# Franklin BSP Realty Trust, Inc. (FBRT) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Franklin BSP Realty Trust, Inc.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1562528/000156252824000008/bsprt-20231231.htm
Accession: 0001562528-24-000008
Filing date: 2024-02-26
Report date: 2023-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/FBRT/
All MD&A years: /company/FBRT/mda/
Previous year: /company/FBRT/mda/fy2022/ (FY 2022)
Next year: /company/FBRT/mda/fy2024/ (FY 2024)

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Franklin BSP Realty Trust, Inc. the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K.

As used herein, the terms "the Company," "we," "our" and "us" refer to Franklin BSP Realty Trust, Inc., a Maryland corporation and, as required by context, to Benefit Street Partners Realty Operating Partnership, L.P., a Delaware limited partnership, which we refer to as the "OP," and to its subsidiaries. We are externally managed by Benefit Street Partners L.L.C. (our "Advisor").

This discussion contains forward-looking statements reflecting the Company’s current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections of this Annual Report on Form 10-K entitled “Risk Factors” and “Forward-Looking Statements.”

Overview

The Company is a Maryland corporation and has made tax elections to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes since 2013. The Company, through one or more subsidiaries which are each treated as a taxable REIT subsidiary ("TRS"), is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States. Substantially all of our business is conducted through the OP, a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP.

The Company has no employees. We are managed by our Advisor pursuant to an Advisory Agreement (the "Advisory Agreement"). Our Advisor manages our affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of our assets and our operations.

The Advisor, an SEC-registered investment adviser, is a credit-focused alternative asset management firm. The Advisor manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the Advisor’s robust platform. The Advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton".

The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") securitization transactions. Historically this business has focused primarily on CMBS, commercial real estate collateralized loan obligation bonds ("CRE CLO bonds"), collateralized debt obligations ("CDOs") and other securities. As a result of the October 2021 acquisition of Capstead Mortgage Corporation ("Capstead"), the Company acquired a portfolio of residential mortgage backed securities (“RMBS”) in the form of residential adjustable-rate mortgage pass-through securities ("ARM Agency Securities" or "ARMs") issued and guaranteed by government-sponsored enterprises or by an agency of the federal government. As of December 31, 2023, the Company has fully disposed of all of its ARM Agency Securities and is continuing to reinvest the proceeds from the sale of these securities in its other businesses. The Company also owns real estate that was either acquired by the Company through foreclosure or deed in lieu of foreclosure, or that was purchased for investment, primarily subject to triple net leases.

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Book Value Per Share

The following table calculates the Company's book value per share as of December 31, 2023 and 2022 (in thousands, except share and per share amounts):

[[GREPCENT_TABLE]]
[["","","December 31, 2023","","December 31, 2022"],["Stockholders' equity applicable to common stock","","$","1,300,372","","","$","1,304,238"],["Shares:"],["Common stock","","81,942,656","","","82,479,743"],["Restricted stock and restricted stock units","","809,257","","","513,041"],["Total outstanding shares","","82,751,913","","","82,992,784"],["Book value per share","","$","15.71","","","$","15.72"]]
[[/GREPCENT_TABLE]]

The following table calculates the Company's fully-converted book value per share as of December 31, 2023 and 2022 (in thousands, except share and per share amounts):

[[GREPCENT_TABLE]]
[["","","December 31, 2023","","December 31, 2022"],["Stockholders' equity applicable to convertible common stock","","$","1,390,120","","","$","1,398,986"],["Shares:"],["Common stock","","81,942,656","","","82,479,743"],["Restricted stock and restricted stock units","","809,257","","","513,041"],["Series H convertible preferred stock","","5,370,498","","","5,370,640"],["Series I convertible preferred stock","","\u2014","","","299,200"],["Total outstanding shares","","88,122,411","","","88,662,624"],["Fully-converted book value per share (1) (2)","","$","15.77","","","$","15.78"]]
[[/GREPCENT_TABLE]]
________________________

(1) Fully-converted book value per share reflects full conversion of our outstanding series of convertible preferred stock and vesting of our outstanding equity compensation awards.

(2) Excluding the amounts for accumulated depreciation and amortization of real property of $9.4 million and $5.2 million as of December 31, 2023 and 2022, respectively, would result in a fully-converted book value per share of $15.88 and $15.84 as of December 31, 2023 and 2022, respectively.

Critical Accounting Estimates

Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting estimates are those that require the application of management’s most difficult, subjective or complex judgments on matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses.

Set forth below is a summary of the critical accounting estimates that management believes are important to the preparation of our financial statements and require complex management judgment. The Company’s significant accounting policies, including recently issued accounting pronouncements, are more fully described in Note 2 – Summary of Critical Accounting Policies to the accompanying consolidated financial statements included in this Annual Report on Form 10-K.

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Credit Losses - Estimating Credit Losses

General allowance for credit losses

The general allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the general allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts.

The general allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the general allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

In measuring the general allowance for credit losses for financial instruments such as loans held for investment and unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the provision for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model to determine the general allowance for credit losses principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 2002 to 2021 provided by a reputable third party, forecasting the loss parameters based on a projected macroeconomic scenario using a probability-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a discounted cash flow (“DCF”) methodology.

Specific Allowance for credit losses

For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the specific allowance for credit losses.

For loans held for investment which the Company identifies reasonable doubt as to whether the collection of contractual components can be satisfied, a loan specific allowance for credit losses analysis is performed. Determining whether a specific allowance for credit losses for a loan is required entails significant judgment from management and is based on several factors including (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. If a loan is determined to have a specific allowance for credit losses, the specific allowance for credit losses is recorded as a component of our Current Expected Credit Loss ("CECL") reserve by applying the practical expedient for collateral dependent loans. The CECL reserve is assessed on an individual basis for such loans by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. The estimated fair value of underlying collateral requires judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plans, loan sponsorship, actions of other lenders, and other factors deemed relevant by the Company. Actual losses, if any, could ultimately differ materially from these estimates. The Company only expects to write-off specific provisions if and when such amounts are deemed non-recoverable. Non-recoverability is generally determined at the time a loan is settled, or in the case of foreclosure, when the underlying asset is sold. Non-recoverability may also be concluded if, in the Company's determination, it is deemed certain that all amounts due will not be collected. If a loan is determined to be impaired based on the above considerations, management records a write-off through a charge to the allowance for credit losses and the respective loan balance.

Risk Rating

In developing the provision for credit losses for its loans held for investment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability, using similar factors as those in developing the provision for credit losses. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly.

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The Company designates loans as non-performing when (i) full payment of principal and coupon interest components become 90-days past due ("non-accrual status"); or (ii) the Company has reasonable doubt as to whether the collection of contractual components can be satisfied ("cost recovery status"). When a loan is designated as non-performing and placed on non-accrual status, interest is only recognized as income when payment has been received. Loans designated as non-performing and placed on non-accrual status are removed from their non-performing designation when collection of principal and coupon interest components have been satisfied. When a loan is designated as non-performing and placed on cost recovery status, the cost-recovery method is applied to which receipt of principal or coupon interest is recorded as a reduction to the amortized cost until collection of all contractual components are reasonably assured.

Real Estate Owned - Estimating Fair Value and Holding Period

Real estate owned assets, held for investment are carried at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment.

Real estate owned assets, held for investment are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate owned assets are capitalized and depreciated over their estimated useful lives. Real estate owned revenue is recognized when the Company satisfies a performance obligation by transferring a promised good or service to a customer. The Company is considered to have satisfied all performance obligation at a point in time.

Real estate owned assets that are probable to be sold within one year are reported as held for sale. Real estate owned assets classified as held for sale are measured at the lower of its carrying value or estimated fair value less cost to sell. Real estate owned assets are not depreciated or amortized while classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be accrued. Upon the disposition of a real estate owned asset, the Company calculates realized gains and losses as net proceeds received less the carrying value of the real estate owned asset. Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.

Real Estate Securities - Estimating Fair Value

On the acquisition date, all of our real estate securities will be classified as available for sale ("AFS") and will be carried at fair value, with any unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. However, we may elect to transfer these assets to trading securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded as unrealized gains or losses on investments in the consolidated statements of operations. Related discounts, premiums, and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to Interest income in the consolidated statements of operations.

Credit Impairment Analysis of Real Estate Securities

Real estate securities for which the fair value option has not been elected will be periodically evaluated for credit impairment. AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income, while credit-related impairment is recognized as an allowance in the consolidated balance sheets with a corresponding adjustment in the consolidated statements of operations. If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.

The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.

The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to Accumulated other comprehensive income/(loss) in the consolidated balance sheets.

Real estate securities for which the fair value option has been elected are not evaluated for other-than-temporary impairment as changes in fair value are recorded in the consolidated statement of operations.

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Results of Operations

Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022

The Company conducts its business through the following segments:

•The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgages, subordinate mortgages, mezzanine loans and participations in such loans.

•The real estate securities business focuses on investing in and asset managing real estate securities. Historically this business has focused primarily on CMBS, CRE CLO bonds, CDO notes, and other securities. As a result of the October 2021 acquisition of Capstead, the Company acquired a portfolio of ARM Agency Securities. The portfolio was completely divested by the third quarter of 2023.

•The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit. The TRS may also hold certain mezzanine loans that don't qualify as good REIT assets due to any potential loss from foreclosure.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2023 and 2022 (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2023","","2022"],["","","Average Carrying Value (1)","","Interest Income/Expense (2)(3)","","Avg Yield/Financing Cost (4)","","Average Carrying Value (1)","","Interest Income/Expense (2)","","Avg Yield/Financing Cost (4)"],["Interest-earning assets:"],["Real estate debt (5)","","$","5,038,267","","$","530,116","","","10.5","%","","$","4,917,287","","$","320,546","","","6.5","%"],["Real estate conduit","","16,408","","2,244","","","13.7","%","","97,556","","6,956","","","7.1","%"],["Real estate securities","","260,425","","17,323","","","6.7","%","","1,203,242","","30,203","","","2.5","%"],["Total","","$","5,315,100","","$","549,683","","","10.3","%","","$","6,218,085","","$","357,705","","","5.8","%"],["Interest-bearing liabilities:"],["Repurchase Agreements - commercial mortgage loans","","$","573,530","","$","54,564","","9.5","%","","$","771,223","","$","40,162","","","5.2","%"],["Other financing and loan participation - commercial mortgage loans","","59,519","","5,478","","9.2","%","","47,216","","1,487","","","3.1","%"],["Repurchase Agreements - real estate securities","","244,469","","14,118","","5.8","%","","1,097,874","","8,850","","","0.8","%"],["Collateralized loan obligations","","3,165,612","","223,686","","7.1","%","","2,909,513","","103,744","","","3.6","%"],["Unsecured debt","","85,613","","7,731","","9.0","%","","101,659","","6,283","","","6.2","%"],["Total","","$","4,128,743","","$","305,577","","","7.4","%","","$","4,927,485","","$","160,526","","","3.3","%"],["Net interest income/spread","","","","$","244,106","","","2.9","%","","","","$","197,179","","","2.5","%"],["Average leverage % (6)","","77.7","%","","","","","","79.2","%"],["Weighted average levered yield (7)","","","","","","20.6","%","","","","","","15.3","%"]]
[[/GREPCENT_TABLE]]
________________________

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities. Amounts are calculated based on daily averages for the years ended December 31, 2023 and 2022, respectively.

