Franklin BSP Realty Trust, Inc.

PART I. Item 1. Consolidated Financial Statements and Notes (unaudited)

CONSOLIDATED BALANCE SHEETS

(1) Includes pledged assets of $18.6 million as of September 30, 2025.

(2) Includes pledged assets of $588.2 million and $268.7 million as of September 30, 2025 and December 31, 2024, respectively.

(3) There wereno pledged assets of September 30, 2025 and $61.1 million pledged assets as of December 31, 2024, respectively.

(4) Includes pledged assets of $82.2 million and $180.7 million as of September 30, 2025 and December 31, 2024, respectively.

(5) Includes $25.6 million and $157.0 million of cash held by servicer related to the CLOs as of September 30, 2025 and December 31, 2024, respectively.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data)

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

Note 1 - Organization and Business Operations

Franklin BSP Realty Trust, Inc., (the "Company") is a Maryland corporation that operates as a real estate finance company. The Company has elected to be taxed as a real estate investment trust (a “REIT”) for U.S. federal income tax purposes since 2013. The Company’s operations are organized intotwo business units: (i) Commercial Real Estate Financing, and (ii) Agency Business.

Commercial Real Estate Financing

The Commercial Real Estate Financing unit primarily focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Secondarily, this unit also invests in and asset manages real estate securities, with a historical focus on commercial mortgage-backed securities ("CMBS"), commercial real estate collateralized loan obligation bonds and single asset single borrower bonds (collectively "CMBS bonds"), collateralized debt obligations ("CDOs") and other securities. Through this unit the Company also originates conduit loans which the Company intends to sell through its taxable REIT subsidiary ("TRS") into CMBS securitization transactions, and owns real estate that was either acquired by the Company through foreclosure, deed-in-lieu of foreclosure or that was purchased for investment.

Agency Business

On July 1, 2025, through a wholly owned subsidiary, we acquired NewPoint Holdings JV LLC, which now comprises our Agency Business unit. Through this unit, we originate, sell and service a range of multifamily finance products under programs offered by government-sponsored enterprises (“GSEs”), such as the Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) and by government agencies (“Agencies”), such as the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae Delegated Underwriting and Servicing (“DUS”) lender, a Freddie Mac Program Plus Seller/Servicer, a Multifamily Accelerated Processing (“MAP”) and Section 232 LEAN lender for HUD and a Ginnie Mae issuer. Additionally, the Company services external portfolios of commercial real estate financing products.

Structure

The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. As of September 30, 2025, substantially all of the Company's business is conducted through FBRT OP LLC (the “OP”), a Delaware limited liability company. As of September 30, 2025, the Company is the managing member of the OP and directly or indirectly holds 91% of the common units of membership interest in the OP. In addition, the Company, through subsidiaries which are treated as taxable REIT subsidiaries (“TRS”), is indirectly subject to U.S. federal, state and local income taxes.

The Company is externally-managed by Benefit Street Partners L.L.C. (the "Advisor") pursuant to an advisory agreement, as amended on August 18, 2021 (the "Advisory Agreement"). Established in 2008, the Advisor's credit platform 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 platform. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation fees and reimbursements for services related to the investment and management of the Company's assets and the operations of the Company. The Advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton.”

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The Company's unaudited consolidated financial statements and related footnotes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2024, which are included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 26, 2025, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this report.

Reclassifications

Certain prior year balances have been reclassified in order to conform to the current period presentation.

For the nine months ended September 30, 2024, $118.7 million of Borrowings on repurchase agreements - real estate securitiesand $51.5 million of Repayments of repurchase agreements - real estate securities were combined to be presented as a net result in Net borrowings (paydowns) on repurchase agreements - real estate securities, less than 90 days maturity in the consolidated statements of cash flows.

For the nine months ended September 30, 2025, $0.9 million of Intangible lease liability, held for sale was reclassified to Other Liabilities on the consolidated balance sheets. For the year ended December 31, 2024, $1.3 million of Intangible lease liability, held for sale was reclassified to Other Liabilitieson the consolidated balance sheets.

For the nine months ended September 30, 2025, $9.0 million of Accrued Expenses and Accounts Payable was reclassified to Other Liabilitieson the consolidated balance sheets. For the year ended December 31, 2024, $10.4 million of Accrued Expenses and Accounts Payable was reclassified to Other Liabilitieson the consolidated balance sheets.

For the three months ended September 30, 2025 and 2024, $0.3 million and $6.2 million, respectively, was reclassified from Realized gain/(loss) on sale of commercial mortgage loans, held for sale, measured at fair valueto Gain/(loss) on sales, including fee-based services, neton the consolidated statements of operations.

For the nine months ended September 30, 2025 and 2024, $5.3 million and $13.1 million, respectively, was reclassified from Realized gain/(loss) on sale of commercial mortgage loans, held for sale, measured at fair valueto Gain/(loss) on sales, including fee-based services, net on the consolidated statements of operations.

For the three months ended September 30, 2025 and 2024, Unrealized gain/(loss) on derivativesand Realized gain/(loss) on derivatives were combined and reclassified to Gain/(loss) on derivatives, resulting in net $(0.2) million and $(1.3) million, respectively, being reclassified on the consolidated statements of operations.

For the nine months ended September 30, 2025 and 2024, Unrealized gain/(loss) on derivativesand Realized gain/(loss) on derivatives were combined and reclassified to Gain/(loss) on derivatives, resulting in net $(0.3) million and $(1.3) million, respectively, being reclassified on the consolidated statements of operations.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members, as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary.

The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.

The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Non-controlling interest represents the equity of consolidated joint ventures that are not owned by the Company.

The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.

Cash and Cash Equivalents

Cash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates risk by investing in or through major financial institutions and primarily in funds that are currently U.S. federal government insured up to applicable account limits.

Restricted Cash

Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions, the duration of which generally matches the duration of the related repurchase agreements or derivative transactions, and cash reserves that are a requirement of Fannie Mae Delegated Underwriting and Servicing (DUS) program.

Investment Securities, held to maturity

Investment securities, held to maturity, consist of U.S. Treasury securities. These investment securities are pledged as collateral to satisfy reserve requirements of the Fannie Mae DUS program. The Company classifies these debt securities as held-to-maturity (“HTM”). HTM debt securities are those debt securities in which the Company has the ability and intent to hold the security until maturity. HTM debt securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts, less allowance for credit losses. The Company includes accrued interest as part of the HTM debt security amortized cost basis.

Commercial Mortgage Loans

Held for Sale, Measured at Fair Value - The fair value option provides an option to irrevocably elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held for sale in the Company's Agency and Conduit loans under the fair value option. These commercial mortgage loans are included in Commercial mortgage loans, held for sale, measured at fair value in the consolidated balance sheets. Interest income received on these loans is recorded on the accrual basis of accounting and is included in Interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.

For loans issued to GSE's and Agencies (“Agency Loans”), the Company also retains the rights to service the loans ("MSRs"), and receives fees for such servicing during the life of the loans, which generally last seven years or more. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the adjusted value of the related mortgage loans sold.

Sales of Agency Loans are considered transfers of financial assets, which are accounted for as sales when control over the assets have been transferred. The criteria for control to be transferred are (1) the assets have been isolated, put presumptively beyond the reach of the Company, even in bankruptcy, (2) the transferee has the right to pledge or exchange the transferred financial assets, and (3) the Company does not maintain effective control over the transferred financial assets. The Company has determined that all loans sold have met these specific conditions.

Mortgage Servicing Rights, net

The Company originates, sells, and services multifamily, healthcare, and senior-living related loans under programs offered by government and government-sponsored enterprises. These loans are generally held for short periods and minimal interest income is earned from these activities. Instead, the Company receives origination fees when it closes the loans and sale premiums when it sells the loans. Upon sale, the Company typically retains the MSRs and earns servicing fees over the life of the loans, which often extend seven years or longer.

When the Company commits to originate a loan with a borrower and sell it to an investor, income for the related MSR is recognized as a derivative asset. The asset is recognized at fair value based on the discounted expected net cash flows associated with the servicing of the loan. Once funded, the holding period for mortgage loans originated by the Company is approximately 30 days. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the adjusted value of the related mortgage loans sold. Once sold, the Company retains the servicing rights and the value allocated to the associated MSR is reclassed and capitalized as an individual originated MSR ("OMSR") asset on the consolidated balance sheets. The Company utilizes the amortization method to account for MSRs, under which the MSRs are amortized over the period of net servicing income or loss. Amortization of MSRs is recorded as a reduction of Servicing revenues, net in the consolidated statements of operations.

MSRs are initially recorded at fair value and subsequently carried at amortized cost. The following assumptions were used in estimating the fair value of the capitalized MSRs:

•Discount Rate: We used discount rates ranging from 8% to 14%, representing a weighted average discount rate of 10%, based on management's best estimate of the market to determine the present value of MSRs.

•Servicing Cost: The difference between estimated future cash flows and future cost to service a loan by a market participant for the estimated life of the MSR.

