5 unchanged sentences
Reverse Stock Split
−Removed: On February 22, 2023, we announced that our Board of Directors had unanimously approved a reverse stock split of our common stock at a ratio of one-for-four (the “Reverse Stock Split”).
−Removed: The Reverse Stock Split was effected as of 12:01 a.m., New York City time, on March 9, 2023 (the “Effective Time”) .
−Removed: Accordingly, at the Effective Time, every four issued and outstanding shares of our common stock were converted into one share of our common stock.
−Removed: No fractional shares were issued in connection with the Reverse Stock Split.
−Removed: Instead, each stockholder that would have held fractional shares as a result of the Reverse Stock Split received cash in lieu of such fractional shares.
−Removed: The par value per share of our common stock remained unchanged at $0.01 per share after the Reverse Stock Split.
−Removed: All references made to common share or per common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock Split.
+Added: On March 9, 2023, we effected a one-for-four reverse stock split of our common stock (the “Reverse Stock Split”).
+Added: Accordingly, all references made to common share or per common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Reverse Stock Split.
Executive Summary
−Removed: Since the significant market disruption that occurred in March 2020, we have sought to build out a low-levered, higher-yielding portfolio of credit sensitive single-family and multi-family assets through our proprietary sourcing channels.
−Removed: Building scale in the portfolio and momentum in investment activity was challenging in the months following the March 2020 market disruption, in large part due to the market's increasing demand for credit assets coupled with our portfolio's elevated prepayment and redemption activity.
−Removed: We managed to capitalize on more opportunities in our areas of investment focus from the fourth quarter of 2021 through May of 2022, allowing us to expand our total investment portfolio to approximately $4.6 billion as of June 30, 2022, up from $3.6 billion as of December 31, 2021.
−Removed: However, the improved investment environment was short-lived, as the markets entered into a period of heightened interest rate volatility and credit spread widening due to the Federal Reserve's actions to attempt to subdue inflation.
−Removed: The Federal Reserve ultimately increased the federal funds target rate by a combined 525 bps during 2022 through July of 2023, which was the fastest pace of increases in history.
−Removed: In response, we chose to significantly curtail our investment activity and pipeline late in the second quarter of 2022 shortly after the Federal Reserve's first rate hike of this cycle, allowing a significant portion of our portfolio to run-off through the first quarter of 2023.
−Removed: By adopting this approach, we endeavored to conserve capital, preserve liquidity and limit what we believed was material credit risk from investments underwritten to peak real estate valuations in 2022.
−Removed: Beginning in the second quarter of 2023, we began stabilizing our investment portfolio holdings through greater investment activity, particularly in assets with less price sensitivity to credit deterioration, like Agency RMBS.
−Removed: We believe that Agency RMBS is a compelling asset class to invest in over the near term, as the sector is trading at historically wide spread levels resulting from volatility in interest rates and reduced demand from regional banks and the Federal Reserve.
−Removed: Recognizing that a recession call was premature, but still concerned about market liquidity due to, among other things, growing commercial real estate risks, we also remained selective in adding credit-related assets during the year.
−Removed: Over the course of the past three quarters, we have experienced solid momentum in our portfolio acquisition activities.
−Removed: On a net basis, our investment portfolio increased by approximately $1.3 billion during the year, with repayments received from our short-duration business purpose loans, opportunistic sales of residential loans and investment securities and impairments offsetting some of our investment activity.
+Added: Beginning in the second quarter of 2023, after significantly curtailing our investment activity and pipeline in 2022 in anticipation of a recession to conserve capital, preserve liquidity and limit what we believed was material credit risk from investments underwritten to peak real estate valuations in 2022, we began stabilizing our investment portfolio holdings through greater investment activity.
+Added: Since that time, we have focused, in large part, on acquiring assets with less price sensitivity to credit deterioration that could expand our interest income levels, like Agency RMBS.
+Added: We believe that Agency RMBS is a compelling asset class to invest in over the near term, as the sector is trading at attractive spread levels resulting from volatility in interest rates.
+Added: Recognizing that a recession call was premature, but still concerned about market liquidity due to, among other things, growing commercial real estate risks, we also remained selective in adding credit-related assets in our portfolio.
+Added: Specifically, we have targeted low duration, high-coupon business purpose loans while remaining selective on credit profile and worked to optimize financing of the loans we acquire.
+Added: During this time, we continued to drive higher business purpose loan acquisition volumes through ongoing partnerships with numerous originators.
+Added: Over the course of the past seven quarters, we have experienced solid momentum in our portfolio acquisition activities and increased adjusted interest income, a supplemental non-GAAP financial measure, by more than 60% year-over-year.
+Added: On a net basis, our investment portfolio increased by approximately $3.6 billion between December 31, 2022 and December 31, 2024, with repayments received from our short-duration business purpose loans, opportunistic sales of residential loans and investment securities, redemptions of our Mezzanine Lending investments, return of capital from our joint venture equity investments and impairments offsetting some of our investment activity.
In September 2022, we announced that our Board of Directors approved a strategic repositioning of our business through the opportunistic disposition over time of our joint venture equity investments in multi-family properties and reallocation of the returned capital from such investments to our targeted assets.
In 2023, joint venture entities in which we held a common equity interest sold five multi-family properties, representing total net equity investments of $43.2 million and recognizing a net gain attributable to the Company totaling $1.7 million.
−Removed: Throughout most of 2023, certain of the multi-family properties held by our joint venture equity investments experienced declines in estimated fair value primarily due to widening cap rates and lower net operating income driven, in large part, by higher interest and operating expenses at the properties.
−Removed: As these joint venture equity investments were included in disposal group held for sale during the year ended December 31, 2023, the declines in estimated fair value of multi-family properties held by certain of our joint venture equity investments resulted in recognition of approximately $89.5 million of losses for the year ended December 31, 2023.
−Removed: In December 2023, we suspended the marketing of nine joint venture equity investments that were held for sale primarily due to unfavorable market conditions and a lack of transactional activity in the multi-family market.
−Removed: As of December 31, 2023, we continue to market for sale our joint venture equity investments in five multi-family properties.
−Removed: We can provide no assurance of the timing or success of our ultimate exit from our joint venture equity investments in multi-family properties or that the value of our interests in joint ventures will not decline further.
+Added: Throughout most of 2023 and continuing into 2024, certain of the multi-family properties held by our joint venture equity investments experienced declines in estimated fair value primarily due to widening cap rates and lower net operating income driven, in large part, by higher interest and operating expenses at the properties which resulted in significant impairment losses.
+Added: We exited ten additional joint venture equity investments in multi-family properties in 2024, received net proceeds of $23.0 million and realized $14.3 million of net gains attributable to us.
+Added: As of December 31, 2024, we have reduced exposure in this disposal group of multi-family investments to $19.5 million over two multi-family properties.
+Added: We anticipate allocating less capital to multi-family investments going forward.
We intend to focus on our core portfolio strengths of single-family and multi-family residential assets, which we believe will deliver better risk-adjusted returns over time.
−Removed: Our targeted investments include (i) residential loans, including business purpose loans, (ii) structured multi-family property investments such as preferred equity in, and mezzanine loans to, owners of multi-family properties, (iii) Agency RMBS, (iv) non-Agency RMBS, (v) CMBS and (vi) certain other mortgage-, residential housing- and credit-related assets and strategic investments in companies from which we purchase, or may in the future purchase, our targeted assets.
−Removed: Subject to maintaining our qualification as a REIT and the maintenance of our exclusion from registration as an investment company under the Investment Company Act, we also may opportunistically acquire and manage various other types of mortgage-, residential housing- and other credit-related or alternative investments that we believe will compensate us appropriately for the risks associated with them, including, without limitation, collateralized mortgage obligations, mortgage servicing rights, excess mortgage servicing spreads, securities issued by newly originated securitizations, including credit sensitive securities from these securitizations, ABS and debt or equity investments in alternative assets or businesses.
−Removed: As of December 31, 2023, the Company’s Recourse Leverage Ratio and Portfolio Recourse Leverage Ratio (as defined in footnotes 4 and 5 to the table under "— Capital Allocation") increased to 1.6x and 1.5x, respectively, from 0.3x and 0.3x, respectively, as of December 31, 2022.
−Removed: While our financing leverage remains low relative to historical levels, the increase is primarily due to the financing of newly-acquired, highly liquid Agency RMBS.
−Removed: As of December 31, 2023, only 58% of our debt, excluding mortgages payable on real estate and Consolidated SLST CDOs, is subject to mark-to-market margin calls, with 45% collateralized by Agency RMBS and 13% collateralized by residential credit assets.
+Added: Our targeted investments include (i) residential loans, including business purpose loans, (ii) Agency RMBS, (iii) non-Agency RMBS, (iv) structured multi-family property investments such as preferred equity in, and mezzanine loans to, owners of multi-family properties and (v) certain other mortgage-, residential housing- and credit-related assets and strategic investments in companies from which we purchase, or may in the future purchase, our targeted assets.
+Added: Subject to maintaining our qualification as a REIT and the maintenance of our exclusion from registration as an investment company under the Investment Company Act, we also may opportunistically acquire and manage various other types of mortgage-, residential housing- and other credit-related or alternative investments that we believe will compensate us appropriately for the risks associated with them, including, without limitation, CMBS, collateralized mortgage obligations, MSRs, excess mortgage servicing spreads, securities issued by newly originated securitizations, including credit sensitive securities from these securitizations, ABS and debt or equity investments in alternative assets or businesses.
+Added: As of December 31, 2024, the Company’s Recourse Leverage Ratio and Portfolio Recourse Leverage Ratio (as defined in footnotes 4 and 5 to the table under "— Capital Allocation") increased to 3.0x and 2.9x, respectively, from 1.6x and 1.5x, respectively, as of December 31, 2023, primarily due to the financing of highly liquid U.S.
+Added: Treasury securities and Agency RMBS.
+Added: As of December 31, 2024, 62% of our debt, excluding mortgages payable on real estate and Consolidated SLST CDOs, is subject to mark-to-market margin calls, with 44% of that debt collateralized by Agency RMBS, 10% collateralized by U.S.
+Added: Treasury securities and 8% collateralized by residential credit assets.
The remaining 38% has no exposure to collateral repricing by our counterparties.
−Removed: Although we expect our leverage to move higher as we expand our holdings of Agency RMBS, we intend to continue to focus on procuring longer-term and non-mark-to-market financing arrangements for certain parts of our credit portfolio.
+Added: Although we expect our leverage to move higher as we access additional liquidity and grow our investment portfolio further, we intend to continue to focus on procuring longer-term and non-mark-to-market financing arrangements for certain parts of our credit portfolio.
We believe that this will allow us to better manage our liquidity risk and better insulate our business from extreme market dislocations.
−Removed: We expect to continue to opportunistically dispose of assets from our portfolio, including our joint venture equity investments, and generate higher portfolio turnover in order to pursue investments across the residential housing sector with a focus on acquiring assets capable of rebuilding our interest income that have less price sensitivity to credit deterioration, such as Agency RMBS.
−Removed: We expect to remain selective in acquiring single-family and multi-family residential credit assets in anticipation of near-term market dislocation that may lead to superior total return opportunities and remain committed to prudently managing our liabilities.
−Removed: We believe these actions, combined with our strong balance sheet and cash position will better position us to deploy capital in the market cycles ahead.
+Added: To this end, we completed a non-Agency RMBS re-securitization and five new, non-recourse securitizations of residential loans and redeemed two existing residential loan securitizations during the year ended December 31, 2024.
+Added: We also completed the issuance of $60.0 million of our 9.125% Senior Notes due 2029 in an underwritten public offering in the second quarter of 2024.
+Added: We received $57.5 million in net proceeds from the issuance and utilized the proceeds to purchase Agency RMBS.
+Added: In January 2025, we completed the issuance of $82.5 million of our 9.125% Senior Notes due 2030 in an underwritten public offering, receiving $79.3 million in net proceeds which were also used to purchase Agency RMBS.
+Added: In February 2025, we completed a new securitization of residential loans resulting in approximately $74.2 million of net proceeds to us after deducting expenses associated with the transaction and redeemed a residential loan securitization with an outstanding balance of approximatel y $54.4 million a t the time of redemption.
+Added: We expect to continue to opportunistically dispose of assets from our portfolio and generate higher portfolio turnover in order to pursue investments across the residential housing sector with a focus on acquiring assets capable of growing our interest income.
+Added: We expect to remain selective in acquiring single-family and multi-family residential credit assets and remain committed to prudently managing our liabilities.
Our investment and capital allocation decisions depend on prevailing market conditions, among other factors, and may change over time in response to opportunities available in different economic and capital market environments.
15 unchanged sentences
(42,236) (39,431) (262,169) 156,511 (360,211)
−Removed: General, administrative and operating expenses 73,517 93,328 75,576 53,800 49,353
+Added: General and administrative expenses
+Added: 48,672 49,565 52,440 48,908 42,228
+Added: Portfolio operating expenses
+Added: 30,688 23,952 40,888 26,668 11,572
+Added: Debt issuance costs
+Added: 12,335 — — — —
Net (loss) income attributable to Company's common stockholders (103,785) (90,035) (340,577) 144,176 (329,696)
21 unchanged sentences
Convertible notes — — — 137,898 135,327
−Removed: Mortgages and notes payable on real estate, net 784,421 394,707 709,356 36,752 —
+Added: Mortgages payable on real estate, net
+Added: 366,606 784,421 394,707 709,356 36,752
Liabilities of disposal group held for sale 97,065 386,024 883,812 — —
13 unchanged sentences
Portfolio Update
−Removed: During the year ended December 31, 2023, we purchased Agency RMBS and selectively pursued new single-family residential loan and multi-family investments.
−Removed: Our investment activity was partially offset primarily by prepayments, redemptions and distributions in addition to opportunistic sales of certain investment securities.
+Added: During the year ended December 31, 2024, we continued to expand our investment securities and residential loan portfolios.
+Added: Our investment activity was offset primarily by prepayments, redemptions, distributions and/or sales.
The following table presents the activity for our investment portfolio for the year ended December 31, 2024 (dollar amounts in thousands):
1 unchanged sentence
Repayments (2)
−Removed: Sales Transfers from Disposal Group Held for Sale (3)
+Added: Sales Transfers (3)(4)
Fair Value Changes and Other (5)
3 unchanged sentences
Agency RMBS 1,989,324 1,500,039 (295,325) — — (57,226) 3,136,812
−Removed: CMBS 30,133 — (226) (30,419) — 512 —
Non-Agency RMBS
24,493 53,286 (1,286) (5,284) — (1,522) 69,687
−Removed: 856 — — (595) — (261) —
+Added: Treasury securities — 657,609 — — — (35,564) 622,045
Total investment securities available for sale 2,013,817 2,210,934 (296,611) (5,284) — (94,312) 3,828,544
9 unchanged sentences
Single-family rental properties 151,885 2,244 — (5,292) — (6,591) 142,246
+Added: Mortgage servicing rights
+Added: — 9,470 — — 10,917 616 21,003
Total investment portfolio $ 5,143,236 $ 4,134,898 $ (1,496,403) $ (169,944) $ — $ (225,022) $ 7,386,765
−Removed: (1) Includes draws funded for business purpose bridge loans and existing joint venture equity investments and capitalized costs for single-family rental properties.
+Added: (1) Includes draws funded for business purpose bridge loans and existing equity investments and capitalized costs for single-family rental properties.
(2) Includes principal repayments and return of invested capital.
(3) In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets.
−Removed: As of December 31, 2023, the assets and liabilities related to certain joint venture equity investments in multi-family properties are included in assets and liabilities of disposal group held for sale on the accompanying consolidated balance sheets.
−Removed: In December 2023, the Company determined that certain joint venture equity investments that were previously reported in assets and liabilities of disposal group held for sale no longer met the criteria to be classified as held for sale and transferred either the assets and liabilities of the respective Consolidated VIEs or its equity investment in the joint venture entity to equity investments in consolidated multi-family properties or equity investments, at fair value, respectively.
−Removed: See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated balance sheets.
+Added: Accordingly, the assets and liabilities related to certain joint venture equity investments in multi-family properties are included in assets and liabilities of disposal group held for sale on the accompanying consolidated balance sheets as of December 31, 2024 and 2023.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated balance sheets.
+Added: (4) Includes in-kind distribution of mortgage servicing rights received from the Company's equity investment in an entity that originates residential loans.
(5) Primarily includes net realized gains or losses, changes in net unrealized gains or losses (including reversals of previously recognized net unrealized gains or losses on sales or redemptions), net amortization/accretion/depreciation, transfers within investment categories and net loss from real estate attributable to the Company.
8 unchanged sentences
(a) Included in other liabilities on our consolidated balance sheets as of December 31, 2024 and 2023.
−Removed: (6) See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated balance sheets.
+Added: (7) See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated balance sheets.
Current Market Conditions and Commentar y
−Removed: The results of our business operations are affected by a number of factors, many of which are beyond our control, and primarily depend on, among other things, the level of our net interest income, the market value of our assets, which is driven by numerous factors including changes in interest rates and the supply and demand for mortgage, housing and credit assets in the marketplace, our ability to identify and acquire assets on favorable terms, our ability to dispose of assets from time to time on favorable terms, the ability of our operating partners, tenants and borrowers of our loans and those that underlie our investment securities to meet their payment obligations, the terms and availability of adequate financing and capital, general economic and real estate conditions (both on a national and local level), the impact of government actions in the real estate, mortgage, credit and financial markets, and the credit performance of our credit sensitive assets.
−Removed: Financial and mortgage-related asset markets experienced notable improvement in performance during the fourth quarter of 2023.
−Removed: After rallying in the first half of 2023 and then moderating in the third quarter, U.S.
−Removed: stocks surged to post strong gains in the fourth quarter.
−Removed: The Dow Jones Industrial Average grew 12.5% in the fourth quarter of 2023 and 13.7% for the full year 2023 to finish near a record high.
−Removed: The Nasdaq Composite Index grew 13.6% in the fourth quarter of 2023 and 43.4% for the full year 2023, it’s best full year performance since 2020.
−Removed: Interest rate and monetary policy uncertainty, inflation and geopolitical instability cautioned some economic outlooks.
−Removed: We anticipate that due to uncertainty related to persistent inflation, interest rates, monetary policy, ongoing recession concerns and the upcoming U.S.
−Removed: presidential election in November 2024, markets, and the pricing for many of our assets, will continue to experience volatility in 2024.