(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.

(3) Excludes other income on the real estate owned business segment.

(4) Calculated as interest income or expense divided by average carrying value.

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(5) The collateral sale of a Brooklyn hotel loan in April 2023, which allowed the company to recover its full investment, resulted in $15.5 million and $4.9 million in coupon and default interest income, respectively, recognized in the Company's real estate debt segment during the year ended December 31, 2023.

(6) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

(7) Calculated by dividing net interest income/spread by the average interest-earning assets less average interest-bearing liabilities.

Interest Income

Interest income for the years ended December 31, 2023 and 2022 totaled $552.5 million and $357.7 million, respectively, an increase of $194.8 million due primarily to an approximate 330 basis point increase in daily average SOFR and SOFR equivalent rates and the impact of $20.4 million from the collateral sale of the Brooklyn hotel loan in April 2023. As of December 31, 2023, our portfolio consisted of (i) 144 commercial mortgage loans, held for investment and (ii) seven real estate securities, available for sale, measured at fair value. As of December 31, 2022, our portfolio consisted of (i) 161 commercial mortgage loans, held for investment, (ii) two commercial mortgage loans, held for sale, measured at fair value, (iii) seven real estate securities, available for sale, measured at fair value and (iv) ARMs.

Interest Expense

Interest expense for the years ended December 31, 2023 and 2022 totaled $305.6 million and $160.5 million, respectively, an increase of $145.1 million due primarily to an increase of $256.1 million in the average carrying value of our collateralized loan obligations coupled with an approximate 330 basis point increase in average SOFR and SOFR equivalent rates partially offset by a decrease of $1.1 billion in the average carrying values of our repurchase agreements - commercial mortgage loans and real estate securities.

Revenue from Real Estate Owned

For the years ended December 31, 2023 and 2022, revenue from real estate owned was $17.0 million and $9.7 million, respectively, an increase of $7.3 million due primarily to rental income obtained from additional retail properties acquired as real estate owned.

Provision/(Benefit) for Credit losses

Provision for credit losses was $33.7 million during the year ended December 31, 2023 compared to a provision of $36.1 million during the year ended December 31, 2022. The following paragraphs set forth explanations for changes in the general and specific reserves for the years ended December 31, 2023 and 2022.

For the years ended December 31, 2023 and 2022, the increases in general CECL allowance of $21.4 million and $10.8 million, respectively, were primarily related to a more pessimistic view of the macroeconomic scenario utilized for the CECL model. For the year ended December 31, 2023, this was partially offset by a decrease in the size of our loan portfolio compared to the preceding period.

For the year ended December 31, 2023, the increase in specific CECL allowance of $12.3 million was primarily related to one office loan located in Portland, OR. For the year ended December 31, 2022, a specific CECL provision of $25.3 million was recorded for the loan collateralized by the Walgreens Portfolio.

Realized Gain/(Loss) on Extinguishment of Debt

Realized gain on extinguishment of debt for the year ended December 31, 2023 of $2.2 million was primarily related to the redemption of $17.5 million par value unsecured debt at a price equal to 75% of par value coupled with the repurchases of $2.3 million of bonds of BSPRT 2021-FL7 and $8.25 million of bonds of BSPRT 2019-FL5 partially offset by the redemption of BSPRT 2019-FL5. Realized loss on extinguishment of debt for the year ended December 31, 2022 of $5.2 million was primarily related to the redemption of BSPRT 2018-FL4.

Realized Gain/(Loss) on Sale of Available for Sale Trading Securities

Realized gain on sale of available for sale trading securities for the year ended December 31, 2023 of $0.1 million was primarily related to the sale of 12 CRE CLO bonds. There were no sales of available for sale trading securities during the year ended December 31, 2022.

Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Sale, Measured at Fair Value

Realized gain on commercial mortgage loans, held for sale, measured at fair value for the year ended December 31, 2023 of $3.9 million was related to the sale of $118.1 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $122.1 million. Realized gain on commercial mortgage loans, held for sale,

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measured at fair value for the year ended December 31, 2022 of $2.4 million was related to the sale of $368.9 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $370.2 million.

Gain/(Loss) on Other Real Estate Investments

Loss on other real estate investments for the year ended December 31, 2023 was $7.1 million compared to $0.7 million for the year ended December 31, 2022. For the year ended December 31, 2023, the loss was primarily the result of the sale of two real estate owned, held for sale properties located in New Rochelle, NY and St. Louis, MO, respectively, resulting in a total loss of $3.3 million, in addition to a $4.0 million impairment loss on our real estate owned, held for sale asset related to the Walgreens Portfolio.

Unrealized Gain/(Loss) on Commercial Mortgage Loans, Held for Sale, Measured at Fair Value

The Company did not hold any commercial mortgage loans, held for sale, measured at fair value as of December 31, 2023. Unrealized gain for the year ended December 31, 2023 was $44.0 thousand related to the reversal of prior year unrealized gain/loss on a sale of a commercial real estate loan into the CMBS securitization market made in the first quarter of 2023. Comparatively, unrealized gain for the year ended December 31, 2022 was $0.5 million related to changes in fair market values on loans held in the Company's TRS coupled with the reversal of unrealized gain/loss on a sale of commercial real estate loans into the CMBS securitization market.

Trading Gain/(Loss)

Trading loss for the years ended December 31, 2023 and 2022 of $0.6 million and $119.2 million, respectively, was attributable to $17.6 million and $480.2 million of principal paydowns, respectively, $218.2 million and $3.8 billion of sales of ARM Agency Securities, respectively, and changes in market values on these securities. We sold all remaining assets from our ARMs portfolio in the third quarter of 2023.

Net Result from Derivative Transactions

Net result from derivative transactions for the year ended December 31, 2023 of a $0.9 million gain was composed of a realized gain of $1.0 million due primarily to the termination and settlement of interest rate swap positions partially offset by an unrealized loss of $0.1 million. This is compared to a net gain on our derivative portfolio of $44.2 million composed of a realized gain of $60.0 million due primarily to the termination and settlement of interest rate swap positions specifically designed to hedge the ARMs portfolio partially offset by an unrealized loss of $15.8 million for the year ended December 31, 2022.

(Provision)/Benefit for Income Tax

Benefit for income tax for the year ended December 31, 2023 was $2.8 million compared to a benefit of $0.4 million for the year ended December 31, 2022. The difference is due to change in taxable income/loss in our TRS segment.

Net (Income)/Loss Attributable to Non-controlling Interest

Net loss attributable to non-controlling interest in our consolidated joint ventures for the year ended December 31, 2023 amounted to $0.7 million compared to a net loss attributable to non-controlling interest of $0.2 million for the year ended December 31, 2022.

Preferred Share Dividends

Preferred share dividends were $27.0 million for the year ended December 31, 2023 compared to $41.7 million for the year ended December 31, 2022, a decrease of $14.7 million due primarily to fewer preferred shares outstanding following the automatic conversion into Common Stock of the Company's Series F Convertible Preferred Stock in April 2022, Series C Convertible Preferred Stock in October 2022 and Series I Convertible Preferred Stock in January 2023 (see Note 9 - Redeemable Convertible Preferred Stock and Equity Transactions).

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Expenses from Operations

Expenses from operations for the years ended December 31, 2023 and 2022 consisted of the following (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2023","","2022"],["Asset management and subordinated performance fee","","$","33,847","","","$","26,157"],["Acquisition expenses","","1,241","","","1,360"],["Administrative services expenses","","14,440","","","12,928"],["Professional fees","","15,270","","","22,566"],["Share-based compensation","","4,761","","","2,519"],["Depreciation and amortization","","7,128","","","5,408"],["Other expenses","","11,135","","","6,572"],["Total expenses from operations","","$","87,822","","","$","77,510"]]
[[/GREPCENT_TABLE]]

The increase in operating expense was primarily related to (i) an increase in asset management and subordinated performance fees due to incentive fees incurred during the year ended December 31, 2023 and (ii) an increase in other expenses due to expenses incurred in order to operate various REO investments in our portfolio partially offset by (iii) a decrease in professional fees primarily related to the reduction in legal costs associated with our recovery efforts related to a hotel asset and the Walgreens Portfolio.

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Comparison of the Three Months Ended December 31, 2023 to the Three Months Ended September 30, 2023

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the three months ended December 31, 2023 and September 30, 2023 (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Three Months Ended"],["","","December 31, 2023","","September 30, 2023"],["","","Average Carrying Value (1)","","Interest Income/Expense (2)(3)","","Avg Yield/Financing Cost (4)(5)","","Average Carrying Value (1)","","Interest Income/Expense (2)(3)","","Avg Yield/Financing Cost (4)(5)"],["Interest-earning assets:"],["Real estate debt","","$","4,778,141","","$","125,816","","","10.5","%","","$","4,770,339","","$","131,093","","","11.0","%"],["Real estate conduit","","10,826","","1,065","","","39.4","%","","9,859","","109","","","4.4","%"],["Real estate securities","","232,430","","4,835","","8.3","%","","277,664","","4,908","","","7.1","%"],["Total","","$","5,021,397","","$","131,716","","","10.5","%","","$","5,057,862","","$","136,110","","","10.8","%"],["Interest-bearing liabilities:"],["Repurchase Agreements - commercial mortgage loans","","$","245,775","","$","8,093","","13.2","%","","$","711,560","","$","16,868","","","9.5","%"],["Other financing and loan participation - commercial mortgage loans","","26,051","","657","","10.1","%","","61,125","","1,444","","","9.4","%"],["Repurchase Agreements - real estate securities","","248,456","","3,979","","6.4","%","","223,199","","3,151","","","5.6","%"],["Collateralized loan obligations","","3,508,595","","66,579","","7.6","%","","2,974,039","","54,608","","","7.3","%"],["Unsecured debt","","81,283","","1,924","","9.5","%","","81,258","","1,902","","","9.4","%"],["Total","","$","4,110,160","","$","81,232","","","7.9","%","","$","4,051,181","","$","77,973","","","7.7","%"],["Net interest income/spread","","","","$","50,484","","","2.6","%","","","","$","58,137","","","3.1","%"],["Average leverage % (6)","","81.9","%","","","","","","80.1","%"],["Weighted average levered yield (7)","","","","","","22.2","%","","","","","","23.1","%"]]
[[/GREPCENT_TABLE]]
________________________

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities. Amounts are calculated based on daily averages for the three months ended December 31, 2023 and September 30, 2023, respectively.

(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.

(3) Excludes other income on the real estate owned business segment.

(4) Calculated as interest income or expense divided by average carrying value.

(5) Annualized.

(6) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

(7) Calculated by dividing net interest income/spread by the average interest-earning assets less average interest-bearing liabilities.

