ADAMAS TRUST, INC.
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 20, 2026
ADAM$5.69-3.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001273685-25-000028
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-20.
0001273685-26-000029
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 365 previous paragraphs and 384 current paragraphs.
168 unchanged; 131 reworded; 82 added; 59 removed; 7 previous and 3 current paragraphs rearranged.
Tables are not compared: 61 previous and 69 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (82)
Current report
We are an internally-managed REIT for U.S. federal income tax purposes focused on strategically deploying capital across complementary businesses to generate durable earnings and long-term value for stockholders through disciplined portfolio management and an operating platform designed to capture opportunities across real estate and capital markets. Our current investment portfolio includes credit sensitive single-family and multi-family assets, as well as other types of fixed-income investments such as Agency RMBS. Through our wholly-owned subsidiary, Constructive, we also originate business purpose loans for residential real estate investors. On September 3, 2025, we changed our name from New York Mortgage Trust, Inc. to Adamas Trust, Inc.
Current report
Since 2023, we have actively repositioned our investment portfolio with the objective of enhancing recurring income for our stockholders. Our investment strategy since that time has focused on acquiring assets with less price sensitivity to credit deterioration, like Agency RMBS, and short duration, higher-coupon investments, like business purpose loans. We have also prioritized optimizing our financing structures and expanding our network of originator partnerships to support increased acquisition volumes.
Current report
The year ended December 31, 2025 represented a strategically significant period for the Company. The year was marked by our corporate rebranding, acquisition of Constructive, earnings growth, record investment activity and further execution of the Company’s capital rotation strategy designed to enhance recurring income, improve portfolio liquidity and strengthen our operating platform.
Current report
Net income attributable to common stockholders was $101.1 million, or $1.12 per share, for the year ended December 31, 2025. Earnings available for distribution (“EAD”) per common share, a non-GAAP financial measure, increased 141% year-over-year to $0.89 per share. GAAP book value per share as of December 31, 2025 increased 3.4% to $9.60 and adjusted book value per share as of December 31, 2025 rose 2.7% to $10.63, resulting in an economic return of 12.72% and 11.01% on GAAP book value per share and adjusted book value per share, respectively, for 2025. Supported by this sustained earnings momentum, our Board of Directors declared quarterly dividends of $0.23 per share in the third and fourth quarters of 2025, a 15% increase from the first and second quarters, equating to a 12.6% dividend yield as of December 31, 2025.
Current report
During the year ended December 31, 2025, we achieved the highest level of annual investment activity in our history, expanding our investment portfolio by approximately $3.1 billion, or 42%, to $10.5 billion. Total acquisitions of $6.1 billion were primarily concentrated in Agency RMBS and business purpose loans, including $4.1 billion of Agency investments and $1.7 billion of business purpose loans. Our disciplined capital allocation continued to emphasize liquidity, stability, and shorter-duration exposure, with Agency RMBS now representing greater than a majority of our capital. We believe this repositioning has enhanced the resilience of our earnings profile and strengthened our ability to navigate evolving market conditions.
Current report
On July 15, 2025, we completed the acquisition of the remaining 50% interest in Constructive, resulting in full ownership and consolidation of Constructive’s financial results beginning in the third quarter of 2025. Constructive operates in 48 states and originated approximately $1.8 billion of loans over the year ended December 31, 2025, including $864.9 million since July 15, 2025. From July 15, 2025 to December 31, 2025, Constructive generated $26.6 million of mortgage banking income from origination and sale activity and incurred $8.1 million of direct loan origination costs. We believe our integration of Constructive expands the Company's presence in the residential credit ecosystem and establishes a scalable origination platform that we expect will support sustained earnings growth over time.
Current report
We also completed several capital markets and financing initiatives during the year ended December 31, 2025 designed to support future portfolio growth and further strengthen our balance sheet. During the year ended December 31, 2025, we completed four securitizations of performing, re-performing, and business purpose loans totaling approximately $945.5 million in net proceeds. In addition, we issued $82.5 million of 9.125% 2030 Senior Notes and $115.0 million of 9.875% 2030 Senior Notes, providing additional flexibility to fund new investments. As of December 31, 2025, our Company Recourse Leverage Ratio and Portfolio Recourse Leverage Ratio (as defined in "Capital Allocation" below) increased to 5.0x and 4.7x, respectively, from 3.0x and 2.9x as of December 31, 2024, primarily reflecting increased Agency RMBS financing, the acquisition and consolidation of Constructive and senior unsecured notes issuance activity.
Current report
In January 2026, we completed the issuance of $90.0 million of our 9.250% Senior Notes due 2031 in an underwritten public offering, receiving $86.6 million in net proceeds.
Current report
In February 2026, the Company redeemed its 2026 Senior Notes at 100% of the $100.0 million principal amount plus accrued but unpaid interest to, but excluding, the redemption date, for a total payment of $101.5 million. The Company recognized a loss on extinguishment of debt related to the redemption totaling approximately $0.3 million.