•Estimated Life: Estimated MSR life is based on stated yield-maintenance or prepayment-protection terms of the underlying loans.

The fair value of MSRs from loans we originate and sell are estimated considering market prices for similar MSRs, when available, and by estimating the present value of the future net cash flows of the capitalized MSRs, net of adequate compensation for servicing. Adequate compensation is based on the market rate of similar servicing contracts.

The MSR portfolio is evaluated for impairment at each reporting period by comparing the aggregate carrying amount of the MSRs to their aggregate fair value. For purposes of impairment evaluation, the MSRs are stratified based on the predominant risk characteristics of the underlying loans, which the Company has identified as loan type, and prepayment or default behavior, which vary by Agency. If the carrying value of an MSRs strata exceeds fair value, a valuation allowance is established. The Company utilizes an independent third-party valuation expert to assist in determining the estimated fair value of our MSR portfolio on a quarterly basis.

The Company writes off MSRs related to loans that were repaid prior to their expected maturity and loans that are determined to be unrecoverable. The write-off is recorded as a direct, permanent, reduction to the carrying value of MSRs and is included as a component of Servicing revenue, net in the consolidated statements of operations.

Derivatives and Hedging Activities

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

The Company also enters into loan commitments with borrowers on loan originations whereby the interest rate on the prospective loan is determined prior to funding. In general, the Company simultaneously enters into forward sale commitments with investors in order to hedge against the interest rate exposure on loan commitments. The forward sale commitment with the investor locks in the interest rate and price for the sale of the loan. The terms of the loan commitment with the borrower and the forward sale commitment with the investor are matched with the objective of hedging interest rate risk. Loan commitments and forward sale commitments are considered derivative instruments.

The Company recognizes all derivatives on the consolidated balance sheets at fair value. The estimated fair value of loan commitments includes values attributable to loan origination fees, premiums on the sale of loans, the fair value of the MSR, and changes in fair value due to interest rate movements between the date of the rate lock and period end. The estimated fair value of forward sale commitments includes the changes in fair value due to interest rate movements between the rate lock and period end. The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and, therefore, any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in Unrealized (gain)/loss on derivative instruments and(Gain)/loss on sales, including fee-based servicing, in the accompanying consolidated statements of operations based on the nature of the derivative.

The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within restricted cash in the consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.

Revenue Recognition

Interest income is accrued based on the actual coupon rate adjusted for accretion of any purchase discounts, the amortization of any purchase premiums and the accretion of any deferred fees, in accordance with GAAP. The Company may place loans as non-performing when the loan becomes 90 days past due or there is reasonable doubt about collection. When a loan is designated as non-performing status and put on non-accrual or cost recovery status, interest is only recorded as interest income or applied against the amortized cost basis of the loan, respectively, when received. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due.

Revenue from real estate owned represents income associated with the operations of commercial real estate properties, primarily base rent and reimbursements from property operating expenses. We recognize fixed rental income on a straight line basis over the non-cancelable lease term. Income for these activities is recognized when collection is reasonably assured and as the services under the arrangement have been provided.

Servicing Fees, net

Servicing fees are earned for servicing mortgage loans, including all activities related to servicing the loans, and are recognized as services are provided over the life of the related mortgage loan. Servicing fees include the net fees earned on borrower prepayment penalties, other ancillary fees, and any write-offs related to loans repaid prior to their expected maturity.

Gain on sales, including fee-based service, net

Gains on sales include loan origination fees, gain on the sale of loans, changes to the fair value of mortgage loans held for sale and derivative financial instruments attributable to the loan commitments and forward sale commitments, and other miscellaneous loan fees. Loan origination fees and gain on the sale of loans originated are recognized when the Company commits to make a loan to a borrower.

Goodwill and Other Intangible Assets

The Company typically uses independent third party valuation specialists to assist us in estimating the fair value and estimated useful lives of intangible assets.

The Company has intangible assets consisting of both finite and indefinite lived intangibles. Finite lived intangibles include above-market and below-market in-place leases, developed technology, and non-compete agreements. Indefinite lived intangibles include agency licenses.

Intangible lease assets or liabilities related to above-market and below-market in-place leases are recorded based on the present value of the difference between the contractual rent amounts and management’s estimate of market rates measured over a period equal to the remaining terms of the leases, including lease renewals where applicable. Key assumptions in the estimated fair values of in-place leases includes estimated direct costs to obtain the "in place" tenant, such as commissions and tenant improvements, and opportunity costs associated with lost rentals, which are calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease.

Developed technology intangible assets are recorded based on the cost the Company would incur in rebuilding the technology. Key assumptions include the costs to replace the technology plus the developer's profit and entrepreneurial incentive.

Non-compete intangible assets are recorded based on the present value of the projected revenue differences tied to such arrangement. Key assumptions in calculating the value of such intangible asset include projected revenue, the selected discount rate, and the terms of the agreement.

The Company's agency licenses are deemed to have an indefinite life due to their continuous economic value. The key assumptions in the determination of the value of the licenses include the projected revenue and servicing fees, the selected discount rate, and the time period over which revenue would be generated.

Finite lived intangibles are amortized over their estimated useful lives on a straight-line basis. Intangible assets deemed to have indefinite lives are not amortized and instead are assessed for impairment annually when events or circumstances indicate that the carrying value may be impaired.

Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. The Company does not amortize goodwill and tests for impairment at least annually. The Company tests for impairment by assessing qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount. Such qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of the Company and other relevant Company specific factors. Key assumptions considered in assessing overall financial performance include, but are not limited to rate lock volume, forecasted or actual EBITDA, forecasted or actual revenue, net cash generated and growth in MSR value.

If the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company will perform the goodwill impairment test. A goodwill impairment will be recorded if the carrying value of the Company exceeds its fair value as a result of the goodwill impairment test.

Allowance for Loss Sharing

Mortgage loans originated and sold by the Company to Fannie Mae under the Fannie Mae DUS program are subject to the terms and conditions of the Loss Sharing Addendum to the Multifamily Selling and Servicing Agreement, effective August 1, 2019 and amended effective June 15, 2021. Under the Loss Sharing Agreement, the Company is responsible for absorbing certain losses incurred by Fannie Mae with respect to loans originated under the DUS program. The compensation for this risk of loss is a component of servicing fees on the loan.

When a loan is sold under the Fannie Mae DUS program, the Company undertakes an obligation to partially guarantee the performance of the loan. On the date the Company commits to make a loan to a borrower, a liability for the current expected credit losses related to the loan is recognized in Allowance for loss sharing on the consolidated balance sheets.

The estimate of expected credit losses is determined based on detailed loan-specific characteristics, including loan-to-value (LTV) ratio, vintage year, loan term, property type, occupancy, and geographic location. The evaluation also considers the financial performance of the borrower, expected payments of principal and interest, as well as qualitative factors, utilizing both internal and external information. This approach incorporates past events, current conditions, and forward-looking information through the use of projected macroeconomic scenarios over reasonable and supportable forecasts.

Subsequent changes (favorable and unfavorable) in expected credit losses each period are recognized immediately in(Provision)/benefit for credit losses in the consolidated statement of operations as allowance for loss sharing expense or a reversal of provision for loss sharing.

Mortgage Loan Repurchase

When a loan is sold under the Fannie Mae DUS and Ginnie Mae programs, the Company retains an option to repurchase individual delinquent loans that meet certain criteria. Loans are considered delinquent when a payment has been missed for four consecutive months. At the Company’s option, and without Fannie Mae’s or Ginnie Mae’s prior authorization, the Company may repurchase the delinquent loan for an amount equal to 100% of the remaining unpaid principal balance of the loan plus applicable interest and the Company’s share of delinquency resolution costs. Under FASB ASC Topic 860, Transfers and Servicing, (“ASC 860”), once the Company has the unilateral ability to repurchase the delinquent loan and that ability has a more-than-trivial benefit to the Company, the Company is deemed to have regained effective control of the loan and is required to recognize the loan on its consolidated balance sheets with an offsetting liability, regardless of the Company’s intent to repurchase the loan. Historically the Company has not elected the option to repurchase eligible loans.

At September 30, 2025, there weretwo delinquent Ginnie Mae loans with an unpaid principal balance of $13.1 million eligible to be repurchased by the Company. During the year ended September 30, 2025, the Company did not exercise its option to repurchase any delinquent loans and it is not probable that the Company will be required to repurchase these delinquent loans. Loans meeting the criteria for the repurchase option are included in the Loan repurchase option asset with an offsetting Loan repurchase option liability on the consolidated balance sheets.

Servicing Fee Payable

The Company provides additional payments to certain employees, both current and former, and third-party correspondents by providing them with a percentage of the servicing fee revenue that is earned by the Company, which is initially recorded as a liability when the Company commits to make a loan to a borrower (“the servicing fee payable”). The initial fair value of the liability represents the expected net cash payments over the life of the related mortgage loan that are discounted at a rate that reflects the credit and liquidity risk of the related MSR. The Company incurs an expense over the life of each loan as long as the related loan is performing. If a particular loan is not performing, the recipient will not receive any additional compensation on that loan, and if a loss sharing event is triggered, the recipient will not receive any portion of the additional compensation on other loans.