Interest Income

Interest income for the three months ended December 31, 2023 and September 30, 2023 totaled $132.0 million and $137.0 million, respectively, a decrease of $5.0 million due primarily to payoffs of two loans occurring in the third quarter of 2023 resulting in approximately $6.3 million of income. As of December 31, 2023, our portfolio consisted of (i) 144 commercial mortgage loans, held for investment and (ii) seven real estate securities, available for sale, measured at fair value. As of September 30, 2023, our portfolio consisted of (i) 145 commercial mortgage loans, held for investment, (ii) one commercial mortgage loan, held for sale, measured at fair value and (iii) six real estate securities, available for sale, measured at fair value.

Interest Expense

Interest expense for the three months ended December 31, 2023 and September 30, 2023 totaled $81.2 million and $78.0 million, respectively, an increase of $3.2 million due primarily to an increase of $534.6 million in the average carrying value of our collateralized loan obligations partially offset by a decrease of $465.8 million in the average carrying value of our repurchase agreements - commercial mortgage loans.

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Revenue from Real Estate Owned

For the three months ended December 31, 2023 and September 30, 2023, revenue from real estate owned was $4.0 million and $3.3 million, respectively, an increase of $0.7 million due primarily to rental income obtained from the acquisition of an additional property as real estate owned.

(Provision)/Benefit for Credit losses

Provision for credit losses was $5.4 million during the three months ended December 31, 2023 compared to a provision of $2.4 million during three months ended September 30, 2023. The following paragraphs set forth explanations for changes in the general and specific reserves for the three months ended December 31, 2023 and September 30, 2023.

For the three months ended December 31, 2023 and September 30, 2023, the increases in general allowance of $5.4 million and $2.8 million, respectively, were primarily related to a more pessimistic view of the macroeconomic scenario utilized for the CECL model. For the three months ended December 31, 2023, this was coupled with increases in the size of our loan portfolio compared to the preceding period.

For the three months ended December 31, 2023, the Company did not recognize specific CECL benefit or provisions. Comparatively, for the three months ended September 30, 2023, the Company recognized $0.4 million of specific CECL benefit on one office loan located in Portland, OR.

Realized Gain/(Loss) on Extinguishment of Debt

The Company did not realized a gain or loss on extinguishment of debt for the three months ended December 31, 2023. Realized loss on extinguishment of debt for the three months ended September 30, 2023 of $2.8 million was related to redemption of BSPRT 2019-FL5.

Realized Gain/(Loss) on Sale of Available for Sale Trading Securities

Realized loss on sale of available for sale trading securities for the three months ended December 31, 2023 of $30.0 thousand was primarily related to the sale of two CRE CLO bonds. Realized loss on sale of available for sale trading securities for the three months ended September 30, 2023 of $0.5 million was primarily related to the sale of six CRE CLO bonds.

Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Sale, Measured at Fair Value

Realized gain on commercial mortgage loans, held for sale, measured at fair value for the three months ended December 31, 2023 of $0.8 million was related to the sale of $26.3 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $27.0 million. Realized gain on commercial mortgage loans, held for sale, measured at fair value for the three months ended September 30, 2023 of $0.9 million was related to the sale of $34.3 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $35.3 million.

Gain/(Loss) on Other Real Estate Investments

Gain on other real estate investments for the three months ended December 31, 2023 was $0.1 million. This is compared to a loss of $4.1 million for the three months ended September 30, 2023 primarily due to an impairment on the Walgreens Portfolio, real estate owned, held for sale asset.

Unrealized Gain/(Loss) on Commercial Mortgage Loans, Held for Sale, Measured at Fair Value

The Company did not have any commercial mortgage loans, held for sale, measured at fair value held in an unrealized gain or loss position as of December 31, 2023 and September 30, 2023.

Trading Gain/(Loss)

The Company did not experience any trading losses during the three months ended December 31, 2023. Trading loss for the three months ended September 30, 2023 of $2.6 million was attributable to $2.6 million of principal paydowns, $122.8 million of sales of ARM Agency Securities, and changes in market values on these securities.

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Net Result from Derivative Transactions

Net result from derivative transactions for the three months ended December 31, 2023 of a $0.3 million gain was composed primarily of realized gains related to the termination and settlement of interest rate swap positions. This is compared to a net loss on our derivative portfolio of $0.1 million composed of a realized gain of $0.1 million due primarily to the termination and settlement of interest rate swap positions offset by an unrealized loss of $0.2 million for the three months ended September 30, 2023 .

(Provision)/Benefit for Income Tax

Benefit for income tax for the three months ended December 31, 2023 was $0.3 million compared to a benefit of $1.8 million for the three months ended September 30, 2023. The difference is due to change in taxable income/loss in our TRS segment.

Net Income/(Loss) Attributable to Non-controlling Interest

Net income attributable to non-controlling interest in our consolidated joint ventures for the three months ended December 31, 2023 amounted to $16 thousand. Comparatively, for the three months ended September 30, 2023, net loss attributable to non-controlling interest amounted to $0.8 million.

Preferred Share Dividends

Preferred share dividends were $6.7 million for each of the three months ended December 31, 2023 and September 30, 2023. (see Note 9 - Redeemable Convertible Preferred Stock and Equity Transactions).

Expenses from operations

Expenses from operations for the three months ended December 31, 2023 and September 30, 2023 consisted of the following (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Three Months Ended"],["","","December 31, 2023","","September 30, 2023"],["Asset management and subordinated performance fee","","$","8,954","","","$","7,908"],["Acquisition expenses","","264","","","316"],["Administrative services expenses","","3,447","","","3,566"],["Professional fees","","3,509","","","4,153"],["Share-based compensation","","1,256","","","1,255"],["Depreciation and amortization","","1,614","","","1,513"],["Other expenses","","1,812","","","2,856"],["Total expenses from operations","","$","20,856","","","$","21,567"]]
[[/GREPCENT_TABLE]]

Overall, operating expenses were consistent with prior quarter, with a decrease of approximately $0.8 million due to a decrease in other expenses from REO that was offset by Asset management and subordinated performance fee increases due to incentive fees.

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Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021

See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 16, 2023, for a discussion of the comparison of the year ended December 31, 2022 to the year ended December 31, 2021.

Portfolio

As of December 31, 2023 and 2022, our portfolio consisted of 144 and 161 commercial mortgage loans, held for investment, respectively. The commercial mortgage loans held for investment, net of allowance for credit losses, as of December 31, 2023 and 2022 had a total carrying value of $4,989.8 million and $5,228.9 million, respectively. As of December 31, 2023 the Company did not hold any commercial mortgage loans, held for sale. As of December 31, 2022, the contractual principal balance outstanding of commercial mortgage loans, held for sale, measured at fair value was $15.6 million, comprised of two loans, neither of which were in default or greater than ninety days past due. As of December 31, 2023 and 2022, we had $242.6 million and $221.0 million, respectively, of real estate securities, available for sale, measured at fair value. As of December 31, 2023 and 2022, our real estate owned, held for investment portfolio was composed of three and 11 properties, respectively, with carrying values of $115.8 million and $127.8 million, respectively. As of December 31, 2023 and 2022, we had 23 and two properties classified as real estate owned, held for sale, respectively, with combined carrying values of $103.7 million and $36.5 million, respectively.

As of December 31, 2023, the Company did not hold any real estate securities, trading, measured at fair value. As of December 31, 2022, the Company had real estate securities, trading, measured at fair value of $235.7 million. During the year ended December 31, 2023, the Company fully disposed of the remaining ARM Agency Securities portfolio acquired from the Capstead merger that resulted in (i) $17.6 million of principal paydowns, (ii) $218.2 million of sales and (iii) $0.6 million of net trading losses related to principal paydowns, changes in market values and sales of these securities.

As of December 31, 2023, we had two loans, designated as non-performing status with a total amortized cost of $78.2 million. As of December 31, 2023, no specific allowance for credit losses were recorded on the two non-performing loans, all of which were senior mortgage notes secured by multifamily properties.

As of December 31, 2023 and 2022, our commercial mortgage loans, held for investment, excluding commercial mortgage loans on non-performing status, had a weighted average coupon of 9.2% and 8.3% and a weighted average remaining life of 0.9 years and 1.4 years, respectively.

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The following charts summarize our commercial mortgage loans, held for investment, by coupon rate type, collateral type geographical region and state as of December 31, 2023 and 2022:

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(1) Regions included: New England, Plains, Rocky Mountain

An investments region classification is defined according to the below map based on the location of investments secured property.

39

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40

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The following charts show the par value by contractual maturity year for the investments in our portfolio as of December 31, 2023 and 2022:

41

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The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, 2023 (dollars in thousands):

