VIE’s are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.

The most common type of VIE is a special purpose entity (“SPE”). SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. The basic SPE structure involves a company selling assets to the SPE with the SPE funding the purchase of those assets by issuing securities to investors. The agreements that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s assets by creditors of other entities, including the creditors of the seller of the assets. The primary beneficiary of a VIE (i.e., the party that has a controlling financial interest) is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The following table shows the Company’s remaining interest in the CRE-2 security, which represents a single security purchased by the Company in the securitizations for which the Company generated all of the commercial mortgage-backed loan collateral (dollars in thousands).


	December 31, 2024
	Principal amount outstanding						The Company's
					Assets held in		interest
	Total assets		Assets held in		nonconsolidated		in securitized
	held by		consolidated		VIEs with		assets in
	securitization		securitization		continuing		nonconsolidated
	VIEs⁽¹⁾		VIEs		involvement		VIEs⁽²⁾
Commercial mortgage-backed securities
CRE2⁽³⁾	$	24,450	$	—	$	24,450	$	3,462
CRE3		1,939		—		1,939		—
CRE4		261		—		261		—
CRE5		12,991		—		12,991		—

	December 31, 2023
	Principal amount outstanding						The Company's
					Assets held in		interest
	Total assets		Assets held in		nonconsolidated		in securitized
	held by		consolidated		VIEs with		assets in
	securitization		securitization		continuing		nonconsolidated
	VIEs⁽¹⁾		VIEs		involvement		VIEs
Commercial mortgage-backed securities
CRE2	$	40,743	$	—	$	40,743	$	12,574
CRE3		1,939		—		1,939		—
CRE4		821		—		821		—
CRE5		14,138		—		14,138		—

⁽¹⁾Consists of notes backed by commercial loans predominantly secured by real estate.

⁽²⁾For securities purchased from securitizations which comprise the Company's interest: CRE2 was non-rated at issuance. As of December 31, 2024, CRE2 is valued by discounted cash flow analysis.