The servicing fee payable to current employees and former employees is included within Accrued compensation on the consolidated balance sheet. The initial fair value of the related expense and the changes in the fair value of the servicing fee payable over the life of the related mortgage loan for current employees is included within Compensation and benefits, on a net basis, in the consolidated statement of operations in the period in which the change occurs. The changes in the fair value of the servicing fee payable over the life of the related mortgage loan for former employees is included within Professional fees, on a net basis, in the consolidated statement of operations in the period in which the change occurs.

Deferred Compensation Plans (Nonqualified)

The nonqualified deferred compensation plans are liability-classified cash based plans that are intended to promote the interest of the Company by creating incentives for employees in the form of long term compensation awards. Awards may be granted annually and generally vest over a period of four years. Certain employees participate in the Deferred Cash Plan (“DC Plan”) and the Profit Incentive Plan provided by the Company.

All long-term incentive (“LTI”) plans attribute expected future benefits to a period of service greater than one year. The Company accrues the cost of such awards issued under the LTI plans over the period of the employee’s service in a systematic and rational manner such that at the end of the period the aggregate amount accrued equals the value of the benefits expected to be provided to the employee in exchange for the employee’s service to that date.

Operating Leases

The Company's lease portfolio primarily contains real estate operating leases, which are accounted for in accordance with Topic 842, Leases. The Company determines if an arrangement is or contains a lease at contract inception. When a lease exists, The Company records a right-of-use ("ROU") asset and lease liability, which are initially recognized based on the discounted future lease payments over the term of the lease. Variable lease payments are not included in the measurement of ROU assets and lease liabilities.

As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Tenant improvement allowances are netted against the associated ROU asset and accreted over the leasehold period.

Our leases generally include options to extend or terminate use of the underlying assets. These options are included in the lease term used to determine ROU assets and lease liability when The Company is reasonably certain they will be exercised.

The Company elected the practical expedient related to lease and non-lease components, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component.

Operating lease expense is recognized on a straight-line basis over the lease term with the expense recorded in Other expensesthe consolidated statements of operations.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” or ASU 2023-09. ASU 2023-09 requires additional disaggregated disclosures on the entity’s effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU, 2024-01 “Compensation — Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards,” or ASU 2024-01. ASU 2024-01 improves clarity and operability without changing the guidance. ASU 2024-01 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. We do not expect the adoption of ASU 2024-01 to have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02 “Codification Improvements — Amendments to Remove References to the Concepts Statements,” or ASU 2024-02. ASU 2024-02 amended certain definitions in the FASB guidance. ASU 2024-02 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. We do not expect the adoption of ASU 2024-02 to have a material impact on our consolidated financial statements.

Note 3 - Business Combinations

Acquisition of NewPoint

On July 1, 2025 (the “Acquisition Date”), the Company completed the acquisition ("the Transaction") of NewPoint Holdings JV LLC (“NewPoint”), a commercial real estate finance company offering lending solutions nationwide to investors in multifamily, affordable housing, seniors housing, healthcare, and manufactured housing properties.

The Transaction is expected to expand the Company's presence in the multifamily lending sector, with the opportunity to enhance its diversified mortgage finance platform and capitalize on agency capabilities.

The Company purchased 100% of the outstanding equity interests of NewPoint for an aggregate purchase price of $427.8 million, comprised of $336.9 million in cash and $90.9 million of equity, in the form of 8,385,951 Class A units of the OP ("OP Units") issued as consideration. The OP Units were valued based on the closing market price of the Company's common shares on the acquisition date. The Company will operate the acquired business through a taxable REIT subsidiary.

The Company accounted for the Transaction as a business combination under the acquisition method of accounting, which requires allocation of the total consideration transferred to the assets acquired and liabilities assumed based on their fair values as of the Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill. Determining the fair value of the assets acquired requires significant judgments, assumptions, and estimates about future events, which the Company believes are reasonable. Use of different estimates and judgments could produce materially different results. The Company may refine such estimates and adjust the assets acquired and liabilities assumed over the measurement period, which will not exceed one year from the Acquisition Date. The following is a preliminary purchase price allocation, which is subject to change as the Company finalizes its analysis over certain items such as intangible assets, MSRs, and other items.

The allocation of the purchase consideration, subject to future measurement period adjustments, is as follows (dollars in thousands):

The purchase price exceeded the estimated fair value of the assets acquired and liabilities assumed and, as a result of the purchase allocation, the Company recorded goodwill of $90.8 million, which has been allocated to the Agency segment. The goodwill recognized is attributable primarily to anticipated growth opportunities and synergies resulting from the Transaction, which provides the Company with an expanded presence in the multifamily sector and the ability to originate and service agency mortgage loans. The amount of goodwill expected to be deductible for tax purposes is approximately $61.7 million.

The fair value of the identifiable tangible assets and liabilities acquired in the Transaction approximated their carrying values at the Acquisition Date. The Company used independent third-party valuation specialists to assist in determining the fair value of certain intangible assets acquired and liabilities assumed, which are classified as Level III. Provisional estimates of fair value are established at the time of the acquisition. There are significant estimates used in determining the fair values of certain intangible assets acquired, which consist of mortgage servicing rights, licenses, developed technology, and non-compete agreements.

Mortgage servicing rights: When a mortgage loan is sold, the Company retains the right to service the loan and recognizes the MSR at fair value. The initial fair value represents expected net cash flows from servicing, borrower prepayment penalties, interest earnings on escrows, interim cash balances, delinquency rates, late charges and ancillary fees that are discounted at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the underlying loan. After initial recognition, the MSRs will be amortized using the amortization method.

Licenses: The fair value of the licenses were estimated using a discounted cash flow method, which involves projecting revenue and servicing fees associated with the license, while accounting for related expenses. The significant unobservable input used to discount the future cash flows to present value is the discount rate of 11.5%. These licenses are considered to have indefinite useful lives, reflecting their continuous economic value. Key assumptions are drawn from management’s projections and legal guidance.

Developed technology: The fair value was estimated based on a replacement cost method of the cost approach, which estimates the cost the Company would incur in rebuilding the technology. Under this method, fair value is equal to the replacement cost of the technology plus developer’s profit and entrepreneurial incentive, which are the key assumptions embedded into the valuation. The technology is amortized over five years based upon the estimated economic benefits received.

Non-compete agreements: The fair value of the non-compete agreements were estimated using a discounted cash flow method, which calculates the present value of projected revenue differences attributable to the agreement, adjusted for operating expenses. The significant unobservable input used to discount the future cash flows to present value is the discount rate of 11.5%. Key assumptions are based on management input and the terms of the non-compete agreement. The agreements are amortized over a period of nine to 12 months.

The estimates above directly impact the amount of identified intangible assets recognized and the related amortization expenses in future periods. Intangible assets acquired had a weighted average useful economic life of 2.7 years. As of September 30, 2025, aggregate intangible assets relating to the Transaction of $80.1 million were recorded in Intangible assets, neton the consolidated balance sheets. The Company may record certain measurement period adjustments, which will be made in the period in which the amounts are determined. The current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the Acquisition Date.

The Company recognized acquisition-related expenses of $2.3 million and $3.7 million for the three and nine months ended September 30, 2025, respectively, in Other Expensesand $1.7 million and $5.1 million for the three and nine months ended September 30, 2025, respectively, in Professional Fees on the consolidated statement of operations.

The Company's consolidated financial statements for the three and nine months ended September 30, 2025 include the operations of NewPoint from the Acquisition Date. The following table presents NewPoint's revenue and earnings as reported in the Company's consolidated statement of operations (dollars in thousands):

Supplemental Pro Forma Combined Information (unaudited)

The following unaudited pro forma combined financial information presents the combined results of operations of the Company, as if the Transaction occurred on January 1, 2024. The unaudited proforma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the Transaction had taken place on the date indicated or of results that may occur in the future (dollars in thousands):

The unaudited pro forma financial information is based on historical information of the Company and NewPoint, along with certain material, non-recurring pro forma adjustments. The material, non-recurring pro forma adjustments primarily consist of (i) incremental amortization expense based on the preliminary fair values of the intangible assets acquired; (ii) recognition of non-controlling interest to reflect the reclassification of the OP units; (iii) a change in the valuation methodology of mortgaging servicing rights from fair value to the amortization method; (iv) increased provision for credit loss expense due to revised loss estimation methodology, (v) non-recurring transaction costs; and (vi) income tax impact of the aforementioned pro forma adjustments.

Note 4 - Commercial Mortgage Loans, Held for Investment

Commercial Mortgage Loans, Held for Investment

The following table presents a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (dollars in thousands):

For the nine months ended September 30, 2025 and year ended December 31, 2024, the activity in the Company's commercial mortgage loans, held for investment carrying values, was as follows (dollars in thousands):

(1)Other items primarily consist of purchase discounts or premiums and deferred origination expenses.