[[GREPCENT_TABLE]]
[["Loan Type","Risk Rating (1)","Property Type","State","Par Value","Amortized Cost","Origination Date (2)","Fully Extended Maturity (3)","Interest Rate (4) (5)","Effective Yield (6)","Loan to Value (7)"],["Senior Debt 1","3","Hospitality","Wisconsin","$4,586","$4,586","11/30/2017","3/9/2024","Adj. 1M SOFR Term + 4.00%","9.47%","77.0%"],["Senior Debt 2","3","Multifamily","Ohio","35,212","35,212","4/23/2018","9/9/2025","1M SOFR Term + 4.50%","9.85%","83.6%"],["Senior Debt 3","2","Hospitality","Louisiana","21,796","21,796","6/28/2018","3/9/2025","1M SOFR Term + 4.25%","9.60%","68.8%"],["Senior Debt 4","2","Office","New Jersey","13,937","13,937","8/28/2018","9/9/2024","1M SOFR Term + 5.50%","10.85%","70.0%"],["Senior Debt 5","2","Office","Maryland","41,185","41,185","4/30/2019","5/9/2025","1M SOFR Term + 3.56%","8.91%","71.0%"],["Senior Debt 6","4","Hospitality","Texas","18,398","18,398","7/18/2019","1/9/2024","1M SOFR Term + 3.84%","9.19%","62.6%"],["Senior Debt 7","2","Hospitality","Michigan","12,900","12,900","9/17/2019","10/9/2025","1M SOFR Term + 4.41%","9.76%","56.4%"],["Senior Debt 8","2","Hospitality","New York","4,805","4,805","7/9/2019","7/9/2025","1M SOFR Term + 5.25%","10.60%","47.7%"],["Senior Debt 9","2","Office","Arizona","14,852","14,852","11/22/2019","12/9/2024","1M SOFR Term + 4.00%","9.35%","70.9%"],["Senior Debt 10","4","Office","Georgia","24,444","24,442","12/17/2019","1/9/2025","Adj. 1M SOFR Term + 4.35%","9.82%","64.9%"],["Senior Debt 11","2","Manufactured Housing","Arkansas","1,301","1,301","4/22/2020","5/9/2025","5.50%","5.50%","62.8%"],["Senior Debt 12","3","Self Storage","New York","27,440","27,440","9/3/2020","1/9/2026","Adj. 1M SOFR Term + 5.00%","10.47%","58.8%"],["Senior Debt 13","3","Office","Texas","17,103","17,103","10/6/2020","10/9/2025","Adj. 1M SOFR Term + 4.50%","9.97%","47.9%"],["Senior Debt 14","2","Office","Massachusetts","63,274","63,146","10/8/2020","10/9/2025","5.15%","5.15%","52.5%"],["Senior Debt 15","3","Office","Michigan","30,186","30,186","10/14/2020","7/9/2025","1M SOFR Term + 2.81%","8.16%","66.0%"],["Senior Debt 16","2","Office","Texas","9,175","9,175","11/6/2020","11/9/2025","Adj. 1M SOFR Term + 5.00%","10.47%","67.8%"],["Senior Debt 17","2","Multifamily","Texas","12,550","12,547","1/22/2021","2/9/2026","Adj. 1M SOFR Term + 4.55%","10.02%","73.0%"],["Senior Debt 18","2","Multifamily","Florida","21,000","21,000","12/31/2020","1/9/2025","Adj. 1M SOFR Term + 4.60%","10.07%","66.7%"],["Senior Debt 19","2","Office","California","10,855","10,855","12/31/2020","1/9/2024","1M SOFR Term + 5.56%","10.91%","63.9%"],["Senior Debt 20","4","Office","Colorado","44,913","44,892","3/1/2021","3/9/2026","Adj. 1M SOFR Term + 3.97%","9.43%","53.9%"],["Senior Debt 21","3","Multifamily","Arizona","34,476","34,457","2/2/2021","2/9/2026","1M SOFR Term + 8.00%","13.35%","N/A"],["Senior Debt 22","2","Hospitality","North Carolina","23,000","22,992","2/24/2021","3/9/2024","Adj. 1M SOFR Term + 5.79%","11.26%","57.2%"],["Senior Debt 23","2","Multifamily","Texas","34,750","34,750","3/5/2021","3/9/2024","1M SOFR Term + 4.10%","9.45%","78.2%"],["Senior Debt 24","3","Multifamily","Texas","55,000","55,000","3/16/2021","5/9/2026","1M SOFR Term + 4.00%","9.35%","71.6%"],["Senior Debt 25","2","Multifamily","Texas","14,700","14,696","3/15/2021","4/9/2026","Adj. 1M SOFR Term + 3.39%","8.86%","70.6%"],["Senior Debt 26","2","Multifamily","Pennsylvania","8,898","8,893","3/23/2021","4/9/2026","Adj. 1M SOFR Term + 3.80%","9.27%","69.9%"],["Senior Debt 27","2","Multifamily","Texas","19,804","19,798","3/25/2021","4/9/2026","Adj. 1M SOFR Term + 3.60%","9.07%","70.8%"],["Senior Debt 28","2","Multifamily","Texas","43,246","43,237","4/1/2021","4/9/2026","Adj. 1M SOFR Term + 2.95%","8.42%","71.6%"],["Senior Debt 29","2","Hospitality","Louisiana","25,700","25,700","4/15/2021","5/9/2026","Adj. 1M SOFR Term + 5.60%","11.07%","61.0%"],["Senior Debt 30","2","Mixed Use","Washington","32,500","32,500","6/30/2021","1/9/2026","Adj. 1M SOFR Term + 3.70%","9.17%","69.7%"],["Senior Debt 31","2","Multifamily","Texas","75,927","75,901","3/31/2021","4/9/2026","Adj. 1M SOFR Term + 2.95%","8.42%","72.6%"],["Senior Debt 32","3","Multifamily","Texas","20,450","20,426","4/22/2021","5/9/2026","Adj. 1M SOFR Term + 3.60%","9.07%","67.7%"],["Senior Debt 33","2","Multifamily","Texas","30,320","30,310","3/31/2021","4/9/2026","Adj. 1M SOFR Term + 2.95%","8.42%","70.4%"],["Senior Debt 34","2","Multifamily","Texas","35,466","35,459","4/1/2021","4/9/2026","Adj. 1M SOFR Term + 2.95%","8.42%","71.7%"]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["Loan Type","Risk Rating (1)","Property Type","State","Par Value","Amortized Cost","Origination Date (2)","Fully Extended Maturity (3)","Interest Rate (4) (5)","Effective Yield (6)","Loan to Value (7)"],["Senior Debt 35","2","Multifamily","Texas","33,588","33,582","4/1/2021","4/9/2026","Adj. 1M SOFR Term + 2.95%","8.42%","72.2%"],["Senior Debt 36","2","Multifamily","Florida","152,112","151,644","5/26/2021","6/9/2026","1M SOFR Term + 4.55%","9.90%","47.8%"],["Senior Debt 37","2","Hospitality","Florida","36,750","36,713","5/20/2021","6/9/2026","Adj. 1M SOFR Term + 6.25%","11.72%","59.2%"],["Senior Debt 38","2","Multifamily","North Carolina","35,116","34,990","7/22/2021","3/9/2027","Adj. 1M SOFR Term + 8.00%","13.47%","N/A"],["Senior Debt 39","2","Multifamily","Texas","16,453","16,453","10/6/2021","10/9/2026","Adj. 1M SOFR Term + 3.75%","9.22%","76.9%"],["Senior Debt 40","2","Multifamily","Pennsylvania","47,984","47,901","9/10/2021","10/9/2026","Adj. 1M SOFR Term + 3.15%","8.62%","71.0%"],["Senior Debt 41","2","Multifamily","South Carolina","41,650","41,650","9/2/2021","9/9/2025","Adj. 1M SOFR Term + 3.40%","8.87%","79.9%"],["Senior Debt 42","3","Multifamily","Texas","34,760","34,713","9/20/2021","10/9/2024","Adj. 1M SOFR Term + 3.64%","9.11%","66.0%"],["Senior Debt 43","2","Multifamily","Oregon","8,500","8,489","9/8/2021","9/9/2026","Adj. 1M SOFR Term + 3.75%","9.22%","79.4%"],["Senior Debt 44","2","Multifamily","Texas","14,890","14,890","9/9/2021","9/9/2026","Adj. 1M SOFR Term + 3.15%","8.62%","79.8%"],["Senior Debt 45","2","Multifamily","South Carolina","69,500","69,312","9/20/2021","10/9/2026","Adj. 1M SOFR Term + 3.25%","8.72%","77.1%"],["Senior Debt 46","2","Multifamily","Georgia","11,325","11,306","9/22/2021","10/9/2026","Adj. 1M SOFR Term + 3.75%","9.22%","70.0%"],["Senior Debt 47","2","Multifamily","Texas","27,199","27,160","9/30/2021","10/9/2026","Adj. 1M SOFR Term + 3.20%","8.67%","77.3%"],["Senior Debt 48","2","Hospitality","Texas","17,122","17,122","9/30/2021","10/9/2026","Adj. 1M SOFR Term + 5.25%","10.72%","61.0%"],["Senior Debt 49","2","Multifamily","Texas","56,150","56,071","9/30/2021","10/9/2026","Adj. 1M SOFR Term + 3.10%","8.57%","78.9%"],["Senior Debt 50","2","Multifamily","Texas","38,242","38,116","10/14/2021","11/9/2026","Adj. 1M SOFR Term + 2.90%","8.37%","72.2%"],["Senior Debt 51","3","Multifamily","Texas","55,394","55,394","11/23/2021","1/9/2027","Adj. 1M SOFR Term + 3.10%","8.57%","67.2%"],["Senior Debt 52","3","Multifamily","Arizona","38,153","38,101","11/16/2021","12/9/2026","Adj. 1M SOFR Term + 2.90%","8.37%","72.0%"],["Senior Debt 53","2","Multifamily","Texas","68,165","68,165","10/29/2021","11/9/2026","Adj. 1M SOFR Term + 2.85%","8.32%","70.6%"],["Senior Debt 54","2","Multifamily","Texas","32,567","32,510","11/23/2021","12/9/2026","Adj. 1M SOFR Term + 3.25%","8.72%","80.0%"],["Senior Debt 55","2","Multifamily","South Carolina","61,600","61,600","11/10/2021","11/9/2026","Adj. 1M SOFR Term + 3.35%","8.82%","78.0%"],["Senior Debt 56","2","Multifamily","Texas","44,987","44,987","11/16/2021","12/9/2026","Adj. 1M SOFR Term + 3.00%","8.47%","74.8%"],["Senior Debt 57","2","Multifamily","Texas","47,147","47,019","11/9/2021","11/9/2026","Adj. 1M SOFR Term + 2.75%","8.22%","68.1%"],["Senior Debt 58","2","Multifamily","New Jersey","86,000","85,959","2/25/2022","3/9/2026","1M SOFR Term + 3.24%","8.59%","60.0%"],["Senior Debt 59","3","Manufactured Housing","Georgia","6,700","6,688","12/13/2021","12/9/2026","Adj. 1M SOFR Term + 4.50%","9.97%","77.9%"],["Senior Debt 60","2","Multifamily","Texas","58,680","58,677","12/10/2021","1/9/2027","Adj. 1M SOFR Term + 3.45%","8.92%","74.8%"],["Senior Debt 61","2","Multifamily","Georgia","26,068","26,068","11/30/2021","3/9/2024","Adj. 1M SOFR Term + 2.90%","8.37%","72.1%"],["Senior Debt 62","2","Multifamily","Kentucky","14,933","14,905","11/19/2021","12/9/2026","Adj. 1M SOFR Term + 3.20%","8.67%","62.4%"],["Senior Debt 63","2","Multifamily","Texas","38,283","38,219","11/22/2021","12/9/2026","Adj. 1M SOFR Term + 3.00%","8.47%","73.3%"],["Senior Debt 64","4","Multifamily","Texas","42,235","42,234","11/18/2021","1/9/2027","Adj. 1M SOFR Term + 2.90%","8.37%","71.7%"],["Senior Debt 65","3","Multifamily","Texas","69,415","69,415","11/30/2021","12/9/2026","Adj. 1M SOFR Term + 2.88%","8.35%","74.8%"],["Senior Debt 66","2","Multifamily","Texas","66,742","66,742","11/30/2021","12/9/2026","Adj. 1M SOFR Term + 2.88%","8.35%","75.5%"],["Senior Debt 67","2","Multifamily","Texas","17,145","17,144","12/30/2021","1/9/2027","1M SOFR Term + 3.50%","8.85%","71.7%"],["Senior Debt 68","3","Multifamily","Michigan","59,232","59,175","12/9/2021","12/9/2026","Adj. 1M SOFR Term + 2.75%","8.22%","73.9%"],["Senior Debt 69","3","Multifamily","Pennsylvania","22,240","22,239","12/16/2021","1/9/2027","1M SOFR Term + 2.96%","8.31%","79.4%"],["Senior Debt 70","3","Multifamily","Texas","25,241","25,195","12/16/2021","1/9/2027","1M SOFR Term + 2.96%","8.31%","72.9%"]]
[[/GREPCENT_TABLE]]