Current report
Looking ahead, we expect to maintain a disciplined and measured approach to portfolio growth, supported by the integration of Constructive’s origination platform and our continued focus on high-quality, income-producing assets. We believe our current balance sheet, diversified capital sources and expanded origination capacity position us to capitalize on market opportunities, further scale recurring earnings, and enhance long-term stockholder value.
Current report
Investing Activity
Current report
(5)Includes TBAs that are recorded as derivative instruments in the Company's consolidated financial statements. There were no TBAs outstanding as of December 31, 2025 and 2024.
Current report
(7)Residential loans include transfers of originated loans from Constructive segment to investment portfolio segment at fair value on the date of transfer.
Current report
(9)The Company completed its disposition of the real property held by its joint venture equity investments in multi-family properties during the year ended December 31, 2025. Accordingly, equity investments in disposal group held for sale as of December 31, 2025 consisted of assets and liabilities held by the respective Consolidated VIEs for the conclusion of business operations after the aforementioned real property sales. 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 report
The U.S. labor market experienced some cooling over the course of the year and into the fourth quarter as the unemployment rate rose throughout the year. According to the U.S. Department of Labor, the U.S. unemployment rate rose from 4.1% at the end of December 2024 to 4.5% at the end of November, which represented the highest unemployment rate since October 2021, and settled at 4.4% at the end of December 2025. Additionally, over the course of 2025, the number of nonfarm job openings trended downward and, in July 2025 for the first time since April 2021, the number of unemployed persons exceeded the number of available job openings, further signaling a potential softening in the labor market. Uncertainty with respect to economic and trade policies and higher costs due to inflation, particularly with respect to the construction industry, have been suggested by some market commentators as having contributed to the slackening labor market.
Current report
Near the end of 2025 and into 2026, some market commentators began expressing concerns about the ongoing independence of the Federal Reserve to make monetary policy decisions, including setting interest rates, without direct interference from the executive branch or U.S. Congress. If the independence of the Federal Reserve is eroded or eliminated, or perceived to be, economists and market commentators suggest that higher inflation, greater stock market volatility and higher long-term interests rates on mortgages and other loans could result. Such outcomes may limit or undermine business activity or raise the costs of many of our liabilities, which could negatively impact the value of our investments
Current report
We own and rent single-family rental homes to families that are eligible to receive housing assistance through the U.S. Department of Housing and Urban Development Housing Choice Vouchers program. In January 2026, the president issued an executive order (the “Order”) directing executive agencies to identify ways to prevent GSEs from facilitating the acquisition by large institutional investors of single-family homes or from selling homes owned by the U.S. federal government to large institutional investors and instructs the U.S. Department of Housing and Urban Development to track single-family rental owners that receive federal housing assistance to determine any involvement of large institutional investors, among other things. The Order does not address immediate steps for implementation. There can be no guarantee how the Order will be implemented, what legislation may be enacted to further the Order, or how “single-family” or “large institutional investor” will be defined; however, such policies could materially adversely affect our investments in single-family rental homes.
Current report
•Purchased approximately$4.4 billion of investment securities, including$4.1 billionof Agency investments.
Current report
•Acquired approximately$1.7 billion of residential loans.
Current report
•Exited remaining multi-family joint venture equity investments in disposal group.
Current report
•Received approximately $79.2 million in proceeds from redemptions of Mezzanine Lending investments.
Current report
•Acquired the outstanding 50% ownership interests in Constructive that were not previously owned by the Company through the consummation of a membership interest purchase agreement on July 15, 2025.
Current report
•Completed the issuance of$115.0 million in aggregate principal amount of our 9.875%Senior Notes due 2030 in public offerings. The total net proceeds to us from the offerings of the notes, after deducting the underwriters' discount and commissions and offering expenses, as applicable, were approximately$111.4 million.
Current report
•Completed four securitizations of residential loans, resulting in approximately$945.5 million in aggregate net proceeds to us after deducting expenses associated with the securitization transactions.
Current report
•Exercised our right to optional redemptions ofthree residential loan securitizations with aggregate outstanding principal balances of $424.6 million at the time of redemption.
Current report
•Increased common stock dividend declared to $0.23 per common share for the final two quarters of 2025.
Current report
•On February 2, 2026, we redeemed our 5.75% Senior Notes due 2026 at 100% of the $100.0 million principal amount plus accrued but unpaid interest to, but excluding, the redemption date, for a total payment of $101.5 million.
Current report
Net loss from real estate decreased in 2025 due to the sale or de-consolidation of a significant portion of our multi-family real estate assets throughout 2024 and 2025.
Current report
Other Income (Loss)
Current report
In 2025, the Company recognized$65.4 million of net realized losses, primarily related to the sale of U.S. Treasury securities, write-downs of certain investment securities, losses incurred on foreclosed properties and losses on discounted payoffs of non-performing business purpose bridge loans.