+Added: The results of our business operations are affected by a number of factors, many of which are beyond our control, and primarily depend on, among other things, the level of our net interest income and the market value of our assets, which are driven by numerous factors including changes in interest rates and the supply and demand for mortgage, housing and credit assets in the marketplace, our ability to identify and acquire assets on favorable terms, our ability to dispose of assets from time to time on favorable terms, the ability of our operating partners, tenants and borrowers of our loans and those that underlie our investment securities to meet their payment obligations, the terms and availability of adequate financing and capital, general economic and real estate conditions (both on a national and local level), the impact of government actions in the real estate, mortgage, credit and financial markets, and the credit performance of our credit sensitive assets.
+Added: Financial markets experienced modest positive performance in the fourth quarter of 2024 and strong positive performance for the full year 2024, spurred in part by economic growth and the Federal Reserve’s first cuts to the target range for the federal funds rate in approximately four and a half years.
+Added: Mortgage-related markets were challenged in 2024 as borrowers remained sensitive to higher interest rates and origination volumes were down by some measures as compared to 2023, among other considerations.
+Added: The Dow Jones Industrial Average finished the fourth quarter of 2024 up 0.51% and grew 12.88% for the full year 2024.
+Added: The Nasdaq Composite Index finished the fourth quarter of 2024 up 6.17% and grew 28.64% for the full year 2024.
+Added: However, interest rate and monetary policy uncertainty, mixed inflation data and geopolitical instability have cautioned some economic outlooks.
+Added: We anticipate that due to uncertainty related to inflation, interest rates, monetary policy, the U.S.
+Added: debt limit and the implementation of the new U.S.
+Added: presidential administration’s policies, markets and the pricing for many of our assets will continue to experience volatility in 2025.
The market conditions discussed below significantly influence our investment strategy and results:
Financial and Economic Data .
−Removed: economy grew modestly in 2023 with real gross domestic product (“GDP”) increasing by 2.5% (advanced estimate) for full year 2023, up from the GDP growth of 1.9% recorded for full year 2022.
−Removed: GDP grew at a 3.3% (advanced estimate) annualized rate in the fourth quarter of 2023, as compared to the annualized 4.9% GDP growth in the third quarter of 2023, annualized 2.1% GDP growth in the second quarter of 2023 and annualized 2.2% GDP growth in the first quarter of 2023.
−Removed: The fourth quarter 2023 GDP increase marks six straight quarters of GDP growth, and the full year 2023 GDP growth marks three straight years of GDP growth since contracting in 2020.
−Removed: Such GDP growth in the fourth quarter and full year 2023 exceeded the expectations of many economists and market commentators.
−Removed: Throughout 2023 and the fourth quarter of 2023, inflation retreated but remained above the Federal Reserve’s target of two percent.
−Removed: Uncertainty created by such persistent inflationary pressures and how the Federal Reserve may adjust its monetary policy in response may limit or undermine business activity and the potential for future GDP growth, which could negatively impact the value of credit investments.
−Removed: However, according to the projection materials of the Federal Reserve’s December 2023 meeting, Federal Reserve policymakers expect GDP to grow modestly for full year 2024.
−Removed: labor market remained tight and fluctuated little throughout the fourth quarter of 2023.
+Added: economy grew modestly in 2024 with real gross domestic product (“GDP”) increasing by 2.8% for full year 2024, as compared to the GDP growth of 2.9% recorded for full year 2023.
+Added: GDP grew at a 2.3% annualized rate in the fourth quarter of 2024, as compared to the annualized 3.1% GDP growth in the third quarter of 2024, annualized 3.0% GDP growth in the second quarter of 2024 and annualized 1.6% GDP growth in the first quarter of 2024.
+Added: The fourth quarter 2024 GDP increase marks eleven straight quarters of GDP growth.
+Added: While GDP grew in 2024, inflation remains persistently above the Federal Reserve’s target of two percent, and job growth remains robust, uncertainty about how the Federal Reserve may adjust its monetary policy or the target range for the federal funds rate in response to such macroeconomic trends may limit or undermine business activity and the potential for future GDP growth, which could negatively impact the value of credit investments.
+Added: After moderating in the first half of 2024, the U.S.
+Added: labor market tightened during the third quarter of 2024 and remained tight in the fourth quarter of 2024 in contrast to many market commentators’ expectations.
According to the U.S.
Department of Labor, the U.S.
−Removed: unemployment rate was 3.7% at the end of December 2023, finishing slightly below the unemployment rate of 3.8% as of the end of September 2023 and up 20 basis points from the unemployment rate of 3.5% as of the end of December 2022.
+Added: unemployment rate was 4.1% at the end of December 2024, finishing flat to the unemployment rate of 4.1% as of the end of September 2024 and up 30 basis points from the unemployment rate of 3.8% as of the end of December 2023.
The number of unemployed persons increased by 0.6 million year-over-year to 6.9 million as of December 2024.
−Removed: There continues to be a wide disparity between the number of available job openings, 9.0 million as of the end of December 2023, and the number of unemployed persons, resulting in a competitive labor market and rising wages.
+Added: There continues to be a wide disparity between the number of available job openings, 8.1 million as of the end of November 2024, and the number of unemployed persons, resulting in a competitive labor market and rising wages.
As of December 2024, average hourly earnings for all employees on non-farm payrolls rose 3.9% year-over-year.
−Removed: From March 2022 through July 27, 2023, the Federal Reserve raised the target range for the federal funds rate a total of 5.25%, including 100 basis points of increases in 2023.
−Removed: These rate increases brought the target range for the federal funds rate to 5.25% to 5.50% — the highest level in over 22 years and where it stands as of February 2, 2024.
−Removed: The Federal Reserve had raised interest rates in an effort to rein in inflation as the Consumer Price Index (the “CPI”) maintained multi-decade highs above 6% throughout 2022 and into February of 2023.
−Removed: A trend of decelerating inflation emerged at the end of 2022, and a 3.0% rise in the CPI from June 2022 to June 2023 marked the smallest increase in inflation since March 2021.
−Removed: But, since June 2023, the deceleration in inflation appears to have stalled with the CPI rising 3.4% for the twelve months ended December 2023.
−Removed: The Federal Reserve remains highly attentive to inflation risks and reaffirmed in January 2024 that its monetary policy seeks to achieve inflation that averages two percent over time.
−Removed: However, the Federal Reserve has not raised the target range for the federal funds rate at any of its four meetings since July 2023, and the “dot plot” included in the projection materials from the Federal Reserve’s December 2023 meeting implies that most Federal Reserve officials believe that modest decreases to the federal funds rate before the end of 2024 will be appropriate.
−Removed: But, with inflation persistently elevated above the Federal Reserve’s two percent long run target, some market commentators have suggested that the Federal Reserve will hold the target range for the federal funds rate higher for longer.
−Removed: Higher interest rates may put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally.
−Removed: Fears of an economic recession in the U.S.
−Removed: have receded somewhat in connection with the consistent U.S.
−Removed: GDP growth seen in 2023, but some economists and market commentators have continued to express caution with respect to the U.S.
−Removed: economic outlook.
−Removed: The National Bureau of Economic Research defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” A January 2024 survey of economists by the Wall Street Journal indicated that the respondents believed that the probability of a recession in the next twelve months is at 39%, a figure that is down 22% from the recession probability indicated by the survey taken in January 2023.
−Removed: The economists surveyed by the Wall Street Journal attribute the diminished likelihood of a recession in the next twelve months to decreases in the prices of certain consumer goods and incomes growing faster than inflation.
−Removed: However, certain economists surveyed by the Wall Street Journal indicated that, while they believed a recession was less likely in the coming year, they expect economic growth to stagnate.
−Removed: An economic recession or stagnating economic growth may put pressure on the ability of our operating partners, joint ventures, tenants and borrowers to meet their obligations, including to us, and would likely adversely impact the value of our assets, among other things, any of which could materially adversely affect our results of operations and financial condition.
+Added: After raising the target range for the federal funds rate a total of 5.25% in 2022 and 2023, bringing the range to its highest level in over 22 years, and holding the range at that target for 14 months, the Federal Reserve cut the target range by 50 basis points in September 2024 (the first such cut since March 2020), 25 basis points in November 2024 and 25 basis points in December 2024.
+Added: In connection with its cuts to the target range for the federal funds rate, the Federal Reserve acknowledged that inflation has made progress toward the Federal Reserve’s target of two percent but remains somewhat elevated.
+Added: In considering additional adjustments to the target range for the federal funds rate, the Federal Reserve stated that it will carefully assess incoming data, the evolving outlook, and the balance of risks to the Federal Reserve’s dual mandate of achieving maximum employment and inflation at a rate of two percent over the longer run.
+Added: Changing expectations with respect to the Federal Reserve’s actions regarding the target range for the federal funds rate after quarter end contributed to an uncertain interest rate environment.
+Added: Particularly, some market commentators have suggested that persistently elevated inflation and continued robust employment readings in recent months may mean that the Federal Reserve is likely to make fewer or smaller cuts to the target range for the federal funds rate in 2025.
+Added: Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally.
+Added: The fears of an economic recession in the U.S.
+Added: that were prevalent in 2023 receded in connection with the consistent U.S.
+Added: GDP growth seen in 2024, although some economists and market commentators have expressed expectations for U.S.
+Added: GDP growth to slow in 2025.
+Added: The National Bureau of Economic Research defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” An economic recession or stagnating economic growth may put pressure on the ability of our operating partners, joint ventures, tenants and borrowers to meet their obligations to us, and would likely adversely impact the value of our assets, among other things, any of which could materially adversely affect our results of operations and financial condition.
Single-Family Homes and Residential Mortgage Market.
−Removed: Over the course of the fourth quarter and full year 2023, the residential real estate market remained competitive for home buyers.
−Removed: Data released by the S&P Dow Jones Indices for their S&P CoreLogic Case-Shiller National Home Price NSA Indices for November 2023 showed that, on average, home prices increased 5.4% for the 20-City Composite over November 2022.
−Removed: Additionally, according to the National Association of Realtors (“NAR”), existing home sales in December 2023 were down 1.0% month-over-month and 6.2% year-over-year.
−Removed: NAR also reported that the median existing-home sales price for all housing types in December 2023 was $382,600, up 4.4% from $366,500 in December 2022.
+Added: Throughout 2024, the residential real estate market remained competitive for home buyers.
+Added: Data released by the S&P Dow Jones Indices for their S&P CoreLogic Case-Shiller National Home Price NSA Indices for October 2024 showed that, on average, home prices increased 4.2% for the 20-City Composite over October 2023.
+Added: Additionally, according to the National Association of Realtors (“NAR”), existing home sales in November 2024 increased 4.8% month-over-month and 6.1% year-over-year.
+Added: NAR also reported that the median existing-home sales price for all housing types in November 2024 was $406,100, up 4.7% from $387,800 in November 2023.
According to data provided by the U.S.
1 unchanged sentence
Department of Housing and Urban Development, privately-owned housing starts for single-family homes averaged a seasonally adjusted annual rate of 1,003,000 and 1,009,917 for the three and twelve months ended December 31, 2024, respectively, as compared to 948,500 for the year ended December 31, 2023.
−Removed: Overall, existing home inventory for sale at the end of December 2023 amounted to 3.2 months of supply, up from 2.9 months of supply in December 2022, according to the NAR.
−Removed: According to Freddie Mac, the average 30-year fixed-rate mortgage was up 0.54% year-over-year to 6.63% as of February 1, 2024.
−Removed: As interest rates remain at relatively elevated levels for the most recent decade, we expect this to put downward pressure on home prices and borrowers.
+Added: Overall, existing home inventory for sale at the end of November 2024 amounted to 3.8 months of supply, down from 4.2 months of supply in October 2024 but up from 3.5 months of supply in November 2023, according to the NAR.
+Added: According to Freddie Mac, the weekly average 30-year fixed-rate mortgage was up 0.44% year-over-year to 7.04% as of January 16, 2025.
Declining single-family housing fundamentals may adversely impact the overall credit profile and value of our existing portfolio of single-family residential credit investments and the value of our single-family rental properties, as well as the availability of certain of our targeted assets.
3 unchanged sentences
Department of Housing and Urban Development, starts on multi-family homes containing five or more units averaged a seasonally adjusted annual rate of 355,667 and 336,583 for the three and twelve months ended December 31, 2024, respectively, as compared to 459,417 for the year ended December 31, 2023.
−Removed: According to RealPage Analytics (“RealPage”), rents fell 1.3% nationally in the fourth quarter of 2023 but achieved a slight 0.2% growth for the full year 2023.
−Removed: RealPage noted that, while apartment demand remains high, asking rents were likely dampened by the increased supply from the completion of nearly 440,000 apartment units in 2023 that caused apartment supply to jump to a 36-year high.
−Removed: RealPage further noted that even more apartment units are expected to be completed in 2024 than in 2023.
+Added: According to RealPage Analytics, rents for professionally managed apartments grew a modest 50 basis points in 2024 as a near-historic number of new apartment units were completed.
+Added: The CoStar Group notes that the majority of the weakest-performing geographic markets in 2024 from an asking rent growth perspective were located in the Southeast and Texas, where oversupply conditions remain challenging and where a significant amount of our multi-family investments are concentrated.
Weakening multi-family housing fundamentals, including, among other things, increasing supply of apartments and declining rents in the markets or submarkets in which we invest, increasing interest rates, widening capitalization rates and reduced liquidity for owners of multi-family properties, may cause our operating partners to fail to meet their obligations to us and/or contribute to reduced cash flows from and/or valuation declines for multi-family properties, and in turn, many of the multi-family investments that we own.
−Removed: Additionally, multi-family investments face growing regulatory and political headwinds.
−Removed: In January 2023, the White House Domestic Policy Council and National Economic Council released a white paper entitled the “Blueprint for a Renters Bill of Rights” (the “Blueprint”).
−Removed: The Blueprint discusses potential tenant protections regarding leasing and management of rental properties, tenant organizing, evictions and rent increases, among other potential protections.
−Removed: Although the Blueprint is non-binding, several federal agencies, including Fannie Mae and Freddie Mac, have announced actions that seek to further some of the principles set forth in the Blueprint.
−Removed: In July 2023, President Biden announced an initiative to promote disclosure and reduction of rental housing fees such as application fees, payment fees, and other mandatory fees.
−Removed: Further, in August 2023, the White House announced a series of initiatives to build on the Blueprint such as providing funding to support tenant organizing efforts.
−Removed: Policies, regulations or laws implemented to further the principles discussed in the Blueprint or reduce or limit fees could lead to increased costs and reduced operational flexibility for multi-family and single-family rental properties, which could contribute to reduced cash flows from and/or valuation declines for multi-family and single-family rental properties, and in turn, many of the multi-family investments and single-family rentals that we own.
+Added: The prior presidential administration issued statements and implemented policies aimed at establishing certain rights and protections for tenants and limiting the actions of real property owners and managers.
+Added: However, certain political commentators expect that the current administration will reverse or cease the implementation of such positions and policies.
+Added: Policies, regulations or laws implemented to establish tenant rights and protections and/or limit the actions of real property owners and managers could lead to increased costs, decreased revenue and reduced operational flexibility for multi-family and single-family rental properties, which could contribute to reduced cash flows from and/or valuation declines for multi-family and single-family rental properties, and in turn, many of the multi-family investments and single-family rentals that we own.
Credit Spreads.
−Removed: Investment grade and high-yield credit spreads both tightened over the course of the fourth quarter of 2023 with investment grade spreads finishing 34 basis points lower than the start of 2023 and high-yield spreads finishing 142 basis points lower than the start of 2023.
+Added: Investment grade and high-yield credit spreads both tightened over the course of the fourth quarter of and full year 2024.
+Added: At the end of 2024, investment grade spreads tightened 10 basis points and 22 basis points as compared to the start of the fourth quarter of 2024 and the start of 2024, respectively.
+Added: At the end of 2024, high-yield credit spreads tightened 11 basis points and 47 basis points as compared to the start of the fourth quarter of 2024 and the start of 2024, respectively.
Tightening credit spreads generally increase the value of many of our credit sensitive assets, while widening credit spreads tend to have a negative impact on the value of many of our credit sensitive assets.
Financing Markets.
−Removed: Driven in part by the Federal Reserve’s increases to the federal funds rate and speculation about the Federal Reserve’s strategy with regard to future rate hikes, the Treasury curve inverted in July 2022 and has remained inverted ever since.
+Added: For the first time since June 2022, the Treasury curve uninverted at the end of August 2024, marking the end of the longest inverted Treasury curve on record.
+Added: This normalization of the Treasury curve was driven in part by investors’ expectations of the Federal Reserve’s cuts to the target range for the federal funds rate.
+Added: Inversions and subsequent normalizations of this spread are generally considered to be indicators of a recession in the near term, although some market commentators have cautioned against August 2024’s uninversion being such an indicator.
+Added: Further, a January 2025 survey of economists by the Wall Street Journal indicated that the respondents believed that the probability of a recession in the next twelve months is at 22%, the lowest probability indicated by the Wall Street Journal’s survey since January 2022.
On December 31, 2024, the spread between the 2-Year U.S.
Treasury yield and the 10-Year U.S.
−Removed: Treasury yield closed at negative 35 basis points, as compared to a negative 53 basis point spread on December 30, 2022.
−Removed: Inversions of this spread are generally considered to be indicators of a recession in the near term.
+Added: Treasury yield closed at 33 basis points, as compared to a negative 35 basis point spread on December 29, 2023.
This spread is important as it is indicative of opportunities for investing in levered assets.
9 unchanged sentences
Treasuries and Agency RMBS it rolls off its balance sheet to $95 billion each month.
+Added: On June 1, 2024, the Federal Reserve reduced from $60 billion to $25 billion the amount of U.S.
+Added: Treasuries it rolls off its balance sheet each month while continuing to reduce its holdings of Agency RMBS by $35 billion per month.
As of January 13, 2025, the Federal Reserve held about $6.8 trillion in assets.
1 unchanged sentence
From March 2020 to March 2022, the Federal Reserve maintained a target range for the federal funds rate of 0% to 0.25% in view of the COVID-19 pandemic and to foster maximum employment and price stability.
−Removed: Then, from March 2022 through July 2023, the Federal Reserve increased the federal funds rate eleven times to bring the target range for the federal funds rate to 5.25% to 5.50% where it remained as of February 2, 2024.
−Removed: However, even though inflation remained elevated above the Federal Reserve’s target of two percent through December 2023, some Federal Reserve officials have signaled that the current interest rate levels have been sufficient to bring down inflation and that cuts to the federal funds rate may be likely in 2024.