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Table of Contents

[[GREPCENT_TABLE]]
[["Loan Type","Risk Rating (1)","Property Type","State","Par Value","Amortized Cost","Origination Date (2)","Fully Extended Maturity (3)","Interest Rate (4) (5)","Effective Yield (6)","Loan to Value (7)"],["Senior Debt 71","2","Multifamily","Texas","32,428","32,425","12/16/2021","1/9/2027","1M SOFR Term + 3.20%","8.55%","74.2%"],["Senior Debt 72","2","Multifamily","Florida","78,416","78,167","12/21/2021","1/9/2027","1M SOFR Term + 3.45%","8.80%","78.8%"],["Senior Debt 73","2","Multifamily","North Carolina","81,247","81,164","12/15/2021","1/9/2027","1M SOFR Term + 3.21%","8.56%","76.1%"],["Senior Debt 74","2","Multifamily","North Carolina","24,000","23,999","12/17/2021","1/9/2027","1M SOFR Term + 3.10%","8.45%","72.7%"],["Senior Debt 75","2","Retail","New York","31,000","30,946","12/23/2021","1/9/2027","1M SOFR Term + 3.29%","8.64%","42.5%"],["Senior Debt 76","3","Multifamily","Texas","38,511","38,511","5/12/2022","8/9/2027","1M SOFR Term + 3.55%","8.90%","66.2%"],["Senior Debt 77","2","Multifamily","Georgia","23,855","23,848","1/28/2022","2/9/2027","1M SOFR Term + 2.95%","8.30%","65.6%"],["Senior Debt 78","2","Multifamily","North Carolina","11,100","11,097","1/14/2022","2/9/2027","1M SOFR Term + 3.30%","8.65%","75.7%"],["Senior Debt 79","3","Multifamily","Texas","47,444","47,442","12/21/2021","1/9/2027","1M SOFR Term + 2.86%","8.21%","68.2%"],["Senior Debt 80","2","Multifamily","Texas","36,824","36,821","12/22/2021","1/9/2027","1M SOFR Term + 2.86%","8.21%","69.7%"],["Senior Debt 81","2","Hospitality","North Carolina","10,504","10,481","1/19/2022","2/9/2027","1M SOFR Term + 5.30%","10.65%","68.2%"],["Senior Debt 82","2","Multifamily","Florida","82,000","81,989","2/10/2022","2/9/2027","1M SOFR Term + 3.20%","8.55%","74.5%"],["Senior Debt 83","2","Industrial","Arizona","55,000","54,973","3/15/2022","3/9/2027","1M SOFR Term + 3.50%","8.85%","70.1%"],["Senior Debt 84","2","Multifamily","Texas","39,864","39,843","3/14/2022","3/9/2027","1M SOFR Term + 3.10%","8.45%","74.1%"],["Senior Debt 85","2","Multifamily","Arizona","35,220","35,202","3/2/2022","3/9/2027","1M SOFR Term + 2.95%","8.30%","63.1%"],["Senior Debt 86","2","Mixed Use","New York","19,000","18,991","3/7/2022","3/9/2026","1M SOFR Term + 3.42%","8.78%","65.1%"],["Senior Debt 87","2","Multifamily","North Carolina","85,500","85,480","2/24/2022","3/9/2027","1M SOFR Term + 3.15%","8.50%","69.6%"],["Senior Debt 88","2","Multifamily","North Carolina","31,900","31,888","3/29/2022","4/9/2027","1M SOFR Term + 3.30%","8.65%","76.9%"],["Senior Debt 89","2","Hospitality","Colorado","30,021","29,741","5/20/2022","6/9/2027","1M SOFR Term + 7.05%","12.40%","N/A"],["Senior Debt 90","2","Multifamily","Texas","13,558","12,691","7/20/2022","4/9/2027","1M SOFR Term + 6.75%","12.10%","N/A"],["Senior Debt 91","2","Hospitality","Georgia","43,457","43,457","3/30/2022","4/9/2027","1M SOFR Term + 4.90%","10.25%","61.1%"],["Senior Debt 92","2","Hospitality","New York","15,634","15,568","11/8/2022","11/9/2027","1M SOFR Term + 5.34%","10.69%","57.7%"],["Senior Debt 93","3","Multifamily","Nevada","35,949","35,949","6/3/2022","6/9/2027","1M SOFR Term + 6.05%","11.40%","62.4%"],["Senior Debt 94","3","Multifamily","Virginia","56,616","56,479","4/29/2022","5/9/2027","1M SOFR Term + 3.95%","9.30%","73.2%"],["Senior Debt 95","3","Multifamily","Texas","29,905","29,816","10/21/2022","11/9/2027","1M SOFR Term + 4.00%","9.35%","70.9%"],["Senior Debt 96","2","Multifamily","North Carolina","56,859","56,806","8/23/2022","9/9/2027","1M SOFR Term + 6.70%","12.05%","46.5%"],["Senior Debt 97","2","Multifamily","Texas","12,536","12,523","5/2/2022","5/9/2027","1M SOFR Term + 3.55%","8.90%","67.7%"],["Senior Debt 98","2","Industrial","Florida","18,724","18,673","9/13/2022","9/9/2027","1M SOFR Term + 4.90%","10.25%","64.6%"],["Senior Debt 99","2","Multifamily","Tennessee","19,899","19,875","5/18/2022","6/9/2027","1M SOFR Term + 3.50%","8.85%","64.5%"],["Senior Debt 100","3","Multifamily","Texas","28,979","28,936","5/26/2022","6/9/2027","1M SOFR Term + 3.65%","9.00%","71.0%"],["Senior Debt 101","3","Multifamily","Texas","17,330","17,303","5/26/2022","6/9/2027","1M SOFR Term + 3.65%","9.00%","73.9%"],["Senior Debt 102","2","Multifamily","Georgia","70,750","70,673","5/18/2022","6/9/2027","1M SOFR Term + 3.80%","9.15%","77.9%"],["Senior Debt 103","4","Multifamily","North Carolina","83,914","83,810","6/1/2022","6/9/2027","1M SOFR Term + 3.95%","9.30%","71.8%"],["Senior Debt 104","3","Multifamily","North Carolina","45,469","45,414","6/1/2022","6/9/2027","1M SOFR Term + 3.95%","9.30%","75.9%"],["Senior Debt 105","4","Multifamily","North Carolina","58,003","57,930","6/1/2022","6/9/2027","1M SOFR Term + 3.95%","9.30%","73.7%"],["Senior Debt 106","3","Multifamily","North Carolina","20,716","20,688","6/1/2022","6/9/2027","1M SOFR Term + 3.95%","9.30%","75.1%"]]
[[/GREPCENT_TABLE]]

44

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[[GREPCENT_TABLE]]
[["Loan Type","Risk Rating (1)","Property Type","State","Par Value","Amortized Cost","Origination Date (2)","Fully Extended Maturity (3)","Interest Rate (4) (5)","Effective Yield (6)","Loan to Value (7)"],["Senior Debt 107","2","Multifamily","Various","146,810","146,608","6/1/2022","6/9/2027","1M SOFR Term + 3.95%","9.30%","67.8%"],["Senior Debt 108","2","Multifamily","Kentucky","56,000","55,938","6/1/2022","6/9/2027","1M SOFR Term + 3.80%","9.15%","73.8%"],["Senior Debt 109","2","Multifamily","North Carolina","11,675","11,661","11/3/2022","11/9/2027","1M SOFR Term + 4.45%","9.80%","74.8%"],["Senior Debt 110","2","Multifamily","Georgia","70,750","70,569","6/14/2022","6/9/2027","1M SOFR Term + 3.45%","8.80%","71.6%"],["Senior Debt 111","2","Hospitality","District of Columbia","39,525","39,346","8/2/2022","8/9/2027","1M SOFR Term + 6.94%","12.29%","71.2%"],["Senior Debt 112 (8)","2","Multifamily","Pennsylvania","\u2014","\u2014","2/17/2023","9/9/2026","1M SOFR Term + 6.31%","11.66%","N/A"],["Senior Debt 113","2","Hospitality","Alabama","16,270","16,249","9/20/2022","10/9/2027","1M SOFR Term + 5.75%","11.10%","62.1%"],["Senior Debt 114","2","Manufactured Housing","Florida","11,617","11,587","9/13/2022","9/9/2027","1M SOFR Term + 4.75%","10.10%","53.8%"],["Senior Debt 115 (8)","2","Hospitality","Texas","\u2014","\u2014","1/31/2023","11/9/2027","1M SOFR Term + 7.50%","12.85%","6.2%"],["Senior Debt 116","2","Multifamily","North Carolina","48,764","48,684","12/29/2022","1/9/2028","1M SOFR Term + 4.20%","9.55%","70.1%"],["Senior Debt 117","2","Multifamily","South Carolina","51,000","50,875","12/2/2022","12/9/2027","1M SOFR Term + 3.75%","9.10%","64.6%"],["Senior Debt 118","2","Multifamily","South Carolina","14,635","14,594","12/16/2022","1/9/2027","1M SOFR Term + 4.25%","9.60%","68.1%"],["Senior Debt 119","2","Hospitality","North Carolina","28,300","28,297","12/15/2022","1/9/2025","1M SOFR Term + 5.25%","10.60%","54.9%"],["Senior Debt 120","2","Multifamily","Arizona","55,500","55,353","4/10/2023","4/9/2026","1M SOFR Term + 3.85%","9.20%","44.7%"],["Senior Debt 121","2","Hospitality","Florida","10,500","10,465","4/4/2023","4/9/2028","1M SOFR Term + 5.50%","10.85%","39.6%"],["Senior Debt 122","2","Hospitality","Various","120,000","119,559","2/9/2023","2/9/2028","1M SOFR Term + 4.90%","10.25%","53.6%"],["Senior Debt 123","2","Multifamily","Florida","64,500","64,388","4/19/2023","5/9/2025","1M SOFR Term + 5.00%","10.35%","62.3%"],["Senior Debt 124","2","Hospitality","New York","39,549","39,661","4/17/2023","12/27/2024","1M SOFR Term + 3.75%","9.10%","39.1%"],["Senior Debt 125","2","Multifamily","District of Columbia","21,700","21,616","6/30/2023","7/9/2027","1M SOFR Term + 3.95%","9.30%","29.4%"],["Senior Debt 126","2","Manufactured Housing","Florida","21,449","21,296","7/28/2023","8/9/2028","1M SOFR Term + 4.25%","9.60%","43.2%"],["Senior Debt 127","2","Multifamily","New York","19,793","19,881","6/28/2023","7/9/2028","4.75%","4.75%","85.7%"],["Senior Debt 128","2","Multifamily","Texas","78,996","78,664","8/1/2023","8/9/2028","1M SOFR Term + 3.20%","8.55%","58.7%"],["Senior Debt 129","2","Hospitality","Florida","23,000","22,861","8/10/2023","8/9/2028","1M SOFR Term + 5.45%","10.80%","72.8%"],["Senior Debt 130","2","Hospitality","Georgia","12,420","12,322","8/17/2023","9/9/2028","1M SOFR Term + 4.85%","10.20%","53.5%"],["Senior Debt 131","2","Multifamily","Texas","38,750","38,572","10/18/2023","11/9/2026","1M SOFR Term + 4.50%","9.85%","62.4%"],["Senior Debt 132","2","Hospitality","Florida","31,300","31,078","10/17/2023","11/9/2028","1M SOFR Term + 4.25%","9.60%","48.9%"],["Senior Debt 133","2","Multifamily","Texas","42,750","42,555","10/17/2023","11/9/2026","1M SOFR Term + 3.85%","9.20%","61.4%"],["Senior Debt 134","2","Multifamily","Texas","17,119","16,966","10/12/2023","10/9/2028","1M SOFR Term + 3.20%","8.55%","55.1%"],["Senior Debt 135","2","Multifamily","Texas","21,000","20,887","12/6/2023","12/9/2026","1M SOFR Term + 3.75%","9.10%","63.6%"],["Senior Debt 136","2","Hospitality","Tennessee","41,071","40,855","11/14/2023","12/9/2028","1M SOFR Term + 3.65%","9.00%","50.0%"],["Senior Debt 137","2","Hospitality","Nevada","25,750","25,595","12/15/2023","1/9/2028","1M SOFR Term + 3.95%","9.30%","42.4%"],["Senior Debt 138","3","Hospitality","Illinois","16,566","16,563","12/4/2017","10/6/2025","5.99%","5.99%","52.9%"],["Mezzanine Loan 1","2","Retail","New York","3,000","2,994","12/23/2021","1/9/2027","1M SOFR Term + 12.00%","17.35%","46.6%"],["Mezzanine Loan 2","2","Mixed Use","New York","1,000","1,000","3/7/2022","3/9/2026","1M SOFR Term + 11.00%","16.35%","68.5%"],["Mezzanine Loan 3","2","Hospitality","New York","1,350","1,346","11/8/2022","11/9/2027","1M SOFR Term + 9.25%","14.60%","64.6%"],["Mezzanine Loan 4 (8)","2","Hospitality","Texas","\u2014","\u2014","1/31/2023","11/9/2027","1M SOFR Term + 10.00%","15.35%","6.2%"],["Mezzanine Loan 5","3","Multifamily","Ohio","2,378","2,378","3/9/2023","9/9/2025","1M SOFR Term + 4.50%","9.85%","58.2%"]]
[[/GREPCENT_TABLE]]

