Granite Point Mortgage Trust Inc.

Previous wording

The past several quarters were characterized by continued volatility in the global securities markets. Volatility was driven by investor concerns over tariffs, inflation, elevated interest rates, escalating trade tensions, slowing economic growth, political and regulatory uncertainty and geopolitical conditions. During the year, financial institutions were affected by certain events which also contributed to global markets volatility, diminished liquidity and credit availability.

Current wording

The past several quarters were characterized by continued volatility in the global securities markets. Volatility was likely driven by investor concerns over tariffs, inflation, elevated interest rates, escalating trade tensions, slowing economic growth, political and regulatory uncertainty and geopolitical conditions. During the year, financial institutions were affected by certain events which also contributed to global markets volatility, diminished liquidity and credit availability.

Previous wording

Interest rates remained at an elevated level. The timing, direction and extent of any future interest rate changes remained uncertain. Absent other factors, our business model is such that higher interest rates should generally correlate to higher net interest income. However, interest rates have remained elevated for an extended period of time, adversely affecting our existing borrowers and the cost of financing their properties. Continued higher interest rates may further impact our borrowers and lead to non-performance, as well as dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans. Higher interest rates have adversely impacted, and may continue to adversely impact, commercial real estate property values. It remains difficult to predict the full impact of recent events, interest rate fluctuation, and inflation on macroeconomic conditions and our business.

Current wording

On September 17, 2025, the Federal Reserve reduced interest rates by 25 basis points, although the timing, direction and extent of any future interest rate changes remained uncertain and interest rates remained at an elevated level. Absent other factors, our business model is such that higher interest rates should generally correlate to higher net interest income. However, interest rates have remained elevated for an extended period of time, adversely affecting our existing borrowers and the cost of financing their properties. Continued higher interest rates may further impact our borrowers and lead to non-performance, as well as dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans. Higher interest rates have adversely impacted, and may continue to adversely impact, commercial real estate property values. It remains difficult to predict the full impact of recent events, interest rate fluctuation, and inflation on macroeconomic conditions and our business.

Previous wording

On April 2, 2025, the U.S. presidential administration initiated significant changes to U.S. tariff policy, with the specific policies changing multiple times since that date. The initial announcement and subsequent related announcements had and continue to have global repercussions, causing capital market uncertainty worldwide. The impact from these changes to U.S. trade policy on commercial real estate remains uncertain, and it is challenging to predict the impact on our business. Tariffs could have an inflationary effect, slow economic growth, result in rising interest rates, and increase unemployment, all of which could decrease demand for space, and the attractiveness of commercial real estate to investors.

Current wording

On April 2, 2025, the U.S. presidential administration initiated significant changes to U.S. tariff policy, with the specific policies changing multiple times since that date. The initial announcement and subsequent related announcements had and continue to have global repercussions, causing capital market uncertainty worldwide. The impact from these changes to U.S. trade policy on commercial real estate remains uncertain, and it is challenging to predict the impact on our business. Tariffs have had and could continue to have an inflationary effect, slow economic growth, result in rising interest rates, and increase unemployment, all of which could decrease demand for space, and the attractiveness of commercial real estate to investors.

Previous wording

•Generated Distributable (Loss) to common stockholders of $(45.3) million, or $(0.94) per basic share, which includes $(36.1) million in write-offs and $(7.6) million of accumulated depreciation and amortization related to a REO sale, and excludes $(11.0) million in provision for credit losses, $(2.2) million of equity compensation expense and $(2.1) million of depreciation and amortization on REO.

Current wording

•Generated Distributable (Loss) to common stockholders of $(18.9) million, or $(0.40) per basic share, which includes $(19.8) million in write-offs, and excludes $1.6 million in benefit from credit losses, $(0.9) million of equity compensation expense and $(2.2) million of depreciation and amortization on REO.

Previous wording

•Generated Distributable (Loss) before realized gains and losses to common stockholders of $(2.0) million, or $(0.04) per basic share.

Current wording

•Generated Distributable (Loss) Before Realized Gains and Losses to common stockholders of $0.9 million, or $0.02 per basic share.