−Removed: As reflected on the “dot plot” included in the projection materials from the Federal Reserve’s December 2023 meeting, most Federal Reserve officials expect the target range for the federal funds rate to be lowered below its current level by the end of 2024, with many of the officials expecting the target range to reach a level between 4.50% and 4.75% by the end of 2024.
−Removed: However, this plotting of the Federal Reserve officials’ expected target range for the federal funds rate as of December 2023 indicates divided thoughts among Federal Reserve officials as to how many, if any, decreases to the target range are appropriate.
−Removed: In 2017, policymakers announced that LIBOR would be replaced by 2021.
−Removed: The directive was spurred by the fact that banks were uncomfortable contributing to the LIBOR panel given the shortage of underlying transactions on which to base levels and the liability associated with submitting an unfounded level.
−Removed: The Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the Federal Reserve Bank of New York to help ensure a successful transition from LIBOR, proposed that SOFR replace LIBOR.
−Removed: SOFR is based on overnight Treasury General Collateral repo rates.
−Removed: The administrator of LIBOR, with the support of the Federal Reserve and the United Kingdom’s Financial Conduct Authority, ceased publication of all USD LIBOR tenors on June 30, 2023.
−Removed: The market’s adoption of SOFR appears to have been strong and generally without disruption.
−Removed: Additionally, the federal government enacted the Adjustable Interest Rate (LIBOR) Act in March 2022 with the intention of assisting in the transition away from LIBOR, particularly with respect to certain legacy contracts that are difficult to transition off of LIBOR and expire after June 2023.
−Removed: We continue to carefully integrate this new rate into our operations, as it has become in many cases, and will likely become in other cases, the new benchmark for hedges and a range of interest rate investments and financing arrangements.
+Added: Then, from March 2022 through July 2023, the Federal Reserve increased the federal funds rate eleven times to bring the target range for the federal funds rate to 5.25% to 5.50% where it remained until September 19, 2024 when the Federal Reserve implemented a 50 basis point cut to the target range.
+Added: When announcing the 50 basis point rate cut in September 2024, the Federal Reserve stated that inflation had made progress toward the Federal Reserve’s objective of achieving an inflation rate of two percent over the longer run and that, in light of this progress on inflation and considering the risks to the Federal Reserve’s second objective of achieving maximum employment, a cut to the target range was appropriate.
+Added: On each of November 8, 2024 and December 19, 2024, the Federal Reserve again cut the target range to the federal funds rate by 25 basis points, bringing the total cuts to the target range in 2024 to 100 basis points.
+Added: The Federal Reserve noted in its December 2024 statement that any future cuts to the target range for the federal funds rate will depend on a careful assessment of incoming data, the evolving outlook, and the balance of risks to its dual mandate of achieving maximum employment and an inflation rate of two percent.
+Added: As reflected on the “dot plot” included in the projection materials from the Federal Reserve’s December 2024 meeting, most Federal Reserve officials indicated that an additional 50 basis points in cuts to the target range for the federal funds rate by the end of 2025 would be appropriate.
+Added: However, recent economic data along with the Federal Reserve’s December 2024 statement emphasizing the consideration that will be given to evolving economic data has cautioned some market commentators’ expectations of the number and extent of further cuts to the target range for the federal funds rate in 2025.
+Added: Uncertainty exists regarding the U.S.
+Added: debt limit, which is the statutory maximum amount of money that the U.S.
+Added: government may borrow to meet its existing obligations.
+Added: government reached the debt limit in the middle of January 2025 and the U.S.
+Added: Treasury began taking “extraordinary measures” to keep the U.S.
+Added: from breaching its obligations.
+Added: Congress must approve any increases to or suspensions of the U.S.
+Added: debt limit is not increased or suspended before the effectiveness of such extraordinary measures is exhausted, which some estimate will be sometime around the middle of 2025, the U.S.
+Added: government may default on its obligations causing severe economic consequences.
+Added: A default of the U.S.
+Added: government on its obligations may also cause yields on U.S.
+Added: Treasuries, and interest rates broadly, to rise, among other things.
+Added: A weakened economy and/or higher interest rates may put pressure on the ability of our operating partners, tenants and borrowers to meet their obligations to us, and would likely adversely impact the value of our assets, among other things, any of which could materially adversely affect our results of operations and financial condition.
+Added: In September 2008, the U.S.
+Added: Government placed Fannie Mae and Freddie Mac into the conservatorship of the FHFA in order to preserve and conserve their assets and property and restore them to a sound and solvent condition so they can continue to fulfill their statutory missions.
+Added: In President Trump’s first term, his administration sought to end the conservatorships of Fannie Mae and Freddie Mac, but so far into his second term, President Trump’s administration has not explicitly expressed its intentions with respect to the conservatorships.
+Added: However, many market and political commentators believe President Trump may seek to end the conservatorships of Fannie Mae and Freddie Mac.
+Added: Together, Fannie Mae and Freddie Mac guarantee a significant amount of the nearly $13 trillion U.S.
+Added: Home loan market.
+Added: If the conservatorships of Fannie Mae and Freddie Mac were ended, Fannie Mae and Freddie Mac may need to hold additional capital against riskier loans which may, in turn, cause Fannie Mae and Freddie Mac to charge borrowers higher mortgage rates or to lessen the amount of their lending, among other things.
+Added: We invest in Agency RMBS and other mortgage-related assets that may be guaranteed by Fannie Mae or Freddie Mac.
+Added: Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally.
+Added: For further discussion, please see the risk factor titled “The federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in such conservatorship or laws and regulations affecting the relationship between Fannie Mae, Freddie Mac and Ginnie Mae and the U.S.
+Added: Government, may materially adversely affect our business, financial condition and results of operations, and our ability to pay dividends to our shareholders” in Part I, Item “1A.
+Added: Risk Factors” in this Annual Report on Form 10-K.
The scope and nature of the actions the Federal Reserve and other governmental authorities will ultimately undertake are unknown and will continue to evolve.
30 unchanged sentences
Investing Activities
−Removed: • Purchased approximately $2.0 billion of Agency RMBS and approximately $620.3 million in residential loans.
−Removed: • Sold investment securities for approximately $64.7 million in proceeds and residential loans for approximately $25.1 million in proceeds.
−Removed: • Funded approximately $55.9 million of Mezzanine Lending investments.
−Removed: Received approximately $94.6 million in proceeds from redemptions of Mezzanine Lending investments.
−Removed: • Sold five multi-family properties held by joint venture equity investments representing total net equity investments of $43.2 million.
−Removed: • Repurchased $59.9 million par value of our residential loan securitization CDOs for approximately $58.4 million.
−Removed: • Suspended the marketing of nine multi-family properties held by joint venture equity investments that were in disposal group held for sale primarily due to unfavorable market conditions and a lack of transactional activity in the multi-family market which resulted in a loss upon reclassification of these investments from disposal group held for sale to held and used of approximately $16.2 million.
−Removed: • Recognized $89.5 million of impairment losses due to declines in estimated fair value of multi-family properties held by joint venture equity investments in disposal group held for sale driven by wider cap rates and lower net operating income at the properties.
+Added: • Purchased approximately $2.2 billion of investment securities, including $1.5 billion of Agency RMBS with an average coupon of 5.69%.
+Added: • Purchased approximately $1.9 billion of residential loans with an average gross coupon of 9.93% .
+Added: • Sold three multi-family apartment communities held by joint venture equity investments which generated a net gain attributable to the Company's common stockholders of approximately $12.3 million.
+Added: • Sold or distributed equity interests in joint venture equity investments that owned ten multi-family apartment communities which generated a gain on de-consolidation attributable to the Company's common stockholders of approximately $5.7 million.
Financing Activities
−Removed: • Obtained approximately $84.9 million of financing for residential loans through a repurchase agreement with a new counterparty.
−Removed: • Obtained approximately $74.3 million of financing for single-family rental properties through a repurchase agreement with an existing counterparty.
−Removed: • Effected a one-for-four reverse stock split of our issued, outstanding and authorized shares of common stock.
−Removed: • Announced upsize of common stock repurchase program to $246.0 million and authorized preferred stock repurchase program under which the Company may repurchase up to $100.0 million of the Company’s preferred stock.
−Removed: • Repurchased 937,850 shares of common stock pursuant to common stock repurchase program for approximately $8.6 million at an average repurchase price of $9.19 per common share and 120,580 shares of preferred stock pursuant to preferred stock repurchase program for approximately $2.4 million at an average repurchase price of $20.29 per preferred share.
+Added: • Completed five securitizations of residential loans and a re-securitization of our investment in certain subordinated securities issued by Consolidated SLST, resulting in approximately $1.3 billion in net proceeds to us after deducting expenses associated with the transactions.
+Added: We utilized a portion of the net proceeds to repay approximately $865.4 million on outstanding repurchase agreements related to residential loans and investment securities.
+Added: We also redeemed two residential loan securitizations with an outstanding balance of approximately $193.3 million at the time of redemption.
+Added: • Completed the issuance of $60.0 million of 9.125% Senior Notes due 2029 in an underwritten public offering at par, resulting in approximately $57.5 million in net proceeds to us after deducting the underwriters' discount and commissions and offering expenses.
+Added: • Repurchased 587,347 shares of common stock for approximately $3.5 million at an accretive average repurchase price of $5.95 per common share.
Subsequent Developments
−Removed: • Completed a securitization of business purpose loans, resulting in approximately $223.2 million in net proceeds to us after deducting estimated expenses associated with the transaction.
−Removed: We utilized the net proceeds to repay approximately $136.6 million on outstanding repurchase agreements related to residential loans.
+Added: • On January 14, 2025, we completed the issuance of $82.5 million in aggregate principal amount of our 9.125% Senior Notes due 2030 in an underwritten public offering.
+Added: The total net proceeds to us from the offering of the notes, after deducting the underwriters' discount and commissions and offering expenses, were approximately $79.3 million.
+Added: • In February 2025, we completed a new securitization of residential loans resulting in approximately $74.2 million of net proceeds to us after deducting expenses associated with the transaction and redeemed a residential loan securitization with an outstanding balance of approximatel y $54.4 million a t the time of redemption.
• On February 19, 2025, we announced that our Board of Directors approved extensions of our common stock repurchase program, under which $189.7 million of the approved amount remained available for repurchase, and our preferred stock repurchase program, under which $97.6 million of the approved amount remained available for repurchase.
2 unchanged sentences
The following provides an overview of the allocation of our total equity as of December 31, 2024 and 2023, respectively.
−Removed: We fund our investing and operating activities with a combination of cash flow from operations, proceeds from common and preferred equity and debt securities offerings, including convertible notes, senior unsecured notes and subordinated debentures, short-term and longer-term repurchase agreements and CDOs.
+Added: We fund our investing and operating activities with a combination of cash flow from operations, proceeds from common and preferred equity and debt securities offerings, including senior unsecured notes and subordinated debentures, short-term and longer-term repurchase agreements and CDOs.
A detailed discussion of our liquidity and capital resources is provided in “Liquidity and Capital Resources” elsewhere in this section.
12 unchanged sentences
Single-family rental properties 142,246 — — 142,246
+Added: Mortgage servicing rights
+Added: 21,003 — — 21,003
Total investment portfolio carrying value 6,399,895 331,680 660,763 7,392,338
Repurchase agreements (3,377,161) — (635,064) (4,012,225)
+Added: Collateralized debt obligations
Residential loan securitization CDOs
+Added: (2,096,096) — — (2,096,096)
+Added: Non-Agency RMBS re-securitization
+Added: (70,757) — — (70,757)
Senior unsecured notes — — (159,196) (159,196)
9 unchanged sentences
(1) Represents the Company's equity investments in consolidated multi-family properties that are not in disposal group held for sale.
−Removed: See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
(2) Represents the Company's equity investments in consolidated multi-family properties that are held for sale in disposal group.
−Removed: See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
(3) Excludes cash in the amount of $6.6 million held in the Company's equity investments in consolidated multi-family properties and equity investments in consolidated multi-family properties in disposal group held for sale.
1 unchanged sentence
(4) Represents the Company's total outstanding recourse repurchase agreement financing, subordinated debentures and senior unsecured notes divided by the Company’s total stockholders’ equity.
−Removed: Does not include non-recourse repurchase agreement financing amounting to $149.7 million, Consolidated SLST CDOs amounting to $593.7 million, residential loan securitization CDOs amounting to $1.3 billion and mortgages payable on real estate , including mortgages payable on real estate of disposal group held for sale, totaling $1.2 billion as they are non-recourse debt.
+Added: Does not include non-recourse repurchase agreement financing amounting to $11.0 million, Consolidated SLST CDOs amounting to $811.6 million, residential loan securitization CDOs amounting to $2.1 billion, non-Agency RMBS re-securitization CDOs amounting to $70.8 million and mortgages payable on real estate , including mortgages payable on real estate of disposal group held for sale, totaling $460.0 million as they are non-recourse debt.
(5) Represents the Company's outstanding recourse repurchase agreement financing divided by the Company’s total stockholders’ equity.
24 unchanged sentences
(1) Represents the Company's equity investments in consolidated multi-family properties that are not in disposal group held for sale.
−Removed: See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
−Removed: (2) Includes both unconsolidated and consolidated equity investments in multi-family properties that are held for sale in disposal group.
−Removed: See "Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
−Removed: (3) Excludes cash in the amount of $35.1 million held in the Company's equity investments in consolidated multi-family properties and consolidated equity investments in disposal group held for sale.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
+Added: (2) Represents the Company's equity investments in consolidated multi-family properties that are held for sale in disposal group.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Equity Investments in Multi-Family Entities" for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's consolidated financial statements.
+Added: (3) Excludes cash in the amount of $21.3 million held in the Company's equity investments in consolidated multi-family properties and equity investments in consolidated multi-family properties in disposal group held for sale.
Restricted cash of $143.5 million is included in the Company's accompanying consolidated balance sheets in other assets.
20 unchanged sentences
Portfolio operating expenses 30,688 23,952 6,736
+Added: Debt issuance costs
+Added: 12,335 — 12,335
Loss from operations before income taxes
13 unchanged sentences
Interest Income and Interest Expense
−Removed: Although our average interest earning assets increased in 2023, our interest income remained relatively flat due to a change in composition of interest earning assets resulting from increased investment in lower-yielding Agency RMBS and continued repayments of higher-yielding business purpose loans and multi-family loans.
−Removed: The decline in net interest income was primarily driven by an increase in interest expense due to increased securitization financings, repurchase agreement financing of our Agency RMBS, residential loan and single-family rental portfolios and an increase in cost of financing due to increases in interest rates.
+Added: Interest income increased in 2024 primarily due to increased investments in Agency RMBS and business purpose loans.
+Added: The increase in interest expense in 2024 was due primarily to an increase in financing obtained to fund investing activity through repurchase agreements and securitizations as well as issuance of the 9.125% Senior Notes due 2029.
Net Loss from Real Estate
12 unchanged sentences
$ (42,841) $ (31,302) $ (11,539)
−Removed: The decrease in net loss from real estate in 2023 was primarily due to the full year income and expense impact of joint venture equity investments consolidated in 2022 (net of income and expense decreases resulting from sales of multi-family real estate assets by consolidated joint venture equity investments in disposal group held for sale in 2023), a decrease in amortization expense as a result of lease intangibles being fully amortized during the year ended 2022 and a reduction in depreciation expense due to the application of held for sale accounting to real estate in disposal group held for sale beginning in September 2022.
−Removed: Interest expense on mortgages payable increased in the period despite a reduction in mortgages payable resulting from sales of multi-family real estate assets by consolidated joint venture equity investments in disposal group held for sale in 2023, primarily due to increases in interest rates.
−Removed: Other (Loss) Income
−Removed: Realized (Losses) Gains, Net
−Removed: The following table presents the components of realized (losses) gains, net recognized for the years ended December 31, 2023 and 2022, respectively (dollar amounts in thousands ):
+Added: The increase in net loss from real estate in 2024 was primarily attributable to a reduction in rental income as a result of the sale or de-consolidation, since December 31, 2023, of certain multi-family real estate assets owned by entities in which we had joint venture equity investments.
+Added: Expenses related to real estate decreased due to a decrease in interest expense on mortgages payable and a decrease in operating expenses due to the aforementioned sales or de-consolidation of multi-family real estate assets.
+Added: This decrease was partially offset by an increase in depreciation expense and amortization of lease intangibles as a result of the return of certain multi-family real estate assets owned by entities in which we have joint venture equity investments to held and used since December 2023.
+Added: Realized Losses, Net
+Added: The following table presents the components of realized losses, net recognized for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands ):
For the Years Ended December 31,
2024 2023 $ Change
−Removed: Residential loans $ (12,738) $ 8,281 $ (21,019)
+Added: Residential loans and real estate owned
+Added: $ (28,133) $ (12,738) $ (15,395)
Investment securities
(1,218) (14,321) 13,103
−Removed: Total realized (losses) gains, net
+Added: Total realized losses, net
$ (29,351) $ (27,059) $ (2,292)
−Removed: During the year ended December 31, 2023, we recognized net realized losses of $12.7 million related to our residential loan portfolio, a decrease from 2022, primarily as a result of losses recognized on the sale of certain non-performing loans, fewer loan prepayments and losses incurred on foreclosed properties in 2023.
−Removed: We also recognized net realized losses of $14.3 million primarily attributable to the sales of ABS, CMBS and non-Agency RMBS in 2023.
−Removed: During the year ended December 31, 2022, we recognized net realized gains of $8.3 million related to our residential loan portfolio, primarily as a result of loan prepayments.
−Removed: We also recognized net realized gains of $18.3 million on the sale of ABS and non-Agency RMBS as part of our strategy to selectively and opportunistically dispose of certain of our investment securities.
−Removed: Unrealized Gains (Losses), Net
−Removed: The following table presents the components of unrealized gains (losses), net recognized for the years ended December 31, 2023 and 2022, respectively (dollar amounts in thousands):
+Added: Net realized losses related to our residential loan portfolio increased in 2024, primarily as a result of increased losses incurred on foreclosed properties and recognized on the sale of residential loans and a decrease in net realized gain from payoffs of residential loans.
+Added: We also recognized net realized losses of $1.2 million on write-downs of non-Agency RMBS in 2024 .
+Added: In 2023, we recognized net realized losses of $14.3 million related to investment securities primarily attributable to the sale of ABS, CMBS and non-Agency RMBS.
