Franklin BSP Realty Trust, Inc.

Previous wording

The Company is a Maryland corporation and has made tax elections to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes since 2013. Substantially all of our business is conducted through the OP, a Delaware limited liability company. We are the managing member of the OP and directly or indirectly held 90% of the common units of membership interests in the OP ("OP Units") as of June 30, 2026.

Current wording

The Company is a Maryland corporation and has made tax elections to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes since 2013. Substantially all of our business is conducted through the OP, a Delaware limited liability company. We are the managing member of the OP and directly or indirectly held 99% of the common units of membership interests in the OP ("OP Units") as of September 30, 2026.

Previous wording

(1) Book value per share includes unvested shares for restricted stock and restricted stock units.

Current wording

(1) Book value per share includes unvested shares of restricted stock and restricted stock units.

Previous wording

(3) Excluding the impact of accumulated depreciation and amortization of real property of $19.5 million and $17.5 million as of June 30, 2026 and December 31, 2025, respectively, as well as including the impact of the fair value of our MSRs over their carrying value of $26.2 million as of June 30, 2026, would result in a fully converted book value per share of $14.74 and $14.34, respectively.

Current wording

(3) Excluding the impact of accumulated depreciation and amortization of real property of $21.0 million and $17.5 million as of September 30, 2026 and December 31, 2025, respectively, as well as including the impact of the fair value of our MSRs over their carrying value of $51.0 million as of September 30, 2026, would result in a fully converted book value per share of $15.13 and $14.34, respectively.

Previous wording

During the six months ended June 30, 2026, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

During the nine months ended September 30, 2026, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

As of June 30, 2026 and December 31, 2025, our portfolio consisted of 172 and 169 commercial mortgage loans, held for investment, respectively. The commercial mortgage loans, held for investment, net of allowance for credit losses, as of June 30, 2026 and December 31, 2025 had a total carrying value of $4,275.1 million and $4,383.1 million, respectively. As of June 30, 2026, our commercial mortgage loans, held for sale, measured at fair value, were comprised of one conduit loan and 11 Agency loans, with a total fair value of $251.8 million. As of December 31, 2025, our commercial mortgage loans, held for sale, measured at fair value, were comprised of two conduit loans and 15 Agency loans, with a total fair value of $360.7 million. As of June 30, 2026 and December 31, 2025, we had $187.2 million and $151.7 million, respectively, of real estate securities, available for sale, measured at fair value. As of June 30, 2026 and December 31, 2025, our real estate owned, held for investment portfolio was composed of three and two properties with carrying values of $164.6 million and $99.3 million, respectively. As of June 30, 2026 and December 31, 2025, we had four and six positions classified as real estate owned, held for sale with combined carrying values of $115.7 million and $198.9 million, respectively. As of June 30, 2026 and December 31, 2025 our equity method investments consisted of five and four investments with carrying values of $89.2 million and $71.7 million, respectively.

Current wording

As of September 30, 2026 and December 31, 2025, our portfolio consisted of 175 and 169 commercial mortgage loans, held for investment, respectively. The commercial mortgage loans, held for investment, net of allowance for credit losses, as of September 30, 2026 and December 31, 2025 had a total carrying value of $4.0 billion and $4.4 billion, respectively. As of September 30, 2026, our commercial mortgage loans, held for sale, measured at fair value, were comprised of two conduit loans and 17 Agency loans, with a total fair value of $373.2 million. As of December 31, 2025, our commercial mortgage loans, held for sale, measured at fair value, were comprised of two conduit loans and 15 Agency loans, with a total fair value of $360.7 million. As of September 30, 2026 and December 31, 2025, we had zero and $151.7 million, respectively, of real estate securities, available for sale, measured at fair value. As of September 30, 2026 and December 31, 2025, our real estate owned, held for investment portfolio was composed of six and two properties with carrying values of $259.7 million and $99.3 million, respectively. As of September 30, 2026 and December 31, 2025, we had five and six positions classified as real estate owned, held for sale with combined carrying values of $160.0 million and $198.9 million, respectively. As of September 30, 2026 and December 31, 2025 our equity method investments consisted of six and four investments with carrying values of $88.7 million and $71.7 million, respectively.