Previous wording

•Recorded a decrease to the allowance for credit losses of $(25.1) million, for a total allowance of credit losses of $155.1 million, or approximately 8.1% of total loan commitments of $1.9 billion at June 30, 2025.

Current wording

•Recorded a decrease to the allowance for credit losses of $(21.4) million, for a total allowance of credit losses of $133.6 million, or approximately 7.4% of total loan commitments of $1.8 billion at September 30, 2025.

Previous wording

•Book value per share of common stock at June 30, 2025, was $7.99, inclusive of $(3.27) per basic common share of total CECL reserve.

Current wording

•Book value per share of common stock at September 30, 2025, was $7.94, inclusive of $(2.82) per basic common share of total CECL reserve.

Previous wording

•Realized $(128.6) million of total unpaid principal balance in loan repayments, principal paydowns, principal amortization, resolutions and write-offs.

Current wording

•Realized $(122.4) million of total unpaid principal balance in loan repayments, principal paydowns, principal amortization, resolutions and write-offs.

Previous wording

•Funded $13.3 million of prior loan commitments and upsizes.

Current wording

•Funded $12.7 million of prior loan commitments and upsizes, including $0.4 million of capitalized deferred interest.

Previous wording

•Resolved a senior loan secured by a mixed-use office and retail property located in Baton Rouge, LA, with a $79.3 million unpaid principal balance via property sale.

Current wording

•Resolved a senior loan secured by a student housing property located in Louisville, KY, with a $50.0 million unpaid principal balance via property sale.

Previous wording

•Ended the quarter with a portfolio of 47 loan investments with an aggregate unpaid principal balance of $1.8 billion and total commitments of $1.9 billion, a weighted average stabilized LTV at origination of 64.7%, and a weighted average all-in yield at origination of S+3.95%.

Current wording

•Ended the quarter with a portfolio of 44 loan investments with an aggregate unpaid principal balance of $1.7 billion and total commitments of $1.8 billion, a weighted average stabilized LTV at origination of 65.0%, and a weighted average all-in yield at origination of S+3.92%.

Previous wording

•At June 30, 2025, carried unrestricted cash of $85.1 million, a portion of which is subject to certain liquidity covenants.

Current wording

•At September 30, 2025, carried unrestricted cash of $62.7 million, a portion of which is subject to certain liquidity covenants.

Previous wording

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share presented on a GAAP basis, dividends declared on common stock, Distributable Earnings and book value per share of common stock. For the three months ended June 30, 2025, we recorded a GAAP net (loss) per basic common share of $(0.35), declared a cash dividend of $0.05 per share of common stock and reported Distributable (Loss) of $(0.94) per basic common share. Our book value as of June 30, 2025, was $7.99 per share of common stock, inclusive of $(3.27) per share of total CECL reserves.

Current wording

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share presented on a GAAP basis, dividends declared on common stock, Distributable Earnings and book value per share of common stock. For the three months ended September 30, 2025, we recorded a GAAP net (loss) per basic common share of $(0.01), declared a cash dividend of $0.05 per share of common stock and reported Distributable (Loss) of $(0.40) per basic common share. Our book value as of September 30, 2025, was $7.94 per share of common stock, inclusive of $(2.82) per share of total CECL reserves.

Previous wording

The following table sets forth the calculation of basic and diluted earnings (loss) per share and dividends declared per share for the three and six months ended June 30, 2025, and 2024:

Current wording

The following table sets forth the calculation of basic and diluted earnings (loss) per share and dividends declared per share for the three and nine months ended September 30, 2025, and 2024:

Previous wording

While Distributable Earnings (Loss) excludes the impact of the unrealized non-cash current provision for credit losses, we expect to only recognize such potential credit losses in Distributable Earnings (Loss) if and when such amounts are deemed non-recoverable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings (Loss) will equal the difference between the cash received, or expected to be received, and the carrying value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan. During the three and six months ended June 30, 2025, we recorded a provision for credit losses of $11.0 million and $14.8 million, respectively, which has been excluded from Distributable Earnings (Loss), consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings (Loss) referenced above. During the three and six months ended June 30, 2025, we recorded $(2.1) million and $(3.5) million, respectively, in depreciation and amortization on REO and related intangibles, which has been excluded from Distributable Earnings (Loss) consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings (Loss) referenced above.

