KKR Real Estate Finance Trust Inc.

Previous wording

The last several quarters have been marked by significant volatility in global markets, driven by inflation, elevated interest rates, slowing economic growth, increased tariffs, trade tensions, geopolitical conditions, and political and regulatory uncertainty. These conditions have adversely impacted, and may continue to adversely impact, the U.S. and global economies, the real estate industry and our borrowers, and the performance of the properties securing our loans. Collectively, these market dynamics pose challenges to commercial real estate values and transaction activity, which have resulted in lower demand for office space and elevated levels of vacancy and default rates.

Current wording

The last several quarters have been marked by significant volatility in global markets, driven by inflation, elevated interest rates, slowing economic growth, increased tariffs, trade tensions, geopolitical conditions, including as a result of the outbreak of a military conflict between the United States, Israel and Iran on February 28, 2026, and political and regulatory uncertainty. These conditions have adversely impacted, and may continue to adversely impact, the U.S. and global economies, the real estate industry and our borrowers, and the performance of the properties securing our loans. Collectively, these market dynamics pose challenges to commercial real estate values and transaction activity, which have resulted in lower demand for office space and elevated levels of vacancy and default rates.

Previous wording

Although the Federal Reserve lowered interest rates by 50 basis points in September 2024, by 25 basis points in November 2024, by 25 basis points in December 2024 and by 25 basis points in September 2025, interest rates remain elevated and the timing, direction and extent of any future interest rate changes remain uncertain. Although higher interest rates will generally correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers and the cost of financing their properties and lead to nonperformance. Higher interest rates may also adversely impact real estate asset values and increase our interest expense, which expense may not be fully offset by any resulting increase in interest income.

Current wording

Although the Federal Reserve lowered interest rates three times during 2024 and three times in 2025, interest rates remain elevated and the timing, direction and extent of any future interest rate changes remain uncertain. Although higher interest rates will generally correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers and the cost of financing their properties and lead to nonperformance. Higher interest rates may also adversely impact real estate asset values and increase our interest expense, which expense may not be fully offset by any resulting increase in interest income.

Previous wording

Book value as of September 30, 2025 included the impact of an estimated CECL allowance of $160.4 million, or ($2.45) per share. See Note 2 — Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Form 10-Q for detailed discussion of allowance for credit losses.

Current wording

Book value as of March 31, 2026 included the impact of an estimated CECL allowance of $260.3 million, or ($4.03) per share and accumulated depreciation of $6.5 million, or ($0.10) per share. See Note 2 — Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Form 10-Q for detailed discussion of allowance for credit losses.

Previous wording

We have established a $5,850.8 million portfolio of diversified investments, consisting primarily of senior commercial real estate loans as of September 30, 2025.

Current wording

We have established a $5,725.4 million portfolio of diversified investments, consisting primarily of senior commercial real estate loans as of March 31, 2026.

Previous wording

During the three months ended September 30, 2025, we collected 100% of interest payments due on our loan portfolio. As of September 30, 2025, the average risk rating of our loan portfolio was 3.1, weighted by loan outstanding principal. As of September 30, 2025, the average loan commitment in our portfolio was $110.3 million and multifamily and industrial loans comprised 58% of our loan portfolio.

Current wording

As of March 31, 2026, the average risk rating of our loan portfolio was 3.3, weighted by loan outstanding principal. As of March 31, 2026, the average loan commitment in our portfolio was $107.8 million and multifamily and industrial loans comprised 63% of our loan portfolio.

Previous wording

In addition, we owned Real Estate Assets with an investment amount of $495.8 million, comprised of the acquired properties (directly or indirectly) and capitalized redevelopment costs, as of September 30, 2025. These properties are reflected on our Condensed Consolidated Balance Sheets.

Current wording

In addition, we owned Real Estate Assets with an investment amount of $505.0 million, comprised of the acquired properties (directly or indirectly) and capitalized redevelopment costs, as of March 31, 2026. These properties are reflected on our Condensed Consolidated Balance Sheets.