+Added: Unrealized (Losses) Gains, Net
+Added: The following table presents the components of unrealized (losses) gains, net recognized for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
For the Years Ended December 31,
2 unchanged sentences
Consolidated SLST 2,902 (10,016) 12,918
+Added: CDOs at fair value
+Added: (1,484) — (1,484)
+Added: Senior unsecured notes at fair value
+Added: (310) — (310)
Preferred equity and mezzanine loan investments (4,717) 1,079 (5,796)
1 unchanged sentence
(88,822) 36,343 (125,165)
−Removed: Total unrealized gains (losses), net
+Added: Mortgage servicing rights
+Added: Total unrealized (losses) gains, net
$ (90,530) $ 97,196 $ (187,726)
−Removed: We recognized $97.2 million in net unrealized gains for the year ended December 31, 2023, primarily due to credit spread tightening that impacted the pricing of our residential loans.
+Added: We recognized net unrealized losses in 2024 primarily due to an increase in interest rates, which impacted the pricing of our investment securities and residential loans.
+Added: The net unrealized losses on our investment securities were more than offset by unrealized gains on our derivative instruments, as discussed below.
+Added: The unrealized losses on residential loans were more than offset by the reversal of unrealized losses as a result of foreclosures, payoffs and sales during the year.
+Added: We recognized net unrealized gains in 2023, primarily due to credit spread tightening that impacted the pricing of our residential loans.
Net unrealized gains on our investment securities for the year ended December 31, 2023 included unrealized gains recognized on Agency RMBS purchased in 2023.
−Removed: For the year ended December 31, 2022, we recognized $347.4 million in net unrealized losses, primarily due to credit spread widening and increases in interest rates that impacted the pricing of our credit assets, particularly our residential loans and investment in Consolidated SLST.
−Removed: Net unrealized losses on our investment securities for the year ended December 31, 2022 included a reversal of previously recognized unrealized gains amounting to $15.9 million o n ABS that were sold during the year as well as additional unrealized losses on non-Agency RMBS and CMBS due to credit spread widening.
−Removed: Unrealized losses on investment securities for the year ended December 31, 2022 were partially offset by unrealized gains recognized on certain non-Agency IOs during the period as a result of an increase in interest rates.
−Removed: (Losses) Gains on Derivative Instruments, Net
−Removed: The following table presents the components of (losses) gains on derivative investments, net for the years ended December 31, 2023 and 2022, respectively (dollar amounts in thousands):
+Added: Gains (Losses) on Derivative Instruments, Net
+Added: The following table presents the components of gains (losses) on derivative investments, net for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
For the Years Ended December 31,
2024 2023 $ Change
−Removed: Unrealized (losses) gains on derivative instruments
+Added: Unrealized gains (losses) on derivative instruments
$ 83,899 $ (29,373) $ 113,272
1 unchanged sentence
12,097 2,995 9,102
−Removed: Total (losses) gains on derivative instruments, net
+Added: Total gains (losses) on derivative instruments, net
$ 95,996 $ (26,378) $ 122,374
−Removed: We recognized $26.4 million in net losses on derivative instruments for the year ended December 31, 2023, primarily due to decreases in fair value of swaps entered into during the year and lower valuations of interest rate caps.
+Added: We recognized $96.0 million in net gains on derivative instruments in 2024, primarily due to increases in interest rates which resulted in higher valuations of our interest rate swaps.
+Added: We also recognized net realized gains on derivative instruments resulting from net payments received on instruments, partially offset by losses realized on contract terminations in 2024.
+Added: We recognized $26.4 million in net losses on derivative instruments in 2023, primarily due to decreases in fair value of interest rate swaps entered into during the year and lower valuations of interest rate caps.
This was offset by gains realized upon termination of interest rate cap contracts in connection with sales of multi-family properties and repayment of related mortgages payable in our joint venture equity investments in disposal group held for sale.
−Removed: For the year ended December 31, 2022, we recognized $27.2 million in net gains on derivative instruments primarily due to higher valuations of interest rate caps as a result of increases in interest rates.
−Removed: Total gains on derivative investments in 2022 included realized gains of $0.9 million upon termination of an interest rate cap contract resulting from the sale of a multi-family property and repayment of related mortgage payable in a joint venture equity investment .
Income from Equity Investments
3 unchanged sentences
Preferred return on preferred equity investments accounted for as equity $ 12,775 $ 19,308 $ (6,533)
−Removed: Unrealized gains (losses), net on preferred equity investments accounted for as equity
+Added: Unrealized (losses) gains, net on preferred equity investments accounted for as equity
(4,863) 1,154 (6,017)
1 unchanged sentence
(4,382) (3,291) (1,091)
−Removed: Income (loss) from entities that invest in or originate residential properties and loans
+Added: Income from entity that originates residential loans
12,481 614 11,867
Total income from equity investments $ 16,011 $ 17,785 $ (1,774)
−Removed: Income from equity investments increased during the year ended December 31, 2023, due to net unrealized gains recognized on preferred equity investments accounted for as equity and an equity investment in an entity that originates residential loans.
−Removed: The increase in income from equity investments was offset by a $3.0 million decrease in preferred return on preferred equity investments as a result of investment redemptions in 2023.
+Added: The decrease in income from equity investments in 2024 was primarily due to 1) decreases in preferred return on preferred equity investments accounted for as equity as a result of redemptions that have occurred since December 31, 2023 and 2) unrealized losses recognized on preferred equity investments accounted for as equity and unconsolidated joint venture equity investments in multi-family properties as a result of property performance and wider cap rates during the current period.
+Added: The decrease in total income from equity investments was partially offset by an increase in income from an entity that originates residential loans due to increased origination volume and profitability in 2024.
Impairment of Real Estate
3 unchanged sentences
Impairment of real estate $ (48,875) $ (89,548) $ 40,673
−Removed: During the year ended December 31, 2023 , we recognized impairment losses on certain multi-family real estate assets in disposal group held for sale due to a decrease in the estimated fair value less costs to sell of the real estate assets held by entities in which we have a joint venture equity investment primarily due to widening cap rates and lower net operating income driven, in large part, by higher interest and operating expenses at the properties.
+Added: In 2024, we recognized impairment losses on certain multi-family real estate assets due to lower valuations driven by a decrease in net operating income estimates and wider cap rates.
+Added: We also recognized impairment losses on certain single-family rental properties transferred to held for sale as a result of the remeasurement of those assets to estimated fair value less costs to sell in 2024.
+Added: The decrease in impairment of real estate in 2024 can be attributed to slowing cap rate widening as compared to 2023 as well as the sale or de-consolidation of certain multi-family real estate assets since December 31, 2023.
Loss on Reclassification of Disposal Group
4 unchanged sentences
$ (14,636) $ (16,163) $ 1,527
−Removed: In December 2023, we suspended the marketing of nine joint venture equity investments that were held for sale primarily due to unfavorable market conditions and a lack of transactional activity in the multi-family market.
−Removed: As a result, we determined that these joint venture equity investments no longer met the criteria to be classified as held for sale and transferred either the assets and liabilities of the respective Consolidated VIEs or its equity investment in the joint venture entity to their respective categories or equity investments, at fair value, respectively, as of December 31, 2023.
−Removed: Accordingly, we adjusted the carrying value of the long-lived assets in Consolidated VIEs to the lower of the carrying amount before the assets were classified as held for sale adjusted for depreciation and amortization expense that would have been recognized had the assets been continuously classified as held and used and the fair value of the assets at the date of the transfer and recognized a loss on reclassification of disposal group.
+Added: One joint venture equity investment was reclassified from disposal group held for sale in 2024 .
+Added: As a result of this transfer, we adjusted the carrying value of the long-lived assets in the Consolidated Real Estate VIE to the lower of the carrying amount before the assets were classified as held for sale adjusted for depreciation and amortization expense that would have been recognized had the assets been continuously classified as held and used and the fair value of the assets at the date of the transfer and recognized an approximately $14.6 million loss on reclassification of disposal group.
+Added: In 2023, nine joint venture equity investments were reclassified from disposal group held for sale, resulting in a loss on reclassification of disposal group of approximately $16.2 million.
The following table presents the components of other income for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
1 unchanged sentence
2024 2023 $ Change
+Added: Gain on sale of real estate
+Added: $ 27,835 $ 4,763 $ 23,072
+Added: Gain on de-consolidation of joint venture equity investments in Consolidated VIEs
+Added: 6,115 — 6,115
+Added: Servicing fee income
Preferred equity and mezzanine loan premiums resulting from early redemption
196 390 (194)
−Removed: Gain on sale of real estate held for sale 4,763 17,132 (12,369)
−Removed: (Loss) gain on extinguishment of collateralized debt obligations and mortgages payable on real estate
+Added: Loss on extinguishment of collateralized debt obligations and mortgages payable on real estate
(2,864) (796) (2,068)
−Removed: Miscellaneous income (loss)
+Added: Provision for uncollectible receivables
(3,207) — (3,207)
+Added: Miscellaneous income
+Added: 168 379 (211)
Total other income $ 29,149 $ 4,736 $ 24,413
−Removed: (1) Includes premiums resulting from early redemptions of preferred equity and mezzanine loan investments accounted for as loans.
−Removed: The net decrease in other income in 2023 is primarily due to a greater amount of gains recognized on the sales of certain multi-family properties during 2022, reduced premiums from early redemptions of preferred equity and mezzanine loan investments in 2023 and losses incurred on extinguishment of mortgages payable by joint venture equity investments in disposal group held for sale partially offset by net gains on repurchased CDOs.
+Added: The net increase in other income in 2024 is primarily due to gains recognized on the sales of both certain multi-family properties and our membership interests in consolidated joint venture equity investments.
The following tables present the components of general, administrative and portfolio operating expenses for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
6 unchanged sentences
Total general and administrative expenses $ 48,672 $ 49,565 $ (893)
−Removed: The decrease in general and administrative expenses in 2023 is primarily related to a net reduction in compensation expense, specifically decreased stock based compensation due to forfeitures and a decrease in incentive bonus compensation.
+Added: The decrease in general and administrative expenses in 2024 is primarily related to decreases in salary and stock compensation expenses, partially offset by increases in legal and tax advisory fees.
For the Years Ended December 31,
1 unchanged sentence
Portfolio operating expenses $ 30,688 $ 23,952 $ 6,736
−Removed: The decrease in portfolio operating expenses in 2023 can be attributed primarily to decreased residential loan purchase activity and decreased net servicing fees due to residential loan portfolio runoff.
+Added: The increase in portfolio operating expenses in 2024 is primarily related to the growth in our residential loan portfolio as well as an increase in expenses related to our non-performing residential loan portfolio..
+Added: For the Years Ended December 31,
+Added: 2024 2023 $ Change
+Added: Securitization transaction costs
+Added: $ 9,855 $ — $ 9,855
+Added: Senior unsecured notes transaction costs
+Added: 2,480 — 2,480
+Added: Total debt issuance costs
+Added: $ 12,335 $ — $ 12,335
+Added: We elected the fair value option with respect to CDOs and senior unsecured notes issued by the Company after January 1, 2024.
+Added: Accordingly, costs associated with the issuance of debt subject to the fair value election are expensed as they are incurred and are included in debt issuance costs i n 2024.
Comprehensive Loss
4 unchanged sentences
$ (103,785) $ (90,035) $ (13,750)
−Removed: OTHER COMPREHENSIVE INCOME (LOSS)
−Removed: Increase (decrease) in fair value of available for sale securities
+Added: OTHER COMPREHENSIVE INCOME
+Added: Increase in fair value of available for sale securities
Non-Agency RMBS — 144 (144)
2 unchanged sentences
4 1,822 (1,818)
−Removed: TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
+Added: TOTAL OTHER COMPREHENSIVE INCOME
4 1,966 (1,962)
1 unchanged sentence
$ (103,781) $ (88,069) $ (15,712)
−Removed: The changes in other comprehensive income (loss) ("OCI") in 2023 can be attributed primarily to an increase in the fair value of our investment securities, where the fair value option was not elected, as a result of credit spread tightening in 2023.
−Removed: Additionally, previously recognized net unrealized losses reported in OCI were reclassified to net realized losses in relation to the sale of certain investment securities during the year ended December 31, 2023.
−Removed: Beginning in the fourth quarter of 2019, the Company’s newly purchased investment securities are presented at fair value as a result of a fair value election made at the time of acquisition pursuant to ASC 825, Financial Instruments (“ASC 825”).
−Removed: The fair value option was elected for these investment securities to provide stockholders and others who rely on our financial statements with a more complete and accurate understanding of our economic performance.
+Added: Beginning in the fourth quarter of 2019, the Company’s newly purchased investment securities are presented at fair value as a result of a fair value election made at the time of acquisition.
Changes in the market values of investment securities where the Company elected the fair value option are reflected in earnings instead of in OCI.
−Removed: As of December 31, 2023 , the majority of the Company's investment securities are accounted for using the fair value option.
+Added: As of December 31, 2024 , all of the Company's investment securities are accounted for using the fair value option.
Analysis of Changes in GAAP Book Value
6 unchanged sentences
(3,493) (587)
−Removed: Preferred stock repurchases
Balance after share activity 1,028,077 90,575 11.35
7 unchanged sentences
(2) Includes amortization of stock based compensation.
−Removed: (3) The net increase relates to the reclassification of unrealized losses to net loss in relation to the sale of investment securities and unrealized gains on our investment securities resulting from changes in pricing.
+Added: (3) The net increase relates to the reclassification of unrealized loss to net loss during the period.
The following table analyzes the changes in GAAP book value of our common stock for the year ended December 31, 2023 (amounts in thousands, except per share):
3 unchanged sentences
Common stock issuance, net (2)
−Removed: Preferred stock issuance, net 130 —
Common stock repurchases
(8,615) (938)
+Added: Preferred stock repurchases
Balance after share activity 1,210,410 90,675 13.35
Adjustment of redeemable non-controlling interest to estimated redemption value 14,175 0.16
−Removed: Costs associated with non-controlling interest contributions
Dividends and dividend equivalents declared (111,014) (1.23)
−Removed: Net change in accumulated other comprehensive income (loss):
+Added: Net change in accumulated other comprehensive loss:
Investment securities available for sale (3)
−Removed: (3,748) (0.04)
Net loss attributable to Company's common stockholders
3 unchanged sentences
(2) Includes amortization of stock based compensation.
−Removed: (3) The net decrease relates to unrealized losses on our investment securities resulting from a reduction in pricing.
+Added: (3) The net increase relates to the reclassification of unrealized losses to net loss in relation to the sale of investment securities and unrealized gains on our investment securities resulting from changes in pricing.
Non-GAAP Financial Measures
−Removed: In addition to the results presented in accordance with GAAP, this Annual Report on Form 10-K includes certain non-GAAP financial measures, including adjusted interest income, adjusted interest expense, adjusted net interest income, yield on average interest earning assets, average financing cost, net interest spread, undepreciated (loss) earnings and adjusted book value per common share.
+Added: In addition to the results presented in accordance with GAAP, this Annual Report on Form 10-K includes certain non-GAAP financial measures, including adjusted interest income, adjusted interest expense, adjusted net interest income (loss), yield on average interest earning assets, average financing cost, net interest spread, undepreciated loss and adjusted book value per common share.
Our management team believes that these non-GAAP financial measures, when considered with our GAAP financial statements, provide supplemental information useful for investors as it enables them to evaluate our current performance and trends using the metrics that management uses to operate our business.
2 unchanged sentences
Our GAAP financial results and the reconciliations of the non-GAAP financial measures included in this Annual Report on Form 10-K to the most directly comparable financial measures prepared in accordance with GAAP should be carefully evaluated.
−Removed: Adjusted Net Interest Income and Net Interest Spread
−Removed: Financial results for the Company during a given period include the net interest income earned on our investment portfolio of residential loans, RMBS, CMBS, ABS and preferred equity investments and mezzanine loans, where the risks and payment characteristics are equivalent to and accounted for as loans (collectively, our “interest earning assets”).
−Removed: Adjusted net interest income and net interest spread (both supplemental non-GAAP financial measures) are impacted by factors such as our cost of financing, including our hedging costs, and the interest rate that our investments bear.
−Removed: Furthermore, the amount of premium or discount paid on purchased investments and the prepayment rates on investments will impact adjusted net interest income as such factors will be amortized over the expected term of such investments.
+Added: Adjusted Net Interest Income (Loss) and Net Interest Spread
+Added: Financial results for the Company during a given period include the net interest income earned on our investment portfolio of residential loans, investment securities and preferred equity investments and mezzanine loans, where the risks and payment characteristics are equivalent to and accounted for as loans (collectively, our “interest earning assets”).
+Added: Adjusted net interest income (loss) and net interest spread (both supplemental non-GAAP financial measures) are impacted by factors such as our cost of financing, including our hedging costs, and the interest rate that our investments bear.
+Added: Furthermore, the amount of premium or discount paid on purchased investments and the prepayment rates on investments will impact adjusted net interest income (loss) as such factors will be amortized over the expected term of such investments.
We provide the following non-GAAP financial measures, in total and by investment category, for the respective periods:
1 unchanged sentence
• adjusted interest expense – calculated as our GAAP interest expense reduced by the interest expense recognized on Consolidated SLST CDOs and adjusted to include the net interest component of interest rate swaps,
−Removed: • adjusted net interest income – calculated by subtracting adjusted interest expense from adjusted interest income,
+Added: • adjusted net interest income (loss) – calculated by subtracting adjusted interest expense from adjusted interest income,
• yield on average interest earning assets – calculated as the quotient of our adjusted interest income and our average interest earning assets and excludes all Consolidated SLST assets other than those securities owned by the Company,
6 unchanged sentences
In addition to the foregoing, our management team uses these measures to assess, among other things, the performance of our interest earning assets in total and by asset, possible cash flows from our interest earning assets in total and by asset, our ability to finance or borrow against the asset and the terms of such financing and the composition of our portfolio of interest earning assets, including acquisition and disposition determi nations.
−Removed: Prior to the quarter ended December 31, 2022, we also reduced GAAP interest expense by the interest expense on mortgages payable on real estate.
−Removed: Commencing with the quarter ended December 31, 2022, we reclassified the interest expense on mortgages payable on real estate to expenses related to real estate on our consolidated statements of operations and, as such, it is no longer included in GAAP interest expense.
−Removed: Prior period disclosures have been conformed to the current period presentation.