Current wording

While Distributable Earnings (Loss) excludes the impact of the unrealized non-cash current provision for credit losses, we expect to only recognize such potential credit losses in Distributable Earnings (Loss) if and when such amounts are deemed non-recoverable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings (Loss) will equal the difference between the cash received, or expected to be received, and the carrying value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan. During the three and nine months ended September 30, 2025, we recorded a (benefit from) provision for credit losses of $(1.6) million and $13.1 million, respectively, which has been excluded from Distributable Earnings (Loss), consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings (Loss) referenced above. During the three and nine months ended September 30, 2025, we recorded $(2.2) million and $(5.7) million, respectively, in depreciation and amortization on REO and related intangibles, which has been excluded from Distributable Earnings (Loss) consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings (Loss) referenced above.

Previous wording

The following table provides a reconciliation of GAAP net (loss) attributable to common stockholders to Distributable Earnings (Loss) Before Realized Gains and Losses and Distributable Earnings (Loss) for the three and six months ended June 30, 2025, and 2024:

Current wording

The following table provides a reconciliation of GAAP net (loss) attributable to common stockholders to Distributable Earnings (Loss) Before Realized Gains and Losses and Distributable Earnings (Loss) for the three and nine months ended September 30, 2025, and 2024:

Previous wording

Book value per share as of June 30, 2025, includes the impact of an estimated allowance for credit losses of $155.1 million, or $(3.27) per common share. See Note 3 –Loans Held-for-Investment, Net of Allowance for Credit Losses to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a detailed discussion of allowance for credit losses.

Current wording

Book value per share as of September 30, 2025, includes the impact of an estimated allowance for credit losses of $133.6 million, or $(2.82) per common share. See Note 3 –Loans Held-for-Investment, Net of Allowance for Credit Losses to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a detailed discussion of allowance for credit losses.

Previous wording

Interest-earning assets include our 100% loan investment portfolio. At June 30, 2025, our loan portfolio was comprised of 47 investments, of which 46 were senior first mortgage loans totaling $1.9 billion of commitments with an unpaid principal balance of $1.8 billion, and one subordinate loan totaling $13.1 million in commitments and unpaid principal balance. At June 30, 2025, the weighted average risk rating of our loan portfolio was 2.8 as compared to 3.1 at December 31, 2024, weighted by total unpaid principal balance.

Current wording

Interest-earning assets include our 100% loan investment portfolio. At September 30, 2025, our loan portfolio was comprised of 44 investments, of which 43 were senior first mortgage loans totaling $1.8 billion of commitments with an unpaid principal balance of $1.7 billion, and one subordinate loan totaling $13.0 million in commitments and unpaid principal balance. At September 30, 2025, the weighted average risk rating of our loan portfolio was 2.8 as compared to 3.1 at December 31, 2024, weighted by total unpaid principal balance.

Previous wording

We may hold REO as a result of taking title to a loan’s collateral. As of June 30, 2025, we owned two office properties with an aggregate carrying value of $107.0 million, inclusive of $11.0 million of intangible assets included in other assets and $(0.2) million of unfavorable lease liabilities in our Condensed Consolidated Balance Sheets.

Current wording

We may hold REO as a result of taking title to a loan’s collateral. As of September 30, 2025, we held two REO office properties with an aggregate carrying value of $105.5 million, inclusive of $10.0 million of intangible assets included in other assets and $(0.2) million of unfavorable lease liabilities in our Condensed Consolidated Balance Sheets.

Previous wording

During the three months ended June 30, 2025, we funded $13.5 million under existing loan commitments and loan upsizes. We realized $(115.1) million in aggregate reductions in portfolio unpaid principal balance from loan repayments, paydowns, amortization and resolutions. See Note 3 —Loans Held-for-Investment, Net of Allowance for Credit Losses to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further detail.