Previous wording

We have executed on our primary investment strategy of originating floating-rate transitional senior loans and, as we continue to scale our loan portfolio, we expect that our originations will be heavily weighted toward floating-rate loans. As of September 30, 2025, substantially all of our loans by outstanding principal earned a floating rate of interest. We expect the majority of our future investment activity to focus on originating floating-rate senior loans that we finance with our repurchase and other financing facilities. As of September 30, 2025, all of our investments were located in the United States.

Current wording

We have executed on our primary investment strategy of originating floating-rate transitional senior loans and, as we continue to scale our loan portfolio, we expect that our originations will be heavily weighted toward floating-rate loans. As of March 31, 2026, substantially all of our loans by outstanding principal earned a floating rate of interest. We expect the majority of our future investment activity to focus on originating floating-rate senior loans that we finance with our repurchase and other financing facilities. As of March 31, 2026, all of our investments were located in the United States and Europe.

Previous wording

(A) Charts are based on outstanding principal of our commercial real estate loans. Excludes fully written off loans and loans held in consolidated CMBS trust.

Current wording

(A) Charts are based on outstanding principal of our commercial real estate loans. Excludes fully written off loans, loans held in CMBS investments, and equity method investment, unconsolidated entity.

Previous wording

(A) Our total portfolio represents the current principal amount or investment amount on senior and mezzanine loans, real estate assets and other investments. Excludes loans that were fully written off.

Current wording

(A) Our total portfolio represents the current principal amount or investment amount on senior and mezzanine loans, real estate assets, CMBS investments and other investments. Excludes loans that were fully written off.

Previous wording

For Senior Loan 6, the total whole loan is $199.4 million, including (i) a fully funded senior mortgage loan of $120.0 million, at an interest rate of S+2.25% and (ii) a mezzanine note with a commitment of $79.4 million, of which $74.4 million was funded as of September 30, 2025, at a fixed interest rate of 4.5%. The mezzanine note interest is payment-in-kind (“PIK Interest”), which is capitalized, compounded, and added to the outstanding principal balance of the respective loan.

Current wording

For Senior Loan 5, the total whole loan is on non-accrual and has an outstanding principal balance of $194.4 million, including (i) a fully funded senior mortgage loan of $120.0 million, at an interest rate of S+2.25% and (ii) a mezzanine note with a commitment of $79.4 million, of which $74.4 million was funded as of March 31, 2026, at a fixed interest rate of 4.5% PIK.

Previous wording

(B) Total Whole Loan represents the total commitment of the entire loan originated, including participations by KKR affiliated entities.

Current wording

(B) Total Whole Loan represents the total commitment of the entire loan originated, including participations by KKR affiliated entities. KREF has been the sole or lead investor across all of its originations since its 2015 inception. As of December 31, 2025, KKR's investment portfolio has less than 0.5% overlap with KREF's portfolio on a KKR AUM basis. Global Atlantic’s investment portfolio has less than 1% overlap with KREF's portfolio on a Global Atlantic AUM basis.

Previous wording

(C) Net equity reflects (i) the amortized cost basis of our loans, net of borrowings; (ii) Real Estate Owned ("REO"), net of borrowings and noncontrolling interests, and (iii) the investment amount of equity method investments, net of borrowings.

Current wording

(C) Net equity reflects (i) the amortized cost basis of our loans, net of borrowings; (ii) real estate assets, net of borrowings and noncontrolling interests, and (iii) the investment amount of equity method investments, net of borrowings.

Previous wording

(E) Coupon expressed as spread over Term SOFR.

Current wording

(E) Coupon expressed as spread over Term SOFR, SONIA or EURIBOR.

Previous wording

(G) Loan Per SF / Unit / Key is based on the current principal amount divided by the current SF / Unit / Key. For Senior Loans 1, 2, 4, 11, 16 and 38, Loan Per SF / Unit / Key is calculated as the total commitment amount of the loan divided by the proposed SF / Unit / Key.

Current wording

(G) Loan Per SF / Unit / Key is based on the current principal amount divided by the current SF / Unit / Key. For Senior Loans 1, 3, 10, 22 and 37, Loan Per SF / Unit / Key is calculated as the total commitment amount of the loan divided by the proposed SF / Unit / Key.