Current report
Realized losses in 2024 were primarily attributable tolosses incurred on foreclosed properties and recognized on the sale of residential loans.
Current report
Unrealized Gains (Losses), Net
Current report
We recognized net losses on derivative instruments in 2025, primarily due to decreases in interest rates which resulted in lower valuations of our interest rate swaps. These losses were partially offset by unrealized gains recognized on U.S. Treasury and commodity futures, gains realized on contract terminations and net payments received on derivative instruments in 2025.
Current report
Mortgage Banking Activities, Net
Current report
The following table presents the components of mortgage banking activities, net for the years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands):
Current report
The increase in mortgage banking activities during the period is related tothe consolidation of Constructive in 2025.
Current report
(Loss) Income from Equity Investments
Current report
During 2025, there were no joint venture equity investments reclassified from disposal group held for sale.
Current report
The decline in other income in 2025 reflects the elevated level of other income in 2024, which was driven by gains recognized on the dispositions of both consolidated multi-family properties and membership interests in consolidated joint venture equity investments. Other income in 2025 benefitted from gains recognized on the sale of consolidated multi-family properties and servicing fee income related to mortgage servicing rights acquired in late 2024. Additionally, year-over-year comparisons were affected by a provision for uncollectible receivables recorded in the prior year period. The provision is related to asset management expenses incurred on a non-accrual Mezzanine Lending investment which exceeded the anticipated redemption proceeds.
Current report
The increase in general and administrative expenses during the period is primarily related to the consolidation of Constructive in 2025.
Showing the first 40 of 82 passages. Open the source sections for the rest.
Removed paragraphs (59)
Previous report
We are an internally-managed REIT for U.S. federal income tax purposes, in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets. Our objective is to deliver long-term stable distributions to our stockholders over changing economic conditions through a combination of net interest spread and capital gains from a diversified investment portfolio. Our investment portfolio includes credit sensitive single-family and multi-family assets, as well as more traditional types of fixed-income investments that provide coupon income, such as Agency RMBS.
Previous report
Reverse Stock Split
Previous report
On March 9, 2023, we effected a one-for-four reverse stock split of our common stock (the “Reverse Stock Split”). 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.
Previous report
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. 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. 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. 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. 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. During this time, we continued to drive higher business purpose loan acquisition volumes through ongoing partnerships with numerous originators. 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. 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.
Previous report
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. 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. 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. 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. We anticipate allocating less capital to multi-family investments going forward.
Previous report
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. Treasury securities and Agency RMBS. 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. Treasury securities and 8% collateralized by residential credit assets. The remaining 38% has no exposure to collateral repricing by our counterparties. 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. 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. 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. We received $57.5 million in net proceeds from the issuance and utilized the proceeds to purchase Agency RMBS.
Previous report
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. 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 approximately $54.4 million at the time of redemption.
Previous report
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. 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.
Previous report
Portfolio Update
Previous report
After moderating in the first half of 2024, the U.S. 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. 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. 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.
Previous report
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. However, certain political commentators expect that the current administration will reverse or cease the implementation of such positions and policies. 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.
Previous report
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. 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. 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. 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. 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. 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. 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.
Previous report
Uncertainty exists regarding the U.S. debt limit, which is the statutory maximum amount of money that the U.S. government may borrow to meet its existing obligations. The U.S. government reached the debt limit in the middle of January 2025 and the U.S. Treasury began taking “extraordinary measures” to keep the U.S. from breaching its obligations. The U.S. Congress must approve any increases to or suspensions of the U.S. debt limit. If the U.S. 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. government may default on its obligations causing severe economic consequences. A default of the U.S. government on its obligations may also cause yields on U.S. Treasuries, and interest rates broadly, to rise, among other things. 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.
Previous report
•Purchased approximately$2.2 billion of investment securities, including$1.5 billion of Agency RMBS with an average coupon of 5.69%.
Previous report
•Purchased approximately$1.9 billion of residential loans with an average gross coupon of 9.93%.
Previous report
•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.
Previous report
•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.
Previous report
•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 billionin net proceeds to us after deducting expenses associated with the transactions. 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. We also redeemed two residential loan securitizations with an outstanding balance of approximately$193.3 million at the time of redemption.
Previous report
•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.
Previous report
•Repurchased 587,347 shares of common stock for approximately $3.5 million at an accretive average repurchase price of $5.95 per common share.
Previous report
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.
Previous report
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. 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.
Previous report
Other Loss
Previous report
Net realized losses related to our residential loan portfolio increased in 2024, primarily as a result of increased losses incurred on foreclosed properties andrecognized on the sale of residential loans and a decrease in net realized gain from payoffs of residential loans. We also recognized net realized losses of$1.2 million on write-downs of non-Agency RMBSin 2024.
Previous report
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.
Previous report
Unrealized (Losses) Gains, Net
Previous report
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 offsetby 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.