45

Table of Contents

[[GREPCENT_TABLE]]
[["Loan Type","Risk Rating (1)","Property Type","State","Par Value","Amortized Cost","Origination Date (2)","Fully Extended Maturity (3)","Interest Rate (4) (5)","Effective Yield (6)","Loan to Value (7)"],["Mezzanine Loan 6","2","Multifamily","District of Columbia","11,700","11,655","6/30/2023","7/9/2027","1M SOFR Term + 3.95%","9.30%","45.2%"],["","","","","$5,045,036","$5,036,942","","","","9.18%","65.4%"]]
[[/GREPCENT_TABLE]]
_______________________

(1) For a discussion of risk ratings, see Note 3 - Commercial Mortgage Loans in our Consolidated Financial Statements included in this Form 10-K.

(2) Date loan was originated or acquired by us. The origination or acquisition date is not updated for subsequent loan modifications.

(3) Fully extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date.

(4) Our floating rate loan agreements generally contain the contractual obligation for the borrower to maintain an interest rate cap to protect against rising interest rates. In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the “cap rate”). When the floating rate exceeds the cap rate, the borrower receives a payment from the cap counterparty equal to the difference between the floating rate and the cap rate on the same notional principal amount for a specified period of time. When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates.

(5) On March 5, 2021, the Financial Conduct Authority of the U.K. (the “FCA”) announced that LIBOR tenors would cease to be published or no longer be representative. The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event. The benchmark index of LIBOR interest rate will convert from LIBOR to compounded SOFR, plus a benchmark adjustment of 11.448 basis points. As of December 31, 2023, all of our commercial mortgage loans, held for investment which had been indexed at LIBOR were converted to SOFR utilizing the 11.448 basis points adjustment and the applicable spreads remain unchanged. The loans which have the SOFR adjustment are indicated with "Adj. 1M SOFR Term."

(6) Effective yield is calculated as the spread of the loan plus the greater of the applicable index or index floor.

(7) Loan-to-value percentage ("LTV") represents the ratio of the loan amount to the appraised value of the property at the time of origination. However, for predevelopment construction loans at origination, LTV is not applicable and is therefore nil.

(8) Commitment on the loan was unfunded as of December 31, 2023.

The following table shows selected data from our real estate owned, held for investment assets in our portfolio as of December 31, 2023 (dollars in thousands):

[[GREPCENT_TABLE]]
[["Type","","Acquisition Date","","Primary Location(s)","","Property Type","","Real Estate Owned, Net","","Intangible Lease Asset, Net","","Total"],["Real Estate Owned 1","","September 2021","","Jeffersonville, GA","","Industrial","","$","85,444","","","$","42,713","","","$","128,157"],["Real Estate Owned 2","","August 2023","","Portland, OR","","Office","","18,531","","","\u2014","","","18,531"],["Real Estate Owned 3","","October 2023","","Lubbock, TX","","Multifamily","","11,855","","","80","","","11,935"],["","","","","","","","","$","115,830","","","$","42,793","","","$","158,623"]]
[[/GREPCENT_TABLE]]
The following table shows selected data from our real estate owned, held for sale assets in our portfolio as of December 31, 2023 (dollars in thousands):

[[GREPCENT_TABLE]]
[["Type","","Acquisition Date","","Primary Location(s)","","Property Type","","Assets, Net","","Liabilities, Net"],["Real Estate Owned, held for sale 1","","Various","","Various","","Retail","","$","103,657","","","$","12,297"]]
[[/GREPCENT_TABLE]]

The following table shows selected data from our real estate securities, CRE CLO bonds, measured at fair value as of December 31, 2023 (dollars in thousands):

[[GREPCENT_TABLE]]
[["Type","","Interest Rate","","Maturity","","Par Value","","Fair Value","","Effective Yield"],["CRE CLO bond 1","","1 month SOFR + 2.78%","","8/19/2035","","$","30,000","","","$","30,040","","","8.14%"],["CRE CLO bond 2","","1 month SOFR + 3.23%","","8/19/2035","","25,000","","","24,637","","","8.59%"],["CRE CLO bond 3","","1 month SOFR + 2.90%","","10/19/2039","","28,340","","","28,310","","","8.30%"],["CRE CLO bond 4","","1 month SOFR + 3.20%","","5/25/2038","","50,000","","","49,875","","","8.55%"],["CRE CLO bond 5","","1 month SOFR + 2.37%","","4/16/2028","","45,000","","","44,911","","","7.72%"],["CRE CLO bond 6","","1 month SOFR + 2.27%","","9/19/2038","","53,000","","","52,827","","","7.63%"],["CRE CLO bond 7","","1 month SOFR + 3.10%","","9/19/2038","","12,000","","","11,969","","","8.46%"],["","","","","","","$","243,340","","","$","242,569","","","8.12%"]]
[[/GREPCENT_TABLE]]

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Liquidity and Capital Resources

Overview

Our expected material cash requirements over the next twelve months and thereafter are composed of (i) contractually obligated payments, including payments of principal and interest and contractually-obligated fundings on our loans; (ii) other essential expenditures, including operating and administrative expenses and dividends paid in accordance with REIT distribution requirements; and (iii) opportunistic investments, including new loans.

Our contractually obligated payments primarily consist of payment obligations under the debt financing arrangements which are set forth below, and included in the table under Contractual Obligations and Commitments.

We may from time to time purchase or retire outstanding debt securities and repurchase or redeem our equity securities. Such purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors.

We closely monitor our liquidity position and believe that we have sufficient current liquidity and access to additional liquidity to meet our financial obligations for the next 12 months and beyond.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our debt-to-equity and total leverage ratios:

[[GREPCENT_TABLE]]
[["","","December 31, 2023","","December 31, 2022"],["Net debt-to-equity ratio(1)","","2.3x","","2.5x"],["Total leverage ratio(2)","","2.5x","","2.6x"]]
[[/GREPCENT_TABLE]]

________________________

(1) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, less cash and cash equivalents, to (ii) total equity and total redeemable convertible preferred stock, at period end. Recourse net debt-to-equity ratio was 0.2x and 0.7x as of December 31, 2023 and December 31, 2022, respectively.

(2) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, to (ii) total equity and total redeemable convertible preferred stock, at period end. Recourse leverage ratio was 0.4x and 0.8x as of December 31, 2023 and December 31, 2022, respectively.

Sources of Liquidity

Our primary sources of liquidity include unrestricted cash, capacity in our collateralized loan obligations available for reinvestment, and funds available and in progress on financing lines.

Our current sources of near-term liquidity as of December 31, 2023 and December 31, 2022 are set forth in the following table (dollars in millions):

[[GREPCENT_TABLE]]
[["","","December 31, 2023","","December 31, 2022"],["Unrestricted cash","","$","338","","","$","179"],["CLO reinvestment available(1)","","55","","","16"],["Financings available & in progress(2)","","1,131","","","822"],["Total","","$","1,524","","","$","1,017"]]
[[/GREPCENT_TABLE]]

________________________

(1) See discussion below for further information on the Company's collateralized loan obligations.

(2) Represents cash available to invest at a market advance rate utilizing available capacity on financing lines.

We expect to use additional debt and equity financing as a source of capital. Our board of directors currently intends to operate at a leverage level of between one to three times book value of equity. However, our board of directors may change this target without shareholder approval. We anticipate that our debt and equity financing sources and our anticipated cash generated from operations will be adequate to fund our anticipated uses of capital.

We have an effective shelf registration statement for offerings of equity securities that is not limited on the amount of securities we may issue. We also have authorized an at-the-market sales program ("ATM") pursuant to which we may sell up to $200 million of shares of our common stock from time to time. We have not sold any shares of common stock under the ATM to date. We also may access liquidity through our dividend reinvestment and stock purchase plan ("DRIP"), which includes a direct stock purchase option.

47

Table of Contents

In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by the Company or its subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.

Collateralized Loan Obligations

During the year ended December 31, 2023, the Company raised $896.6 million through the issuance of BSPRT 2023-FL10 Issuer, LLC. Additionally, as of December 31, 2023, the Company had $54.5 million of reinvestment capital available across all outstanding collateralized loan obligations. The following table shows the par value outstanding for each CLO and the respective reinvestment end dates (dollars in millions):

[[GREPCENT_TABLE]]
[["CLO Name","","Debt Amount","","Reinvestment End Date"],["2019-FL5 Issuer(1)","","$","\u2014","","","Ended"],["2021-FL6 Issuer","","$","558.0","","","Ended"],["2021-FL7 Issuer","","$","720.0","","","01/08/24"],["2022-FL8 Issuer","","$","960.0","","","03/08/24"],["2022-FL9 Issuer","","$","670.6","","","07/08/24"],["2023-FL10 Issuer","","$","689.3","","","04/08/25"]]
[[/GREPCENT_TABLE]]

________________________

(1) On July 17, 2023, the Company called all of the outstanding notes issued by BSPRT 2019-FL5 Issuer, Ltd, a wholly owned indirect subsidiary of the Company.

Repurchase Agreements and Revolving Credit Facilities ("Repo and Revolving Credit Facilities")

The Repo and Revolving Credit Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate that typically range between 60% to 75% of the principal amount of the mortgage loan being pledged.