Previous wording

As of June 30, 2026, we had nine loans (one secured by an office property and eight secured by multifamily properties), designated as non-performing status with a total amortized cost of $344.2 million. As of December 31, 2025, we had seven loans (six secured by a multifamily properties and one secured by an office property), designated as non-performing status with a total amortized cost of $214.0 million. As of June 30, 2026, four loans designated as non-performing and put on cost recovery status were determined to have a combined $17.8 million specific allowance for credit losses. As of December 31, 2025, three loans designated as non-performing and put on cost recovery status were determined to have a combined $4.1 million specific allowance for credit losses.

Current wording

As of September 30, 2026, we had seven loans (all secured by multifamily properties), designated as non-performing status with a total amortized cost of $181.7 million. As of December 31, 2025, we had seven loans (six secured by a multifamily properties and one secured by an office property), designated as non-performing status with a total amortized cost of $214.0 million. As of September 30, 2026, five loans designated as non-performing and put on cost recovery status were determined to have a combined $35.4 million specific allowance for credit losses, while two loans designated as non-performing and put on non-accrual status were determined to have a combined $0.9 million specific allowance for credit losses. As of December 31, 2025, three loans designated as non-performing and put on cost recovery status were determined to have a combined $4.1 million specific allowance for credit losses, while four loans designated as non-performing and put on non-accrual status were not determined to have a specific allowance for credit losses.

Previous wording

As of June 30, 2026 and December 31, 2025 our commercial mortgage loans, held for investment, excluding commercial mortgage loans on non-performing status, had a weighted average coupon of 7.1% and 7.1%, respectively, and a weighted average remaining contractual maturity life of 1.1 years and 1.1 years, respectively.

Current wording

As of September 30, 2026 and December 31, 2025 our commercial mortgage loans, held for investment, excluding commercial mortgage loans on non-performing status, had a weighted average coupon of 7.2% and 7.1%, respectively, and a weighted average remaining contractual maturity life of 1.1 years and 1.1 years, respectively.

Previous wording

As of June 30, 2026 and December 31, 2025, the Company had a total servicing portfolio consisting of 1,948 and 1,596 loans with an unpaid principal balance of $59.8 billion and $47.8 billion, respectively. As of June 30, 2026 and December 31, 2025, the Company owned Mortgage Servicing Rights (“MSRs”) of $205.5 million and $212.2 million, respectively. As of June 30, 2026 and December 31, 2025, the MSRs consisted of 1,051 and 1,042 loans with an unpaid principal balance of $22.3 billion and $21.6 billion, respectively.

Current wording

As of September 30, 2026 and December 31, 2025, the Company had a total servicing portfolio consisting of 1,970 and 1,596 loans with an unpaid principal balance of $61.3 billion and $47.8 billion, respectively. As of September 30, 2026 and December 31, 2025, the Company owned Mortgage Servicing Rights (“MSRs”) of $201.2 million and $212.2 million, respectively. As of September 30, 2026 and December 31, 2025, the MSRs consisted of 1,075 and 1,042 loans with an unpaid principal balance of $22.8 billion and $21.6 billion, respectively.

Previous wording

•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.

Current wording

•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 do not qualify as good REIT assets due to any potential loss from foreclosure.

Previous wording

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

Current wording

Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025

Previous wording

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the six months ended June 30, 2026 and 2025 (dollars in thousands):

Current wording

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the nine months ended September 30, 2026 and 2025 (dollars in thousands):

Previous wording

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities. Amounts are calculated based on daily averages for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities. Amounts are calculated based on daily averages for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Interest income for the six months ended June 30, 2026 and 2025 totaled $189.4 million and $225.1 million, respectively, a decrease of $35.7 million. The decrease was primarily due to i) an approximate 68 basis point decrease in daily average SOFR and SOFR equivalent rates and ii) approximately $344.2 million of loans being on non-accrual as of June 30, 2026 versus $56.9 million as of June 30, 2025. As of June 30, 2026, our portfolio consisted of (i) 172 commercial mortgage loans, held for investment, (ii) 12 commercial mortgage loans, held for sale, measured at fair value and (iii) 13 real estate securities, available for sale, measured at fair value. As of June 30, 2025, our portfolio consisted of (i) 145 commercial mortgage loans, held for investment, (ii) three commercial mortgage loans, held for sale, measured at fair value and (iii) five real estate securities, available for sale, measured at fair value.