Previous report
Income from Equity Investments
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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..
Previous report
We elected the fair value option with respect to CDOs and senior unsecured notes issued by the Company after January 1, 2024. 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 in 2024.
Previous report
Comprehensive Loss
Previous report
(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.
Previous report
Our adjusted net interest income decreased in 2023 as compared to the prior year. While adjusted interest income remained relatively flat, our adjusted interest expense increased in 2023, primarily due to additional repurchase agreement and securitization financings and an increase in the cost of financing due to base interest rate movements partially offset by the benefit of our interest rate swaps.
Previous report
Net interest spread decreased in 2023 due to a combination of a decrease in yield on Average Interest Earning Assets and an increase in our cost of financing. The decrease in our yield on Average Interest Earning Assets was primarily due to 1) portfolio run-off of higher yielding business purpose loans, 2) an increase in business purpose loans held in non-accrual status, 3) the sale of certain higher yielding ABS in the second half of 2022 and 4) investment in lower yielding Agency RMBS in 2023. The previously described increase in cost of financing combined with the decrease in yield to reduce net interest spread in 2023.
Previous report
Undepreciated Loss
Previous report
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. 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. In addition, we believe that presenting undepreciated loss enables our investors to measure, evaluate, and compare our operating performance to that of our peers.
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Reworded paragraphs (131)
Previous wording
Joint Venture Equity Investments in Consolidated Multi-Family Properties not in Disposal Group Held for Sale
Current wording
We completed the wind-down of our multi-family joint venture equity investments during the year ended December 31, 2025. As of December 31, 2025, our multi-family exposure was limited to our Mezzanine Lending and cross-collateralized mezzanine lending portfolio, which continues to perform well, with a 25.8% payoff rate during the year and an average occupancy rate of 91% across underlying properties.
Previous wording
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. 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. 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.
Current wording
Our targeted assets include (i) Agency RMBS, (ii) residential loans, including business purpose loans, (iii) non-Agency RMBS and (iv) certain other mortgage-, residential housing- and credit-related assets, as well as strategic investments in companies from which we purchase, or may in the future purchase, our targeted assets. 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, preferred equity and joint venture equity investments in multi-family properties, securities issued by newly originated securitizations, including credit sensitive securities from these securitizations, ABS and debt or equity investments in alternative assets or businesses.
Previous wording
During the year ended December 31, 2024, we continued to expand our investment securities and residential loan portfolios. 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):
Current wording
During theyear ended December 31, 2025, we continued to expand our investment securities and residential loan portfolios and completed our purchase of the outstanding membership interests in Constructive that were not previously owned. Our investment activity was offset primarily by repayments and sales of investment securities and residential loans. The following table presents investing activity for the year ended December 31, 2025 (dollar amounts in thousands):
Previous wording
(1)Includes draws funded for business purpose bridge loans and existing equity investments and capitalized costs for single-family rental properties.
Current wording
(1)Includes draws funded for business purpose bridge loans and existing equity investments in consolidated multi-family properties, cost basis of new TBA positions and capitalized costs for single-family rental properties.
Previous wording
(4)Includes in-kind distribution of mortgage servicing rights received from the Company's equity investment in an entity that originates residential loans.
Current wording
(3)Includes residential loans, residential loans held for sale and mortgage servicing rights resulting from the Company's acquisition on July 15, 2025 of the membership interests in Constructive that were not previously owned by the Company, which resulted in consolidation of Constructive into the Company's financial statements. Also includes in-kind distribution of mortgage servicing rights received from Constructive prior to July 15, 2025.
Previous wording
(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.
Current wording
(4)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, net loss from real estate attributable to the Company and transfers of residential loans to real estate owned.
Previous wording
(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. 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. 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 wording
(8)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.
Previous wording
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.
Current wording
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-related assets in the marketplace, market volatility, 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, our ability to control operating costs, 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.
Previous wording
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. 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. The Dow Jones Industrial Average finished the fourth quarter of 2024 up 0.51% and grew 12.88% for the full year 2024. The Nasdaq Composite Index finished the fourth quarter of 2024 up 6.17% and grew 28.64% for the full year 2024. However, interest rate and monetary policy uncertainty, mixed inflation data and geopolitical instability have cautioned some economic outlooks. We anticipate that due to uncertainty related to inflation, interest rates, monetary policy, the U.S. debt limit and the implementation of the new U.S. presidential administration’s policies, markets and the pricing for many of our assets will continue to experience volatility in 2025.