Current wording

During the three months ended September 30, 2025, we funded $12.7 million under existing loan commitments and loan upsizes. We realized $(109.7) million in aggregate reductions in portfolio unpaid principal balance from loan repayments, paydowns, amortization and resolutions. See Note 3 —Loans Held-for-Investment, Net of Allowance for Credit Losses to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further detail.

Previous wording

(1)Transfers in from loan related receivables of $0.6 million included in loan write-offs during the three months ended June 30, 2025.

Current wording

(1)Transfers in from loan related receivables of $0.4 million included in loan write-offs during the three months ended September 30, 2025.

Previous wording

(10)Includes a $1.7 million unsecured note advanced to an existing borrower.

Current wording

(9)Includes a $1.7 million unsecured note advanced to an existing borrower.

Previous wording

(11)As of June 30, 2025, the loan was in maturity default with a maturity date of June 9, 2025.

Current wording

(10)As of September 30, 2025, the loan was in maturity default.

Previous wording

As of June 30, 2025, we had three loans that had a risk rating of “5” with an aggregate principal balance of $222.8 million, for which we recorded an allowance for credit losses of $97.5 million. These three loans were on nonaccrual status as of June 30, 2025. The performance of these assets, which include two office buildings and one multifamily property, has been adversely affected to varying degrees by many factors, such as slower pace in leasing activity for office properties, related to work from home trends and other submarket dynamics, combined with a significant rise in interest rates contributing to a meaningful reduction in real estate transaction activity, capital markets volatility and limited market liquidity affecting property values and these borrowers’ ability to either sell or refinance their loans, and other property specific factors. These loans are considered collateral-dependent and have been placed on nonaccrual status as of June 30, 2025.

Current wording

As of September 30, 2025, we had three loans that had a risk rating of “5” with an aggregate principal balance of $196.3 million, for which we recorded an allowance for credit losses of $86.5 million. These three loans were on nonaccrual status as of September 30, 2025. The performance of these assets, which include one office building, one retail property, and one hotel property, has been adversely affected to varying degrees by many factors, such as slower pace in leasing activity for office properties and other submarket dynamics, combined with a significant rise in interest rates contributing to a meaningful reduction in real estate transaction activity, capital markets volatility and limited market liquidity affecting property values and these borrowers’ ability to either sell or refinance their loans, and other property specific factors. These loans are considered collateral-dependent and have been placed on nonaccrual status as of September 30, 2025.

Previous wording

During the three months ended June 30, 2025, we resolved a loan secured by a mixed-use office and retail property located in Baton Rouge, LA, via a property sale. The loan was on nonaccrual status with an unpaid principal balance of $79.3 and a risk-rating of “5”. As a result of the property sale, we recognized a write-off of $(20.7) million, which had been reserved for through a previously recorded allowance for credit losses.

Current wording

During the three months ended September 30, 2025, we resolved a senior loan secured by a multifamily student housing property located in Louisville, KY, via a property sale. The loan was on nonaccrual status with an unpaid principal balance of $50.0 million and a risk-rating of “5.” As a result of the property sale, we recognized a write-off of $(19.4) million, which had been reserved for through a previously recorded allowance for credit losses of $22.6 million, resulting in a benefit from credit losses of $3.2 million.

Previous wording

During the twelve months ended June 30, 2025, we completed the modification of a first mortgage loan secured by a multifamily student housing property in Louisville, KY. As of June 30, 2025, and December 31, 2024, the loan had a principal balance of $50.0 million and an amortized cost of $49.8 million. The terms of the modification included, among other things, a 12-month extension of the fully-extended maturity date to November 9, 2025, the full deferral of debt service payments with interest capitalized and compounding, the deferral of the extension fee and our agreement to pay for approved expenses, in its sole discretion. Due to the uncertainty with respect to the collection of future interest accruals, the loan was placed on nonaccrual status as of November 9, 2023, in conjunction with a previous modification. The loan was performing pursuant to its modified contractual terms as of June 30, 2025.