Current wording

Interest income for the nine months ended September 30, 2026 and 2025 totaled $273.7 million and $331.2 million, respectively, a decrease of $57.6 million. The decrease was primarily due to (i) an approximate 66 basis point decrease in daily average SOFR and SOFR equivalent rates, (ii) a decrease in the size of our portfolio and (iii) approximately $181.7 million of loans being on non-accrual as of September 30, 2026 versus $66.8 million as of September 30, 2025. As of September 30, 2026, our portfolio consisted of (i) 175 commercial mortgage loans, held for investment and (ii) 19 commercial mortgage loans, held for sale, measured at fair value. As of September 30, 2025, our portfolio consisted of (i) 147 commercial mortgage loans, held for investment, (ii) 36 commercial mortgage loans, held for sale, measured at fair value, (iii) two commercial mortgage loans, held for sale and (iv) five real estate securities, available for sale, measured at fair value.

Previous wording

Interest expense for the six months ended June 30, 2026 and 2025 was $132.5 million and $140.8 million, respectively, a decrease of $8.3 million. The decrease was primarily due to an approximate 68 basis point decrease in daily average SOFR and SOFR equivalent rates coupled with a decrease in spreads.

Current wording

Interest expense for the nine months ended September 30, 2026 and 2025 was $192.3 million and $217.3 million, respectively, a decrease of $25.0 million. The decrease was primarily due to an approximate 66 basis point decrease in daily average SOFR and SOFR equivalent rates coupled with a decrease in spreads.

Previous wording

Gain on sales, including fee-based services, net for the six months ended June 30, 2026 and 2025 was $37.1 million and $5.3 million, respectively, which was comprised of sales, including fee-based services, from our Agency Business and conduit segments. As discussed below, the increase was primarily attributable to the contributions of the Agency Business in the 2026 period, as the Company did not have the Agency Business segment during the 2025 period.

Current wording

Gain on sales, including fee-based services, net for the nine months ended September 30, 2026 and 2025 was $57.8 million and $34.7 million, respectively, which was comprised of sales, including fee-based services, from our Agency Business and conduit segments.

Previous wording

Gain on sales, including fee-based services, net from our conduit segment for the six months ended June 30, 2026 and 2025 was $10.9 million and $5.3 million, respectively. During the six months ended June 30, 2026, the Company sold $354.5 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $362.3 million. This is compared to the sale of $114.4 million in principal amount of commercial real estate loans sold into the CMBS securitization market resulting in proceeds of $119.7 million for the six months ended June 30, 2025.

Current wording

Gain on sales, including fee-based services, net from our conduit segment for the nine months ended September 30, 2026 and 2025 was $11.8 million and $8.7 million, respectively. During the nine months ended September 30, 2026, the Company sold $409.0 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $415.4 million. This is compared to the sale of $173.8 million in principal amount of commercial real estate loans sold into the CMBS securitization market resulting in proceeds of $181.5 million for the nine months ended September 30, 2025.

Previous wording

Income from mortgage servicing rights for the six months ended June 30, 2026 was $10.7 million which related to the fair value of originated MSR loans rate locked under programs with Fannie Mae, Freddie Mac and HUD. The Company did not have income from mortgage servicing rights for the six months ended June 30, 2025.

Current wording

Income from mortgage servicing rights for the nine months ended September 30, 2026 and 2025 was $19.3 million and $19.7 million, respectively, which related to the fair value of originated MSR loans rate locked under programs with Fannie Mae, Freddie Mac and HUD. The change reflects a full nine months of Agency Business operations in 2026, compared with three months in 2025 following the Company’s acquisition of NewPoint on July 1, 2025; however, higher production volume in Q3 2025 vs. Q3 2026 and product mix was also a driver of the change.

Previous wording

Servicing revenue for the six months ended June 30, 2026 was $20.2 million which related to $25.7 million of servicing fee income, $14.8 million in placement fees on borrower escrows and reserves and $2.6 million in MSR impairment recovery. This is offset by $22.9 million in reductions to the MSR for amortization and payoffs. The Company did not have servicing revenue for the six months ended June 30, 2025.

Current wording

Servicing revenue for the nine months ended September 30, 2026 and 2025 was $32.5 million and $3.6 million, respectively. The increase reflects a full nine months of Agency Business operations in 2026, compared with three months in 2025 following the Company’s acquisition of NewPoint on July 1, 2025. Servicing revenue for the nine months ended September 30, 2026 related to $39.4 million of servicing fee income, $23.0 million in placement fees on borrower escrows and reserves and $2.6 million in MSR impairment recovery, partially offset by $32.6 million in reductions to the MSR for amortization and payoffs. Servicing revenue for the nine months ended September 30, 2025 related to $11.7 million of servicing fee income and $7.9 million in placement fees on borrower escrows and reserves, partially offset by $15.9 million in reductions to the MSR for amortization and payoffs and impairment.