Current wording
Financial markets experienced strong positive performance in the fourth quarter of and full year 2025, spurred in part by the Federal Reserve’s cuts to the target range for the federal funds rate and significant investment in artificial intelligence, among other things, and in the face of the longest U.S. federal government shutdown in history near year end. The Dow Jones Industrial Average finished the fourth quarter of 2025 up 3.59% and grew 12.97% for the full year 2025. The Nasdaq Composite Index finished the fourth quarter of 2025 up 2.57% and grew 20.36% for the full year 2025. Mortgage-related markets experienced volatility and relatively improved performance in the fourth quarter of and full year 2025. Trade policy turbulence, labor market uncertainty, elevated inflation and geopolitical instability have cautioned some economic outlooks, with concerns regarding the potential for stagflation persisting. We anticipate that due to ongoing uncertainty related to trade policy, the labor market, inflation and geopolitical instability, markets and the pricing for many of our assets will continue to experience volatility in 2026.
Previous wording
Select U.S. Financial and Economic Data. The U.S. 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. 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. The fourth quarter 2024 GDP increase marks eleven straight quarters of GDP growth. 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.
Current wording
Select U.S. Financial and Economic Data. The U.S. economy grew modestly in 2025 with real gross domestic product (“GDP”) increasing by 2.2% (advanced estimate) for full year 2025, as compared to the GDP growth of 2.8% recorded for full year 2024. GDP grew at a 1.4% (advanced estimate) annualized rate in the fourth quarter of 2025. By these estimates, GDP growth continued in the fourth quarter of and full year 2025, overcoming a 0.6% contraction in GDP seen in the first quarter of 2025; however, inflation remains persistently above the Federal Reserve’s target of two percent and the labor market has shown signs of cooling. 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 and the continued independence of the Federal Reserve may limit or undermine business activity and the potential for future GDP growth or result in further volatility, which could negatively impact the value of credit investments.
Previous wording
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. 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. 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. 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. 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. Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally.
Current wording
The Federal Reserve raised 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 level for 14 months. In 2024, the Federal Reserve cut the target range by 100 basis points, in aggregate, and held the rate at that range until September 2025. Then, in the last four months of 2025, the Federal Reserve cut the target range for the federal funds rate three times for an aggregate reduction of 75 basis points, bringing the target range to its lowest level since September 2022. Expectations among market commentators for additional rate cuts to the target range in the near term are subdued. In considering the extent and timing of 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. In its December 2025 statement, the Federal Reserve noted that job gains slowed in 2025, the unemployment rate edged up, inflation remained somewhat elevated and downside risks to employment rose in recent months. As reflected on the “dot plot” included in the projection materials from the Federal Reserve’s December 2025 meeting, Federal Reserve officials’ views of the appropriateness of additional cuts to the target range for the federal funds rate by the end of 2026 are divided, though a majority of officials indicated that one or more additional cuts by the end of 2026 would be appropriate. Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners, our financing and capital costs and economic growth generally.
Previous wording
The fears of an economic recession in the U.S. that were prevalent in 2023 receded in connection with the consistent U.S. GDP growth seen in 2024, although some economists and market commentators have expressed expectations for U.S. GDP growth to slow in 2025. 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.
Current wording
Concerns regarding an economic recession – a significant decline in economic activity that is spread across the economy and that lasts more than a few months, as defined by the National Bureau of Economic Research – in the U.S. retreated in 2025, but market observers and the Federal Reserve are closely monitoring the labor market and inflation, among other items, for resurgent indicators of recession risk. According to some market commentators, uncertain and evolving U.S. trade and tariff policy and threats to Federal Reserve independence also present downside risks to the economy. Tariffs are often considered to be inflationary, including with respect to construction costs, with such higher costs frequently borne by consumers. Higher prices resulting from tariffs may generally lead to a reduction in economic activity, particularly if such increase in prices is not offset by a reduction in interest rates. An economic recession, stagnating economic growth or market disruption 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.
Previous wording
Single-Family Homes and Residential Mortgage Market. Throughout 2024, the residential real estate market remained competitive for home buyers. 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. 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. 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. Census Bureau and the U.S. 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. 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. 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.
Current wording
Single-Family Homes and Residential Mortgage Market. Throughout 2025, the residential real estate market remained competitive for home buyers. Data released by the S&P Dow Jones Indices for their S&P Cotality Case-Shiller U.S. National Home Price NSA Indices for October 2025 showed that, on average, home prices increased 1.3% for the 20-City Composite over October 2024. Additionally, according to the National Association of Realtors (“NAR”), existing home sales in December 2025 increased 5.1% month-over-month and 1.4% year-over-year. NAR also reported that the median existing-home sales price for all housing types in December 2025 was $405,400, up 0.4% from December 2024, which marked the 30th consecutive month of year-over-year price increases. NAR notes that total housing inventory as of the end of December 2025 was down 18.1% month-over-month and up 3.5% year-over-year and that the supply of unsold housing inventory sat at 3.3 months as of the end of December 2025, up 0.1 months from December 2024. Despite interest rates trending downward over the course of 2025, such rates remained relatively elevated and continued to contribute to affordability challenges for home buyers. According to Freddie Mac, the weekly average 30-year fixed-rate mortgage was 6.09% as of January 22, 2026, down 0.87% year-over-year. 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.