Current wording

During the three months ended September 30, 2025, we completed the modification of a senior loan secured by a hotel property located in Tempe, AZ. As of September 30, 2025, and December 31, 2024, the loan had a principal balance of $26.9 million and $25.2 million, respectively, and an amortized cost of $26.9 million and $25.1 million, respectively. The terms of the modification included, among other things, (i) a 2-month extension of the fully-extended maturity date to November 9, 2025, with one 6-month option to extend to May 9, 2026; and (ii) a $2.5 million upsizing of the total commitment of the loan, resulting in an aggregate $3.7 million upsizing of the total commitment when considering other modifications occurring during the twelve months ended September 30, 2025. Due to the uncertainty with respect to the collection of future principal and interest, the loan was deemed collateral dependent, assigned a risk rating of “5” and was placed on nonaccrual status. The senior loan was performing pursuant to its modified contractual terms as of September 30, 2025.

Previous wording

During the twelve months ended June 30, 2025, we completed the modification of a senior loan secured by a hotel property located in Minneapolis, MN. As of June 30, 2025, and December 31, 2024, the loan had a principal balance of $37.1 million and $52.6 million, respectively, and an amortized cost of $37.2 million and $52.7 million, respectively. The terms of the modification included, among other things, (i) a 3-year extension of the fully-extended maturity date to May 9, 2028, with one 12-month option to extend to May 9, 2029; (ii) a restructuring of the loan into a $37.0 million senior note and a subordinate note that was immediately charged off; and (iii) an accrued pay spread. As a result of the modification, we recognized a write-off of approximately $(15.4) million, which had been reserved for through a previously recorded allowance for credit losses. The senior note was performing pursuant to its modified contractual terms as of June 30, 2025.

Current wording

During the twelve months ended September 30, 2025, we completed the modification of a senior loan secured by a hotel property located in Minneapolis, MN. As of September 30, 2025, and December 31, 2024, the loan had a principal balance of $37.5 million and $52.6 million, respectively, and an amortized cost of $37.5 million and $52.7 million, respectively. The terms of the modification included, among other things, (i) a 3-year extension of the fully-extended maturity date to May 9, 2028, with one 12-month option to extend to May 9, 2029; (ii) a restructuring of the loan into a $37.0 million senior note and a subordinate note that was immediately charged off; and (iii) an accrued pay spread. As a result of the modification, we recognized a write-off of approximately $(15.4) million, which had been reserved for through a previously recorded allowance for credit losses. The senior note was performing pursuant to its modified contractual terms as of September 30, 2025.

Previous wording

As of June 30, 2025, our portfolio financing consisted of repurchase and secured credit facilities collateralized by loans held-for-investment and securitized debt obligations collateralized by pools of loans held-for-investment issued in CRE CLOs. Our non-mark-to-market financing sources accounted for approximately 63.7% of portfolio loan-level financing as of June 30, 2025.

Current wording

As of September 30, 2025, our portfolio financing consisted of repurchase and secured credit facilities collateralized by loans held-for-investment and securitized debt obligations collateralized by pools of loans held-for-investment issued in CRE CLOs. Our non-mark-to-market financing sources accounted for approximately 63.3% of portfolio loan-level financing as of September 30, 2025.

Previous wording

(1)As of June 30, 2025, real estate owned, net included $8.3 million in other assets and liabilities related to acquired leases.

Current wording

(1)As of September 30, 2025, real estate owned, net included $7.2 million in other assets and liabilities related to acquired leases.

Previous wording

As of June 30, 2025, we had repurchase facilities in place with three counterparties with aggregate outstanding borrowings of $0.5 billion, which financed a portion of our loans held-for-investment and real estate owned. As of June 30, 2025, the weighted average borrowing rate on our repurchase facilities was 7.7%, the weighted average advance rate was 61.0%, and the term to maturity ranged from 0.8 years to approximately 1.0 year, with a weighted average remaining maturity of 0.8 years.

Current wording

As of September 30, 2025, we had repurchase facilities in place with three counterparties with aggregate outstanding borrowings of $0.4 billion, which financed a portion of our loans held-for-investment and real estate owned. As of September 30, 2025, the weighted average borrowing rate on our repurchase facilities was 7.0%, the weighted average advance rate was 57.7%, and the term to maturity ranged from 60 days to approximately 1.0 year, with a weighted average remaining maturity of 0.8 years.