Previous wording

Gain on derivatives for the six months ended June 30, 2026 was $2.3 million, compared to a loss of $0.3 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, the gain was composed of a $0.1 million unrealized gain related to mark to market on credit default swaps and treasury note futures, coupled with a $2.2 million realized gain primarily due to the termination and settlement of credit default swaps, options and treasury note futures. For the six months ended June 30, 2025, the loss was primarily composed of a $1.2 million unrealized loss on mark to market on credit default swaps, treasury note futures, and options, partially offset by a realized gain of $0.9 million due to the termination and settlement of treasury note futures.

Current wording

Gain on derivatives for the nine months ended September 30, 2026 was $3.3 million, compared to a loss of $0.5 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, the gain was composed of a $0.4 million unrealized gain related to mark to market on credit default swaps, options and treasury note futures, coupled with a $2.9 million realized gain primarily due to the termination and settlement of credit default swaps, options and treasury note futures. For the nine months ended September 30, 2025, the loss was primarily composed of a $1.0 million unrealized loss on mark to market on credit default swaps, treasury note futures, and options, partially offset by a realized gain of $0.5 million due to the termination and settlement of treasury note futures.

Previous wording

Provision for credit losses during the six months ended June 30, 2026 was $18.6 million, compared with a benefit of $3.4 million during the six months ended June 30, 2025.

Current wording

Provision for credit losses during the nine months ended September 30, 2026 was $61.7 million, compared with a benefit of $4.0 million during the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, general provision for credit losses was $2.3 million compared to a benefit of $4.2 million during the six months ended June 30, 2025. General provision for the six months ended June 30, 2026 was attributable to a worsening economic scenario projection utilized for the CECL model compared to preceding periods. General benefit for the six months ended June 30, 2025 was primarily due to a decrease in the size of the overall portfolio.

Current wording

For the nine months ended September 30, 2026, general provision for credit losses was $1.4 million compared to a benefit of $5.7 million during the nine months ended September 30, 2025. The increase in the general provision for the nine months ended September 30, 2026 was attributable to a worsening economic scenario projection utilized for the CECL model compared to preceding periods. General benefit for the nine months ended September 30, 2025 was primarily due to a decrease in the size of the overall portfolio compared to the preceding periods.

Previous wording

For the six months ended June 30, 2026, specific provision for credit losses was $16.4 million compared to a specific provision for credit losses of $0.8 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, the increase in specific reserve was primarily related to a $13.2 million provision for a non-performing loan secured by two multifamily properties located in North Carolina, coupled with an increase to provisions for non-performing loans secured by multifamily properties located in Pennsylvania, Arizona, Texas and North Carolina. For the six months ended June 30, 2025, the increase in specific reserve was primarily related to a non-performing loan secured by a multifamily property in Texas, partially offset by a partial paydown on a non-performing loan secured by an office property in Georgia.

Current wording

For the nine months ended September 30, 2026, specific provision for credit losses was $55.0 million compared to a specific provision for credit losses of $2.7 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, the increase in specific reserve was primarily related to provisions on ten non-performing loans secured by multifamily properties, one of which paid off during the period at a discount and three of which the Company obtained possession through foreclosure. For the nine months ended September 30, 2025, the increase in specific reserve was primarily related to a non-performing loan secured by a multifamily property in Texas which the Company foreclosed on during the second quarter of that year and a non-performing loan secured by a multifamily property in Pennsylvania, partially offset by the reversal of a specific reserve on a non-performing loan secured by an office property in Georgia.

Previous wording

For the three months ended June 30, 2026, provision for loss sharing was $2.1 million, compared with a benefit for loss sharing of $2.1 million for the three months ended March 31, 2026. For the three months ended June 30, 2026, the provision primarily related to a worsening economic scenario outlook since the end of the prior quarter. For the three months ended March 31, 2026 the benefit primarily related to a $1.2 million decrease to the general CECL reserve due to an increased overall economic outlook, coupled with a $0.9 million decrease in the specific loan reserve due to the removal of a large at-risk loan from the reserve.

