Investment Portfolio
ConstructiveTotal Reportable SegmentsInvestment PortfolioConstructiveTotal Reportable Segments
NET INTEREST INCOME:
Interest income$518,437 $9,208 $527,645 $429,025 $2,192 $431,217 
Interest expense343,881 7,761 351,642 303,038 2,068 305,106 
Total net interest income174,556 1,447 176,003 125,987 124 126,111 
NET LOSS FROM REAL ESTATE:
Rental income35,871 — 35,871 51,940 — 51,940 
Other real estate income5,972 — 5,972 8,457 — 8,457 
Total income from real estate41,843 — 41,843 60,397 — 60,397 
Interest expense, mortgages payable on real estate10,452 — 10,452 17,298 — 17,298 
Depreciation expense13,612 — 13,612 17,759 — 17,759 
Other real estate expenses25,430 — 25,430 34,466 — 34,466 
Total expenses related to real estate49,494 — 49,494 69,523 — 69,523 
Total net loss from real estate(7,651)— (7,651)(9,126)— (9,126)
OTHER (LOSS) INCOME:
Realized losses, net(29,703)— (29,703)(50,481)— (50,481)
Unrealized (losses) gains, net(549,187)— (549,187)197,450 — 197,450 
Gains (losses) on derivative instruments, net394,128 (158)393,970 (87,995)(1,941)(89,936)
Mortgage banking activities, net— 42,394 42,394 — 14,103 14,103 
(Loss) income from equity investments(2,706)— (2,706)2,121 — 2,121 
Impairment of real estate(2,489)— (2,489)(9,437)— (9,437)
Other income56,600 1,462 58,062 5,644 — 5,644 
Total other (loss) income (133,357)43,698 (89,659)57,302 12,162 69,464 
GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES:
General and administrative expenses 18,113 33,973 52,086 1,277 12,274 13,551 
Portfolio operating expenses18,400 — 18,400 20,040 — 20,040 
Loan origination costs
— 13,070 13,070 — 3,788 3,788 
Financing transaction costs7,049 — 7,049 6,589 — 6,589 
Total general, administrative and operating expenses43,562 47,043 90,605 27,906 16,062 43,968 
(LOSS) INCOME FROM OPERATIONS BEFORE INCOME TAXES$(10,014)$(1,898)$(11,912)$146,257 $(3,776)$142,481 
For the Nine Months Ended September 30,
Reconciliation of (loss) income from operations before income taxes20262025
Total (loss) income from operations before income taxes for reportable segments$(11,912)$142,481 
Unallocated amounts:
Interest income47 51 
Interest expense(28,633)(20,031)
Unrealized gains, net6,245 220 
Gains on derivative instruments, net41,595 3,162 
Loss from equity investments— (1,554)
Other loss(308)— 
General and administrative expenses(22,277)(33,998)
Portfolio operating expenses— (1,267)
Financing transaction costs(7,119)(7,584)
Total unallocated amounts(10,450)(61,001)
Consolidated (loss) income from operations before income taxes$(22,362)$81,480 


September 30, 2026September 30, 2025
Other segment disclosuresInvestment PortfolioConstructiveTotal Reportable SegmentsInvestment PortfolioConstructiveTotal Reportable Segments
Assets (1) (2)
$12,953,933 $269,244 $13,223,177 $11,983,324 $224,261 $12,207,585 
Investments in equity method investees$17,926 $— $17,926 $28,825 $— $28,825 
Expenditures for long-lived assets (1)
$2,676 $— $2,676 $6,887 $— $6,887 
Reconciliation of segment assets
Total assets for reportable segments$13,223,177 $12,207,585 
Unallocated amounts:
Cash and cash equivalents241,559 170,871 
Restricted cash18,605 3,332 
Other assets40,834 20,074 
Total unallocated amounts300,998 194,277 
Consolidated total assets$13,524,175 $12,401,862 

(1)Our condensed consolidated balance sheets include assets of Consolidated VIEs as the Company is the primary beneficiary of these VIEs.
(2)Goodwill in the amount of approximately $22.4 million is allocated to Constructive (see Note 23).