(2) For additional details on properties obtained through foreclosure or deed-in-lieu of foreclosure see Note 5 - Real Estate Owned.

As of September 30, 2025 and December 31, 2024, the Company's total commercial mortgage loan, held for investment, portfolio was comprised of 147 and 155 loans, respectively.

Loan Portfolio by Collateral Type and Geographic Region

The following tables present the composition by loan collateral type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):

(1) Represents loans secured by a portfolio of properties located in various parts of the United States.

Allowance for Credit Losses

The following table presents the quarterly changes in the Company's allowance for credit losses for the nine months ended September 30, 2025 (dollars in thousands):

Specific Allowance for Credit Losses

The Company has elected to apply a practical expedient for collateral dependent assets in which the allowance for credit losses is calculated as the difference between the estimated fair value of the underlying collateral, less estimated cost to sell, and the amortized cost basis of the loan. As such, these loans receivable are measured at fair value on a nonrecurring basis using significant unobservable inputs and are classified as Level 3 assets in the fair value hierarchy. The fair value of the underlying collateral is determined using the market approach, the income approach, or a combination thereof. The significant unobservable input used for the income approach is the exit capitalization rate assumptions. The significant unobservable input used for the market approach is the estimated fair value less cost to sell based on a negotiated price from an anticipated buyer.

In November 2021, the Company originated a first mortgage loan with a commitment of $66.7 million secured by a multifamily property in Texas. The loan was identified by management as non-performing and placed on cost recovery status, with an amortized cost of $66.7 million as of December 31, 2024. The Company recorded a specific allowance for credit losses of $3.2 million on this loan for the year ended December 31, 2024. In January 2025, the Company, through foreclosure, acquired the property which was subsequently sold in February 2025. See Note 5 - Real Estate Owned for additional details. The Company charged off the specific allowance for credit losses at the time of the foreclosure.

In March 2021, the Company originated a first mortgage loan with a commitment of $48.5 million secured by an office property in Colorado. The loan was identified by management as non-performing and placed on cost recovery status, with an amortized cost of $43.7 million as of December 31, 2024. The Company recorded a specific allowance for credit losses of $26.7 million on this loan for the year ended December 31, 2024. In February 2025, the Company, through deed-in-lieu of foreclosure, acquired the property which is recorded in Real estate owned, held for sale in the consolidated balance sheets. See Note 5 - Real Estate Owned for additional details. The Company charged off the specific allowance for credit losses at the time of the deed-in-lieu of foreclosure.

In May 2022, the Company originated a first mortgage loan with a commitment of $42.3 million secured by a multifamily property in Texas. The loan was identified by management as non-performing and placed on non-accrual status, with an amortized cost of $36.8 million as of March 31, 2025. The Company recorded a specific allowance for credit losses of $0.5 million on this loan as of March 31, 2025, and an additional $1.4 million specific allowance for credit losses in the second quarter as a result of the property's decrease in fair market value. In April 2025, the Company acquired the property through foreclosure, which is recorded in Real estate owned, held for sale in the consolidated balance sheets. See Note 5 - Real Estate Owned for additional details. The Company charged off the specific allowance for credit losses at the time of the foreclosure.

In December 2021, the Company originated a first mortgage loan with a commitment of $23.0 million secured by a multifamily property in Pennsylvania. The loan was identified by management as non-performing and placed on non-accrual status, with an amortized cost of $22.0 million as of September 30, 2025. The Company recorded a specific allowance for credit losses of $2.3 million on this loan as of September 30, 2025.

General Allowance for Credit Losses

The Company recorded a total decrease in its general allowance for credit losses during the three and nine months ended September 30, 2025 of $1.5 million and $5.7 million, respectively. The primary driver for the lower reserve balance is due to a decrease in the size of the overall portfolio of commercial mortgage loans, held for investment for the three and nine months ended September 30, 2025. Changes in the provision for credit losses for the Company’s financial instruments are recorded in(Provision)/benefit for credit losses in the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded in the consolidated balance sheet, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

Past Due Status

The following table presents a summary of the loans amortized cost basis as of September 30, 2025 (dollars in thousands):

(1)Comprised ofthree mortgage loans, one of which was collateralized by an office property and the other two by multifamily properties. All three loans have been designated as non-performing and placed on cost recovery status.

Non-performing Status

The following table presents the amortized cost basis of our non-performing loans as of September 30, 2025 and December 31, 2024 (dollars in thousands):

(1)As of both September 30, 2025 and December 31, 2024, the Company hadthree loans designated as non-performing. As of September 30, 2025, the three non-performing loans were placed on cost recovery status, one of which was collateralized by an office property with no specific allowance for credit losses. The other two were collateralized by multifamily properties, one of which had no specific allowance for credit losses and the other with a specific allowance for credit losses of $2.3 million as of September 30, 2025. As of December 31, 2024, thethree non-performing loans were placed on cost recovery status, two of which were collateralized by office properties with a specific allowance for credit losses of $26.7 million and $1.3 million, respectively, and the other by a multifamily property with a specific allowance for credit losses of $3.2 million.

Loan Credit Characteristics, Quality and Vintage

As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

All commercial mortgage loans, excluding loans classified as Commercial mortgage loans, held for sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2. As of both September 30, 2025 and December 31, 2024, the weighted average risk rating of loans was 2.3.

The following tables present the par value and amortized cost of our commercial mortgage loans, held for investment as of September 30, 2025 and December 31, 2024, by the Company’s internal risk rating and year of origination (dollars in thousands):

Note 5 - Mortgage Loans, Held for Sale

Mortgage Loans, Held for sale, Measured at Fair Value

Our mortgage loans, held for sale, measured at fair value are comprised of both Agency loans and non-Agency loans. Our Agency loans held for sale are typically sold within 60 days of loan origination, while non-Agency loans are generally expected to be sold to third parties or securitized within 180 days of loan origination. The following table shows the aggregate unpaid principal balance and fair value of our mortgage loans, held for sale, measured at fair value (dollars in thousands):

As of September 30, 2025 and December 31, 2024, respectively, there were no loans that were 90 days or more past due or on a non-accrual status.

Mortgage Loans, Held for sale

The following tables present the composition by loan collateral type and region of the Company's commercial mortgage loans, held for sale portfolio (dollars in thousands):

(1) Represents loans secured by a portfolio of properties located in various parts of the United States.

Note 6 - Mortgage Servicing Rights

Mortgage Servicing Rights (“MSRs”) represent servicing rights retained by the Company for loans it originates and sells. The servicing fees are collected from the monthly payments made by the borrowers. The Company generally receives other remuneration including rights to various loan fees such as late charges, collateral re-conveyance charges, loan prepayment penalties, and other ancillary fees. In addition, the Company is also generally entitled to retain the interest earned on funds held pending remittance related to its collection of loan principal and escrow balances. As of September 30, 2025, the Company had a servicing portfolio consisting of 1,010 loans with an unpaid principal balance of $20.4 billion for which it owns MSRs.

Activity related to MSRs for the nine months ended September 30, 2025, was as follows (in thousands):

The discount rates used to determine the present value of the MSRs, at recognition, were between 8% -14% (representing a weighted average discount rate of 10%) as of September 30, 2025. The weighted average estimated life remaining of the MSRs was 6.6 years as of September 30, 2025.

Contractual servicing fees, including late fees, and ancillary fees were $11.4 million for the three months ended September 30, 2025, and are included in servicing fees, net in the consolidated statement of operations. At September 30, 2025, $4.3 million of MSR were considered impaired.

The expected amortization of capitalized MSRs recorded at September 30, 2025 is as follows (in thousands):

Based on scheduled maturities, actual amortization may vary from these estimates.

Note 7 - Real Estate Securities

Real Estate Securities Classified As Available For Sale

The following is a summary of the Company's real estate securities, available for sale, measured at fair value, as of September 30, 2025 and December 31, 2024 (dollars in thousands):

The Company classified its CMBS bonds as available for sale and reports them at fair value in the consolidated balance sheets with changes in fair value recorded in Accumulated other comprehensive income/(loss)in the consolidated balance sheets.

The following table shows the amortized cost, unrealized gain/(loss) and fair value of the Company's CMBS bonds as of September 30, 2025 and December 31, 2024 (dollars in thousands):

As of September 30, 2025, the Company held five CMBS bonds with an amortized cost basis of $82.6 million and a net unrealized gain of $0.1 million, two of which were held in a gross unrealized loss position of $0.1 million. As of December 31, 2024, the Company held 11 CMBS bonds with an amortized cost basis of $202.9 million and a net unrealized gain of $0.1 million, four of which were held in a gross unrealized loss position of $0.2 million. As of September 30, 2025 and December 31, 2024, zero positions had an unrealized loss for a period greater than twelve months. As of September 30, 2025 and December 31, 2024, the fair value of the Company's CMBS bonds that were in an unrealized loss position for less than twelve months was $28.2 million and $50.3 million, respectively.