Previous wording

(H) For senior loans, LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated; for mezzanine loans, LTV is based on the initial balance of the whole loan divided by the as-is appraised value as of the date the loan was originated; for CMBS investments, LTV is based on the weighted average LTV of the underlying loan pool at issuance. Weighted Average LTV excludes risk-rated 5 loans.

Current wording

(H) For senior loans, LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated; for construction loans, LTV is generally calculated as the total commitment amount of the loan divided by the as-stabilized value; for mezzanine loans, LTV is based on the initial balance of the whole loan divided by the as-is appraised value as of the date the loan was originated; for CMBS investments, LTV is based on the weighted average LTV of the underlying loan pool at issuance. Weighted Average LTV excludes risk-rated 5 loans.

Previous wording

As of September 30, 2025, the average risk rating of our portfolio was 3.1, weig hted by outstanding loan principal, consistent with that as of December 31, 2024.

Current wording

As of March 31, 2026, the average risk rating of KREF's portfolio was 3.3, weighted by outstanding loan principal, compared to 3.2 with that as of December 31, 2025.

Previous wording

In December 2024, we modified a risk-rated 5 senior life science loan located in San Carlos, CA, with an outstanding principal balance of $103.2 million. The terms of the modification included a $13.1 million principal repayment, and a restructure of the $90.1 million senior loan (after the $13.1 million repayment) into (i) a $89.1 million committed senior mortgage loan (with $34.9 million in unfunded commitment), and (ii) a $35.9 million subordinated note which is subordinate to a new $20.0 million sponsor interest. The restructured senior loan earns a coupon rate of S+1.00% and has a new term of three years. The $35.9 million subordinated note was deemed uncollectible and written off in December 2024. The loan modification was accounted for as a new loan for GAAP purposes. The restructured senior loan with an outstanding principal balance of $60.1 million was risk-rated 3 as of September 30, 2025.

Current wording

In March 2026, we modified a risk-rated 5 senior life science loan located in Cambridge, MA, with an outstanding principal balance of $100.4 million. The terms of the modification included a $20.2 million principal repayment, and a restructure of the $80.2 million senior loan (after the $20.2 million repayment) into (i) a $62.9 million committed senior mortgage loan (with $35.5 million in unfunded commitment), and (ii) a $17.3 million subordinated note which is subordinate to a new $14.4 million sponsor interest. The restructured senior loan earns a coupon rate of S+3.7% and has a new term of five years. The $17.3 million subordinated note was deemed uncollectible and written off in March 2026. The loan modification was accounted for as a new loan for GAAP purposes. The restructured senior loan with an outstanding principal balance of $64.1 million was risk-rated 3 as of March 31, 2026.

Previous wording

Each of our existing master repurchase facilities includes "credit mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit underlying collateral value decreases, the gross amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. The lender under the applicable repurchase facility sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. As a contractual matter, the lender has the right to reset the value of the assets at any time based on then-current market conditions, but the market convention is to reassess valuations on a monthly, quarterly and annual basis using the financial information delivered pursuant to the facility documentation regarding the real property, borrower and guarantor under such underlying loans. Generally, if the lender determines (subject to certain conditions) that the market value of the collateral in a repurchase transaction has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. As of September 30, 2025, the weighted average haircut under our repurchase agreements was 36.0% (or 34.5%, if we had borrowed the maximum amount approved by its repurchase agreement counterparties as of such dates). In addition, our existing master repurchase facilities are not entirely term-matched financings and may mature before our CRE debt investments that represent underlying collateral to those financings. As we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

Current wording

Each of our existing master repurchase facilities includes "credit mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit underlying collateral value decreases, the gross amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. The lender under the applicable repurchase facility sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. As a contractual matter, the lender has the right to reset the value of the assets at any time based on then-current market conditions, but the market convention is to reassess valuations on a monthly, quarterly and annual basis using the financial information delivered pursuant to the facility documentation regarding the real property, borrower and guarantor under such underlying loans. Generally, if the lender determines (subject to certain conditions) that the market value of the collateral in a repurchase transaction has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. In addition, our existing master repurchase facilities are not entirely term-matched financings and may mature before our CRE debt investments that represent underlying collateral to those financings. As we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

Previous wording

In March 2025, we upsized our corporate revolving credit agreement (“Revolver”), administered by Morgan Stanley Senior Funding, Inc., to $660.0 million and extended the maturity date to March 2030. In September 2025, we further upsized our Revolver to $700.0 million. We may use our Revolver as a source of financing, which is designed to provide short-term liquidity to originate or de-lever loans, pay operating expenses and borrow amounts for general corporate purposes. Our Revolver is secured by corporate level guarantees and includes net equity interests in the investment portfolio.