We expect to use the advances from these Repo and Revolving Credit Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo and Revolving Credit Facilities generally provide that in the event of a decrease in the value of our collateral, the lenders can demand additional collateral. Should the value of our collateral decrease as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in our liquidity position.

The following tables summarize our Repo and Revolving Credit Facilities and our master repurchase agreements ("MRAs") for the years ended December 31, 2023, 2022, and 2021, respectively:

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[[GREPCENT_TABLE]]
[["","","As of December 31, 2023"],["","","Amount Outstanding","","Average Outstanding Balance"],["","","Q1","","Q2","","Q3","","Q4","","Q1","","Q2","","Q3","","Q4"],["Repurchase Agreements, Commercial Mortgage Loans","","$","604,421","","","$","695,039","","","$","249,345","","","$","299,707","","","$","725,300","","","$","796,659","","","$","816,929","","","$","278,168"],["Repurchase Agreements, Real Estate Securities","","107,934","","","176,993","","","240,010","","","174,055","","","217,389","","","209,025","","","349,878","","","263,769"],["Repurchase Agreements, Real Estate Securities held as trading","","121,000","","","113,000","","","\u2014","","","\u2014","","","149,387","","","117,159","","","57","","","\u2014"],["Total","","$","833,355","","","$","985,032","","","$","489,355","","","$","473,762","","","$","1,092,076","","","$","1,122,843","","","$","1,166,864","","","$","541,937"],["","","As of December 31, 2022"],["","","Amount Outstanding","","Average Outstanding Balance"],["","","Q1","","Q2","","Q3","","Q4","","Q1","","Q2","","Q3","","Q4"],["Repurchase Agreements, Commercial Mortgage Loans","","$","522,890","","","$","832,034","","","$","699,408","","","$","680,859","","","$","813,144","","","$","834,337","","","$","709,679","","","$","729,329"],["Repurchase Agreements, Real Estate Securities","","54,610","","","53,288","","","112,613","","","222,864","","","44,744","","","54,033","","","53,688","","","174,389"],["Repurchase Agreements, Real Estate Securities held as trading","","1,659,931","","","240,000","","","225,000","","","217,144","","","3,055,413","","","1,818,495","","","230,011","","","220,102"],["Total","","$","2,237,431","","","$","1,125,322","","","$","1,037,021","","","$","1,120,867","","","$","3,913,301","","","$","2,706,865","","","$","993,378","","","$","1,123,820"],["","","As of December 31, 2021"],["","","Amount Outstanding","","Average Outstanding Balance"],["","","Q1","","Q2","","Q3","","Q4","","Q1","","Q2","","Q3","","Q4"],["Repurchase Agreements, Commercial Mortgage Loans","","$","152,925","","","$","287,462","","","$","550,156","","","$","1,019,600","","","$","340,485","","","$","282,891","","","$","331,871","","","$","959,729"],["Repurchase Agreements, Real Estate Securities","","88,272","","","46,510","","","46,531","","","34,311","","","123,322","","","57,301","","","46,527","","","37,735"],["Repurchase Agreements, Real Estate Securities held as trading","","\u2014","","","\u2014","","","\u2014","","","4,144,473","","","\u2014","","","\u2014","","","\u2014","","","4,266,556"],["Total","","$","241,197","","","$","333,972","","","$","596,687","","","$","5,198,384","","","$","463,807","","","$","340,192","","","$","378,398","","","$","5,264,020"]]
[[/GREPCENT_TABLE]]

The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.

During the twelve months ended December 31, 2023, the maximum monthly average outstanding balance was $1.2 billion, of which $0.9 billion was related to repurchase agreements on our commercial mortgage loans and $0.3 billion for repurchase agreements on our real estate securities.

During the twelve months ended December 31, 2022, the maximum monthly average outstanding balance was $5.3 billion, of which $1.1 billion was related to repurchase agreements on our commercial mortgage loans and $4.2 billion for repurchase agreements on our real estate securities.

During the twelve months ended December 31, 2021, the maximum monthly average outstanding balance was $5.8 billion, of which $0.7 billion was related to repurchase agreements on our commercial mortgage loans and $5.1 billion for repurchase agreements on our real estate securities.

Distributions

In order to maintain our election to qualify as a REIT, we must currently distribute, at a minimum, an amount equal to 90% of our taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes.

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Distributions on our common stock are payable when declared by our board of directors.

Dividends payable on each share of Series H convertible preferred stock ("Series H Preferred Stock") is generally equal to the quarterly dividend that would have been paid had such share of preferred stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels. To the extent dividends on shares of preferred stock are not authorized and declared by our board of directors and paid by the Company monthly, the dividend amounts will accrue.

Holders of shares of the Company's 7.50% Series E Cumulative Redeemable Preferred Stock ("Series E Preferred Stock") are entitled to receive, when, as and if authorized by our board of directors and declared by the Company, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 7.50% of the $25.00 per share liquidation preference per annum (equivalent to $1.875 per annum per share).

In December 2023, the Company's board of directors declared the following: (i) a fourth quarter 2023 dividend of $0.355 per share on the Company's common stock (equivalent to $1.42 per annum), (ii) a fourth quarter 2023 dividend of $106.22 per share on the Company’s Series H Preferred Stock, and (iii) a fourth quarter 2023 dividend of $0.46875 per share on the Company’s Series E Preferred Stock, all of which were paid in January 2024 to holders of record as of December 31, 2023.

Under the Company's dividend reinvestment and direct stock purchase plan ("DRIP"), the Company may elect to supply shares for reinvestment via newly issued shares of common stock under the DRIP or via shares of common stock acquired by the DRIP administrator on the open market. During the years ended December 31, 2023, 2022 and 2021, the Company issued 61,866 shares, 72,764 shares and zero shares, respectively, of common stock under the dividend reinvestment component of DRIP.

During the year ended December 31, 2023 and 2022, the Company paid an aggregate of $118.0 million and $87.8 million, respectively, of common stock distributions.

Cash Flows

The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2023 and 2022:

[[GREPCENT_TABLE]]
[["","For the Year Ended December 31,"],["","2023","","2022"],["Cash Flows From Operating Activities","$","197,387","","","$","152,515"],["Cash Flows From Investing Activities","380,807","","","3,097,265"],["Cash Flows From Financing Activities","(424,994)","","","(3,227,492)"],["Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash","$","153,200","","","$","22,288"]]
[[/GREPCENT_TABLE]]

Cash Flows from Operating Activities

Our cash flows from operating activities were primarily driven by net income of $144.5 million, net proceeds of $19.5 million related to originations and sales of commercial mortgage loans, measured at fair value and $33.7 million related to provision for credit losses which is a non-cash transaction.

During the year ended December 31, 2022, cash flows from operating activities were primarily driven by net income of $14.2 million, net proceeds of $18.1 million related to originations and sales of commercial mortgage loans, measured at fair value and $119.2 million related to trading losses on real estate securities.

Cash Flows from Investing Activities

Our cash flows from investing activities consisted of cash inflows primarily driven by proceeds from principal repayments of $1,065.5 million received on commercial mortgage loans, held for investment, proceeds received from the sale of real estate securities of $418.8 million, proceeds from the sale of other real estate investments of $39.8 million and $17.7 million received from principal collateral on mortgage investments. Inflows were partially offset by the origination and acquisition of $936.3 million of commercial mortgage loans, held for investment and the purchase of real estate securities for $223.8 million.

During the year ended December 31, 2022, cash inflows were primarily driven by proceeds from principal repayments of $1,258.4 million received on commercial mortgage loans, held for investment, proceeds received from the sale of real estate securities of $3,731.7 million, $545.4 million received from principal collateral on mortgage investments and proceeds from sale of commercial mortgage loans, held for sale, of $9.3 million. Inflows were partially offset by the origination and acquisition of $2,227.7 million of commercial mortgage loans, held for investment and the purchase of real estate securities for $220.6 million.

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Cash Flows from Financing Activities

Our cash outflows from financing activities were primarily driven by net repayments on repurchase agreements for real estate securities, commercial mortgage loans and other financings of $266.0 million, $381.2 million and $39.8 million, respectively, $144.3 million in cash distributions to stockholders, repayments on unsecured debt of $13.4 million, deferred financing cost payments of $12.9 million and $12.5 million of common stock repurchases. Outflows were partially offset by net proceeds of $448.1 million received from repurchase agreements on CLOs.

During the year ended December 31, 2022, cash outflows were primarily driven by net payments on repurchase agreements for real estate securities and commercial mortgage loans of $3,738.8 million and $$338.7 million, respectively, $139.4 million in cash distributions to stockholders and $16.6 million of common stock repurchases. Outflows were partially offset by $38.5 million of proceeds received from borrowings on other financing and loan participation for commercial mortgage loans and net proceeds of $968.2 million received from repurchase agreements on CLOs.

Election as a REIT

We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. As a REIT, if we meet certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, we will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and U.S. federal income and excise taxes on our undistributed income.

Contractual Obligations and Commitments

Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of December 31, 2023 are summarized as follows (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Less than 1 year","","1 to 3 years","","3 to 5 years","","More than 5 years","","Total"],["Unfunded loan commitments (1)","","$","9,694","","","$","277,515","","","$","684","","","$","\u2014","","","$","287,893"],["Repurchase agreements - commercial mortgage loans","","52,864","","","246,843","","","\u2014","","","\u2014","","","299,707"],["Repurchase agreements - real estate securities","","174,055","","","\u2014","","","\u2014","","","\u2014","","","174,055"],["CLOs (2)","","\u2014","","","\u2014","","","\u2014","","","3,597,973","","","3,597,973"],["Mortgage Note Payable","","\u2014","","","23,998","","","\u2014","","","\u2014","","","23,998"],["Unsecured debt","","\u2014","","","\u2014","","","\u2014","","","81,295","","","81,295"],["Other financing and loan participation - commercial mortgage loans","","23,669","","","\u2014","","","12,865","","","\u2014","","","36,534"],["Total","","$","260,282","","","$","548,356","","","$","13,549","","","$","3,679,268","","","$","4,501,455"]]
[[/GREPCENT_TABLE]]
________________________

(1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.

(2) Excludes $495.0 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheets as of December 31, 2023.

In addition to its cash requirements, the Company pays a quarterly dividend and has an existing share repurchase authorization. As of December 31, 2023, the Company’s quarterly cash dividend was $0.355 per share of common stock (which was paid on an as-converted basis on the Company’s shares of Series H Preferred Stock), and $0.46875 per share on the Company’s shares of Series E Preferred Stock. The payment of future dividends is subject to declaration by the Board of Directors. The Company’s Board of Directors also has authorized a $65.0 million share repurchase program, of which $35.9 million remained available as of December 31, 2023. The authorization does not obligate the Company to acquire any specific number of shares.

Related Party Arrangements

Benefit Street Partners L.L.C.

Amended Advisory Agreement

Refer to “Note 11 - Related Party Transactions and Arrangements” for a summary of the Company’s Advisory Agreement with the Advisor and amounts paid to the Advisor pursuant to the Advisory Agreement for the years ended December 31, 2023 and December 31, 2022.