Note 8 - Real Estate Owned

Real Estate Owned, Held for Investment

The following table summarizes the Company's real estate owned, held for investment assets as of September 30, 2025 and December 31, 2024 (dollars in thousands):

See note below.

(1) The Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the “Jeffersonville JV”) to acquire a triple net lease property in Jeffersonville, GA. Refer to Note 18 - Related Party Transactions and Arrangements for details.

Depreciation expense for the three and nine months ended September 30, 2025 totaled $0.7 million and $2.0 million, respectively. Depreciation expense for the three and nine months ended September 30, 2024 totaled $0.7 million and $2.0 million, respectively.

Real Estate Owned, Held for Sale

The following table summarizes the Company's real estate owned, held for sale assets and liabilities as of September 30, 2025 and December 31, 2024 (dollars in thousands):

See notes below.

(1)In November 2022, the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, BSPRT Walgreens Portfolio, LLC (the "Walgreens JV") to assume a group of 24 retail properties with various locations throughout the United States (the "Walgreens Portfolio"). Refer to Note 18 - Related Party Transactions and Arrangements. The Company soldone property within the Walgreens Portfolio during the first quarter of 2025 and a second property within the Walgreens Portfolio during the second quarter of 2025. In addition, during the first quarter of 2025, the Company received $5.6 million related to settled litigation regarding the Walgreens Portfolio. As a result, the Company recorded a net (loss)/gain of $(1.0) million and $4.4 million for the three and nine months ended September 30, 2025, respectively, related to the legal settlement and property sales included within Gain/(loss) on other real estate investments in the Company's consolidated financial statements of operations. As of September 30, 2025, the Company's real estate owned, held for sale assets includestwo remaining retail properties in the Walgreens Portfolio.

(2)During the first quarter of 2025, the Company obtainedone office property, in Denver, CO, through deed-in-lieu of foreclosure. During the three and nine months ended September 30, 2025, the Company recognized a net loss of $0 and $1.4 million, respectively. included within Gain/(loss) on other real estate investments in the Company's consolidated financial statements of operations related to the foreclosure of this property.

(3)The Company soldone multifamily property within its existing portfolio during the third quarter of 2025. During the quarter, the Company also reclassified one multifamily property located in Lubbock, Texas from held for investment to held for sale. As of September 30, 2025, the Company's real estate owned, held for sale assets includedsix multifamily properties that previously collateralizedsix commercial mortgage loans. During the three and nine months ended September 30, 2025, the Company recognized a net loss of $1.1 million and $4.7 million, respectively, included within Gain/(loss) on other real estate investments in the Company's consolidated financial statements of operations related to the foreclosure, sales, and fair value write-down of these properties.

As of September 30, 2025, the Company has designated certain properties included within the real estate owned business segment as held for sale in accordance with ASC 360. The properties are currently being marketed and sales are probable to occur within one year.

Note 9 - Equity Method Investments

55 Riverwalk Aker/BSP Venture LLC - The Company holds a 21.01% interest in 55 Riverwalk Aker/BSP Venture LLC (the "55 Riverwalk JV"), a joint venture that is a mixed-use development property consisting of a multifamily apartment complex and retail shopping stores. The 55 Riverwalk JV was formed on December 20, 2024, where the Company made an initial investment of $13.3 million. The Company has received total distributions of $0.2 million as of September 30, 2025. The equity investment in 55 Riverwalk JV has a carrying value of $13.5 million on the consolidated balance sheets as of September 30, 2025.

Garfield PG JV HoldCo LLC - The Company holds a 28.87% interest in Garfield PG JV HoldCo LLC (the "Garfield JV"), a joint venture that is an industrial property for warehousing and distribution. The Garfield JV was formed on May 22, 2025, where the Company made an initial investment of $9.8 million. The Company has received total distributions of $0.8 million as of September 30, 2025. The equity investment in Garfield JV has a carrying value of $8.9 million on the consolidated balance sheets as of September 30, 2025.

NewPoint JV LLC -Through the acquisition of NewPoint Holdings JV LLC on July 1, 2025, the Company holds a 6.65% ownership interest in NewPoint JV LLC (the “Bridge JV”), a joint venture with the purpose of investing in multifamily bridge loans. The Company has received total distributions of $0.9 million as of September 30, 2025. The Company has a total commitment of $25.0 million which was completely funded as of September 30, 2025. The equity investment in Bridge JV has a carrying value of $24.3 million on the consolidated balance sheets as of September 30, 2025.

NewPoint + MORE Capital Affordable Fund LLC -Through the acquisition of NewPoint Holdings JV LLC on July 1, 2025, the Company holds a 30% ownership interest in NewPoint + MORE Capital Affordable Fund LLC (the “Affordable JV”), a joint venture with the purpose of investing in multifamily affordable debt instruments through its subsidiary, NewPoint Impact Fund I LP. The Company has a total capital commitment of $30.0 million to Affordable JV, of which $9.0 million was unfunded as of September 30, 2025. The Company has receivedno distributions as of September 30, 2025. The equity investment in Affordable JV has a carrying value of $22.4 million on the consolidated balance sheets as of September 30, 2025.

The following table provides a summary of the combined financial position of the Company’s equity method investments as of September 30, 2025 and December 31, 2024 (dollars in thousands):

The following provides a summary of the combined results of operations of the Company’s equity method of investments for the three and nine months ended September 30, 2024 and 2025, respectively (dollars in thousands):

Note 10 - Leases

The Company leases office space, classified as operating leases, in the normal course of business at varying lengths through 2033. Leases are negotiated with third parties and, in some instances, contain renewal, expansion and termination options. As of September 30, 2025, the Company recorded ROU assets of $8.8 million and operating lease liabilities of $11.0 million within Prepaid expenses and other assets andother liabilities, respectively, on the consolidated balance sheets. All lease commencement dates are recorded as of July 1, 2025 in conjunction with the acquisition of NewPoint.

Operating lease cost is included in Other expenses in the consolidated statement of operations. The discount rate was determined by using the Company's incremental borrowing rate.

The following table shows future minimum payments under the Company's operating leases as of September 30, 2025 (dollars in thousands):

Rental Income

Rental income for the three and nine months ended September 30, 2025 totaled $7.2 million and $22.4 million, respectively. Rental income for the three and nine months ended September 30, 2024 totaled $4.4 million and $13.2 million, respectively. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

The following table summarizes the Company's schedule of future minimum rents on its real estate owned, held for investment properties, with a remaining lease term of approximately 13 years, to be received under the leases (dollars in thousands):

Note 11 - Goodwill & Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reporting segment were as follows (dollars in thousands):

(1) Represents goodwill related to the NewPoint acquisition.

Intangible Assets

The following table summarizes the carrying value of the Company’s intangible assets, as described in Note 2 as of September 30, 2025 and December 31, 2024 (dollars in thousands):

Amortization expense for the three and nine months ended September 30, 2025 totaled $2.6 million and $4.0 million, respectively. Amortization expense for the three and nine months ended September 30, 2024 totaled $0.7 million and $2.2 million, respectively.

The following table summarizes the Company's expected other identified intangible assets, net amortization over the next five years (dollars in thousands):

Note 12 - Debt

Below is a summary of the Company's Repurchase facilities and revolving credit facilities - commercial mortgage loans ("Repo and Revolving Credit Facilities"), Mortgage note payable, Other financings and Unsecured debt as of September 30, 2025 and December 31, 2024 (dollars in thousands):

See notes below.

(1) Represents year to date expense and includes amortization of deferred financing costs.

(2)The Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 60% to 75% of the principal amount of the mortgage loan being pledged. These loans are all floating rate at the Secured Overnight Financing Rate ("SOFR") plus an applicable spread. Additionally, the Repo and Revolving Credit Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. As of both September 30, 2025 and December 31, 2024, the Company was in compliance with all debt covenants.

(3) There aretwo one-year extension options.

(4) On October 9th, 2025, the Company extended the maturity date to January 5th, 2027.

(5)On October 10th, 2025, the Company extended the maturity date to October 25th, 2027 and reduced the facility capacity to $250 million. There isone one-year extension option.

(6)There isone one-year extension option.

(7) On February 21, 2025, the Company extended the maturity date to March 14, 2028, with aone-year extension option remaining.

(8)On October 21, 2025, the Company terminated the Churchill MRA.

(9)Collateralized by a first lien on the Company’s interest in the mortgage loans that it originates. Advances cannot exceed 100% of the principal amounts of the mortgage loans originated by the Company and must be repaid at the earlier of the sale or other disposition of the mortgage loans or at the expiration date of the Line of Credit.

(10)Operating line that is secured by an equity interest in NewPoint Real Estate Capital LLC ("NPREC").

(11) Collateralized by a first lien on the Company’s interest in the mortgage loans that it originates.

(12) The Company is party to the line of credit to finance installments received from Fannie Mae. The commitment amount is subject to change at any time at Fannie Mae’s discretion. Fannie Mae advances payment to the Company in two separate installments according to the terms as set forth in the ASAP sale agreement. The first installment is considered an advance to the Company from Fannie Mae and not a sale until the second advance and settlement is made.