Current wording

In March 2025, we upsized our Revolver, administered by Morgan Stanley Senior Funding, Inc., to $660.0 million and extended the maturity date to March 2030. In September 2025, we further upsized our Revolver to $700.0 million. We may use our Revolver as a source of financing, which is designed to provide short-term liquidity to originate or de-lever loans, pay operating expenses and borrow amounts for general corporate purposes. Our Revolver is secured by corporate level guarantees and includes net equity interests in the investment portfolio.

Previous wording

In March 2025, we refinanced our existing term loan of $339.5 million with a new $550.0 million secured term loan due March 2032. In September 2025, we upsized our secured term loan to $650.0 million and reduced the spread by 0.75% to S+2.5%. The secured term loan is partially amortizing, with an amount equal to 1.0% per annum of the principal balance due in quarterly installments. The secured term loan contains restrictions relating to liens, asset sales, indebtedness, investments and transactions with affiliates, and is secured by corporate level guarantees and does not include asset-based collateral.

Current wording

In March 2025, we refinanced our existing term loan of $339.5 million with a new $550.0 million secured term loan due March 2032. In September 2025, we upsized our secured term loan to $650.0 million and reduced the spread to S+2.5%. The secured term loan is partially amortizing, with an amount equal to 1.0% per annum of the principal balance due in quarterly installments. The secured term loan contains restrictions relating to liens, asset sales, indebtedness, investments and transactions with affiliates, and is secured by corporate level guarantees and does not include asset-based collateral.

Previous wording

•a trailing four quarter interest income to interest expense ratio covenant (1.3 to 1.0 beginning September 30, 2024 through June 30, 2026, then 1.4 to 1.0 thereafter);

Current wording

•a trailing four quarter interest income to interest expense ratio covenant (1.3 to 1.0);

Previous wording

•a cash liquidity covenant (the greater of (i) $10.0 million or (ii) 5.0% of KREF's recourse indebtedness; from September 30, 2024 and through June 30, 2026 the Revolver has a minimum cash liquidity covenant of $75.0 million)

Current wording

•a cash liquidity covenant (the greater of (i) $10.0 million or (ii) 5.0% of KREF's recourse indebtedness; the Revolver has a minimum cash liquidity covenant of $75.0 million)

Previous wording

Guarantees— In connection with our financing arrangements, including master repurchase agreements, term lending agreements, and asset specific financing, our Operating Partnership has entered into a limited guarantee in favor of each lender, under which our Operating Partnership guarantees the obligations of the borrower under the respective financing agreement (i) in the case of certain defaults, up to a maximum liability of 25.0% of the then-outstanding repurchase price of the eligible loans, participations or securities, as applicable, or (ii) up to a maximum liability of 100.0% in the case of certain "bad boy" defaults. The borrower in each case is a special purpose subsidiary of ours. In addition, some guarantees include certain full recourse insolvency-related trigger events.

Current wording

Guarantees— In connection with our financing arrangements, including master repurchase agreements, term lending agreements, and asset specific financing, KKR Real Estate Finance Holdings L.P. (our "Operating Partnership") has entered into a limited guarantee in favor of each lender, under which our Operating Partnership guarantees the obligations of the borrower under the respective financing agreement (i) in the case of certain defaults, up to a maximum liability of 25.0% of the then-outstanding repurchase price of the eligible loans, participations or securities, as applicable, or (ii) up to a maximum liability of 100.0% in the case of certain "bad boy" defaults. The borrower in each case is a special purpose subsidiary of ours. In addition, some guarantees include certain full recourse insolvency-related trigger events.