Previous wording
Rental Housing. According to data provided by the U.S. Census Bureau and the U.S. 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. 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. 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.
Current wording
Rental Housing. According to RealPage Analytics (“RealPage”), effective rents for professionally managed apartments fell 1.7% in the fourth quarter of 2025 and 0.6% for 2025. RealPage noted that, in general, markets located in the South and West of the U.S. experienced the greatest growth in apartment supply in recent years and the greatest declines in rents over the course of 2025. Further, Zillow Research forecasts that relatively slower rent growth for both single-family and multi-family rental housing is expected to continue through 2026. 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.
Previous wording
Credit Spreads. Investment grade and high-yield credit spreads both tightened over the course of the fourth quarter of and full year 2024. 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. 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.
Current wording
Credit Spreads. Investment grade and high-yield credit spreads both experienced significant widening in the second quarter of 2025 before tightening through year end and finishing nearly flat to the start of 2025. At the end of 2025, investment grade spreads widened 3 basis points as compared to the start of the fourth quarter of 2025 and tightened 3 basis points as compared to the start of 2025. At the end of 2025, high-yield credit spreads widened 1 basis point as compared to the start of the fourth quarter of 2025 and tightened 11 basis points as compared to the start of 2025. 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.
Previous wording
Financing Markets. 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. 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. 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. 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. 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. Increases in interest rates raise the costs of many of our liabilities, while overall interest rate volatility generally increases the costs of hedging and may place downward pressure on some of our strategies.
Current wording
Financing Markets. From June 2022 until the end of August 2024, the Treasury curve inverted with short term yields greater than long term yields, which was the longest inverted Treasury curve on record. 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. On December 31, 2025, the spread between the 2-Year U.S. Treasury yield and the 10-Year U.S. Treasury yield closed at 71 basis points, as compared to a 33 basis point spread on December 31, 2024. This spread is important as it is indicative of opportunities for investing in levered assets. Increases in interest rates raise the costs of many of our liabilities, while overall interest rate volatility generally increases the costs of hedging and may place downward pressure on some of our strategies.
Previous wording
Monetary Policy and Recent Regulatory Developments. The Federal Reserve took a number of actions to stabilize markets during the COVID-19 pandemic. From March 2020 until March 2022, the Federal Reserve implemented an asset purchase program aimed at providing liquidity to the U.S. Treasury and Agency RMBS markets. Under the Federal Reserve’s asset purchase program, the Federal Reserve’s balance sheet grew from about $4.2 trillion in assets at the start of March 2020 to about $8.9 trillion in assets at the end of the program in March 2022. On June 1, 2022, the Federal Reserve shifted course and began shrinking its balance sheet by reducing its holdings of U.S. Treasuries and Agency RMBS by $47.5 billion per month. In September 2022, the Federal Reserve increased its efforts to reduce its balance sheet by doubling the amount of U.S. Treasuries and Agency RMBS it rolls off its balance sheet to $95 billion each month. On June 1, 2024, the Federal Reserve reduced from $60 billion to $25 billion the amount of U.S. 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. Sales or reductions in the pace of purchasing of Agency RMBS by the Federal Reserve could create headwinds in the market for Agency RMBS where increased supply could drive prices lower and interest rates higher.
Current wording
Monetary Policy and Recent Regulatory Developments. The Federal Reserve took a number of actions to stabilize markets during the COVID-19 pandemic. From March 2020 until March 2022, the Federal Reserve implemented an asset purchase program aimed at providing liquidity to the U.S. Treasury and Agency RMBS markets. Under the Federal Reserve’s asset purchase program, the Federal Reserve’s balance sheet grew from about $4.2 trillion in assets at the start of March 2020 to about $8.9 trillion in assets at the end of the program in March 2022. In June 2022, the Federal Reserve shifted course and began shrinking its balance sheet by reducing its holdings of U.S. Treasuries and Agency RMBS. In December 2025, the Federal Reserve halted the reduction of its holding of U.S. Treasuries and announced an intention to purchase short-term U.S. Treasuries in an effort to alleviate expected pressures in money markets, but the Federal Reserve continued to allow up to $35 billion of Agency RMBS to roll off its balance sheet each month. The Federal Reserve’s participation in the Agency RMBS market can materially impact mortgage market conditions, affecting supply, pricing, and returns. In January 2026, the FHFA raised the cap on the amount of Agency RMBS that Fannie Mae and Freddie Mac can hold from $40 billion each to $225 billion each, and the current administration instructed Fannie Mae and Freddie Mac to purchase $200 billion in Agency RMBS. Asset purchases by the Federal Reserve generally drive Agency RMBS values higher and tighten mortgage spreads, which increases our adjusted book value but reduces the return potential on new investments. The announced January 2026 purchases, or any other purchases, by Fannie Mae and/or Freddie Mac of Agency RMBS, though such purchases are, and are expected to be, on a smaller scale than purchases of Agency RMBS conducted by the Federal Reserve in recent years, may have similar effects on us and the market. Conversely, actual or anticipated reductions in the amount of the Federal Reserve’s Agency RMBS holdings or its purchasing pace typically lead to lower values and wider spreads, thereby lowering our adjusted book value while improving the return potential on new acquisitions.