Current wording

For the nine months ended September 30, 2026, provision for loss sharing was $5.3 million compared with a benefit for loss sharing of $1.0 million for the nine months ended September 30, 2025 in our Agency book. For the nine months ended September 30, 2026, the provision related to a $6.0 million increase to the general CECL reserve due to a worsening economic scenario outlook, partially offset with a $0.6 million decrease in the specific loan reserve due to the removal of a large at-risk loan from the reserve. For the nine months ended September 30, 2025, the decrease related to a $2.7 million decrease to the general CECL reserve due to a more positive overall economic outlook, partially offset by a $1.7 million increase in the specific loan reserve due to new at risk loans added to the reserve. In addition, the activity reflects a full nine months of Agency Business operations in 2026, compared with three months in 2025 following the Company’s acquisition of NewPoint on July 1, 2025.

Previous wording

Gain on other real estate investments for the six months ended June 30, 2026 was $3.2 million primarily due to a gain on foreclosure of a property located in Huntersville, NC, partially offset with losses on sales of one multifamily property and one retail property, as well as a write down on an office property located in Denver, CO. This is compared to a gain of $0.5 million for the six months ended June 30, 2025 primarily due to the sales and settled litigation regarding the Walgreens Portfolio (as defined in Note 8 – Real Estate Owned), partially offset by losses related to the onboarding of real estate owned, held for sale, multifamily and office properties, as well as fair value write downs on two of our multifamily properties.

Current wording

Loss on other real estate investments for the nine months ended September 30, 2026 was $9.6 million primarily due to fair value write-downs on one office property and two multifamily properties, coupled with losses on sales of one multifamily property and one retail property, partially offset by gain on foreclosure of a multifamily property located in Huntersville, NC. This is compared to a loss of $1.7 million for the nine months ended September 30, 2025 primarily due to sales of our multifamily and retail properties and fair value write downs on three of our multifamily properties, partially offset by settled litigation regarding the Walgreens Portfolio (as defined in Note 8 – Real Estate Owned).

Previous wording

Income from equity method investments for the six months ended June 30, 2026 of $13.8 million primarily related to the Company's allocated percentage of unrealized gains on a mixed use property located in New Jersey and an industrial property located in California. This is compared to income from equity method investments for the six months ended June 30, 2025 of $0.2 million related to the Company's allocated percentage of quarterly income for a mixed use property located in New Jersey.

Current wording

Income from equity method investments for the nine months ended September 30, 2026 of $13.8 million primarily related to the Company's allocated percentage of unrealized gains on a mixed use property located in New Jersey and two industrial properties located in California. This is compared to income from equity method investments for the nine months ended September 30, 2025 of $0.2 million related to the Company's allocated percentage of quarterly income for a mixed use property located in New Jersey.

Previous wording

Income from VIE's for the six months ended June 30, 2026 of $0.3 million primarily related to the Company's purchase of a CMBS B-Piece during the second quarter (see Note 23 – Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value). The Company did not own a CMBS B-Piece during the six months ended June 30, 2025.

Current wording

Income from VIE's for the nine months ended September 30, 2026 of $1.4 million primarily related to the Company's purchase of a CMBS B-Piece during the second quarter (see Note 23 – Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value). The Company did not own a CMBS B-Piece during the nine months ended September 30, 2025.

Previous wording

Benefit for income tax for the six months ended June 30, 2026 was $2.0 million compared to a provision of $0.5 million for the six months ended June 30, 2025. The increase was primarily due to taxable income related to our Agency Business and conduit segments.

Current wording

Benefit for income tax for the nine months ended September 30, 2026 was $10.0 million compared to a benefit of $2.4 million for the nine months ended September 30, 2025. The increase was primarily due to taxable earnings related to our Agency Business and conduit segments.

Previous wording

Net income attributable to non-controlling interest in our consolidated joint ventures for the six months ended June 30, 2026 and 2025 was $1.0 million and $0.8 million, respectively.

Current wording

Net income attributable to non-controlling interest in our consolidated joint ventures for the nine months ended September 30, 2026 and 2025 was $0.7 million and $1.1 million, respectively.