Previous wording

Portland, OR Retail /Redevelopment—In December 2021, we took title a Portland retail property and recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. We contributed a portion of the REO asset to a joint venture (the "REO JV") with a third party local developer (“JV Partner”), whereby we had a 90% interest and the JV Partner had a 10% interest. The JV Partner's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets. In June 2025, we sold a portion of the property for $6.0 million and recognized a realized gain of $0.7 million after closing costs. As of September 30, 2025, we have a priority of distributions up to $79.7 million before the JV Partner can participate in the economics of the REO JV.

Current wording

Portland, OR Retail /Redevelopment—In December 2021, we took title a Portland retail property and recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. We contributed a portion of the REO asset to a joint venture (the "REO JV") with a third party local developer (“JV Partner”), whereby we had a 90% interest and the JV Partner had a 10% interest. The JV Partner's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets. In June 2025, we sold a portion of the property for $6.0 million and recognized a realized gain of $0.7 million after closing costs. As of March 31, 2026, we have a priority of distributions up to $82.4 million before the JV Partner can participate in the economics of the REO JV.

Previous wording

Mountain View, CA Office —In June 2024, we and the KKR affiliate took title to a Mountain View office property through a deed-in-lieu of foreclosure ("DIL") and we accounted for the property on a consolidated basis. Ours and the KKR affiliate's interest in the property were 68.9% and 31.1%, respectively. We recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. The KKR affiliate's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets.

Current wording

Mountain View, CA Office —In June 2024, we and the KKR affiliate took title to a Mountain View office property through a deed-in-lieu of foreclosure ("DIL") and we accounted for the property on a consolidated basis. Ours and the KKR affiliate's interest in the property were 68.9% and 31.1%, respectively. We recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. The KKR affiliate's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Consolidated Balance Sheets.

Previous wording

Philadelphia, PA Office —In December 2023, we took title to a Philadelphia office portfolio through a DIL and recorded the portfolio and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities.

Current wording

Philadelphia, PA Office —In December 2023, we took title to a Philadelphia office portfolio through a DIL and recorded the portfolio and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. Portions of the portfolio were sold in June 2024 and May 2025. The May 2025 sale resulted in a realized gain of $0.5 million. As of March 31, 2026, there was one office property remaining.

Previous wording

In connection with our investments in CMBS B-Pieces, we consolidate these CMBS trusts that hold the pools of senior loans underlying the CMBS because we determined such trusts are VIEs and we are the primary beneficiary of such VIEs. As a result of the consolidation, our financial statements include the liabilities of the consolidated CMBS trusts. However, these liabilities are not recourse to us, and our risk of loss is limited to the value of our investment in the related CMBS B-Pieces. See Note 8 to the condensed consolidated financial statements for additional information on these liabilities as of September 30, 2025.

Current wording

In connection with our investments in CMBS B-Pieces, we consolidated the CMBS trusts that hold the pools of senior loans underlying the CMBS because we determined such trusts are VIEs and we are the primary beneficiary of such VIEs. As a result of the consolidations, our financial statements include the liabilities of the consolidated CMBS trusts. However, the liabilities are not recourse to us, and our risk of loss is limited to the value of our investment in the related CMBS B-Pieces. See Note 8 to the consolidated financial statements for additional information on these liabilities as of March 31, 2026.

Previous wording

Net interest income decreased by $4.8 million during the three months ended September 30, 2025, as compared to the preceding three-month period. This decrease was due primarily to loans on nonaccrual status and a decline in overall portfolio size. We recorded $4.3 million of deferred loan fees and origination discounts accreted into interest income during the three months ended September 30, 2025, as compared to $4.4 million during the preceding period. In addition, we recorded $4.7 million of deferred financing costs amortization into interest expense during the three months ended September 30, 2025, as compared to $3.0 million for the preceding period.

Current wording

Net interest income increased by $0.4 million during the three months ended March 31, 2026, as compared to the preceding three-month period. This increase was due to the decline in interest expense exceeding the decline in interest income, which both declined primarily due to lower index rates and a reduced loan portfolio size. We recorded $4.1 million of deferred loan fees and origination discounts accreted into interest income during the three months ended March 31, 2026, as compared to $4.8 million during the preceding period. In addition, we recorded $3.5 million of deferred financing costs amortization into interest expense during the three months ended March 31, 2026, as compared to $3.3 million for the preceding period.