Previous wording

(3)Collateral value includes real estate owned with a carrying value of $71.8 million.

Current wording

(3)Collateral value includes real estate owned with a carrying value of $70.7 million.

Previous wording

(4)Collateral value includes real estate owned with a carrying value of $35.2 million.

Current wording

(4)Collateral value includes real estate owned with a carrying value of $34.8 million.

Previous wording

We have financed certain pools of our loans through the issuance of CRE CLOs. At June 30, 2025, we had two CRE CLOs outstanding: GPMT 2021-FL4 and GPMT 2021-FL3, totaling $0.7 billion of outstanding borrowings, financing 29 of our existing first mortgage loan investments with an aggregate principal balance, inclusive of restricted cash, totaling $0.9 billion. As of June 30, 2025, our CRE CLOs financed 50.6% of our total loan portfolio principal balance on a term-matched, non-recourse and non-mark-to-market basis with attractive cost of funds.

Current wording

We have financed certain pools of our loans through the issuance of CRE CLOs. At September 30, 2025, we held two CRE CLOs outstanding: GPMT 2021-FL4 and GPMT 2021-FL3, totaling $0.7 billion of outstanding borrowings, financing 26 of our existing senior loan investments with an aggregate principal balance, inclusive of restricted cash, totaling $0.9 billion. As of September 30, 2025, our CRE CLOs financed 50.0% of our total loan portfolio principal balance on a term-matched, non-recourse and non-mark-to-market basis with attractive cost of funds.

Previous wording

In December 2022, we entered into a secured credit facility with a maximum borrowing capacity of $100.0 million. The facility had aggregate outstanding borrowings of $86.8 million as of June 30, 2025, which financed a portion of our loans held for investment on a non-mark-to-market basis. The facility matures on December 21, 2025.

Current wording

In December 2022, we entered into a secured credit facility with a maximum borrowing capacity of $100.0 million. The facility had aggregate outstanding borrowings of $79.3 million as of September 30, 2025, which financed a portion of our loans held for investment on a non-mark-to-market basis. The facility matures on December 21, 2026.

Previous wording

As of June 30, 2025, the total debt-to-equity ratio with respect to our loans held-for-investment was 2.1:1.0, and our recourse leverage ratio was 0.8:1.0. The following table represents our recourse leverage ratio and total leverage ratio as of June 30, 2025, and December 31, 2024. The period-over-period decrease in our leverage ratios was mainly related to lower borrowings due to loan repayments and paydowns.

Current wording

As of September 30, 2025, the total debt-to-equity ratio with respect to our loans held-for-investment was 1.9:1.0, and our recourse leverage ratio was 0.8:1.0. The following table represents our recourse leverage ratio and total leverage ratio as of September 30, 2025, and December 31, 2024. The period-over-period decrease in our leverage ratios was mainly related to lower borrowings due to loan repayments and paydowns.

Previous wording

Our business strategy seeks to minimize our exposure to changes in interest rates by matching benchmark indices on our assets with those on our asset level borrowings. Accordingly, our business model is such that, in general, rising interest rates will increase our net interest income, while declining interest rates will decrease our net interest income, subject to the impact of interest rate floors on our floating rate assets and certain liabilities. As of June 30, 2025, 97.5% of our loan investments by principal balance earned a floating rate of interest and were financed with liabilities that pay interest on a floating rate basis, which resulted in an amount of net floating rate exposure, subject to the impact of interest rate floors on certain of our floating rate loan investments, of $0.5 billion. As of June 30, 2025, 2.5% of our loan investments by principal balance earned a fixed rate of interest and were financed with liabilities that pay interest on a floating rate basis, which resulted in a negative correlation to elevated interest rates on that amount of our financing.