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The Nominating and Corporate Governance Committee (the “Committee”) of the Company's board of directors, which consists solely of the Company’s independent directors, negotiated, approved and recommended that the board of directors approve, the amended Advisory Agreement. The Committee engaged independent legal counsel to assist the Committee in negotiating the amended Advisory Agreement.

Pursuant to the amended Advisory Agreement, the Advisor provides the daily management for the Company and the Operating Partnership, including an investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the board of directors. The initial term of the amended Advisory Agreement was three-years and was automatically renewed for an additional one-year period on January 19, 2024 and will continue to automatically renew for additional one-year periods unless either party elects not to renew.

The Company may terminate the amended Advisory Agreement for a Cause Event (as defined in the amended Advisory Agreement) without payment of a termination fee. Following the expiration of a term, and upon 180 days’ prior written notice, the Company may, without cause, elect not to renew the amended Advisory Agreement upon the determination by two-thirds of the Company’s independent directors that (i) there has been unsatisfactory performance by the Advisor or (ii) that the asset management fee and annual subordinated performance fee payable to the Advisor are not fair, subject to certain conditions. In such case, the Company shall be obligated to pay a termination fee.

During the term of the amended Advisory Agreement, the Advisor shall not, directly or indirectly, manage or advise another REIT that is engaged in the business of the Company in any geographical region in which the Company has a significant investment, or provide any services related to fixed-rate conduit lending to any other person, subject to certain conditions.

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company is or was required to make the following payments and reimbursements to the Advisor:

•The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company's executive officers.

•The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' equity as calculated pursuant to the Advisory Agreement.

•The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital (as defined in the Advisory Agreement) exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year.

•The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company's behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments.

Other Transactions

In the third quarter of 2021, the Company and an affiliate of the Company entered into the Jeffersonville JV to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliated fund has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliated fund made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.8 million in non-controlling interest. The Company has majority control of Jeffersonville JV and, therefore, consolidates the accounts of Jeffersonville JV in its consolidated financial statements. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

Pursuant to the Company's 2021 Incentive Plan, in the first quarter of 2023, the Company issued awards of restricted stock units to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement.

As of December 31, 2023, our commercial mortgage loans, held for investment, includes an aggregate of $124.1 million carrying value of loans to affiliates of our Advisor. The Company recognized $10.0 million and $5.0 million in interest income from these loans for the year ended December 31, 2023 and 2022 respectively, in the consolidated statements of operations.

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As disclosed in Note 3 - Commercial Mortgage Loans in April 2022, the Company fully funded a $113.2 million first mortgage consisting of the Walgreens Portfolio with various locations throughout the United States. The Company entered into a joint venture agreement and formed a joint venture entity, BSPRT Walgreens Portfolio, LLC to acquire 75.618% ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242% interest (see Note 5 - Real Estate Owned).

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the years ended December 31, 2023, 2022 and 2021 and the associated amounts payable as of December 31, 2023 and 2022 (dollars in thousands). See Note 11 - Related Party Transactions and Arrangements for further detail.

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,","","Payable as of December 31,"],["","","2023","","2022","","2021","","2023","","2022"],["Acquisition expenses (1)","","$","1,241","","","$","1,360","","","$","1,203","","","$","\u2014","","","$","\u2014"],["Administrative services expenses","","14,440","","","12,928","","","7,658","","","3,447","","","3,526"],["Asset management and subordinated performance fee","","33,847","","","26,157","","","28,110","","","15,014","","","8,843"],["Other related party expenses (2)(3)","","1,192","","","875","","","355","","","855","","","3,060"],["Total related party fees and reimbursements","","$","50,720","","","$","41,320","","","$","37,326","","","$","19,316","","","$","15,429"]]
[[/GREPCENT_TABLE]]
______________________

(1) Total acquisition fees and expenses paid during the years ended December 31, 2023, 2022 and 2021 were $5.8 million, $11.7 million and $15.0 million respectively, of which $4.6 million, $10.3 million and $13.8 million were capitalized in Commercial mortgage loans, held for investment and Real estate securities, available for sale, measured at fair value in the consolidated balance sheets for the years ended December 31, 2023, 2022 and 2021.

(2) These are related to reimbursable costs incurred for the increase in loan origination activities and are included in Other expenses in the consolidated statements of operations.

(3) As of December 31, 2023 and December 31, 2022, the related party payable includes $0.7 million and $2.9 million, respectively, of payments made by the Advisor to third party vendors on behalf of the Company.

The payables as of December 31, 2023 and 2022 in the table above are included in Due to affiliates in the consolidated balance sheets.

Off Balance Sheet Arrangements

We currently have no off balance sheet arrangements as of December 31, 2023 and through the date of the filing of this Form 10-K.

Non-GAAP Financial Measures

Distributable Earnings and Run-Rate Distributable Earnings

Distributable Earnings is a non-GAAP measure, which the Company defines as GAAP net income (loss), adjusted for (i) non-cash CLO amortization acceleration and amortization over the expected useful life of the Company's CLOs, (ii) unrealized gains and losses on loans, derivatives and ARMs, including CECL reserves and impairments, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) subordinated performance fee accruals/(reversal), (vi) loan workout charges, (vii) realized gains and losses on debt extinguishment and CLO calls, (viii) actual realized cash loss on a specific real estate owned ("REO") investment, (ix) impairments of acquisition assets related to the Capstead merger and (x) certain other non-cash items. Further, Run-Rate Distributable Earnings, a non-GAAP measure, presents Distributable Earnings before (i) trading and derivative gain/loss on ARMs and (ii) realized cash gain/loss adjustments on REO.

The Company believes that Distributable Earnings and Run-Rate Distributable Earnings provide meaningful information to consider in addition to the disclosed GAAP results. The Company believes Distributable Earnings is a useful financial metric for existing and potential future holders of its common stock as historically, over time, Distributable Earnings has been an indicator of dividends per share. As a REIT, the Company generally must distribute annually at least 90% of its taxable income, subject to certain adjustments, and therefore believes dividends are one of the principal reasons stockholders may invest in its common stock. Further, Distributable Earnings helps investors evaluate performance excluding the effects of certain transactions and GAAP adjustments that the Company does not believe are necessarily indicative of current loan portfolio performance and the Company's operations and is one of the performance metrics the Company's board of directors considers when dividends are declared. The Company believes Run-Rate Distributable Earnings is a useful financial metric because it presents the Distributable Earnings of its core businesses, net of the impacts of realized cash gain/loss adjustments on REO as well as the realized trading and derivative gain/loss on the residential adjustable-rate mortgage securities acquired from Capstead Mortgage Corporation, which the Company has liquidated from its portfolio.

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Distributable Earnings and Run-Rate Distributable Earnings do not represent net income (loss) and should not be considered as an alternative to GAAP net income (loss). The methodology for calculating Distributable Earnings and Run-Rate Distributable Earnings may differ from the methodologies employed by other companies and thus may not be comparable to the Distributable Earnings reported by other companies.

The following table provides a reconciliation of GAAP net income to Distributable Earnings for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2023","","2022","","2021"],["GAAP Net Income","","$","144,509","","$","14,215","","$","25,702"],["Adjustments:"],["Depreciation and amortization","","7,128","","5,408","","2,107"],["Impairment of Acquired Assets","","\u2014","","\u2014","","88,282"],["CLO amortization acceleration (1)","","(5,521)","","(438)","","250"],["Unrealized (gain)/loss on financial instruments (2)","","7,185","","17,010","","(7,853)"],["Unrealized (gain)/loss - ARMs","","415","","43,557","","20,670"],["Subordinated performance fee (3)","","6,171","","(8,380)","","9,846"],["Non-Cash Compensation Expense","","4,762","","3,485","","\u2014"],["(Reversal of)/Provision for credit losses","","33,738","","36,115","","(5,192)"],["Loan workout charges/(loan workout recoveries) (4)","","(5,105)","","5,104","","\u2014"],["Realized (gain)/loss on debt extinguishment / CLO call","","(2,201)","","\u2014","","\u2014"],["Realized trading and derivatives (gain)/loss on ARMs","","677","","21,726","","13,600"],["Run Rate Distributable Earnings (5)","","$","191,758","","$","137,802","","$","147,412"],["Realized trading and derivatives gain/(loss) on ARMs","","(677)","","(21,726)","","(13,600)"],["Realized cash gain/(loss) adjustment on REO (6)","","(1,571)","","\u2014","","\u2014"],["Distributable Earnings","","$","189,510","","$","116,076","","$","133,812"],["7.5% Cumulative Redeemable Preferred Stock, Series E Dividend","","$","(19,367)","","$","(19,367)","","(4,842)"],["Non-controlling interests in joint ventures net (income)/loss","","(602)","","216","","\u2014"],["Depreciation and amortization attributed to non-controlling interests of joint ventures","","(31)","","(1,415)","","\u2014"],["Distributable Earnings to Common","","169,510","","95,510","","128,970"],["Average Common Stock and Common Stock Equivalents","","1,403,558","","1,456,871","","1,146,009"],["GAAP Net Income/(Loss) ROE","","8.9","%","","(0.3)","%","","1.8","%"],["Run-Rate Distributable Earnings ROE","","12.2","%","","8.0","%","","12.4","%"],["Distributable Earnings ROE","","12.1","%","","6.6","%","","11.3","%"],["GAAP Net Income/(Loss) Per Share, Diluted","","$","1.42","","$","(0.38)","","$","(0.18)"],["GAAP Net Income/(Loss) Per Share, Fully Converted (7)","","$","1.42","","$","(0.06)","","$","0.33"],["Run-Rate Distributable Earnings Per Share, Fully Converted (7)","","$","1.94","","$","1.31","","$","2.23"],["Distributable Earnings Per Share, Fully Converted (7)","","$","1.92","","$","1.07","","$","2.02"]]
[[/GREPCENT_TABLE]]

________________________

(1) Adjusted for non-cash CLO amortization acceleration to effectively amortize issuance costs of our CLOs over the expected lifetime of the CLOs. We assume our CLOs will be outstanding for four years and amortized the financing costs over four years in our distributable earnings as compared to effective yield methodology in our GAAP earnings.

(2) Represents unrealized gains and losses on (i) commercial mortgage loans, held for sale, measured at fair value, (ii) other real estate investments, measured at fair value and (iii) derivatives.

(3) Represents accrued and unpaid subordinated performance fee. In addition, reversal of subordinated performance fee represents cash payments of the subordinated performance fee made during the period.

(4) Represents loan workout charges the Company incurred, which the Company deemed likely to be recovered. Reversal of loan workout charges represent recoveries received. During the second quarter of 2023, the Company recovered $5.1 million of loan workout charges, in aggregate, related to the loan workout charges incurred in 2022.

(5) Distributable Earnings before realized trading and derivative gain/loss on residential adjustable-rate mortgage securities (“Run-Rate Distributable Earnings”) (a non-GAAP financial measure).

(6) Represents the actual realized cash loss on a specific REO investment.

(7) Fully Converted assumes conversion of our series of convertible preferred stock and full vesting of our outstanding equity compensation awards.

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