Previous wording

Total operating expenses decreased by $47.8 million during the three months ended September 30, 2025, as compared to the preceding period. This decrease was primarily due to a $48.9 million change in the provision for credit losses. The provision for credit losses during the three months ended June 30, 2025 was due primarily to additional reserves for risk-rated 5 loans in the office and life science sectors.

Current wording

Total operating expenses increased by $32.0 million during the three months ended March 31, 2026, as compared to the preceding period. This increase was primarily due to a $29.9 million change in the provision for credit losses. The provision for credit losses during the three months ended March 31, 2026 was due primarily to additional reserves on risk-rated 5 office and life science loans.

Previous wording

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Current wording

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Previous wording

The following table summarizes the changes in our results of operations for the nine months ended September 30, 2025 and 2024 (amounts in thousands, except per share data):

Current wording

The following table summarizes the changes in our results of operations for the three months ended March 31, 2026 and March 31, 2025 (amounts in thousands, except per share data):

Previous wording

Net interest income decreased by $29.7 million during the nine months ended September 30, 2025, as compared to the corresponding period in the prior year. This decrease was due primarily to a reduced loan portfolio size as a result of repayments or other resolutions and lower index rates. We recorded $12.1 million of deferred loan fees and origination discounts accreted into interest income during the nine months ended September 30, 2025, as compared to $13.5 million during the prior year period. In addition, we recorded $10.8 million of deferred financing costs amortization into interest expense during the nine months ended September 30, 2025, as compared to $13.1 million during the prior year period.

Current wording

Net interest income decreased by $5.2 million during the three months ended March 31, 2026, as compared to the corresponding period in the prior year. This decrease was due primarily to a reduced loan portfolio size as a result of repayments or other resolutions and lower index rates. We recorded $4.1 million of deferred loan fees and origination discounts accreted into interest income during the three months ended March 31, 2026, as compared to $3.4 million during the prior year period. In addition, we recorded $3.5 million of deferred financing costs amortization into interest expense during the three months ended March 31, 2026, as compared to $3.1 million during the prior year period.

Previous wording

Total other income decreased by $9.2 million during the nine months ended September 30, 2025, as compared to the prior year period. This decrease was due primarily to a $7.6 million decrease in revenue from REO operations and a $3.0 million operating loss related to our real estate asset equity method investment, which was partially offset by a $1.2 million gain on sale of REO investments during the current period.

Current wording

Total other income increased by $4.5 million during the three months ended March 31, 2026, as compared to the prior year period. This decrease was due primarily to a $2.1 million increase in revenue from REO operations and gains on foreign currency forward contracts of $6.9 million partially offset by losses on foreign currency translation of $5.4 million

Previous wording

We have capitalized our business to date primarily through the issuance and sale of our common stock and preferred stock, borrowings from three master repurchase agreements, and borrowings from our Non-Mark-to-Market Financing Sources, which were comprised of collateralized loan obligations, term lending agreements, term loan facility, secured term loan, asset specific financing, warehouse facility, and corporate Revolver. Our Non-Mark-to-Market Financing Sources, which accounted for 77% of our total financing as of September 30, 2025, are not subject to credit or capital markets mark-to-market provisions. The remaining 23% of our total financing, which are comprised of three master repurchase agreements, are only subject to credit marks.

Current wording

We have capitalized our business to date primarily through the issuance and sale of our common stock and preferred stock, borrowings from three master repurchase agreements, and borrowings from our Non-Mark-to-Market Financing Sources, which were comprised of collateralized loan obligations, term lending agreements, term loan facility, secured term loan, asset specific financing, warehouse facility, and Revolver. Our Non-Mark-to-Market Financing Sources, which accounted for 77% of our total financing as of March 31, 2026, are not subject to credit or capital markets mark-to-market provisions. The remaining 23% of our total financing, which are comprised of four master repurchase agreements, are only subject to credit marks.

Previous wording

Our primary sources of liquidity include $204.1 million of cash on our Condensed Consolidated Balance Sheets, $700.0 million of available capacity on our corporate Revolver, $28.9 million of available borrowings under our financing arrangements based on existing collateral, and cash flows from operations. In addition, we had $300.6 million of total unencumbered assets, including $215.5 million of real estate owned assets, $44.6 million of CMBS investments and $40.5 million of unencumbered senior loans, that can be financed, as of September 30, 2025. Our corporate Revolver and secured term loan are secured by corporate level guarantees and include net equity interests in the investment portfolio. We may seek additional sources of liquidity from syndicated financing, other borrowings (including borrowings not related to a specific investment) and future offerings of equity and debt securities.