Previous wording
In September 2008, the U.S. 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. 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. However, many market and political commentators believe President Trump may seek to end the conservatorships of Fannie Mae and Freddie Mac. Together, Fannie Mae and Freddie Mac guarantee a significant amount of the nearly $13 trillion U.S. Home loan market. 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. We invest in Agency RMBS and other mortgage-related assets that may be guaranteed by Fannie Mae or Freddie Mac. Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally. 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. 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. Risk Factors” in this Annual Report on Form 10-K.
Current wording
Fannie Mae and Freddie Mac remain under the conservatorship of the FHFA. The current administration is revisiting the idea of taking Fannie Mae and Freddie Mac public. In the fourth quarter of 2025, reports surfaced that investment banks have been in preliminary discussions with the current administration about potential public offerings of Fannie Mae and/or Freddie Mac securities and administration officials indicated that such discussions were continuing to advance. Together, Fannie Mae and Freddie Mac guarantee a significant amount of the nearly $13 trillion U.S. home loan market. 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. We invest in Agency RMBS and other mortgage-related assets that may be guaranteed by Fannie Mae or Freddie Mac. Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners and economic growth generally. 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. 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. Risk Factors” of this Annual Report on Form 10-K.
Previous wording
The scope and nature of the actions the Federal Reserve and other governmental authorities will ultimately undertake are unknown and will continue to evolve. There can be no assurance as to how, in the long term, these and other actions, as well as the negative impacts from ongoing geopolitical instability and uncertainty surrounding inflation, interest rates and the outlook for the U.S. and global economies, will affect the efficiency, liquidity and stability of the financial, credit and mortgage markets, and thus, our business. Greater uncertainty frequently leads to wider asset spreads or lower prices and higher hedging costs.
Current wording
The scope and nature of the actions the Federal Reserve or other governmental authorities will ultimately undertake are unknown and will continue to evolve. There can be no assurance as to how, in the long term, these and other actions, as well as the negative impacts from ongoing geopolitical instability and uncertainty surrounding inflation, interest rates, U.S. tariff and trade policies and the outlook for the U.S. and global economies, will affect the efficiency, liquidity and stability of the financial, credit and mortgage markets, and thus, our business. Greater uncertainty frequently leads to wider asset spreads or lower prices and higher hedging costs.
Previous wording
•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. 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.
Current wording
•On January 13, 2026, we completed the issuance of $90.0 million in aggregate principal amount of our 9.25% Senior Notes due 2031 in an underwritten public offering. The total net proceeds to us from the offering of the notes, after deducting the underwriters' discount and commissions and offering expenses, were approximately $86.6 million.
Previous wording
•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 approximately $54.4 million at the time of redemption.
Current wording
•In January 2026, we completed a new securitization of residential loans resulting in approximately $309.1 million of net proceeds to us after deducting expenses associated with the transaction. We utilized the net proceeds to repay approximately $287.3 million on outstanding repurchase agreements related to residential loans.
Previous wording
•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. The expiration dates of both stock repurchase programs were extended from March 31, 2025 to March 31, 2026.
Current wording
•On February 16, 2026, our Board of Directors approved extensions of our common stock repurchase program, under which $188.2 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. The expiration dates of both stock repurchase programs were extended from March 31, 2026 to March 31, 2027.
Previous wording
The following provides an overview of the allocation of our total equity as of December 31, 2024 and 2023, respectively. 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.
Current wording
The following provides an overview of the allocation of our total equity as of December 31, 2025 and 2024, respectively. 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, short-term and longer-term repurchase agreements and warehouse facilities and CDOs. A detailed discussion of our liquidity and capital resources is provided in “Liquidity and Capital Resources” elsewhere in this section.
Previous wording
The following tables set forth our allocated capital by investment category at December 31, 2024 and 2023, respectively (dollar amounts in thousands).
Current wording
The following tables set forth our allocated capital at December 31, 2025 and 2024, respectively (dollar amounts in thousands).
Previous wording
(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.
Current wording
(3)Excludes cash in the amount of $4.4 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 $132.0 million is included in the Company's accompanying consolidated balance sheets in other assets.
Previous wording
(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. 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.
Current wording
(4)Represents the Company's total outstanding recourse repurchase agreement and warehouse facility financing, subordinated debentures and senior unsecured notes divided by the Company’s total stockholders’ equity. Does not include Consolidated SLST CDOs amounting to $1.0 billion, residential loan securitization CDOs amounting to $2.4 billion, non-Agency RMBS re-securitization CDOs amounting to $65.3 million andmortgages payable on real estate totaling $332.1 million as they are non-recourse debt.
