Note 4 - Securitizations and Variable Interest Entities	12 Months Ended
Dec. 31, 2024
Securitizations and Variable Interest Entities
Securitizations and Variable Interest Entities	Note 4. Securitizations and Variable Interest Entities Freddie Mac Series M Securitizations On August 15, 2024, the Company entered into an arrangement with Freddie Mac to securitize and sell a $230.7 million portfolio of nontaxable LIHTC loans that was securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $36.7 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $473 thousand net loss on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs. Two classes of M-Series certificates were issued: M-Series Class A Certificates totaling $197.5 million of principal and M-Series Class B Certificates totaling $34.9 million of principal. Freddie Mac guarantees timely payment of interest and scheduled principal on M-Series Class A Certificates, which were sold to third-party investors through a Freddie Mac Securitization SPE. M-Series Class B Certificates are subordinated to M-Series Class A Certificates and were issued to the Company, as discussed above, which in turn pledged these M-Series Class B Certificates to provide 15% first loss support to Freddie Mac on the M-Series Class A Certificates, or approximately $34.9 million of first loss support. In addition, the Company pledged $10.1 million of related taxable loans. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any indemnification for material breach in the Company’s representations. As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to a third party, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. Note 4. Securitizations and Variable Interest Entities (continued) On October 12, 2023, the Company entered into an arrangement with Freddie Mac, by which a $128.6 million portfolio of nontaxable LIHTC loans was securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $16.2 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $2.4 million net loss on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs. Two classes of M-Series certificates were issued: M-Series Class A Certificates totaling $114.2 million of principal and M-Series Class B Certificates totaling $15.6 million of principal. Freddie Mac guarantees timely payment of interest and scheduled principal on M-Series Class A Certificates, which were sold to third-party investors through a Freddie Mac Securitization SPE. M-Series Class B Certificates are subordinated to M-Series Class A Certificates and were issued to the Company, as discussed above, which in turn pledged these M-Series Class B Certificates to provide 12% first loss support to Freddie Mac on the M-Series Class A Certificates, or approximately $15.6 million of first loss support. In addition, the Company pledged $7.5 million of related taxable loans providing an additional $3.8 million of first loss support on the M-Series Class A Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any indemnification for material breach in the Company’s representations. As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to a third party, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. On November 26, 2024, the Company entered into an arrangement with a third-party trust and Freddie Mac, by which a $155.8 million portfolio of taxable LIHTC loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $23.6 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $1.4 million net gain on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs. Three classes of Q-Series certificates were issued: Q-Series Class A Certificates, Q-Series Class X Certificates and Q-Series Class B Certificates. Q-Series Class A Certificates, totaling $138.5 million of principal, were sold by Freddie Mac to third-party investors through a Freddie Mac Securitization SPE. Q-Series Class X Certificates totaling $3.2 million of principal, consisted of interest-only certificates for the interest in excess of that earned by the Q-Series Class A Certificates. Q-Series Class B Certificates totaling $18.9 million of principal, are subordinated to Q-Series Class A Certificates and were issued to the Company, as discussed above. The consideration received by the Company for the loans sold consisted of cash and the Company purchased the Q-Series Class X Certificates and Q-Series Class B Certificates as retained beneficial interests. Freddie Mac guarantees timely payment of interest and scheduled principal on both the Q-Series Class A Certificates and Q-Series and Class X Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in the Company’s representations. The Q-Series Class B Certificates provide a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $18.9 million. As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to a third party, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance and otherwise administer the underlying loans. Note 4. Securitizations and Variable Interest Entities (continued) On November 16, 2023, the Company entered into an arrangement with a third-party trust and Freddie Mac, by which a $133.3 million portfolio of taxable LIHTC loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $6.2 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $3.1 million net gain on sale was recognized, which included the impact of the fair value of retained beneficial interests, guarantee liabilities and transaction costs. Two classes of Q-Series certificates were issued: Q-Series Class A Certificates and Q-Series Class X Certificates. Q-Series Class A Certificates, totaling $134.6 million of principal, were sold by Freddie Mac to third-party investors. Q-Series Class X Certificates totaling $6.1 million of principal, consisted of interest-only certificates for the interest in excess of that earned by the Q-Series Class A Certificates. The consideration received by the Company for the loans sold consisted of cash and the Company purchased the Q-Series Class X Certificates as a retained beneficial interest. Freddie Mac guarantees timely payment of interest and scheduled principal on both the Q-Series Class A Certificates and Q-Series Class X Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in the Company’s representations. In connection with the securitization, the Company also entered into a reimbursement agreement for a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $16.2 million. The Company is also required to hold collateral against the reimbursement agreement. Accordingly, the Company pledged an FHLB letter of credit as collateral. As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to a third party, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance and otherwise administer the underlying loans. Variable Interest Entities A VIE is a corporation, partnership, limited liability company, or any other legal structure used to conduct activities or hold assets generally that either: • Does not have equity investors with voting rights that can directly or indirectly make decisions about the entity’s activities through those voting rights or similar rights; or • Has equity investors that do not provide sufficient equity for the entity to finance its activities without additional subordinated financial support. In order to execute certain series securitization transactions outlined above, CRBT created new bankruptcy-remote special purpose entities (each, a “Sponsor SPE”), all wholly-owned subsidiaries of CRBT through which the assets were sold to the Freddie Mac Securitization SPEs. The Company has variable interests in these Sponsor SPE VIEs and consolidates them as they have the power to direct the activities that most significantly impact them. The Company also has variable interests in the Freddie Mac Securitization SPEs described above, as well as Freddie Mac real estate mortgage investment conduit (REMIC) trusts that were established in connection with the Freddie Mac Q-series LIHTC loan sales and securitizations. All Freddie Mac VIE entities for both the M- and Q-series securitizations were assessed for potential consolidation under the VIE model that requires primary beneficiaries to consolidate the entity’s results. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could Note 4. Securitizations and Variable Interest Entities (continued) be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of involvement with the entity are evaluated. At both December 31, 2024 and 2023, the Company determined it was not the primary beneficiary of the Freddie Mac securitization SPE VIEs, including the REMIC trusts, primarily because the Company did not have the power to direct the activities that most significantly impact the VIEs. Evaluation and assessment of VIEs for consolidation is performed on an ongoing basis by management. Any changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment. As of December 31, 2024 and 2023, the Company’s total assets related to the consolidated Sponsor VIEs related to all securitizations to date, were $83.5 million and $22.4 million, respectively, which are included in trading securities on the consolidated balance sheets, and there were no liabilities recorded as of either date. The Company’s maximum exposure to loss associated with these consolidated VIEs consists of the capital invested plus any unfunded equity commitments that are binding. As of December 31, 2024, the maximum exposure to loss was $85.6 million.