Previous wording

Expenses from operations for the six months ended June 30, 2026 and 2025 consisted of the following (dollars in thousands):

Current wording

Expenses from operations for the nine months ended September 30, 2026 and 2025 consisted of the following (dollars in thousands):

Previous wording

For the six months ended June 30, 2026, we incurred asset management and subordinated performance fees and administrative services expenses of $12.0 million and $4.4 million, respectively, which are payable to our Advisor under our Advisory Agreement. For the six months ended June 30, 2026 compared to June 30, 2025, asset management and subordinated performance fees stayed relatively consistent due to minimal changes in applicable average equity between periods, while administrative services expenses decreased due to the time spent on the NewPoint acquisition in the prior period compared to none in the current period. Refer to Note 18 - Related Party Transactions and Arrangements for a summary of the Company's Advisory Agreement with the Advisor and a description of how our fees are calculated.

Current wording

For the nine months ended September 30, 2026, we incurred asset management and subordinated performance fees and administrative services expenses of $17.9 million and $7.3 million, respectively, which are payable to our Advisor under our Advisory Agreement. For the nine months ended September 30, 2026 compared to September 30, 2025, asset management and subordinated performance fees stayed relatively consistent due to minimal changes in applicable average equity between periods, while administrative services expenses decreased due to the time spent on the NewPoint acquisition in the prior period compared to none in the current period. Refer to Note 18 - Related Party Transactions and Arrangements for a summary of the Company's Advisory Agreement with the Advisor and a description of how our fees are calculated.

Previous wording

Interest income for the three months ended June 30, 2026 and March 31, 2026 totaled $97.2 million and $92.2 million, respectively, a increase of $5.0 million. The increase was primarily due to an increase in interest collected on non-accrual loans, partially offset by a decrease in spreads while daily average SOFR and SOFR equivalent rates stayed relatively consistent. As of June 30, 2026, our portfolio consisted of (i) 172 commercial mortgage loans, held for investment, (ii) 12 commercial mortgage loans, held for sale, measured at fair value and (iii) 13 real estate securities, available for sale, measured at fair value. As of March 31, 2026, our portfolio consisted of (i) 177 commercial mortgage loans, held for investment, (ii) 14 commercial mortgage loans, held for sale, measured at fair value and (iii) 12 real estate securities, available for sale, measured at fair value.

Current wording

Interest income for the three months ended September 30, 2026 and June 30, 2026 totaled $84.2 million and $97.2 million, respectively, a decrease of $13.0 million. The decrease was primarily due to an increase in interest collected on non-accrual loans in the prior period, coupled with a decrease in spreads in the latter period as well as a decrease in the size of our portfolio. As of September 30, 2026, our portfolio consisted of (i) 175 commercial mortgage loans, held for investment and (ii) 19 commercial mortgage loans, held for sale, measured at fair value. As of June 30, 2026, our portfolio consisted of (i) 172 commercial mortgage loans, held for investment, (ii) 12 commercial mortgage loans, held for sale, measured at fair value and (iii) 13 real estate securities, available for sale, measured at fair value.

Previous wording

Interest expense for the three months ended June 30, 2026 and March 31, 2026 totaled $67.3 million and $65.2 million, respectively, an increase of $2.1 million. The increase was primarily due to transaction costs incurred in a CMBS trust securitization in May 2026, where the Company purchased the B Piece (see Note 23 – Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value).

Current wording

Interest expense for the three months ended September 30, 2026 and June 30, 2026 totaled $59.8 million and $67.3 million, respectively, a decrease of $7.5 million. The decrease was primarily due to a $266.6 million decrease in average carrying values of our repurchase agreements - commercial mortgage loans, partially offset by transaction costs incurred in a CMBS trust securitization in May 2026, where the Company purchased the B Piece (see Note 23 – Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value).

Previous wording

Gain on sales, including fee-based services, net for the three months ended June 30, 2026 and March 31, 2026 was $15.8 million and $21.3 million, respectively, which was comprised of sales, including fee-based services, from our Agency Business and conduit segments.

Current wording

Gain on sales, including fee-based services, net for the three months ended September 30, 2026 and June 30, 2026 was $20.7 million and $15.8 million, respectively, which was comprised of sales, including fee-based services, from our Agency Business and conduit segments.

Previous wording

Gain on sales, including fee-based services, net from our Agency Business segment for the three months ended June 30, 2026 and March 31, 2026 was $9.8 million and $16.5 million, respectively. The decrease was primarily due to lower premiums earned on loans rate locked during the three months ended June 30, 2026 as compared with three months ended March 31, 2026.