Previous wording
(5)Represents the Company's outstanding recourse repurchase agreement financing divided by the Company’s total stockholders’ equity.
Current wording
(5)Represents the Company's outstanding recourse repurchase agreement and warehouse facility financing divided by the Company’s total stockholders’ equity.
Previous wording
(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. 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 andmortgages 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.
Current wording
(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. 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.
Previous wording
The following table presents the main components of our net loss for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands, except per share data):
Current wording
The following table presents the main components of our net income (loss) for the years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands, except per share data):
Previous wording
Interest income increased in 2024 primarily due to increased investments in Agency RMBS and business purpose loans. 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.
Current wording
Interest income increased in 2025 primarily due to increased investments in Agency RMBS and business purpose loans. We also recognized additional interest income from residential loans consolidated in connection with the purchase of a Consolidated SLST subordinated bond in 2025. The increase in interest expense in 2025 wasdue primarily to increases in financing obtained to fund investing activity through repurchase agreements and securitizations, the issuance of senior unsecured notes and additional expense related to CDOs consolidated in connection with the Consolidated SLST subordinated bond purchased in 2025.
Previous wording
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):
Current wording
The following table presents the components of unrealized gains (losses), net recognized for the years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands):
Previous wording
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.
Current wording
We recognized net unrealized gains in 2025 primarily due to a decrease in interest rates, which impacted the pricing of our investment securities and residential loans.
Previous wording
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. The net unrealized losses on our investment securities were more than offset by unrealized gains on our derivative instruments, as discussed below. 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.
Current wording
An increase in interest rates in 2024 resulted in unrealized losses recognized on investment securities and residential loans. In 2024, the net unrealized losses on our investment securities were more than offset by unrealized gains on our derivative instruments, as discussed below. 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.
Previous wording
Gains (Losses) on Derivative Instruments, Net
Current wording
(Losses) Gains on Derivative Instruments, Net
Previous wording
The following table presents the components of gains (losses) on derivative investments, net for theyears ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
Current wording
The following table presents the components of (losses) gains on derivative investments, net for theyears ended December 31, 2025 and 2024, respectively (dollar amounts in thousands):
Previous wording
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. 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.
Current wording
Net gains on derivative instruments in 2024 were primarily due to increases in interest rates which resulted in higher valuations of our interest rate swaps. 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.
Previous wording
The following table presents the components of income from equity investments for the years ended December 31, 2024 and 2023, respectively (dollar amounts in thousands):
Current wording
The following table presents the components of (loss) income from equity investments for the years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands):
Previous wording
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. 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.
Current wording
The decrease in income from equity investments in 2025 was primarily due to (1) a reduction in our share of income from our equity investment in Constructive, following its consolidation in our financial statements in the third quarter of 2025, (2) a decrease in preferred return on mezzanine lending investments accounted for as equity as a result of redemptions that have occurred since December 31, 2024 and (3) a decline in fair valuation of one mezzanine lending investment accounted for as equity. These decreases were partially offset by lower unrealized losses on unconsolidated joint venture equity investments in multi-family properties as a result of sales in 2025.
Previous wording
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. 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.
Current wording
The decrease in impairment of real estate recognized in 2025 can primarily be attributed to a reduced real estate portfolio subject to impairment due to the sale or de-consolidation of a significant portion of our multi-family real estate assets throughout 2024 and 2025. Also, during the years ended December 31, 2025 and 2024, we 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.
Previous wording
One joint venture equity investment was reclassified from disposal group held for sale in 2024. 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.
Current wording
One joint venture equity investment was reclassified from disposal group held for sale in 2024. 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 during the year ended December 31, 2024.
Showing the first 40 of 131 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•Completed the issuance of$82.5 million in aggregate principal amount of our 9.125% Senior Notes due 2030 in an underwritten public offering. 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.
Current report — wording carried from elsewhere
The following table details the loan characteristics of our residential loans held for sale as of December 31, 2025 (dollar amounts in thousands, except current average loan size):
Current report — wording carried from elsewhere
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. During the year ended December 31, 2025, the Company negotiated a further short-term maturity extension on this preferred equity investment for which the underlying property was subject to a purchase and sale agreement with a closing date subsequent to the scheduled maturity of the preferred equity investment. This investment was redeemed during the year ended December 31, 2025.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
Investment Securities Issued by Consolidated SLST
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
(a)Included in other assets in the accompanying consolidated balance sheets.
Previous report — wording carried elsewhere
The following table provides summary information regarding the multi-family properties in the disposal group held for sale as of December 31, 2024.
Previous report — wording carried elsewhere
(1)Represents average monthly rent per unit.
Previous report — wording carried elsewhere
(2)Represents the weighted average LTV of the underlying properties utilizing maximum senior committed mortgage amount and combined origination appraisal and capital expenditure budget.