(13)Relates to a mortgage note payable in Jeffersonville JV, a consolidated joint venture. The loan has a principal amount of $112.7 million of which $88.7 million of the loan is owned by the Company and was eliminated in our consolidated financial statements (see Note 8 - Real Estate Owned).

(14)Comprised ofone note-on-note financing via a participation agreement. From inception of the loan, the Company's outstanding loans could increase as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The contractual maturity date of this loan is July 2028.

(15) During the second quarter of 2025, the Company issued $82.0 million of 8.25% fixed-rate senior unsecured notes. These notes mature on April 25, 2030.

(16) During the second quarter of 2025, the Company issued $25.0 million of floating-rate senior unsecured notes. As of September 30, 2025, the interest rate on these notes was 8.20%. These notes mature on April 25, 2028.

(17)The notes are currently redeemable, in whole or in part, without penalty, at the Company’s option. Interest paid on unsecured junior debt totaled $1.7 million and $5.0 million for the three and nine months ended September 30, 2025, respectively.

Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs which were included in Repurchase agreements - real estate securities in the Company's consolidated balance sheets as of September 30, 2025 and December 31, 2024 (dollars in thousands):

See note below

(1) Includes $77.8 million and $75.4 million of CMBS bonds, held by the Company, which is eliminated through consolidation of the related CLO's on the Company's consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.

Collateralized Loan Obligation

The following table represents the terms of the notes issued by 2021-FL6 Issuer, 2021-FL7 Issuer, 2022-FL8 Issuer, 2022-FL9 Issuer, 2023-FL10 Issuer and 2024-FL11 Issuer (collectively the "CLOs"), as of September 30, 2025 and December 31, 2024:

(1) Loan assets may be pledged towards one or multiple CLO pool.

(2) Excludes $532.2 million and $532.4 million of CLO notes held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

(3)On March 5, 2021, the Financial Conduct Authority of the U.K. (the “FCA”) announced that LIBOR tenors, relevant to 2021- FL6 Issuer and 2021-FL7 Issuer, would cease to be published or no longer be representative after June 30, 2023. The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event. The benchmark index of 1M LIBOR interest rate converted from LIBOR to compounded SOFR, plus a benchmark adjustment of 11.448 basis points with a lookback period equal to the number of calendar days in the applicable interest accrual period plus two SOFR business days, conforming with the indenture agreement and recommendations from the ARRC. Compounded SOFR for any interest accrual period shall be the “30-Day Average SOFR” as published by the Federal Reserve Bank of New York on each benchmark determination date. On July 13, 2023, the Company converted the indices for 2021-FL6 Issuer and 2021-FL7 Issuer to 1M Term SOFR +11.448 basis points and the applicable spreads remain unchanged.

The below table reflects the total assets and liabilities of the Company's outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2025 and December 31, 2024 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. The VIEs are non-recourse to the Company.

(1) Includes $25.6 million and $157.0 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2025 and December 31, 2024, respectively.

(2) The balance is presented net of allowance for credit losses of $25.9 million and $34.5 million as of September 30, 2025 and December 31, 2024, respectively.

(3) Includes $532.2 million and $532.4 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations of the consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.

(4) The balance is presented net of deferred financing cost and discount of $21.6 million and $28.8 million as of September 30, 2025 and December 31, 2024, respectively. The deferred financing costs are amortized over the expected lifetime of each CLO.

Note 13 - Allowance for Loss Sharing

The Company has risk-sharing obligations on substantially all loans originated under the Fannie Mae DUS program. Servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are larger than the servicing fees received for loans with no risk-sharing obligations.

When a loan is sold under the Fannie Mae DUS program, the Company undertakes an obligation to partially guarantee the performance of the loan. A liability is recognized for the fair value of the guarantee obligation undertaken for the non-contingent aspect of the guarantee and is removed only upon either the expiration or settlement of the guarantee. At September 30, 2025 and December 31, 2024, we had $1.6 million and $0, respectively, of guarantee obligations included in the allowance for loss-sharing obligations.

In addition to and separately from the fair value of the guarantee, the Company estimates an allowance for loss-sharing under CECL over the contractual period in which we are exposed to credit risk. The general reserve related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio. In instances where payment under the loss-sharing obligations of a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated loss-sharing specific reserve. At September 30, 2025 and December 31, 2024, our allowance for loss-sharing obligations related to the specific reserve was $13.4 million and $0, respectively.

At September 30, 2025 and December 31, 2024, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $7.6 million and $0, respectively, and represented 0.11% and 0%, respectively, of our Fannie Mae servicing portfolio. During the three months ended September 30, 2025 and December 31, 2024, we recorded a decrease in CECL reserves of $2.7 million and $0, respectively.

At September 30, 2025 and December 31, 2024, the unpaid principal balance outstanding of loans sold with loss sharing under the DUS program was approximately $7.2 billion and $0, respectively. The Company’s internal credit risk rating process is used to classify loans and commitments according to the degree of credit risk associated with the ability of the borrower to repay. If payment is required under this program, the Company would not have a contractual interest in the collateral underlying the commercial mortgage loan on which the loss occurred, although the value of the collateral is taken into account in determining the Company’s share of such losses.

A summary of the Company’s allowance for loss sharing for the for the nine months ended September 30, 2025 is as follows (dollars in thousands):

As of September 30, 2025, the maximum quantifiable allowance for loss sharing associated with the Company’s guarantees under the Fannie Mae DUS agreement and the Loss Sharing Agreement was $1.1 billion from a total recourse at risk pool of $7.2 billion. The maximum quantifiable allowance for loss sharing is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.

For U.S. Treasury securities classified as HTM, the Company does not record an allowance for credit losses as the expectation of nonpayment of the amortized cost basis, based on historical losses, adjusted for current conditions and reasonable and supportable forecasts, is zero.

Note 14 - Earnings Per Share

The Company uses the two-class method in calculating basic and diluted earnings per share. Net income/(loss) is allocated between our common stock and other participating securities based on their participation rights. Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities. The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 (in thousands, except share and per share data):

(1)The effect of the weighted average dilutive shares excluded restricted shares and stock units for the three months ended September 30, 2025 and 2024 of 160,572 and 276,267, respectively, as the effect was anti-dilutive. Weighted average dilutive shares excluded restricted shares and stock units as of the nine months ended September 30, 2025 and 2024 of 142,604 and 194,571 respectively, as the effect was anti-dilutive. Additionally, the effect of dilutive shares excluded 5,370,498 weighted average common share equivalents of convertible preferred stock for the three and nine months ended September 30, 2025 and 2024, respectively, as the effect was anti-dilutive.

(2)The effect of the weighted average dilutive shares included Class A units of FBRT OP LLC for the three and nine months ended September 30, 2025 of 8,385,951 and 2,826,035, respectively, as the effect was dilutive.

Note 15 - Redeemable Convertible Preferred Stock and Equity Transactions

The following table presents the summary of the Company's outstanding shares of redeemable convertible preferred stock, perpetual preferred stock, and common stock as of September 30, 2025 and December 31, 2024 (in thousands, except share and per share amounts):

(1)As declared by the Company's board of directors.

(2) On January 16, 2025, the Series H Preferred Stock was amended such that the mandatory conversion date was extended byone year, to January 21, 2026. Unless earlier converted, the Series H Preferred Stock will automatically convert into common stock at a rate of 299.2 shares of common stock per share of Series H Preferred Stock (subject to adjustments as described in the Articles Supplementary for the Series H Preferred Stock) on January 21, 2026. The holder of the Series H Preferred Stock has the right to convert up to 4,487 shares of Series H Preferred Stock one time in each calendar month through December 2025, upon 10 business days’ advance notice to the Company.

(3)Common stock includes shares issued pursuant to the Company's DRIP and unvested restricted shares.

During the nine months ended September 30, 2025 and 2024, the Company paid an aggregate of $88.9 million and $88.4 million, respectively, of common stock distributions comprised of quarterly common dividends of $0.355 per share.

Stock Repurchases

The Company’s board of directors has authorized a $65 million share repurchase program of the Company’s common stock. The Company’s share repurchase program authorizes share repurchases at prices below the most recently reported book value per share as determined in accordance with GAAP. Repurchases made under the program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, as permitted by securities laws and other legal requirements. The timing, manner, price and amount of any purchases by the Company will be determined by the Company in its reasonable business judgment and consistent with the exercise of its legal duties and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The share repurchase program does not obligate the Company to acquire any particular amount of common stock. The Company share repurchase program will remain open until it expires or until the capital committed to the applicable repurchase program has been exhausted, whichever is sooner. Repurchases under the Company’s share repurchase program may be suspended from time to time at the Company’s discretion without prior notice. As of September 30, 2025, the Company had $31.1 million remaining under the share repurchase program. There wereno repurchases under the share repurchase program for the nine months ended September 30, 2025.