Current wording

Gain on sales, including fee-based services, net from our Agency Business segment for the three months ended September 30, 2026 and June 30, 2026 was $19.8 million and $9.8 million, respectively. The increase was primarily due to higher premiums earned on loans originated during the three months ended September 30, 2026 as compared with the three months ended June 30, 2026.

Previous wording

Gain on sales, including fee-based services, net from our conduit segment for the three months ended June 30, 2026 and March 31, 2026 was $6.0 million and $4.8 million, respectively. During the three months ended June 30, 2026, the Company sold $249.5 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $252.6 million. This is compared to the sale of $105.0 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $109.3 million for the three months ended March 31, 2026.

Current wording

Gain on sales, including fee-based services, net from our conduit segment for the three months ended September 30, 2026 and June 30, 2026 was $1.0 million and $6.0 million, respectively. During the three months ended September 30, 2026, the Company sold $54.5 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $55.1 million. This is compared to the sale of $249.5 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $252.6 million for the three months ended June 30, 2026.

Previous wording

Income for mortgage servicing rights for the three months ended June 30, 2026 and March 31, 2026 was $3.9 million and $6.7 million, respectively. The decrease is related to lower volume of loans sold during the three months ended June 30, 2026 compared to the three months ended March 31, 2026.

Current wording

Income for mortgage servicing rights for the three months ended September 30, 2026 and June 30, 2026 was $8.7 million and $3.9 million, respectively. The increase is related to higher volume of loans sold during the three months ended September 30, 2026 compared to the three months ended June 30, 2026.

Previous wording

Servicing revenue for the three months ended June 30, 2026 and March 31, 2026 was $9.7 million and $10.6 million, respectively. The decrease was primarily due to MSR impairment recoveries recognized during the first quarter due to potential market interest rate increase, which resulted in lower prepayment rates and higher portfolio valuation, compared to no impairment recoveries recognized in the second quarter.

Current wording

Servicing revenue for the three months ended September 30, 2026 and June 30, 2026 was $12.3 million and $9.7 million, respectively. The increase was primarily due to less MSR payoffs recognized in the third quarter compared with the second quarter.

Previous wording

Gain on derivatives for the three months ended June 30, 2026 was $0.5 million composed of a $1.2 million unrealized loss related to mark to market on credit default swaps, treasury note futures, and options, offset by a $1.7 million realized gain primarily due to the termination and settlement of credit default swaps and options. This is compared to a gain on derivatives for the three months ended March 31, 2026 of $1.9 million composed of a $0.6 million realized gain related to the termination and settlement of credit default swaps and options, coupled with an unrealized gain of $1.3 million related to mark to market on credit default swaps, treasury note futures, and options.

Current wording

Gain on derivatives for the three months ended September 30, 2026 was $1.0 million composed of a $0.3 million unrealized gain related to mark to market on credit default swaps, treasury note futures, and options, coupled with a $0.7 million realized gain primarily due to the termination and settlement of credit default swaps and options. This is compared to a gain on derivatives for the three months ended June 30, 2026 of $0.5 million composed of a $1.2 million unrealized loss related to mark to market on credit default swaps, treasury note futures, and options, offset by a $1.7 million realized gain primarily due to the termination and settlement of credit default swaps and options.

Previous wording

Provision for credit losses was $7.2 million for the three months ended June 30, 2026, compared to a provision of $11.4 million for the three months ended March 31, 2026.

Current wording

Provision for credit losses was $43.1 million for the three months ended September 30, 2026, compared to a provision of $7.2 million for the three months ended June 30, 2026.

Previous wording

For the three months ended June 30, 2026, general provision for credit losses was $3.7 million, compared with a general benefit for credit losses of $1.3 million for the three months ended March 31, 2026. General provision for the three months ended June 30, 2026 was attributable to a worsening economic scenario projection utilized for the CECL model compared to preceding periods. General benefit for the three months ended March 31, 2026 was attributable to more favorable economic assumptions utilized for the CECL model compared to preceding periods.

Current wording

For the three months ended September 30, 2026, general benefit for credit losses was $1.0 million, compared with a general provision for credit losses of $3.7 million for the three months ended June 30, 2026. General benefit for the three months ended September 30, 2026 was attributable to slight improvements in the economic scenario projection utilized for the CECL model since the end of the prior quarter. General provision for the three months ended June 30, 2026 was attributable to a worsening economic scenario projection utilized for the CECL model compared to preceding periods.