Current wording

Our primary sources of liquidity include $135.4 million of cash on our Condensed Consolidated Balance Sheets, $500.0 million of available capacity on our Revolver, $18.0 million of available borrowings under our financing arrangements based on existing collateral, and cash flows from operations. In addition, we had $535.0 million of total unencumbered assets, including $217.4 million of real estate owned assets, $86.5 million of CMBS investments and $231.1 million of unencumbered senior loans, that can be financed, as of March 31, 2026. Our Revolver and secured term loan are secured by corporate level guarantees and include net equity interests in the investment portfolio. We may seek additional sources of liquidity from syndicated financing, other borrowings (including borrowings not related to a specific investment) and future offerings of equity and debt securities.

Previous wording

As described in Note 10 to our condensed consolidated financial statements, we have off-balance sheet arrangements related to VIEs that we account for by either consolidating or by using the equity method of accounting when we hold an economic interest or have a capital commitment. Our maximum risk of loss associated with our interests in these VIEs is limited to the carrying value of our net investment in such entities and any unfunded capital commitments. As of September 30, 2025, we held $9.1 million of net investment in a consolidated CMBS trust and $35.5 million of interests in a CMBS equity method investment.

Current wording

As described in Note 11 to our condensed consolidated financial statements, we have off-balance sheet arrangements related to VIEs that we account for by either consolidating or by using the equity method of accounting when we hold an economic interest or have a capital commitment. Our maximum risk of loss associated with our interests in these VIEs is limited to the carrying value of our net investment in such entities and any unfunded capital commitments. As of March 31, 2026, we held $24.1 million of net investments in consolidated CMBS trusts, and $35.4 million of interests in a CMBS equity method investment.

Previous wording

We have also entered into an equity distribution agreement with certain sales agents, pursuant to which we may sell, from time to time, up to an aggregate sales price of $100.0 million of our common stock, pursuant to a continuous offering program (the “ATM”), under the Shelf. Sales of our common stock made pursuant to the ATM may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. During the nine months ended September 30, 2025, we did not sell any shares of common stock under the ATM. As of September 30, 2025, $93.2 million remained available for issuance under the ATM.

Current wording

We have also entered into an equity distribution agreement with certain sales agents, pursuant to which we may sell, from time to time, up to an aggregate sales price of $100.0 million of our common stock, pursuant to a continuous offering program (the “ATM”), under the Shelf. Sales of our common stock made pursuant to the ATM may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. During the three months ended March 31, 2026, we did not sell any shares of common stock under the ATM. As of March 31, 2026, $93.2 million remained available for issuance under the ATM.

Previous wording

See Notes 5, 6, 7 and 11 to our condensed consolidated financial statements for additional details regarding our secured financing agreements, collateralized loan obligations, secured term loan and stock activity.

Current wording

See Notes 5, 6, 7 and 12 to our condensed consolidated financial statements for additional details regarding our secured financing agreements, collateralized loan obligations, secured term loan and stock activity.

Previous wording

We also had $300.6 million of total unencumbered assets, including $215.5 million of real estate owned assets, $44.6 million of CMBS investments and $40.5 million of unencumbered senior loans as of September 30, 2025. In addition to our primary sources of liquidity, we have the ability to access further liquidity through our ATM program and public offerings of debt and equity securities. Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from repayment become available for us to invest.

Current wording

We also had $535.0 million of total unencumbered assets, including $217.4 million of real estate owned assets, $86.5 million of CMBS investments and $231.1 million of unencumbered senior loans as of March 31, 2026. In addition to our primary sources of liquidity, we have the ability to access further liquidity through our ATM program and public offerings of debt and equity securities. Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from repayment become available for us to invest.

Previous wording

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2025 and 2024 (amounts in thousands):

Current wording

The following table sets forth changes in cash and cash equivalents for the three months ended March 31, 2026, and 2025 (amounts in thousands):