Note 4 - Securitizations and Variable Interest Entities

12 Months Ended

Dec. 31, 2024

Securitizations and Variable Interest Entities

Securitizations and Variable Interest Entities

Note 4. Securitizations and Variable Interest Entities

Freddie Mac Series M Securitizations

On August 15, 2024, the Company entered into an arrangement with Freddie Mac to securitize and sell a $230.7 million portfolio of nontaxable LIHTC loans that was securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $36.7 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $473 thousand net loss on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs.

Two classes of M-Series certificates were issued: M-Series Class A Certificates totaling $197.5 million of principal and M-Series Class B Certificates totaling $34.9 million of principal. Freddie Mac guarantees timely payment of interest and scheduled principal on M-Series Class A Certificates, which were sold to third-party investors through a Freddie Mac Securitization SPE. M-Series Class B Certificates are subordinated to M-Series Class A Certificates and were issued to the Company, as discussed above, which in turn pledged these M-Series Class B Certificates to provide 15% first loss support to Freddie Mac on the M-Series Class A Certificates, or approximately $34.9 million of first loss support. In addition, the Company pledged $10.1 million of related taxable loans. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any indemnification for material breach in the Company’s representations.

As part of the securitization transaction, the Company released all mortgage servicing obligations and rights to a third party, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans.

Note 4. Securitizations and Variable Interest Entities (continued)

On October 12, 2023, the Company entered into an arrangement with Freddie Mac, by which a $128.6 million portfolio of nontaxable LIHTC loans was securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $16.2 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $2.4 million net loss on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs.

Two classes of M-Series certificates were issued: M-Series Class A Certificates totaling $114.2 million of principal and M-Series Class B Certificates totaling $15.6 million of principal. Freddie Mac guarantees timely payment of interest and scheduled principal on M-Series Class A Certificates, which were sold to third-party investors through a Freddie Mac Securitization SPE. M-Series Class B Certificates are subordinated to M-Series Class A Certificates and were issued to the Company, as discussed above, which in turn pledged these M-Series Class B Certificates to provide 12% first loss support to Freddie Mac on the M-Series Class A Certificates, or approximately $15.6 million of first loss support. In addition, the Company pledged $7.5 million of related taxable loans providing an additional $3.8 million of first loss support on the M-Series Class A Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any indemnification for material breach in the Company’s representations.

On November 26, 2024, the Company entered into an arrangement with a third-party trust and Freddie Mac, by which a $155.8 million portfolio of taxable LIHTC loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $23.6 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $1.4 million net gain on sale was recognized, which included the impact of the fair value of retained beneficial interests and transaction costs.