−Removed: The following tables set forth certain information about our interest earning assets by category and their related adjusted interest income, adjusted interest expense, adjusted net interest income, yield on average interest earning assets, average financing cost and net interest spread for the years ended December 31, 2023, 2022 and 2021 , respectively (dollar amounts in thousands):
+Added: The following tables set forth certain information about our interest earning assets by category and their related adjusted interest income, adjusted interest expense, adjusted net interest income (loss), yield on average interest earning assets, average financing cost and net interest spread for the years ended December 31, 2024, 2023 and 2022 , respectively (dollar amounts in thousands):
Year Ended December 31, 2024
5 unchanged sentences
(237,399) — (22,620) (260,019)
−Removed: Adjusted Net Interest Income (1)
+Added: Adjusted Net Interest Income (Loss) (1)
$ 120,082 $ 10,755 $ (16,067) $ 114,770
16 unchanged sentences
(142,742) — (12,799) (155,541)
−Removed: Adjusted Net Interest Income (1)
+Added: Adjusted Net Interest Income (Loss) (1)
$ 77,643 $ 13,707 $ (12,737) $ 78,613
16 unchanged sentences
(94,664) (152) (9,458) (104,274)
−Removed: Adjusted Net Interest Income (1)
+Added: Adjusted Net Interest Income (Loss) (1)
$ 119,106 $ 13,347 $ (3,484) $ 128,969
13 unchanged sentences
Average Interest Earning Assets is calculated based on the daily average amortized cost for the respective periods.
−Removed: (4) Average Interest Bearing Liabilities for the respective periods include repurchase agreements, residential loan securitization CDOs, Convertible Notes, senior unsecured notes and subordinated debentures and exclude Consolidated SLST CDOs and mortgages payable on real estate as the Company does not directly incur interest expense on these liabilities that are consolidated for GAAP purposes.
+Added: (4) Average Interest Bearing Liabilities for the respective periods include repurchase agreements, residential loan securitization and non-Agency RMBS re-securitization CDOs, Convertible Notes, senior unsecured notes and subordinated debentures and exclude Consolidated SLST CDOs and mortgages payable on real estate as the Company does not directly incur interest expense on these liabilities that are consolidated for GAAP purposes.
Average Interest Bearing Liabilities is calculated based on the daily average outstanding balance for the respective periods.
5 unchanged sentences
Our GAAP interest expense includes interest expense recognized on the Consolidated SLST CDOs that permanently finance the residential loans in Consolidated SLST and are not owned by the Company.
−Removed: We calculate adjusted interest income by reducing our GAAP interest income by the interest expense recognized on the Consolidated SLST CDOs and adjusted interest expense by excluding, among other things, the interest expense recognized on the Consolidated SLST CDOs, thus only including the interest income earned by the SLST securities that are actually owned by the Company in adjusted net interest income.
+Added: We calculate adjusted interest income by reducing our GAAP interest income by the interest expense recognized on the Consolidated SLST CDOs and adjusted interest expense by excluding, among other things, the interest expense recognized on the Consolidated SLST CDOs, thus only including the interest income earned by the SLST securities that are actually owned by the Company in adjusted net interest income (loss).
+Added: Our adjusted net interest income increased in 2024 as compared to the prior year.
+Added: Adjusted interest income increased by approximately $140.6 million primarily due to 1) an increase in interest earning assets driven by increased investment in Agency RMBS and 2) an increase in yield on residential loans due to continued investment in business purpose loans.
+Added: Adjusted interest expense increased by approximately $104.5 million as a result of increased financing obtained through repurchase agreements and securitizations as well as the issuance of the 9.125% Senior Notes due 2029 to fund investment activity .
+Added: Net interest spread increased during 2024, primarily due to an increase in yield on Average Interest Earning Assets resulting from our continued investment in higher yielding business purpose loans.
+Added: The increase in net spread was also the result of a decrease in the cost of financing due to the benefit of our in-the-money interest rate swaps.
Our adjusted net interest income decreased in 2023 as compared to the prior year.
3 unchanged sentences
The previously described increase in cost of financing combined with the decrease in yield to reduce net interest spread in 2023.
−Removed: Our adjusted net interest income remained relatively flat in 2022 as compared to the prior year.
−Removed: Adjusted interest expense increased as a result of increased borrowings pursuant to repurchase agreements and securitization financings and an increase in the cost of financing due to base interest rate movements.
−Removed: Our average interest earning assets also increased in 2022, primarily due to additional investment in higher-yielding business purpose loans, which partially offset the increases in repurchase agreement financing obtained on residential loans and investment securities, securitization financings related to residential loans and the associated increased financing costs.
−Removed: Multi-family adjusted net interest income decreased by approximately $6.6 million in 2022 primarily as a result of multi-family loan redemptions that moved multi-family average interest earning assets lower, while a reduction in corporate/other adjusted interest expense resulting from redemption of our Convertible Notes (defined below) in the first quarter of 2022 caused corporate/other adjusted net interest income to increase by approximately $7.0 million.
−Removed: Net interest spread increased during 2022, primarily due to an increase in yield on average interest earning assets resulting from our continued investment in higher-yielding business purpose loans.
−Removed: The increase was partially offset by an increase in the cost of financing due to base interest rate movements in 2022.
−Removed: A reconciliation of GAAP interest income to adjusted interest income, GAAP interest expense to adjusted interest expense and GAAP total net interest income to adjusted net interest income for the years ended December 31, 2023, 2022 and 2021, respectively, is presented below (dollar amounts in thousands):
+Added: A reconciliation of GAAP interest income to adjusted interest income, GAAP interest expense to adjusted interest expense and GAAP total net interest income (loss) to adjusted net interest income (loss) for the years ended December 31, 2024, 2023 and 2022, respectively, is presented below (dollar amounts in thousands):
Years Ended December 31,
4 unchanged sentences
GAAP interest expense (290,483) — (26,942) (317,425) (176,890) — (15,244) (192,134) (119,809) (152) (9,458) (129,419)
−Removed: GAAP total net interest income $ 68,001 $ 13,707 $ (15,182) $ 66,526 $ 119,106 $ 13,347 $ (3,484) $ 128,969 $ 118,144 $ 19,900 $ (10,462) $ 127,582
+Added: GAAP total net interest income (loss)
+Added: $ 93,489 $ 10,755 $ (20,389) $ 83,855 $ 68,001 $ 13,707 $ (15,182) $ 66,526 $ 119,106 $ 13,347 $ (3,484) $ 128,969
GAAP interest income $ 383,972 $ 10,755 $ 6,553 $ 401,280 $ 244,891 $ 13,707 $ 62 $ 258,660 $ 238,915 $ 13,499 $ 5,974 $ 258,388
7 unchanged sentences
Adjusted interest expense $ (237,399) $ — $ (22,620) $ (260,019) $ (142,742) $ — $ (12,799) $ (155,541) $ (94,664) $ (152) $ (9,458) $ (104,274)
−Removed: Adjusted net interest income (1)
+Added: Adjusted net interest income (loss) (1)
$ 120,082 $ 10,755 $ (16,067) $ 114,770 $ 77,643 $ 13,707 $ (12,737) $ 78,613 $ 119,106 $ 13,347 $ (3,484) $ 128,969
−Removed: (1) Adjusted net interest income is calculated by subtracting adjusted interest expense from adjusted interest income.
−Removed: Undepreciated (Loss) Earnings
−Removed: Undepreciated (loss) earnings is a supplemental non-GAAP financial measure defined as GAAP net (loss) income attributable to Company's common stockholders excluding the Company's share in depreciation expense and lease intangible amortization expense related to operating real estate, net.
−Removed: By excluding these non-cash adjustments from our operating results, we believe that the presentation of undepreciated (loss) earnings provides a consistent measure of our operating performance and useful information to investors to evaluate the effective net return on our portfolio.
−Removed: In addition, we believe that presenting undepreciated (loss) earnings enables our investors to measure, evaluate, and compare our operating performance to that of our peers.
−Removed: A reconciliation of net (loss) income attributable to Company's common stockholders to undepreciated (loss) earnings for the years ended December 31, 2023, 2022 and 2021, respectively, is presented below (amounts in thousands, except per share data).
+Added: (1) Adjusted net interest income (loss) is calculated by subtracting adjusted interest expense from adjusted interest income.
+Added: Undepreciated Loss
+Added: Undepreciated loss is a supplemental non-GAAP financial measure defined as GAAP net loss attributable to Company's common stockholders excluding the Company's share in depreciation expense and lease intangible amortization expense, if any, related to operating real estate, net for which an impairment has not been recognized.
+Added: By excluding these non-cash adjustments from our operating results, we believe that the presentation of undepreciated loss provides a consistent measure of our operating performance and useful information to investors to evaluate the effective net return on our portfolio.
+Added: In addition, we believe that presenting undepreciated loss enables our investors to measure, evaluate, and compare our operating performance to that of our peers.
+Added: A reconciliation of net loss attributable to Company's common stockholders to undepreciated loss for the years ended December 31, 2024, 2023 and 2022, respectively, is presented below (amounts in thousands, except per share data).
For the Years Ended December 31,
2024 2023 2022
−Removed: Net (loss) income attributable to Company's common stockholders $ (90,035) $ (340,577) $ 144,176
+Added: Net loss attributable to Company's common stockholders
+Added: $ (103,785) $ (90,035) $ (340,577)
Depreciation expense on operating real estate 12,026 8,714 28,916
Amortization of lease intangibles related to operating real estate — — 50,083
−Removed: Undepreciated (loss) earnings $ (81,321) $ (261,578) $ 159,881
+Added: Undepreciated loss
+Added: $ (91,759) $ (81,321) $ (261,578)
Weighted average shares outstanding - basic 90,815 91,042 94,322
−Removed: Undepreciated (loss) earnings per common share $ (0.89) $ (2.77) $ 1.69
+Added: Undepreciated loss per common share
+Added: $ (1.01) $ (0.89) $ (2.77)
Adjusted Book Value Per Common Share
−Removed: Previously, we presented undepreciated book value per common share as a non-GAAP financial measure.
−Removed: Commencing with the quarter ended December 31, 2022, we discontinued disclosure of undepreciated book value per common share and instead present adjusted book value per common share, also a non-GAAP financial measure.
−Removed: When presented in prior periods, undepreciated book value was calculated by excluding from GAAP book value the Company's share of cumulative depreciation and lease intangible amortization expenses related to real estate held at the end of the period.
−Removed: Since we began disclosing undepreciated book value, we identified additional items as materially affecting our book value and believe they should also be incorporated in order to provide a more useful non-GAAP measure for investors to evaluate our current performance and trends and facilitate the comparison of our financial performance and adjusted book value per common share to that of our peers.
−Removed: Accordingly, we calculate adjusted book value per common share by making the following adjustments to GAAP book value:
−Removed: (i) exclude the Company's share of cumulative depreciation and lease intangible amortization expenses related to real estate held at the end of the period for which an impairment has not been recognized, (ii) exclude the cumulative adjustment of redeemable non-controlling interests to estimated redemption value and (iii) adjust our liabilities that finance our investment portfolio to fair value.
+Added: Adjusted book value per common share is a supplemental non-GAAP financial measure calculated by making the following adjustments to GAAP book value:
+Added: (i) exclude the Company's share of cumulative depreciation and lease intangible amortization expenses related to real estate held at the end of the period for which an impairment has not been recognized, (ii) exclude the cumulative adjustment of redeemable non-controlling interests to estimated redemption value and (iii) adjust our amortized cost liabilities that finance our investment portfolio to fair value.
Our rental property portfolio includes fee simple interests in single-family rental homes and joint venture equity interests in multi-family properties owned by Consolidated Real Estate VIEs.
6 unchanged sentences
The substantial majority of our remaining assets are financial or similar instruments that are carried at fair value in accordance with the fair value option in our consolidated financial statements.
−Removed: However, unlike our use of the fair value option for the assets in our investment portfolio, the CDOs issued by our residential loan securitizations, senior unsecured notes and subordinated debentures that finance our investment portfolio assets are carried at amortized cost in our consolidated financial statements.
+Added: However, unlike our use of the fair value option for the assets in our investment portfolio, certain CDOs issued by our residential loan securitizations, certain senior unsecured notes and subordinated debentures that finance our investment portfolio assets are carried at amortized cost in our consolidated financial statements.
By adjusting these financing instruments to fair value, adjusted book value reflects the Company's net equity in investments on a comparable fair value basis.
−Removed: We believe that the presentation of adjusted book value per common share provides a more useful measure for investors and us than undepreciated book value as it provides a more consistent measure of our value, allows management to effectively consider our financial position and facilitates the comparison of our financial performance to that of our peers.
+Added: We believe that the presentation of adjusted book value per common share provides a useful measure for investors and us as it provides a consistent measure of our value, allows management to effectively consider our financial position and facilitates the comparison of our financial performance to that of our peers.
A reconciliation of GAAP book value to adjusted book value and calculation of adjusted book value per common share as of December 31, 2024 and 2023, respectively, is presented below (amounts in thousands, except per share data).
6 unchanged sentences
Cumulative amortization of lease intangibles related to real estate (1)
−Removed: 14,897 59,844
Cumulative adjustment of redeemable non-controlling interest to estimated redemption value
14 unchanged sentences
We believe that the estimates, judgments and assumptions utilized in the preparation of our consolidated financial statements are prudent and reasonable.
−Removed: Although our estimates contemplate conditions as of December 31, 2023 and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect reported amounts of assets, liabilities and accumulated other comprehensive income (loss) at the date of the consolidated financial statements and the reported amounts of income, expenses and other comprehensive income (loss) during the periods presented.
+Added: Although our estimates contemplate conditions as of December 31, 2024 and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect reported amounts of assets, liabilities and accumulated other comprehensive loss at the date of the consolidated financial statements and the reported amounts of income, expenses and other comprehensive income (loss) during the periods presented.
Changes in the estimates and assumptions could have a material effect on these consolidated financial statements.
37 unchanged sentences
As of December 31, 2024 and 2023, we owned 100% of the first loss subordinated securities of Consolidated SLST.
−Removed: Consolidated SLST represents a Freddie Mac-sponsored residential mortgage loan securitization of which we own the first loss subordinated securities and certain IOs.
−Removed: We determined that Consolidated SLST was a VIE and that we are the primary beneficiary of Consolidated SLST.
+Added: Consolidated SLST represents Freddie Mac-sponsored residential mortgage loan securitizations of which we own the first loss subordinated securities and certain IOs.
+Added: We determined that the Freddie Mac-sponsored residential loan securitization trusts, which we collectively refer to as Consolidated SLST, are VIEs and that we are the primary beneficiary of Consolidated SLST.
As a result, we are required to consolidate Consolidated SLST’s underlying residential loans including their liabilities, income and expenses in our consolidated financial statements.
7 unchanged sentences
The Company considers the value of acquired in-place leases and utilizes an amortization period that is the average remaining term of the acquired leases.
−Removed: The estimation of fair value for purposes of allocating the purchase price of investments in real estate requires significant judgement based on the available sources.
+Added: The estimation of fair value for purposes of allocating the purchase price of investments in real estate requires significant judgment based on the available sources.
The allocation may significantly impact the carrying value of intangible assets and liabilities consolidated as asset acquisitions, as well as the amount and timing of depreciation and amortization expense recognized in relation to these assets and liabilities over time.
10 unchanged sentences
As of December 31, 2024, we had approximately $9.2 billion of total assets.
−Removed: Included in this amount is approximately $757.8 million of assets held in Consolidated SLST and $1.5 billion of assets related to Consolidated Real Estate VIEs, both of which we consolidate in accordance with GAAP.
+Added: Included in this amount is approximately $969.7 million of assets held in Consolidated SLST and $620.6 million of assets related to Consolidated Real Estate VIEs, both of which we consolidate in accordance with GAAP.
As of December 31, 2023, we had approximately $7.4 billion of total assets.
10 unchanged sentences
The Company’s acquired residential loans, including performing, re-performing, and non-performing residential loans and business purpose loans, are presented at fair value on our consolidated balance sheets.
−Removed: Subsequent changes in fair value are reported in current period earnings and presented in unrealized gains (losses), net on the Company’s consolidated statements of operations.
+Added: Subsequent changes in fair value are reported in current period earnings and presented in unrealized (losses) gains, net on the Company’s consolidated statements of operations.
The following table details our acquired residential loans by strategy at December 31, 2024 and 2023, respectively (dollar amounts in thousands):
61 unchanged sentences
Total 100.0 % 100.0 %
−Removed: The Company exercised its option to purchase 50% of the issued and outstanding interests of an entity that originates residential loans during the year ended December 31, 2023.
−Removed: The Company purchased $80.8 million and $260.6 million of residential loans from the entity during the years ended December 31, 2023 and 2022, respectively.
+Added: As of December 31, 2024 and 2023, the Company had an investment in an entity that originates residential loans.
+Added: The Company purchased $307.8 million, $80.8 million and $260.6 million of residential loans from the entity during the years ended December 31, 2024, 2023 and 2022, respectively.
Consolidated SLST
−Removed: The Company owns first loss subordinated securities and certain IOs issued by a Freddie Mac-sponsored residential loan securitization.
−Removed: In accordance with GAAP, the Company has consolidated the underlying seasoned re-performing and non-performing residential loans of the securitization and the CDOs issued to permanently finance these residential loans, representing Consolidated SLST.
−Removed: Our investment in Consolidated SLST as of December 31, 2023 and 2022 was limited to the RMBS comprised of first loss subordinated securities and IOs issued by the securitization with an aggregate net carrying value of $157.2 million and $191.5 million, respectively.
+Added: The Company owns first loss subordinated securities and certain IOs issued by Freddie Mac-sponsored residential loan securitizations.
+Added: In accordance with GAAP, the Company has consolidated the underlying seasoned re-performing and non-performing residential loans of the securitizations and the CDOs issued to permanently finance these residential loans, representing Consolidated SLST.
+Added: During the year ended December 31, 2024, the Company invested in a subordinated security issued by a Freddie Mac-sponsored residential loan securitization, resulting in the initial consolidation of $285.1 million of residential loans and $275.2 million of CDOs in the VIE.
+Added: Our investment in Consolidated SLST as of December 31, 2024 and 2023 was limited to the RMBS comprised of first loss subordinated securities and IOs issued by the respective securitizations with an aggregate net carrying value of $148.5 million and $157.2 million, respectively.
For more information on investment securities held by the Company within Consolidated SLST, refer to "Investment Securities" section below.
26 unchanged sentences
California 11.7 % 10.7 %
−Removed: Florida 10.3 % 10.3 %
−Removed: New York 10.0 % 9.8 %
+Added: 10.8 % 10.0 %
New Jersey 6.8 % 7.6 %
Illinois 6.3 % 7.2 %
−Removed: Residential Loans and Single-Family Rental Property Financing
+Added: Residential Loans, Real Estate Owned and Single-Family Rental Property Financing
Repurchase Agreements
−Removed: As of December 31, 2023, the Company had repurchase agreements with five third-party financial institutions to fund the purchase of residential loans and single-family rental properties.