Dividend Reinvestment and Direct Stock Purchase Plan

The Company has adopted a dividend reinvestment and direct stock purchase plan ("DRIP") under which we registered and reserved for issuance, in the aggregate, up to 63,000,000 shares of common stock. Under the dividend reinvestment component of this plan, the Company's common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of common stock (which shares, at the Company's option, are either issued directly from the Company or purchased by the administrator on the open market). The direct stock purchase component allows stockholders, subject to the Company's approval, to purchase shares of common stock directly from us. During the three months ended September 30, 2025 and 2024, no shares common stock were issued by the Company, and 39,570 and 40,165 shares of common stock, respectively, were purchased in the open market by the DRIP administrator and allocated to DRIP participants under the dividend reinvestment component of the DRIP. During the nine months ended September 30, 2025 and 2024, no shares common stock were issued by the Company, and 120,067 and 125,350 shares of common stock, respectively, were purchased in the open market by the DRIP administrator and allocated to DRIP participants under the dividend reinvestment component of the DRIP.

At-the-Market Sales Agreement

Pursuant to the sales agreement dated April 14, 2023 (as amended the "Sales Agreement"), the Company maintains a $200 million at-the-market offering program (the "ATM program") with a financial syndicate as sales agents (the "Agents"). Pursuant to the Sales Agreement, the Company may offer and sell shares of the Company's common stock, from time to time, and at various prices, through the Agents. Sales of the common stock, if any, made through the Agents may be made in "at the market" offerings (as defined in Rule 415 under the Securities Act of 1933, as amended), by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise, at market prices prevailing at the time of sale, in block transactions, in negotiated transactions, in any manner permitted by applicable law or as otherwise as may be agreed by the Company and any Agent.

As of September 30, 2025, the Company had not sold any shares of common stock under the ATM program, and common stock with an aggregate sales price of $200 million remains available for issuance pursuant to the ATM program.

Non-Controlling Interest

In connection with the NewPoint Transaction, the Company issued 8,385,951 OP Units, providing those unit holders interest in the operating partnership. The OP Unit holders have the right to redeem their OP Units, for either shares of common stock or cash, at the Company's option and subject to certain restrictions. In the event OP Units are redeemed, one OP Unit is equal to one share of the Company’s common stock, or cash equal to the fair value of a share of the Company’s common stock at the time of redemption. When an OP Unit holder redeems an OP Unit, non-controlling interests in the operating partnership is reduced and the Company’s equity is increased. As of September 30, 2025, the non-controlling interest OP Unit holders owned 8,385,951 OP Units.

Accumulated Other Comprehensive Income/(Loss)

The following table sets forth the changes in accumulated other comprehensive income/(loss) related to the Company's real estate securities, available for sale, measured at fair value for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Note 16 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans, Held for Investment

As of September 30, 2025, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

The borrowers are generally required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.

Unfunded Commitments Under Commercial Mortgage Loans, Held for Sale

Commitments to extend credit by the Company are generally agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Occasionally, the commitments may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. As of September 30, 2025, the Company had $375.0 million and $1.1 billion of unfunded commitments to fund loans and sell loans, net, respectively.

Mortgage Impairment Insurance

As of September 30, 2025, the Company carried mortgage impairment and mortgagees’ errors and omissions insurance each with a limit of $50 million. Mortgage impairment insurance provides the Company with hazard insurance coverage for mortgage loan collateral in the event of a catastrophe for which the borrowers insurance does not provide sufficient coverage to protect the Company from loss on loans originated under the Fannie Mae DUS program.

Mortgage Bankers Bond

As of September 30, 2025, the Company carried a mortgage bankers bond, combining the fidelity bond and mortgagees errors and omissions insurance, with a limit of $60 million.

Office Leases

The Company executes lease arrangements for all of its office space in the normal course of business. All such lease arrangements are accounted for as operating leases. The Company initially recognizes a lease liability for the obligation to make lease payments and a right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset is measured at the lease liability amount, adjusted for lease prepayments, accrued rent, lease incentives received, and the lessee’s initial direct costs.

These operating leases do not provide an implicit discount rate; therefore, the Company uses its incremental borrowing rate to calculate lease liabilities. The Company’s lease agreements often include options to extend or terminate the lease. Lease costs are recognized on a straight-line basis over the term of the lease, which includes options to extend when it is reasonably certain that such options will be exercised and the Company knows what the lease payments will be during the optional periods.

Litigation and Regulatory Proceedings

The Company is not presently named as a defendant in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows. Please refer to "Part II, Item 1. Legal Proceedings" for more details about the Company's ongoing litigation matters.

Entry into a Material Definitive Agreement

On March 9, 2025, the Company, along withtwo wholly owned subsidiaries, entered into a definitive purchase and sale agreement with NewPoint Holdings JV LLC ("NewPoint"); each of the holders of issued and outstanding membership interests of NewPoint (the "Existing Equityholders"); Meridian Bravo Investment Company, LLC and BMC Holdings DE LLC, in their capacity as the joint representatives of the Existing Equityholders. The Company purchased all of NewPoint's issued and outstanding membership interests and units (the "Purchased Interests") in exchange for an aggregate amount of $337.4 million paid in cash and the issuance of 8,385,951 OP Units, to the Existing Equityholders. The Company financed the cash portion of the purchase price through a combination of existing cash and the issuance of new debt and/or equity. The acquisition closed on July 1, 2025.

Note 17 - Servicing Revenue

The components of servicing revenue are as follows (in thousands):

As of September 30, 2025 and December 31, 2024, the weighted average servicing fee was 8.9 basis points and 0 basis points, respectively. At September 30, 2025 and December 31, 2024, total escrow and reserve balances were approximately $930 million and $0, respectively, none of which are included in our consolidated balance sheets. These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits. We earn interest income and placement fees on the total escrow deposits, which is generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits. Interest earned on total escrows, net of interest paid to the borrower, is included as a component of servicing revenue, net in the consolidated statements of income as noted in the table above.

Product type concentrations that impact our servicing revenue are as follows ($ in thousands):

Geographic concentrations that impact our servicing revenue are as follows:

(1) No other individual state represented 5% or more of the total.

Note 18 - Related Party Transactions and Arrangements

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company is 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, our 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 our 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.

•NewPoint Holdings JV LLC, a subsidiary of the Company, has entered into a loan referral agreement with the Advisor that provides for the sharing of certain fees. Under the terms of this agreement, the Advisor pays NewPoint a referral fee for directing floating-rate bridge loan opportunities to the Advisor’s commercial real estate platform. Similarly, NewPoint pays the Advisor a percentage of the profit generated from closing agency loans that have been referred to NewPoint by the Advisor.

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2025 and 2024 and the associated payable as of September 30, 2025 and December 31, 2024 (dollars in thousands):

(1) Total acquisition expenses paid during the three months ended September 30, 2025 and 2024 were $1.0 million and $1.8 million, respectively, of which $0.7 million and $1.5 million, were capitalized within the Commercial mortgage loans, held for investmentand Real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets. Total acquisition expenses paid during the nine months ended September 30, 2025 and 2024 were $3.3 million and $7.2 million, respectively, of which $2.6 million and $6.5 million were capitalized within the Commercial mortgage loans, held for investmentand Real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets.

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

(3) As of September 30, 2025 and December 31, 2024, the related party payables included (i) $2.1 million and $2.3 million, respectively, of payments made by the Advisor to third party vendors on behalf of the Company and (ii) $0.3 million of fees per the fee arrangement agreement between the Advisor and the Company. There were no fees incurred per the fee arrangement agreement as of December 31, 2024.

The payables as of September 30, 2025 and December 31, 2024, in the table above are included in Due to affiliates on the Company's consolidated balance sheets.

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 affiliate 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 into its consolidated financial statements. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 12 - Debt).

Pursuant to the Company's 2021 Incentive Plan, in the first quarter of 2025 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 September 30, 2025 and December 31, 2024, our commercial mortgage loans, held for investment, included an aggregate of $37.1 million and $39.6 million, respectively, carrying value of loans to affiliates of our Advisor. For the three and nine months ended September 30, 2025, the Company recognized $0.7 million and $2.0 million, respectively, of interest income from these loans in the Company's consolidated statement of operations. For the three and nine months ended September 30, 2024, the Company recognized $1.6 million and $6.4 million, respectively, of interest income from these loans in the Company's consolidated statement of operations.

In the second quarter of 2022, the Company fully funded a $149.7 million first mortgage consisting of the Walgreens Portfolio:24 retail properties with various locations throughout the United States. The Company entered into a joint venture agreement and formed the Walgreens JV to acquire 75.618% ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242% interest.

Note 19 - Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

•Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

•Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

•Level III - Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

Financial Instruments Measured at Fair Value on a Recurring Basis

CMBS bonds, recorded in Real estate securities, available for sale, measured at fair value in the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. The Company obtains third party pricing for determining the fair value of each CMBS investment, resulting in a Level II classification.