Three classes of Q-Series certificates were issued: Q-Series Class A Certificates, Q-Series Class X Certificates and Q-Series Class B Certificates. Q-Series Class A Certificates, totaling $138.5 million of principal, were sold by Freddie Mac to third-party investors through a Freddie Mac Securitization SPE. Q-Series Class X Certificates totaling $3.2 million of principal, consisted of interest-only certificates for the interest in excess of that earned by the Q-Series Class A Certificates. Q-Series Class B Certificates totaling $18.9 million of principal, are subordinated to Q-Series Class A Certificates and were issued to the Company, as discussed above. The consideration received by the Company for the loans sold consisted of cash and the Company purchased the Q-Series Class X Certificates and Q-Series Class B Certificates as retained beneficial interests. Freddie Mac guarantees timely payment of interest and scheduled principal on both the Q-Series Class A Certificates and Q-Series and Class X Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in the Company’s representations.

The Q-Series Class B Certificates provide a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $18.9 million.

Note 4. Securitizations and Variable Interest Entities (continued)

On November 16, 2023, the Company entered into an arrangement with a third-party trust and Freddie Mac, by which a $133.3 million portfolio of taxable LIHTC loans were sold to the trust and ultimately securitized through Freddie Mac and sold to investors. The Company retained beneficial interests with a fair value of $6.2 million, which are classified as trading securities on the consolidated balance sheets. The transfer of these loans was accounted for as a sale for financial reporting purposes, in accordance with ASC 860, and a $3.1 million net gain on sale was recognized, which included the impact of the fair value of retained beneficial interests, guarantee liabilities and transaction costs.

Two classes of Q-Series certificates were issued: Q-Series Class A Certificates and Q-Series Class X Certificates. Q-Series Class A Certificates, totaling $134.6 million of principal, were sold by Freddie Mac to third-party investors. Q-Series Class X Certificates totaling $6.1 million of principal, consisted of interest-only certificates for the interest in excess of that earned by the Q-Series Class A Certificates. The consideration received by the Company for the loans sold consisted of cash and the Company purchased the Q-Series Class X Certificates as a retained beneficial interest. Freddie Mac guarantees timely payment of interest and scheduled principal on both the Q-Series Class A Certificates and Q-Series Class X Certificates. The Company’s ongoing involvement in this transaction is limited to customary obligations of loan sales, including any material breach in the Company’s representations.

In connection with the securitization, the Company also entered into a reimbursement agreement for a first loss position in the underlying loan portfolio, not to exceed 12% of the unpaid principal amount of the loans comprising the securitization pool at settlement, or approximately $16.2 million. The Company is also required to hold collateral against the reimbursement agreement. Accordingly, the Company pledged an FHLB letter of credit as collateral.

Variable Interest Entities

A VIE is a corporation, partnership, limited liability company, or any other legal structure used to conduct activities or hold assets generally that either:

• Does not have equity investors with voting rights that can directly or indirectly make decisions about the entity’s activities through those voting rights or similar rights; or

• Has equity investors that do not provide sufficient equity for the entity to finance its activities without additional subordinated financial support.

In order to execute certain series securitization transactions outlined above, CRBT created new bankruptcy-remote special purpose entities (each, a “Sponsor SPE”), all wholly-owned subsidiaries of CRBT through which the assets were sold to the Freddie Mac Securitization SPEs. The Company has variable interests in these Sponsor SPE VIEs and consolidates them as they have the power to direct the activities that most significantly impact them.

The Company also has variable interests in the Freddie Mac Securitization SPEs described above, as well as Freddie Mac real estate mortgage investment conduit (REMIC) trusts that were established in connection with the Freddie Mac Q-series LIHTC loan sales and securitizations.

All Freddie Mac VIE entities for both the M- and Q-series securitizations were assessed for potential consolidation under the VIE model that requires primary beneficiaries to consolidate the entity’s results. A primary beneficiary is defined as the party that has both the power to direct the activities that most significantly impact the entity, and an interest that could

Note 4. Securitizations and Variable Interest Entities (continued)

be significant to the entity. To determine if an interest could be significant to the entity, both qualitative and quantitative factors regarding the nature, size and form of involvement with the entity are evaluated.

At both December 31, 2024 and 2023, the Company determined it was not the primary beneficiary of the Freddie Mac securitization SPE VIEs, including the REMIC trusts, primarily because the Company did not have the power to direct the activities that most significantly impact the VIEs.

Evaluation and assessment of VIEs for consolidation is performed on an ongoing basis by management. Any changes in facts and circumstances occurring since the previous primary beneficiary determination will be considered as part of this ongoing assessment.

As of December 31, 2024 and 2023, the Company’s total assets related to the consolidated Sponsor VIEs related to all securitizations to date, were $83.5 million and $22.4 million, respectively, which are included in trading securities on the consolidated balance sheets, and there were no liabilities recorded as of either date. The Company’s maximum exposure to loss associated with these consolidated VIEs consists of the capital invested plus any unfunded equity commitments that are binding. As of December 31, 2024, the maximum exposure to loss was $85.6 million.