−Removed: As of December 31, 2023, the Company's only repurchase agreement exposure where the amount of residential loans and single-family rental properties at risk was in excess of 5% of the Company's stockholders’ equity was to Atlas SP at 7.93%.
+Added: As of December 31, 2024, the Company had repurchase agreements with six third-party financial institutions to fund the purchase of residential loans, real estate owned and single-family rental properties.
+Added: As of December 31, 2024, the Company's only repurchase agreement exposure where the amount of collateral at risk was in excess of 5% of the Company's stockholders’ equity was to Atlas SP at 6.08%.
The amount at risk is defined as the fair value of assets pledged as collateral to the financing arrangement in excess of the financing arrangement liability.
10 unchanged sentences
(2) Costs related to the repurchase agreements, which include commitment, underwriting, legal, accounting and other fees, are reflected as deferred charges.
−Removed: Such costs are presented as a deduction from the corresponding debt liability on the Company’s accompanying consolidated balance sheets and are amortized as an adjustment to interest expense using the effective interest method, or straight line-method, if the result is not materially different.
+Added: Such costs are presented as a deduction from the corresponding debt liability on the Company’s accompanying consolidated balance sheets and are amortized as an adjustment to interest expense over the term of the agreement using the effective interest method, or straight line-method, if the result is not materially different.
+Added: (3) Includes residential loans and real estate owned with an aggregate fair value of $524.6 million and single-family rental properties with a net carrying value of $134.6 million as of December 31, 2024.
Includes residential loans with an aggregate fair value of $658.3 million and single-family rental properties with a net carrying value of $146.7 million as of December 31, 2023.
−Removed: Includes residential loans with an aggregate fair value of $867.0 million as of December 31, 2022.
(4) The Company expects to roll outstanding amounts under these repurchase agreements into new repurchase agreements or other financings, or to repay outstanding amounts, prior to or at maturity.
19 unchanged sentences
The Company had a net investment in Consolidated SLST and other residential loan securitizations of $149.8 million and $215.2 million, respectively, as of December 31, 2024.
−Removed: The following table summarizes Consolidated SLST CDOs and CDOs issued by the Company's residential loan securitizations as of December 31, 2023 (dollar amounts in thousands):
+Added: As of December 31, 2023, the Company had a net investment in Consolidated SLST and other residential loan securitizations of $158.4 million and $315.2 million, respectively.
+Added: The following tables present a summary of Consolidated SLST CDOs and CDOs issued by the Company's residential loan securitizations as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):
+Added: December 31, 2024
Outstanding Face Amount Carrying Value Weighted Average Interest Rate (1) (2)
2 unchanged sentences
$ 867,004 $ 811,591 3.49 % 2059 - 2064
−Removed: Residential loan securitizations $ 1,292,015 $ 1,276,780 4.00 % 2026 - 2062
+Added: Residential loan securitizations at fair value (4)
+Added: $ 1,281,896 $ 1,253,332 5.72 % 2029 - 2069
+Added: Residential loan securitizations at amortized cost, net $ 850,547 $ 842,764 4.35 % 2027 - 2062
+Added: December 31, 2023
+Added: Outstanding Face Amount Carrying Value Weighted Average Interest Rate (1)
+Added: Stated Maturity (3)
+Added: Consolidated SLST (4)
+Added: $ 652,933 $ 593,737 2.75 % 2059
+Added: Residential loan securitizations at amortized cost, net $ 1,292,015 $ 1,276,780 4.00 % 2026 - 2062
(1) Weighted average interest rate is calculated using the outstanding face amount and stated interest rate of notes issued by the securitization and not owned by the Company.
−Removed: (2) The actual maturity of the Company's CDOs are primarily determined by the rate of principal prepayments on the assets of the issuing entity.
+Added: (2) Certain of the Company's CDOs contain interest rate step-up features whereby the interest rate increases if the outstanding notes are not redeemed by expected redemption dates, as defined in the respective governing documents.
+Added: As of December 31, 2024, CDOs with an aggregate outstanding face amount of $1.5 billion contain an interest rate step-up feature whereby the interest rate increases by either 1.00%, 1.50%, 2.00%, or 3.00% on defined dates ranging between 24 months and 48 months after issuance, if the notes are not redeemed before such dates.
+Added: (3) The actual maturity of the Company's CDOs is primarily determined by the rate of principal prepayments on the assets of the issuing entity.
The CDOs are also subject to redemption prior to the stated maturity according to the terms of the respective governing documents.
As a result, the actual maturity of the CDOs may occur earlier than the stated maturity.
−Removed: (3) The Company has elected the fair value option for CDOs issued by Consolidated SLST.
−Removed: As of December 31, 2023, $399.3 million of the Company's CDOs contained an initial interest rate step-up feature whereby the interest rate increases by 3.00% if the outstanding notes are not redeemed by expected redemption dates, as defined in the respective governing documents, ranging from August 2024 to July 2025.
−Removed: Also, as of December 31, 2023, $548.6 million of the Company CDOs contained potential additional interest rate step-ups of 1.00% if the outstanding notes are not redeemed by expected redemption dates ranging from October 2024 to July 2026.
−Removed: As of December 31, 2023, $523.2 million of the Company's CDOs contained a contractual interest rate step-up feature whereby the interest rate increases by either 1.00% or 2.00% at step-up dates, as defined in the respective governing documents, ranging from May 2024 to December 2026.
+Added: (4) The Company has elected the fair value option for CDOs issued by Consolidated SLST and residential loan securitizations completed after January 1, 2024 ( see Note 17 ) .
+Added: See Note 7 for unrealized gains or losses recognized on CDOs issued by Consolidated SLST.
+Added: For the year ended December 31, 2024, the Company recognized $1.3 million in net unrealized losses on residential loan securitizations at fair value, which is included in unrealized (losses) gains, net on the accompanying consolidated statements of operations.
+Added: (5) During the year ended December 31, 2024, the Company invested in a subordinated security issued by a Freddie Mac-sponsored residential loan securitization, resulting in the initial consolidation of $285.1 million of residential loans and $275.2 million of CDOs in the VIE.
Investment Securities
−Removed: At December 31, 2023, our investment securities portfolio included Agency RMBS and non-Agency RMBS, which are classified as investment securities available for sale.
+Added: At December 31, 2024, our investment securities portfolio included Agency RMBS, non-Agency RMBS and U.S.
+Added: Treasury securities, which are classified as investment securities available for sale.
Our investment securities also include first loss subordinated securities and certain IOs issued by Consolidated SLST.
At December 31, 2024, we had no investment securities in a single issuer or entity that had an aggregate book value in excess of 5% of our total assets.
−Removed: The increase in the carrying value of our investment securities as of December 31, 2023 as compared to December 31, 2022 is primarily due to purchases of Agency RMBS during the period partially offset by sales of non-Agency RMBS, CMBS and ABS during the period and a decrease in the fair value of our first loss subordinated securities that we own in Consolidated SLST.
+Added: The increase in the carrying value of our investment securities as of December 31, 2024 as compared to December 31, 2023 is primarily due to purchases of Agency RMBS, non-Agency RMBS and U.S.
+Added: Treasury securities during the period partially offset by a decrease in the fair value of a number of our investment securities.
The following tables summarize our investment securities portfolio as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):
7 unchanged sentences
131,817 130,119 285 (822) 129,582 5.47 % 5.40 % 124,096
−Removed: Interest-only
1,169,330 83,878 843 (16,551) 68,170 0.89 % 11.82 % 44,354
6 unchanged sentences
Total Non-Agency RMBS 400,305 66,203 6,098 (2,614) 69,687 2.01 % 14.02 % 33,240
+Added: Treasury securities
+Added: 652,792 657,659 — (35,614) 622,045 4.16 % 4.13 % 635,064
Total - AFS $ 5,297,827 $ 3,886,897 $ 18,959 $ (77,312) $ 3,828,544 4.04 % 5.98 % $ 3,499,229
11 unchanged sentences
Available for Sale (“AFS”)
−Removed: Non-Agency RMBS
$ 1,756,343 $ 1,761,138 $ 21,581 $ (1,829) $ 1,780,890 5.74 % 5.64 % $ 1,602,695
−Removed: 30,250 29,325 — (2,153) 27,172 4.77 % 5.58 % —
−Removed: 39,104 28,108 — (13,282) 14,826 9.38 % 8.37 % —
−Removed: 524,726 17,100 9,436 — 26,536 1.44 % 20.79 % —
−Removed: Total Non-Agency RMBS
+Added: Adjustable rate 149,052 147,460 1,741 — 149,201 5.48 % 5.35 % 137,084
1,139,828 52,623 6,813 (203) 59,233 0.76 % 14.81 % 31,657
+Added: Total Agency RMBS 3,045,223 1,961,221 30,135 (2,032) 1,989,324 4.34 % 5.79 % 1,771,436
+Added: Non-Agency RMBS
35 35 — (4) 31 3.65 % 3.60 % —
Subordinated 8,164 7,526 — (4,281) 3,245 4.61 % 7.39 % —
−Removed: 32,033 32,033 — (1,900) 30,133 6.14 % 6.13 % —
−Removed: 4 797 59 — 856 — 30.19 % —
−Removed: 4 797 59 — 856 — 30.19 % —
−Removed: $ 626,158 $ 107,404 $ 9,495 $ (17,340) $ 99,559 2.45 % 9.33 % $ —
+Added: IO 375,563 14,571 6,646 — 21,217 1.63 % 27.42 % —
+Added: Total Non-Agency RMBS 383,762 22,132 6,646 (4,285) 24,493 1.70 % 20.27 % —
+Added: Total - AFS $ 3,428,985 $ 1,983,353 $ 36,781 $ (6,317) $ 2,013,817 3.64 % 6.20 % $ 1,771,436
Consolidated SLST
1 unchanged sentence
Subordinated $ 238,017 $ 189,962 $ — $ (49,684) $ 140,278 4.44 % 4.01 % $ 55,881
−Removed: 149,873 21,528 — (546) 20,982 3.50 % 3.01 % —
+Added: IO 139,914 17,937 — (1,061) 16,876 3.50 % 7.43 % —
Total Non-Agency RMBS 377,931 207,899 — (50,745) 157,154 4.09 % 4.32 % 55,881
3 unchanged sentences
(2) Our weighted average yield was calculated by dividing our annualized interest income by our weighted average amortized cost for the respective periods.
+Added: (3) Outstanding repurchase agreements as of December 31, 2023 do not include $34.7 million of repurchase agreement financing for CDOs repurchased from our residential loan securitizations.
+Added: Repurchased CDOs are eliminated in consolidation in accordance with GAAP.
+Added: As of December 31, 2024, Agency RMBS with a fair value of $33.4 million were pledged as initial margin for outstanding interest rate swaps.
+Added: As of December 31, 2024, Consolidated SLST subordinated bonds with a fair value of $114.0 million were held in a non-Agency RMBS re-securitization (see “Investment Securities Financing—Collateralized Debt Obligations” below).
Investment Securities Financing
Repurchase Agreements
−Removed: As of December 31, 2023, the Company had $1.9 billion outstanding under repurchase agreements with third-party financial institutions to fund a portion of its investment securities available for sale, securities owned in Consolidated SLST and CDOs repurchased from our residential loan securitizations.
+Added: As of December 31, 2024, the Company had $3.5 billion outstanding under repurchase agreements with third-party financial institutions to fund a portion of its investment securities available for sale and certain securities owned in Consolidated SLST.
These repurchase agreements are short-term financings that bear interest rates typically based on a spread to SOFR and are secured by the investment securities which they finance.
3 unchanged sentences
The Company expects to roll outstanding amounts under its repurchase agreements into new repurchase agreements or other financings, or to repay outstanding amounts, prior to or at maturity.
−Removed: As of December 31, 2023, the Company's only repurchase agreement exposure where the amount of investment securities at risk was in excess of 5% of the Company's stockholders’ equity was to Bank of America at 5.34%.
+Added: As of December 31, 2024, the Company had no repurchase agreement exposure where the amount of investment securities at risk was in excess of 5% of the Company's stockholders’ equity.
+Added: As of December 31, 2024, the weighted average interest rate for repurchase agreements secured by investment securities was 4.84%.
The following table details the quarterly average balance, ending balance and maximum balance at any month-end during each quarter in 2024, 2023 and 2022 for our repurchase agreements secured by investment securities (dollar amounts in thousands):
14 unchanged sentences
March 31, 2022 116,766 144,852 144,852
+Added: Collateralized Debt Obligations
+Added: During the year ended December 31, 2024, the Company completed a re-securitization of its investment in certain subordinated securities issued by Consolidated SLST, which we refer to as our non-Agency RMBS re-securitization.
+Added: The Company engaged in the re-securitization transaction primarily for the purpose of obtaining non-recourse, longer-term financing on a portion of its investment in Consolidated SLST.
+Added: The Company remains economically exposed to the subordinated positions in the portion of Consolidated SLST transferred to the securitization and continues to consolidate Consolidated SLST.
+Added: The following table presents a summary of CDOs issued by our non-Agency RMBS re-securitization as of December 31, 2024:
+Added: December 31, 2024
+Added: Outstanding Face Amount Carrying Value Interest Rate (1)(2)
+Added: Stated Maturity (3)
+Added: Non-Agency RMBS re-securitization at fair value (4)
+Added: $ 70,867 $ 70,757 7.38 % 2064
+Added: (1) Interest rate is calculated using the outstanding face amount and stated interest rate of notes issued by the securitization and not owned by the Company.
+Added: (2) The Company's non-Agency RMBS re-securitization CDOs contain an interest rate step-up feature whereby the interest rate increases if the outstanding notes are not redeemed by an expected redemption date, as defined in the governing documents.
+Added: As of December 31, 2024, CDOs with an aggregate outstanding face amount of $70.9 million contain an interest rate step-up feature whereby the interest rate increases by 3.00% beginning July 2027, if the notes are not redeemed before such date.
+Added: (3) The actual maturity of the Company's CDOs is primarily determined by the rate of principal prepayments on the assets of the issuing entity.
+Added: The CDOs are also subject to redemption prior to the stated maturity according to the terms of the governing documents.
+Added: As a result, the actual maturity of the CDOs may occur earlier than the stated maturity.
+Added: (4) The Company has elected the fair value option for CDOs issued by its non-Agency RMBS re-securitization ( see Note 17 ) .
+Added: For the year ended December 31, 2024, the Company recognized $0.2 million in net unrealized losses on its non-Agency RMBS re-securitization, which are included in unrealized (losses) gains, net on the accompanying consolidated statements of operations.
Mezzanine Lending
8 unchanged sentences
The Company determined that it gained the power to direct the activities, and became primary beneficiary, of the VIE and consolidated the VIE into its consolidated financial statements.
−Removed: As of December 31, 2023, one preferred equity investment was greater than 90 days delinquent.
−Removed: This investment represents 2.2% of the total fair value of our Mezzanine Lending portfolio.
+Added: During the year ended December 31, 2024, the Company negotiated a short-term maturity extension on one preferred equity investment that included an increase in preferred return rate to a current market rate.
+Added: During the year ended December 31, 2024, the Company reduced the fair value of one defaulted preferred equity investment to zero as a result of developments with respect to the property, its financing and market conditions.
+Added: This investment represents 1.8% of the total investment amount of the Mezzanine Lending portfolio.
+Added: Also during the year ended December 31, 2024, the Company evaluated the hypothetical liquidation value of one preferred equity investment and its preferred equity investment in a Consolidated VIE and ceased further preferred return accruals.
+Added: These two investments represent 17.3% of the total investment amount of the Mezzanine Lending portfolio.
The following tables summarize our Mezzanine Lending portfolio as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):
14 unchanged sentences
Preferred equity investments 21 $ 200,034 $ 200,690 12.40 % 4.2
+Added: Preferred equity investment in Consolidated VIE (4)
+Added: 1 11,706 11,732 13.50 % 8.0
+Added: Total 22 $ 211,740 $ 212,422 12.46 % 4.4
(1) Preferred equity investments in the amounts of $86.2 million and $95.8 million are included in multi-family loans on the accompanying consolidated balance sheets as of December 31, 2024 and 2023, respectively.
3 unchanged sentences
(4) Represents the Company's preferred equity investment in a Consolidated VIE that owns a multi-family apartment community.
−Removed: A reconciliation of our preferred equity investment in the Consolidated VIE to our consolidated financial statements as of December 31, 2023 is shown below (dollar amounts in thousands):
+Added: A reconciliation of our preferred equity investment in the Consolidated VIE to our consolidated financial statements as of December 31, 2024 and 2023, respectively, is shown below (dollar amounts in thousands):
+Added: December 31, 2024 December 31, 2023
Cash and cash equivalents
+Added: $ 392 $ 1,300
Real estate, net
+Added: 53,508 54,439
Lease intangible, net (a)
2 unchanged sentences
Mortgage payable on real estate, net
+Added: 45,120 45,142
Other liabilities 1,823 2,403
10 unchanged sentences
Texas 6 49,619 26.6 % 12.4 % 84 % 1.08x
−Removed: Utah 1 21,970 10.3 % 12.0 % 68 % N/A
Arizona 1 15,201 8.2 % 14.0 % 80 % 1.84x
Tennessee 1 13,045 7.0 % 14.0 % 86 % 0.51x (4)
+Added: South Dakota 1 10,583 5.7 % 15.0 % 85 % 1.80x
+Added: South Carolina 1 9,645 5.2 % 13.0 % 75 % 1.47x
Other 6 34,301 18.3 % 11.7 % 83 % 1.30x
5 unchanged sentences
Texas 6 42,854 20.2 % 11.9 % 92 % 1.21x
−Removed: Alabama 2 33,827 13.9 % 12.3 % 67 % 2.23x
Utah 1 21,970 10.3 % 12.0 % 68 % N/A (5)
+Added: Arizona 1 17,811 8.4 % 14.0 % 85 % 0.45x (6)
Tennessee 1 14,525 6.8 % 11.0 % 90 % 1.27x
3 unchanged sentences
(2) Represents the weighted average debt service coverage ratio ("DSCR") of the underlying properties and excludes properties that are subject to a senior construction loan agreement.
+Added: (3) DSCR affected by non-recurring expenses during the year ended December 31, 2024.
+Added: (4) DSCR for this property affected by recent senior loan and Mezzanine Lending modifications.
(5) Not applicable as the underlying property is subject to a senior construction loan agreement.
−Removed: (4) DSCR for this property affected by low occupancy.
+Added: (6) DSCR for this property affected by low occupancy as of December 31, 2023.
Equity Investments in Multi-Family Entities
4 unchanged sentences
In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of the returned capital from such investments to its targeted assets.