Commercial mortgage loans, held for sale, measured at fair value in the Company's TRS are initially recorded at transaction price, which are considered to be the best initial estimate of fair value. The Company engages the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans, held for sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction price. The Company classified the commercial mortgage loans, held for sale, measured at fair value as Level III.

Derivative instruments, measured at fair value

Treasury note futures trade on the Chicago Board of Trade (“CBOT”) and are made up of contracts of a variety of recently issued 5-year and 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CBOT and are valued using market prices. Treasury note futures are categorized as Level I.

Credit default swaps, interest rate swaps and options can be traded over the counter (“OTC”) or on an exchange. Exchange-traded derivatives are generally valued using market prices while OTC derivative transaction valuations are derived using pricing models that are widely accepted by marketplace participants. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. The valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, the derivatives are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, the derivatives are categorized in Level III of the fair value hierarchy. The Company's option contracts are exchange-traded, and therefore categorized as Level I. The Company classified its credit default swaps as Level II.

Loan commitments and forward sale commitments in the Company's TRS are initially recorded at transaction price, which are considered to be the best initial estimate of fair value. The Company engages the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying commitment collateral. Loan commitments and forward sale commitments that are entered in the last month of the reporting period are held and marked to the transactions price. The Company classified the loan commitments and forward sale commitments as Level III.

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets or liabilities. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were no material transfers between levels within the fair value hierarchy during the periods ended September 30, 2025 and December 31, 2024.

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2025 and December 31, 2024 (dollars in thousands).

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2025 and December 31, 2024 (dollars in thousands).

(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets. The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 for which the Company has used Level III inputs to determine fair value (dollars in thousands):

(1) There were no transfers in or out of Level III as of December 31, 2024.

The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximate their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature and are measured using Level III inputs.

Financial Instruments Measured at Fair Value on a Nonrecurring Basis

Real Estate Owned, held for sale, on the consolidated balance sheets are valued at fair value on a non-recurring basis in accordance with ASC 820 and are classified as Level III investments. At the time of acquisition, we determined the fair value of the net real estate assets, using either the market approach, the income approach, or a combination thereof.

The Company determined the fair value of itsseven multifamily properties, one office property and the remainingtwo retail properties in the Walgreens Portfolio, obtained through foreclosure or deed-in-lieu of foreclosure, based on a combination of the market approach and the income approach.

The significant unobservable input used for the income approach is the exit capitalization rate assumptions, which ranged from 5.00% -9.50%. The significant unobservable input used for the market approach is the estimated fair value less cost to sell based on a negotiated price from an anticipated buyer.

As of September 30, 2025, the Company's Real estate owned, held for sale assets and liabilities, had a fair value of $212.4 million, net, that represented the remainingtwo retail properties in the Walgreens Portfolio, seven multifamily properties andone office property. As of December 31, 2024, the Company's real estate owned, held for sale assets and liabilities, had a fair value of $221.6 million, net, representing the remaining four retail properties in the Walgreens Portfolio andeight multifamily properties.

Mortgage servicing rights, net on the consolidated balance sheets are valued at fair value at inception, and thereafter on a non-recurring basis and are carried at the lower of amortized costs or fair value. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes. The Company's MSRs do not trade in an active, open market with readily observable prices and are classified as Level III. While sales of multifamily MSRs do occur on occasion, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the Company engages the services of a third party independent valuation firm to determine the estimated fair value who use discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated placement fee revenue from escrow deposits, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions that a market participant would consider in valuing MSR assets.

Financial Instruments Not Measured at Fair Value

The Company's financial assets and liabilities that are not reported at fair value in the consolidated balance sheets are reported below as of September 30, 2025 and December 31, 2024 (dollars in thousands):

(1) The carrying value is gross of $44.0 million and $78.1 million of allowance for credit losses as of September 30, 2025 and December 31, 2024, respectively.

(2) Depending upon the significance of the fair value inputs utilized in determining these fair values, our collateralized loan obligations are classified as either Level II or Level III of the fair value hierarchy.

Repurchase agreements - commercial mortgage loans of $1.2 billion and $329.8 million as of September 30, 2025 and December 31, 2024, respectively, and repurchase agreements - real estate securities of $131.7 million and $236.6 million as of September 30, 2025 and December 31, 2024, respectively, are not carried at fair value and do not include accrued interest expense, which are presented in Note 12 – Debt. For these instruments, carrying value generally approximates fair value and are classified as Level III.

The fair value of the commercial mortgage loans, held for investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. Pledged investment securities are comprised of treasury securities for which fair value is generally estimated using discounted cash flow analysis. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. The mortgage note payable was recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The fair value of the other financings is generally estimated using a discounted cash flow analysis. The fair value of the unsecured debt is based on discounted cash flows using Company estimates for market yields on similarly structured debt instruments.

Note 20 - Derivative Instruments

The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following derivative instruments were outstanding as of September 30, 2025 and December 31, 2024 (dollars in thousands):

The following tables indicate the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in the consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

Interest rate swap agreements are measured at fair value on a recurring basis primarily using Level II Inputs in accordance with ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820). In determining fair value estimates for swaps, the Company utilizes the standard methodology of netting the discounted future fixed cash payments and the discounted future variable cash receipts which are based on expected future interest rates derived from observable market interest rate curves. The Company also incorporates both its own nonperformance risk and its counterparties’ nonperformance risk in determining fair value. In considering the effect of nonperformance risk, the Company considered the impact of netting and credit enhancements, such as collateral postings and guarantees, and has concluded that counterparty risk is not significant to the overall valuation.

Note 21 - Offsetting Assets and Liabilities

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting, and a net presentation of the Company's derivative instruments and repurchase agreements as of September 30, 2025 and December 31, 2024 (dollars in thousands):

(1) As of September 30, 2025, there were no assets which were presented gross within the scope of ASC 210-20, Balance Sheet — Offsetting.

(2) Included in Restricted cash in the Company's consolidated balance sheets.

Note 22 - Segment Reporting

Effective July 1, 2025, in order to better align with the manner in which the CODM reviews financial performance and allocates resources, the Company combined the real estate debt business and the real estate securities business into one reportable segment, Real Estate Debt and Other Real Estate Investments. Additionally, following the acquisition of the NewPoint business, the Company added Agency as a new reportable segment to reflect the distinct nature of its agency-related origination and servicing activities. Prior period segment results have been recast to conform to this new presentation. These changes affect only the presentation of the Company’s reportable segments and have no impact on its consolidated financial position, results of operations, or cash flows.

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 business also focuses on investing in and asset managing real estate securities, historically focusing on CMBS, CMBS bonds, CDO notes, and other securities.

•The agency business focuses on originating, selling, and servicing loans under programs offered by GSE’s and Agencies, such as Fannie Mae, Freddie Mac, Ginnie Mae, and HUD. Additionally, the business services external portfolios of commercial real estate financing products.

•The commercial real estate conduit business, operated through the Company's TRS, 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.

The segments are based on financial information presented to the President of Commercial Real Estate and the Chief Financial Officer / Chief Operating Officer of the Company, who are determined to jointly be the Chief Operating Decision Maker (“CODM”). The CODM oversees activities and operations of the business, which includes assessing performance, liquidity, and profit or loss on each operating segment. Profit or loss on segment operations is measured by net income/(loss) included in the consolidated statements of operations. The CODM uses net income/(loss) to measure return on equity to assess the liquidity associated with equity that is allocated to each business based on the Company’s investment objectives and strategies.

The following table represents the Company's operations by segment for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):

(1) For each reportable segment, the other segment items category includes:

•Real Estate Debt - specific and general allowance for credit losses, gains/(losses) associated with debt extinguishment, and gains/(losses) associated with sales of CMBS bonds and divestment of trading securities

•Agency - allowance for loss sharing provision, gains/(losses) associated with sales of agency loans, gains/(losses) related to movements in the fair value of forward sale commitments, and (provisions)/benefits on taxable income.

•TRS - gains/(losses) associated with fair value measurements and securitizations or sales of held for sale loans, fair value measurements and terminations of derivative instruments, and (provisions)/benefits on taxable income.

•Real Estate Owned - gains/(losses) associated with other real estate investments resulting from foreclosure or sale.

(2)Stock compensation expense is allocated to each segment based on total income per segment and included within other segment items.

For the purposes of the tables above, management fees have been allocated to the business segments using an agreed upon percentage of each respective segment's prior period equity. Administrative fees are derived from an agreed upon reimbursable amount based on employee time charged and allocated to the business segments.

Note 23 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q. The following activity took place subsequent to the quarter ended September 30, 2025:

On October 15, 2025, a consolidated subsidiary of the Company, BSPRT 2025-FL12 Issuer, LLC, closed an approximately $1.1 billion commercial real estate mortgage securitization transaction, and sold approximately $947 million of the securitization’s notes in a private placement.

On October 16, 2025, the Company sold a commercial mortgage loan, held for sale, for $33.9 million. The loan was collateralized by a portfolio of retail properties, and had an amortized cost of $33.9 million as of September 30, 2025.