Current wording

Our business strategy seeks to minimize our exposure to changes in interest rates by matching benchmark indices on our assets with those on our asset level borrowings. Accordingly, our business model is such that, in general, rising interest rates will increase our net interest income, while declining interest rates will decrease our net interest income, subject to the impact of interest rate floors on our floating rate assets and certain liabilities. As of September 30, 2025, 97.3% of our loan investments by principal balance earned a floating rate of interest and were financed with liabilities that pay interest on a floating rate basis, which resulted in an amount of net floating rate exposure, subject to the impact of interest rate floors on certain of our floating rate loan investments, of $0.5 billion. As of September 30, 2025, 2.7% of our loan investments by principal balance earned a fixed rate of interest and were financed with liabilities that pay interest on a floating rate basis, which resulted in a negative correlation to elevated interest rates on that amount of our financing.

Previous wording

The following tables present the components of interest income and average annualized net asset yield earned by asset type, the components of interest expense and average annualized cost of funds on borrowings incurred by collateral type and net interest income and average annualized net interest rate spread for the three and six months ended June 30, 2025, and 2024. The net asset yield reflects the impact of loans held on nonaccrual status.

Current wording

The following tables present the components of interest income and average annualized net asset yield earned by asset type, the components of interest expense and average annualized cost of funds on borrowings incurred by collateral type and net interest income and average annualized net interest rate spread for the three and nine months ended September 30, 2025, and 2024. The net asset yield reflects the impact of loans held on nonaccrual status.

Previous wording

The results of our operations are affected by a number of factors and primarily depend on, among other things, the level of our net interest income, the availability and cost of financing for us, the market value of our assets, the credit performance of our assets and the supply of, and demand for, commercial real estate loans, other commercial real estate debt instruments and other financial assets available for investment in the market and available as a source of refinancing of our assets. Our interest income, which reflects the amortization of origination fees and direct costs, is recognized based on the contractual rate and the outstanding principal balance of the loans we originate. The objective of the interest method is to arrive at a periodic interest income that yields a level rate of return over the loan term. Interest rates vary according to the type of loan or security, conditions in the financial markets, creditworthiness of our borrowers, competition and other factors, none of which can be predicted with any certainty. Our operating results may also be impacted by credit losses in excess of initial anticipations or unanticipated credit events experienced by our borrowers. We continue to monitor the effects on each of these factors in light of the continued volatility in global markets, driven by investor concerns over inflation, elevated interest rates and geopolitical uncertainty, and how they will affect our operating results.

Current wording

The results of our operations are affected by a number of factors and primarily depend on, among other things, the level of our net interest income, the availability and our cost of financing, the market value of our assets, the credit performance of our assets and the supply of, and demand for, commercial real estate loans, other commercial real estate debt instruments and other financial assets available for investment in the market and available as a source of refinancing of our assets. Our interest income, which reflects the amortization of origination fees and direct costs, is recognized based on the contractual rate and the outstanding principal balance of the loans we originate. The objective of the interest method is to arrive at a periodic interest income that yields a level rate of return over the loan term. Interest rates vary according to the type of loan or security, conditions in the financial markets, creditworthiness of our borrowers, competition and other factors, none of which can be predicted with any certainty. Our operating results may also be impacted by credit losses in excess of initial anticipations or unanticipated credit events experienced by our borrowers. We continue to monitor the effects on each of these factors in light of the continued volatility in global markets, driven by investor concerns over inflation, elevated interest rates and geopolitical uncertainty, and how they will affect our operating results.

Previous wording

Interest income for the three months ended June 30, 2025, decreased to $33.8 million from $35.1 million for the three months ended March 31, 2025, mainly due to a lower average balance of our interest-earning assets as a result of loan repayments.

Current wording

Interest income for the three months ended September 30, 2025, decreased to $33.7 million from $33.8 million for the three months ended June 30, 2025, mainly due to a lower average balance of our interest-earning assets as a result of loan repayments.

Previous wording

Interest expense for the three months ended June 30, 2025, decreased to $25.8 million from $27.1 million for the three months ended March 31, 2025, mainly due to a lower average balance of our interest-bearing liabilities as a result of loan repayments and nonaccrual loan resolutions.

Current wording

Interest expense for the three months ended September 30, 2025, decreased to $23.4 million from $25.8 million for the three months ended June 30, 2025, mainly due to a lower average balance of our interest-bearing liabilities as a result of loan repayments and nonaccrual loan resolutions.