−Removed: Accordingly, the Company determined that certain joint venture equity investments met the criteria to be classified as held for sale and transferred the assets and liabilities of the respective Consolidated VIEs and its unconsolidated multi-family joint venture equity investments to assets and liabilities of disposal group held for sale.
−Removed: In December 2023, certain of the joint venture equity investments in multi-family properties were determined to no longer meet held for sale criteria and either the assets and liabilities of the respective Consolidated VIEs or its equity investment in the joint venture entity were transferred to their respective categories or equity investments, at fair value, respectively, on the accompanying consolidated balance sheets.
+Added: Accordingly, the Company determined that certain joint venture equity investments met the criteria to be classified as held for sale and the assets and liabilities of the respective Consolidated VIEs are included in assets and liabilities of disposal group held for sale on the accompanying consolidated balance sheets as of December 31, 2024 and 2023.
See Note 9 for additional information.
4 unchanged sentences
Real estate, net
+Added: 481,161 979,934
Lease intangible, net (1)
17 unchanged sentences
Net equity in preferred equity investment in Consolidated VIE (5)
+Added: (16,967) (11,706)
Net equity investment in Consolidated JVs and disposal group held for sale
4 unchanged sentences
(4) The Company's net equity investment as of December 31, 2024 consists of $151.2 million of net equity investments in consolidated multi-family properties (including its preferred equity investment in a Consolidated VIE) and $19.5 million of net equity investments in disposal group held for sale.
−Removed: The Company's net equity investment as of December 31, 2022 consists of $144.7 million of net equity investments in consolidated multi-family properties and $244.0 million of net equity investments in disposal group held for sale.
+Added: The Company's net equity investment as of December 31, 2023 consists of $211.2 million of net equity investments in consolidated multi-family properties (including its preferred equity investment in a Consolidated VIE) and $36.8 million of net equity investments in disposal group held for sale.
(5) See "Mezzanine Lending" above for description of preferred equity investment in Consolidated VIE.
Unconsolidated Multi-Family Joint Venture Equity Investments
−Removed: The Company has invested in two additional joint venture entities that own multi-family apartment communities.
+Added: The Company owns equity interests in two additional joint venture entities that own multi-family apartment communities.
The Company determined that these joint venture entities are VIEs but that the Company is not the primary beneficiary, resulting in the Company recording its equity investments at fair value.
1 unchanged sentence
We also will participate in allocation of excess cash upon sale of the multi-family real estate assets.
−Removed: The Company's investment in the amount of $9.0 million was included in assets of disposal group held for sale as of December 31, 2022.
−Removed: The following table summarizes our unconsolidated multi-family joint venture equity investments as of December 31, 2023 (dollar amounts in thousands):
+Added: The following tables summarize our unconsolidated multi-family joint venture equity investments as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):
+Added: December 31, 2024
State Property Count Ownership Interest Fair Value
Texas 2 70% $ 1,338
+Added: December 31, 2023
+Added: State Property Count Ownership Interest Fair Value
+Added: Texas 2 70% $ 5,720
Joint Venture Equity Investments in Consolidated Multi-Family Properties not in Disposal Group Held for Sale
−Removed: As of December 31, 2023, the Company's net joint venture equity investments in consolidated multi-family properties not in disposal group held for sale of $199.5 million consists of nine joint venture equity investments in multi-family properties and a combined preferred equity and common equity investment in one joint venture entity that do not meet the criteria to be classified as held for sale.
−Removed: One of the joint venture entities has third-party investors that have the ability to sell their ownership interests to us, at their election once a year subject to annual minimum and maximum amount limitations, and we are obligated to purchase, subject to certain conditions, such interests for cash, representing redeemable non-controlling interests of approximately $28.1 million.
+Added: As of December 31, 2024, the Company's net joint venture equity investments in consolidated multi-family properties not in disposal group held for sale of $134.2 million consists of a combined preferred equity and common equity investment in one joint venture entity that does not meet the criteria to be classified as disposal group held for sale.
+Added: The joint venture entity has third-party investors that have the ability to sell their ownership interests to us, at their election once a year subject to annual minimum and maximum amount limitations, and we are obligated to purchase, subject to certain conditions, such interests for cash, representing redeemable non-controlling interests of approximately $12.4 million as of December 31, 2024.
The geographic concentrations in joint venture equity investments in consolidated multi-family properties exceeding 5% of our joint venture equity investments in consolidated multi-family properties not in disposal group held for sale as of December 31, 2024 and 2023, respectively, are shown below (dollar amounts in thousands):
2 unchanged sentences
Percentage of Total Net Equity Investment
+Added: $ 50,505 54.7 %
Florida 1 50%
−Removed: Texas 5 70% $ 49,727 29.4 %
−Removed: Tennessee 2 65% - 70% $ 18,131 10.7 %
−Removed: South Carolina 2 67% - 70% $ 13,561 8.0 %
−Removed: Alabama 2 70% - 80% $ 11,737 6.9 %
+Added: $ 15,868 17.2 %
Kentucky 1 70%
+Added: $ 11,310 12.2 %
+Added: Alabama 1 70%
+Added: $ 7,106 7.7 %
+Added: Tennessee 1 65%
+Added: $ 5,557 6.0 %
December 31, 2023
1 unchanged sentence
Percentage of Total Net Equity Investment
−Removed: Texas 5 69% $ 40,825 40.7 %
−Removed: Tennessee 2 65% - 69% $ 15,959 15.9 %
Florida 5 50% - 95%
+Added: $ 56,607 33.4 %
+Added: $ 49,727 29.4 %
+Added: Tennessee 2 65% - 70%
+Added: $ 18,131 10.7 %
South Carolina 2 67% - 70%
−Removed: Kentucky 1 69% $ 9,257 9.2 %
+Added: $ 13,561 8.0 %
Alabama 2 70% - 80%
+Added: $ 11,737 6.9 %
+Added: Kentucky 1 70%
+Added: $ 10,979 6.5 %
(1) Represents our joint venture equity investment in consolidated multi-family properties net of redeemable non-controlling interest at its estimated redemption value.
2 unchanged sentences
Market Property Count Occupancy % Units Rent per Unit (1)
−Removed: Apopka, FL 1 88.8 % 240 $ 1,718 77.5 %
−Removed: Beaufort, SC 1 92.7 % 248 1,538 71.5 %
−Removed: Birmingham, AL 1 95.1 % 429 1,329 75.9 %
−Removed: Brandon, FL 1 84.2 % 285 1,624 77.8 %
Collierville, TN 1 93.2 % 324 $ 1,545 84.4 %
−Removed: Columbia, SC 1 96.4 % 276 1,172 83.1 %
Dallas, TX 2 90.5 % 401 1,908 88.3 %
2 unchanged sentences
Louisville, KY 1 93.7 % 300 1,491 84.1 %
−Removed: Memphis, TN (3)
−Removed: 242 1,106 80.0 %
Montgomery, AL 1 94.8 % 252 1,063 71.5 %
−Removed: Oklahoma City, OK 2 89.1 % 957 775 76.0 %
−Removed: Orlando, FL 1 87.7 % 220 1,588 76.4 %
San Antonio, TX 2 89.2 % 684 1,282 82.4 %
−Removed: Petersburg, FL 1 96.6 % 326 2,454 71.2 %
−Removed: Tampa, FL 1 83.5 % 400 1,740 77.6 %
+Added: St Petersburg, FL 1 99.1 % 326 2,543 77.5 %
Webster, TX 1 92.9 % 366 967 78.1 %
1 unchanged sentence
(1) Represents average monthly rent per unit.
−Removed: (2) Represents the weighted average LTV of the underlying properties utilizing combined senior loan and preferred equity balances and the most recent appraisal.
−Removed: (3) Property incurred a loss due to fire, affecting occupancy until units are returned to service.
+Added: (2) Represents the weighted average LTV of the underlying properties utilizing combined maximum senior committed mortgage amount and preferred equity balances, if any, and the combined origination appraisal and capital expenditure budget or the most recent appraisal, as applicable.
Property Data for Joint Venture Equity Investments in Multi-Family Properties in Disposal Group Held for Sale
1 unchanged sentence
Market Property Count Occupancy % Units Rent per Unit (1)
−Removed: Birmingham, AL 1 92.0 % 264 $ 1,694 66.7 %
−Removed: Brandon, FL 1 78.7 % 982 1,497 79.6 %
Fort Myers, FL 1 91.7 % 338 $ 1,560 77.3 %
−Removed: Kissimmee, FL 1 94.1 % 320 1,730 77.7 %
−Removed: Pensacola, FL 1 93.3 % 240 1,421 76.2 %
+Added: Tampa, FL 1 92.3 % 400 1,581 77.6 %
Total Count/Average 2 92.0 % 738 $ 1,571 77.5 %
1 unchanged sentence
(2) Represents the weighted average LTV of the underlying properties utilizing maximum senior committed mortgage amount and combined origination appraisal and capital expenditure budget.
−Removed: Equity Investments in Entities that Originate Residential Loans
−Removed: As of December 31, 2023, the Company had an investment in an entity that originates residential loans.
+Added: Equity Investment in Entity that Originates Residential Loans
+Added: As of December 31, 2024 and 2023, the Company had an investment in an entity that originates residential loans.
+Added: The Company accounts for this investment using the equity method and has elected the fair value option.
The following table summarizes our ownership interest in the entity that originates residential loans as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):
3 unchanged sentences
Residential Loans 50% $ 38,718 50% $ 37,154
−Removed: Total $ 37,154 $ 27,500
−Removed: (1) As of December 31, 2022, the Company had the option to purchase 50% of the issued and outstanding interests of this entity.
−Removed: In February 2023, the Company exercised its option in full related to this investment.
−Removed: In the year ended December 31, 2023, we contributed approximately $9.0 million to this entity.
−Removed: The Company accounts for this investment using the equity method and has elected the fair value option.
Derivative Assets and Liabilities
1 unchanged sentence
The Company enters into derivative financial instruments in connection with its risk management activities.
−Removed: These derivative instruments may include interest rate swaps, interest rate caps, futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures.
+Added: These derivative instruments may include interest rate swaps, interest rate caps, credit default swaps, futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures.
The Company may also pursue forward-settling purchases or sales of Agency RMBS where the underlying pools of mortgage loans are “To-Be-Announced,” or TBAs, purchase options on U.S.
1 unchanged sentence
The Company elected not to apply hedge accounting for its derivative instruments.
−Removed: The Company and the entities that own multi-family properties in which the Company owns joint venture equity investments are required by lenders on certain repurchase agreement financing and variable-rate mortgages payable on real estate to enter into interest rate cap contracts.
+Added: The Company and Consolidated Real Estate VIEs may be required by lenders on certain repurchase agreement financing and variable-rate mortgages payable on real estate to enter into interest rate cap contracts.
These interest rate cap contracts are with a counterparty that involve the receipt of variable-rate amounts from the counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.
3 unchanged sentences
Notwithstanding the foregoing, in order to manage its position with regard to its liabilities, the Company may also enter into interest rate swaps which involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments, based on SOFR, over the life of the interest rate swap without exchange of the underlying notional amount.
−Removed: The variable rate we pay or receive under our swap agreements has the effect of offsetting the repricing characteristics and cash flows of the Company's financing arrangements.
−Removed: The Company may purchase equity index put options that gives the Company the right to sell or buy the underlying index at a specified strike price, as well as credit default swap index options that allow the Company to enter into a fixed rate payor position in the underlying credit default swap index at the agreed strike level.
+Added: The variable rate the Company pays or receives under its swap agreements has the effect of offsetting the repricing characteristics and cash flows of the Company's financing arrangements.
+Added: The Company has U.S.
+Added: Treasury future contracts that obligate the Company to sell or buy U.S.
+Added: Treasury securities for future delivery.
+Added: The Company has purchased credit default swap index contracts under which a counterparty, in exchange for a premium, agrees to compensate the Company for the financial loss associated with the occurrence of a credit event in relation to a notional value of an index.
+Added: The Company may purchase equity index put options that give the Company the right to sell or buy the underlying index at a specified strike price.
+Added: The Company may also purchase credit default swap index options that allow the Company to enter into a fixed rate payor position in the underlying credit default swap index at the agreed-upon strike level.
The Company’s debt as of December 31, 2024 included senior unsecured notes and subordinated debentures.
−Removed: Senior Unsecured Notes
−Removed: As of December 31, 2023, the Company had $100.0 million aggregate principal amount of its 5.75% Senior Unsecured Notes (the "Senior Unsecured Notes") outstanding, due on April 30, 2026.
−Removed: The Senior Unsecured Notes were issued at par and carry deferred charges resulting in a total cost to the Company of approximately 6.64%.
−Removed: The Company's Senior Unsecured Notes contain various covenants including the maintenance of a minimum net asset value, ratio of unencumbered assets to unsecured indebtedness and senior debt service coverage ratio and limit the amount of leverage the Company may utilize and its ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with another person.
+Added: 2029 Senior Notes
+Added: On June 28, 2024, the Company completed the issuance of $60.0 million in aggregate principal amount of its 9.125% Senior Notes due 2029 (the "2029 Senior Notes") in an underwritten public offering.
+Added: The 2029 Senior Notes were issued at par, bear interest at a rate equal to 9.125% per year and mature on July 1, 2029, unless earlier redeemed.
+Added: 2026 Senior Notes
+Added: As of December 31, 2024, the Company had $100.0 million aggregate principal amount of its 5.75% Senior Notes due 2026 (the "2026 Senior Notes") outstanding.
+Added: The 2026 Senior Notes were issued at par and carry deferred charges resulting in a total cost to the Company of approximately 6.64%.
+Added: The Company's 2026 Senior Notes, which mature on April 30, 2026, contain various covenants including the maintenance of a minimum net asset value, ratio of unencumbered assets to unsecured indebtedness and senior debt service coverage ratio and limit the amount of leverage the Company may utilize and its ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with another person.
Subordinated Debentures
19 unchanged sentences
In addition, we may satisfy our short-term and/or long-term liquidity needs through the sale of assets from our investment portfolio, securities offerings or the securitization or collateralized financing of our assets.
−Removed: Since late March 2020, we have focused on strengthening our balance sheet and long-term capital preservation primarily by focusing on assets and markets that provide compelling risk-adjusted returns through either an unlevered strategy or through residential loan repurchase agreement financing with terms of one year or more or sustainable non-mark-to-market financing arrangements, including securitizations and non-mark-to-market repurchase agreement financing.
−Removed: During the year ended December 31, 2023, we began expanding our holdings of Agency RMBS, which is more liquid than many if not all of the investments in our portfolio of credit investments, and have utilized mark-to-market repurchase agreement financing to fund that expansion.
−Removed: As of December 31, 2023, the Company’s portfolio recourse leverage ratio of 1.5x, remains low relative to historical levels.
−Removed: As of December 31, 2023, only 58% of our debt, excluding mortgages payable on real estate and Consolidated SLST CDOs, is subject to mark-to-market margin calls, with 45% collateralized by Agency RMBS and 13% collateralized by residential credit assets.
+Added: We continue to seek out assets and markets that provide compelling risk-adjusted returns through residential loan repurchase agreement financing with terms of one year or more or sustainable non-mark-to-market financing arrangements, including securitizations and non-mark-to-market repurchase agreement financing.
+Added: Beginning in 2023 and through the year ended December 31, 2024, we have been expanding our holdings of Agency RMBS, which is more liquid than many if not all of the investments in our portfolio of credit investments.
+Added: To expand our Agency RMBS portfolio, we have utilized mark-to-market repurchase agreement financing with terms of 30 days to 90 days.
+Added: As of December 31, 2024, the Company’s portfolio recourse leverage ratio of 2.9x, remains within our target range.
+Added: As of December 31, 2024, 62% of our debt, excluding mortgages payable on real estate and Consolidated SLST CDOs, is subject to mark-to-market margin calls, with 44% collateralized by Agency RMBS, 10% collateralized by U.S.
+Added: Treasury securities and 8% collateralized by residential credit assets.
The remaining 38% has no exposure to collateral repricing by our counterparties.
−Removed: We expect to continue to opportunistically dispose of assets from our portfolio, including our joint venture equity investments, and generate higher portfolio turnover in order to pursue investments across the residential housing sector with a focus on acquiring assets with less price sensitivity to credit deterioration, like Agency RMBS.
+Added: We expect to continue to opportunistically dispose of assets from our portfolio and generate higher portfolio turnover in order to pursue investments across the residential housing sector with a focus on acquiring assets with less price sensitivity to credit deterioration that are capable of expanding our interest income, like Agency RMBS, and maintaining low duration credit exposure by purchasing high-coupon business purpose loans.
We also intend to maintain a solid position in unrestricted cash and remain committed to prudently managing our liabilities.
−Removed: At December 31, 2023, we had $171.5 million of available cash and cash equivalents (excluding cash and cash equivalents held by consolidated multi-family properties not in disposal group held for sale), $170.6 million of unencumbered investment securities (including the securities we own in Consolidated SLST and CDOs repurchased from our residential loan securitizations) and $169.2 million of unencumbered residential loans.
+Added: At December 31, 2024, we had $163.3 million of available cash and cash equivalents (excluding cash and cash equivalents held by Consolidated Real Estate VIEs), $170.2 million of unencumbered investment securities (including the securities we own in Consolidated SLST and CDOs repurchased from our residential loan securitizations) and $128.7 million of unencumbered residential loans.
We historically have endeavored to fund our investments and operations through a balanced and diverse funding mix, including proceeds from the issuance of common and preferred equity and debt securities, short-term and longer-term repurchase agreements and CDOs.
1 unchanged sentence
The type and terms of the ultimate financing used by us depends on the asset being financed and the financing available at the time of the financing.
−Removed: As a result of the severe market dislocations related to the COVID-19 pandemic and, more specifically, the unprecedented illiquidity in our short-term repurchase agreement financing and MBS markets during that time, we have placed a greater emphasis on procuring longer-termed and/or more committed financing arrangements for our credit investments, such as securitizations, term financings and corporate debt securities that provide less or no exposure to fluctuations in the collateral repricing determinations of financing counterparties or rapid liquidity reductions in repurchase agreement financing markets.
−Removed: Although we expect our leverage to move higher as we expand our holding of Agency RMBS with the aid of short-term mark-to-market repurchase agreement financing, we intend to continue to focus on procuring longer-term and non-mark-to-market financing arrangements for certain parts of our credit portfolio.
+Added: We have placed a greater emphasis on procuring, where appropriate, longer-termed and/or more committed financing arrangements for our credit investments, such as securitizations, term financings and corporate debt securities that provide less or no exposure to fluctuations in the collateral repricing determinations of financing counterparties or rapid liquidity reductions in repurchase agreement financing markets.
+Added: Although we expect our leverage to continue to move higher as we access additional liquidity and grow our investment portfolio further, we intend to continue to focus on procuring longer-term and non-mark-to-market financing arrangements for certain parts of our credit portfolio.
Based on current market conditions, our current investment portfolio, new investment initiatives, expectations to dispose of assets from time to time on terms favorable to us, leverage ratio and available and future possible financing arrangements, we believe our existing cash balances, funds available under our various financing arrangements and cash flows from operations will meet our liquidity requirements for at least the next 12 months.
7 unchanged sentences
(i) differences between (a) accretion, amortization, depreciation and recognition of income and losses recorded with respect to our investments and (b) the cash received therefrom and (ii) unrealized gains and losses on our investments (including impairment of real estate and loss on reclassification of disposal group).
−Removed: Cash Flows from Investing Activities
−Removed: During the year ended December 31, 2023, our net cash flows used in investing activities were $1.2 billion, primarily as a result of purchases of investment securities and residential loans, the funding of multi-family preferred equity investments, capital expenditures on real estate and net variation margin paid for derivative instruments.
−Removed: This was partially offset by principal repayments received on residential loans, investment securities and multi-family loans, net proceeds from the sale of real estate held in Consolidated VIEs, return of capital from equity investments, proceeds from the sale of investment securities and residential loans and net payments received from derivative instruments.
+Added: Cash Flows Used in Investing Activities
+Added: During the year ended December 31, 2024, our net cash flows used in investing activities were $2.2 billion, primarily as a result of purchases of investment securities and residential loans.
+Added: This was partially offset by principal repayments received on residential loans and investment securities, net proceeds from the sale of residential loans and real estate, net variation margin and payments received on derivative instruments and return of capital from equity investments.
Although we generally intend to hold our assets as long-term investments, we may sell certain of these assets in order to manage our interest rate risk and liquidity needs, to meet other operating objectives or to adapt to market conditions.
2 unchanged sentences
Accordingly, all or a significant portion of cash flows from principal repayments received from residential loans, including residential loans held in Consolidated SLST, and proceeds from sales or principal paydowns received from investment securities available for sale were used to repay CDOs issued by the respective Consolidated VIEs or repurchase agreements (included as cash used in financing activities).
−Removed: Additionally, a significant portion of cash flows from the sale of real estate held in Consolidated VIEs were used to repay outstanding mortgages payable on real estate held in Consolidated VIEs.
+Added: Additionally, a significant portion of cash flows from the sale of real estate held in Consolidated VIEs, if any, were used to repay outstanding mortgages payable on real estate held in Consolidated VIEs.
Cash Flows from Financing Activities
During the year ended December 31, 2024, our net cash flows provided by financing activities were $2.2 billion.
−Removed: The main sources of cash flows from financing activities were proceeds from repurchase agreements related to our investment securities, residential loans and single-family rental properties.
−Removed: This was partially offset by paydowns on CDOs, payments made on mortgages payable on real estate, dividend payments on both common and preferred stock and repurchases of shares of common and preferred stock.
+Added: The main sources of cash flows from financing activities were proceeds received from repurchase agreements and proceeds from the issuance of CDOs and senior unsecured notes.
+Added: This was partially offset by paydowns on and extinguishment of CDOs, payments made on Consolidated SLST CDOs, net payments made on mortgages payable on real estate and dividend payments on both common and preferred stock.
Liquidity – Financing Arrangements
9 unchanged sentences
In addition, in the event a repurchase agreement counterparty defaults on its obligation to “re-sell” or return to us the assets that are securing the financing at the end of the term of the repurchase agreement, we would incur a loss on the transaction equal to the amount of “haircut” associated with the short-term repurchase agreement, which we sometimes refer to as the “amount at risk.”
−Removed: At December 31, 2023, we had longer-term repurchase agreements with terms of up to two years with multiple third-party financial institutions that are secured by certain of our residential loans and single-family rental properties.
−Removed: The outstanding financing under three of these repurchase agreements is subject to margin calls to the extent the market value of the collateral falls below specified levels.
−Removed: We have entered into or amended repurchase agreements with three new and existing counterparties that are secured by certain of our residential loans and are not subject to margin calls in the event the market value of the collateral declines.
−Removed: S ee "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Residential Loans and Single-Family Rental Property Financing—Repurchase Agreements" for further information.
−Removed: During the terms of the repurchase agreements secured by residential loans, proceeds from the residential loans will be applied to pay any price differential, if applicable, and to reduce the aggregate repurchase price of the collateral.
−Removed: Repurchase of the residential loans and single-family rental properties financed by the repurchase agreements may be accelerated upon an event of default.
−Removed: The repurchase agreements secured by residential loans and single-family rental properties contain various covenants, including among other things, the maintenance of certain amounts of liquidity and stockholders' equity (as defined in the respective agreements).
−Removed: As of December 31, 2023, we had an aggregate amount at risk under our residential loan and single-family rental property repurchase agreements of approximately $194.0 million, which represents the difference between the carrying value of the collateral pledged and the outstanding balance of our repurchase agreements.
+Added: At December 31, 2024, we had longer-term repurchase agreements with initial terms of up to two years with multiple third-party financial institutions that are secured by certain of our residential loans, real estate owned and single-family rental properties.
+Added: The outstanding financing under five of these repurchase agreements are subject to margin calls to the extent the market value of the collateral falls below specified levels.
+Added: S ee "Management's Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Residential Loans, Real Estate Owned and Single-Family Rental Property Financing—Repurchase Agreements" for further information.
+Added: During the terms of the repurchase agreements, proceeds from the residential loans, real estate owned and single-family rental properties will be applied to pay any price differential, if applicable, and to reduce the aggregate repurchase price of the collateral.
+Added: Repurchase of the residential loans, real estate owned and single-family rental properties financed by the repurchase agreements may be accelerated upon an event of default.
+Added: The repurchase agreements secured by residential loans, real estate owned and single-family rental properties contain various covenants, including among other things, the maintenance of certain amounts of liquidity and stockholders' equity (as defined in the respective agreements).
+Added: As of December 31, 2024, we had an aggregate amount at risk under repurchase agreements secured by residential loans, real estate owned and single-family rental properties of approximately $162.8 million, which represents the difference between the carrying value of the collateral pledged and the outstanding balance of our repurchase agreements.
Significant margin calls have had, and could in the future have, a material adverse effect on our results of operations, financial condition, business, liquidity and ability to make distributions to our stockholders.
2 unchanged sentences
As of December 31, 2024, we had $163.3 million included in cash and cash equivalents and $170.2 million in unencumbered investment securities available to meet additional haircuts or market valuation requirements.
−Removed: The unencumbered investment securities that we believe may be posted as margin as of December 31, 2023 included $75.3 million of non-Agency RMBS (including an IO security we own in Consolidated SLST and CDOs repurchased from our residential loan securitizations) and $95.3 million of Agency RMBS.
−Removed: At December 31, 2023, the Company had $100.0 million aggregate principal amount of Senior Unsecured Notes outstanding.
−Removed: The Senior Unsecured Notes were issued at 100% of the principal amount and bear interest at a rate equal to 5.75% per year (subject to adjustment from time to time based on changes in the ratings of the Senior Unsecured Notes by one or more nationally recognized statistical rating organizations), payable semi-annually in arrears on April 30 and October 30 of each year, and are expected to mature on April 30, 2026, unless earlier redeemed.
−Removed: The Company has the right to redeem the Senior Unsecured Notes, in whole or in part, prior to maturity, subject to a "make-whole" premium or other date-dependent multiples of principal amount redeemed.
−Removed: No sinking fund is provided for the Senior Unsecured Notes.
−Removed: The Company's Senior Unsecured Notes also contain various covenants including the maintenance of a minimum net asset value, ratio of unencumbered assets to unsecured indebtedness and senior debt service coverage ratio and limit the amount of leverage the Company may utilize and its ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with another person.
−Removed: At December 31, 2023, we also had other longer-term debt which includes Company-sponsored residential loan securitization CDOs with a carrying value of $1.3 billion.
−Removed: We had ten Company-sponsored securitizations with CDOs outstanding as of December 31, 2023.
+Added: The unencumbered investment securities that we believe may be posted as margin as of December 31, 2024 included $128.0 million of Agency RMBS and $42.2 million of non-Agency RMBS (including an IO security we own in Consolidated SLST and CDOs repurchased from our residential loan securitizations).
+Added: At December 31, 2024, the Company had $100.0 million aggregate principal amount of 2026 Senior Notes outstanding.
+Added: The 2026 Senior Notes were issued at 100% of the principal amount and bear interest at a rate equal to 5.75% per year (subject to adjustment from time to time based on changes in the ratings of the 2026 Senior Notes by one or more nationally recognized statistical rating organizations), payable semi-annually in arrears on April 30 and October 30 of each year, and mature on April 30, 2026, unless earlier redeemed.
+Added: The Company has the right to redeem the 2026 Senior Notes, in whole or in part, prior to maturity, subject to a "make-whole" premium or other date-dependent multiples of principal amount redeemed.
+Added: No sinking fund is provided for the 2026 Senior Notes.
+Added: The Company's 2026 Senior Notes also contain various covenants including the maintenance of a minimum net asset value, ratio of unencumbered assets to unsecured indebtedness and senior debt service coverage ratio and limit the amount of leverage the Company may utilize and its ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with another person.
+Added: At December 31, 2024, the Company had $60.0 million aggregate principal amount of 2029 Senior Notes outstanding.
+Added: The 2029 Senior Notes were issued at 100% of the principal amount and bear interest at a rate equal to 9.125% per year, payable quarterly in arrears on January 1, April 1, July 1, and October 1 of each year, beginning on October 1, 2024, and mature on July 1, 2029, unless earlier redeemed.
+Added: The Company has the right to redeem the 2029 Senior Notes, in whole or in part, at any time on or after July 1, 2026, at a redemption price equal to 100% of the outstanding principal amount redeemed.
+Added: No sinking fund is provided for the 2029 Senior Notes.
+Added: At December 31, 2024, we also had other longer-term debt which includes Company-sponsored residential loan securitization CDOs with a carrying value of $2.1 billion and non-Agency RMBS re-securitization CDOs with a carrying value of $70.8 million.
+Added: We had 14 Company-sponsored securitizations with CDOs outstanding as of December 31, 2024.
See Note 14 to our consolidated financial statements included in this report for further discussion.
1 unchanged sentence
We have no obligation for repayment of the mortgages payable but, with respect to certain of the mortgages payable, we may execute a guaranty related to commitment of bad acts and our equity investment may be lost or reduced to the extent a lender forecloses on the property.
−Removed: As of December 31, 2023, one of the joint venture equity investments is one month delinquent on its senior mortgage loan in the amount of $195.6 million as a result of increasing interest rates.
−Removed: The Company is not exposed to risk of loss outside of its common equity investment in the joint venture as the senior mortgage loan is non-recourse.
As of December 31, 2024, our Company recourse leverage ratio, which represents our total outstanding recourse repurchase agreement financing, subordinated debentures and senior unsecured notes divided by our total stockholders' equity, was approximately 3.0 to 1.
−Removed: Our Company recourse leverage ratio does not include outstanding non-recourse repurchase agreement financing, debt associated with CDOs or mortgages payable on real estate.
+Added: Our Company recourse leverage ratio does not include outstanding non-recourse repurchase agreement financing, debt associated with CDOs or mortgages payable on real estate, including mortgages payable on real estate of disposal group held for sale.
As of December 31, 2024, our portfolio recourse leverage ratio, which represents our outstanding recourse repurchase agreement financing divided by our total stockholders' equity, was approximately 2.9 to 1.
2 unchanged sentences
Certain of our hedging instruments may also impact our liquidity.
−Removed: We may use interest rate swaps, interest rate caps, futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures.
+Added: We may use interest rate swaps, interest rate caps, credit default swaps, futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures.
We may also use TBAs or other futures contracts to hedge interest rate and market value risk associated with our investment portfolio.
−Removed: The Company and the entities that own multi-family properties in which the Company owns joint venture equity investments are required by lenders on certain repurchase agreement financing and variable-rate mortgages payable on real estate to enter into interest rate cap contracts.
−Removed: These interest rate cap contracts are with a counterparty that involve the receipt of variable-rate amounts from the counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.
−Removed: During the period these contracts are open, changes in the value of the contract are recognized as gains or losses on derivative instruments.
−Removed: The joint venture entities that own the multi-family properties will be required to enter into new interest rate cap contracts upon their expiration and may require the Company to contribute additional capital to the respective joint venture.
−Removed: With respect to interest rate swaps, futures contracts and TBAs, initial margin deposits, which can be comprised of either cash or securities, will be made upon entering into these contracts.
+Added: With respect to interest rate swaps, credit default swaps, futures contracts and TBAs, initial margin deposits, which can be comprised of either cash or investment securities, will be made upon entering into these contracts.
During the period these contracts are open, changes in the value of the contract are recognized as unrealized gains or losses by marking to market on a daily basis to reflect the market value of these contracts at the end of each day’s trading.
−Removed: We may be required to satisfy variable margin payments periodically, depending upon whether unrealized gains or losses are incurred.
+Added: We may be required to satisfy variation margin payments periodically, depending upon whether unrealized gains or losses are incurred.
In addition, because delivery of TBAs extend beyond the typical settlement dates for most non-derivative investments, these transactions are more prone to market fluctuations between the trade date and the ultimate settlement date, and thereby are more vulnerable to increasing amounts at risk with the applicable counterparties.
+Added: As it relates to the variable-rate mortgages payable in our Consolidated Real Estate VIEs, the joint venture entities may be required by the lender to enter into interest rate cap contracts.
+Added: In addition, with respect to one of the Company's financings under repurchase agreements, the lender has, in the past, required the Company to enter into an interest rate cap contract.
+Added: These interest rate cap contracts are with a counterparty that involve the receipt of variable-rate amounts from the counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.
+Added: During the period these contracts are open, changes in the value of the contract are recognized as gains or losses on derivative instruments.
+Added: The joint venture entities that own the multi-family properties may be required to enter into new interest rate cap contracts upon their expiration and may require the Company to contribute additional capital to the respective joint venture.
Liquidity — Securities Offerings
In addition to the financing arrangements described above under the caption “Liquidity—Financing Arrangements,” we also rely on follow-on equity offerings of common and preferred stock, and may utilize from time to time debt securities offerings, as a source of both short-term and long-term liquidity.
−Removed: We also may generate liquidity through the sale of shares of our common stock or preferred stock in “at-the-market” equity offering programs pursuant to equity distribution agreements, as well as through the sale of shares of our common stock pursuant to our Dividend Reinvestment Plan (“DRIP”), which provides for the issuance of up to $20.0 million of shares of our common stock.
+Added: We also may generate liquidity through the sale of shares of our common stock or preferred stock in “at-the-market” equity offering programs pursuant to equity distribution agreements.
The Company had no securities offerings during the year ended December 31, 2024.
1 unchanged sentence
In March 2023, the Board of Directors approved a $100.0 million preferred stock repurchase program.
−Removed: The program, which is currently set to expire on March 31, 2025, allows the Company to make repurchases of shares of preferred stock, from time to time, in open market transactions, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws and the rules and regulations of Nasdaq.
−Removed: During the year ended December 31, 2023, the Company repurchased 16,177 shares of Series D Preferred Stock, 68,348 shares of Series E Preferred Stock, 9,791 shares of Series F Preferred Stock and 26,264 shares of Series G Preferred Stock pursuant to the preferred stock repurchase program for a total cost of approximately $2.4 million, including fees and commissions paid to the broker, representing an average repurchase price of $20.29 per preferred share.
−Removed: The difference between the consideration transferred and the carrying value of the preferred stock resulted in a gain attributable to common stockholders of approximately $0.5 million during the year ended December 31, 2023.
+Added: The program allows the Company to make repurchases of shares of preferred stock, from time to time, in open market transactions, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws and the rules and regulations of Nasdaq.
+Added: The Company did not repurchase any shares of its preferred stock during the year ended December 31, 2024.
As of December 31, 2024, $97.6 million of the approved amount remained available for the repurchase of shares of preferred stock under the preferred stock repurchase program.
+Added: The preferred stock repurchase program expires on March 31, 2026.
In February 2022, the Board of Directors approved a $200.0 million common stock repurchase program.
−Removed: The program allows the Company to make repurchases of shares of common stock, from time to time, in open market transactions, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws and the rules and regulations of Nasdaq.
In March 2023, the Board of Directors approved an upsize of the common stock repurchase program to $246.0 million.
+Added: The program allows the Company to make repurchases of shares of common stock, from time to time, in open market transactions, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws and the rules and regulations of Nasdaq.
During the year ended December 31, 2024, the Company repurchased 587,347 shares of its common stock pursuant to the common stock repurchase program for a total cost of approximately $3.5 million, including fees and commissions paid to the broker, representing an average repurchase price of $5.95 per common share.
As of December 31, 2024, $189.7 million of the approved amount remained available for the repurchase of shares of the Company's common stock under the common stock repurchase program.
−Removed: The common stock repurchase program is currently set to expire on March 31, 2025.
+Added: The common stock repurchase program expires on March 31, 2026.
For information regarding the declaration and payment of dividends on our common stock and preferred stock for the periods covered by this report, please see Note 18 to our consolidated financial statements included in this report.
4 unchanged sentences
In the event we fail to pay dividends on our preferred stock, the Company would become subject to certain limitations on its ability to pay dividends or redeem or repurchase its common stock or preferred stock.
+Added: Commitment to Fund Business Purpose Loans
+Added: As of December 31, 2024, the Company had commitments to fund up to $220.8 million of additional advances on existing business purpose loans.
+Added: These commitments are generally subject to loan agreements with terms that must be met before we fund advances on the commitment.
Redeemable Non-Controlling Interest
11 unchanged sentences
11,225 113,825 68,213 — 193,263
−Removed: Interest rate swaps (1)
−Removed: 906 1,811 1,688 3,258 7,663
Total contractual obligations (2)
2 unchanged sentences
Projected interest payments are based on interest rates in effect and outstanding balances as of December 31, 2024.
−Removed: (2) We exclude our CDOs from the contractual obligations disclosed in the table above as this debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively from the proceeds of the residential loans held in securitization trusts.
+Added: (2) We exclude our CDOs from the contractual obligations disclosed in the table above as this debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively from the proceeds of the residential loans and non-Agency RMBS held in securitization trusts.
See Note 14 in the Notes to Consolidated Financial Statements for further information regarding our CDOs.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.