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Private Loans | 6 Months Ended
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Jun. 30, 2025
Receivables [Abstract] |
Private Loans | 5. Mortgage Loans on Real Estate The Company disaggregates its mortgage loan investments into two portfolio segments: commercial and residential. Commercial mortgage loans include agricultural mortgage loans. The breakdown of mortgage loans on real estate by portfolio segment is as follows:
| June 30, 2025 |  | December 31, 2024
| (Dollars in millions)
Commercial mortgage loans | $ | 8,827 |  |  | $ | 9,576 |
Residential mortgage loans | 2,565 |  |  | 2,696 |
Total | 11,392 |  |  | 12,272 |
Allowance for credit losses | (138) |  |  | (155) |
Total, net of allowance | $ | 11,254 |  |  | $ | 12,117 |
The Company’s commercial mortgage loan portfolio consists of loans collateralized by the related properties and diversified as to property type, location and loan size. The geographic categories come from the U.S. Census Bureau’s “Census Regions and Divisions of the United States”. The commercial mortgage loan portfolio is summarized by geographic region and property type as follows:
| June 30, 2025 |  | December 31, 2024
| Amount |  | Percentage |  | Amount |  | Percentage
| (Dollars in millions)
Geographic distribution |  |  |  |  |  |  |
Pacific | $ | 2,015 |  |  | 22.8 | % |  | $ | 2,060 |  |  | 21.5 | %
Mountain | 1,436 |  |  | 16.3 | % |  | 1,678 |  |  | 17.5 | %
West North Central | 266 |  |  | 3.0 | % |  | 280 |  |  | 2.9 | %
West South Central | 1,372 |  |  | 15.5 | % |  | 1,443 |  |  | 15.1 | %
East North Central | 864 |  |  | 9.8 | % |  | 1,012 |  |  | 10.6 | %
East South Central | 136 |  |  | 1.5 | % |  | 144 |  |  | 1.5 | %
Middle Atlantic | 547 |  |  | 6.2 | % |  | 591 |  |  | 6.2 | %
South Atlantic | 1,746 |  |  | 19.8 | % |  | 1,993 |  |  | 20.8 | %
New England | 141 |  |  | 1.6 | % |  | 133 |  |  | 1.4 | %
Other (multi-region, non-US) | 304 |  |  | 3.5 | % |  | 242 |  |  | 2.5 | %
| 8,827 |  |  | 100.0 | % |  | 9,576 |  |  | 100.0 | %
Allowance for credit losses | (125) |  |  |  |  | (146) |  |  |
Total, net of allowance | $ | 8,702 |  |  |  |  | $ | 9,430 |  |  |
Property type distribution |  |  |  |  |  |  |
Agricultural | $ | 446 |  |  | 5.0 | % |  | $ | 447 |  |  | 4.7 | %
Apartment | 2,248 |  |  | 25.5 | % |  | 2,325 |  |  | 24.3 | %
Hotel | 1,024 |  |  | 11.6 | % |  | 1,246 |  |  | 13.0 | %
Industrial | 1,691 |  |  | 19.2 | % |  | 1,859 |  |  | 19.4 | %
Office | 1,329 |  |  | 15.1 | % |  | 1,425 |  |  | 14.9 | %
Parking | 251 |  |  | 2.8 | % |  | 326 |  |  | 3.4 | %
Retail | 1,473 |  |  | 16.7 | % |  | 1,572 |  |  | 16.4 | %
Storage | 152 |  |  | 1.7 | % |  | 176 |  |  | 1.8 | %
Other | 213 |  |  | 2.4 | % |  | 200 |  |  | 2.1 | %
| 8,827 |  |  | 100.0 | % |  | 9,576 |  |  | 100.0 | %
Allowance for credit losses | (125) |  |  |  |  | (146) |  |  |
Total, net of allowance | $ | 8,702 |  |  |  |  | $ | 9,430 |  |  |
There was $1 million interest income recognized on loans in non-accrual status for the three and six months ended June 30, 2025. There was no interest income recognized on loans in non-accrual status for the three and six months ended June 30, 2024. Impaired loans were not significant for any of the periods presented. Allowance for Credit Losses The Company establishes a valuation allowance to provide for the risk of credit losses inherent in its mortgage loan portfolios. The valuation allowance is maintained at a level believed adequate by management to absorb estimated expected credit losses. The valuation allowance is based on amortized cost, which excludes accrued interest receivable. The Company does not measure a credit loss allowance on accrued interest receivable as any uncollectible accrued interest receivable balances are written off to net investment income in a timely manner. The Company charged off $3 million and $5 million of uncollectible accrued interest receivable on its mortgage loan portfolios for the three and six months ended June 30, 2025. We charged off $1 million and $1 million of uncollectible accrued interest receivable on our mortgage loan portfolios for the three and six months ended June 30, 2024. The rollforward of the allowance for credit losses for mortgage loans for the three and six months ended June 30, 2025 and 2024 is shown below:
| 2025 |  | 2024
| Commercial Mortgage Loans |  | Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Residential Mortgage Loans
| (Dollars in millions)
Balance, as of January 1 | $ | (146) |  |  | $ | (9) |  |  | $ | (53) |  |  | $ | — |
Provision | (1) |  |  | (1) |  |  | (1) |  |  | — |
Writeoffs charged against the allowance | 3 |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |  |  | — |  |  | — |
Balance, as of March 31 | (144) |  |  | (10) |  |  | (54) |  |  | — |
Provision | 15 |  |  | (3) |  |  | — |  |  | — |
Writeoffs charged against the allowance | — |  |  | — |  |  | — |  |  | — |
Recoveries of amounts previously written off | 4 |  |  | — |  |  | — |  |  | — |
Balance, as of June 30 | $ | (125) |  |  | $ | (13) |  |  | $ | (54) |  |  | $ | — |
Credit Quality Indicators Mortgage loans are segregated by property-type and quantitative and qualitative allowance factors are applied. Qualitative factors are developed quarterly based on the pooling of assets with similar risk characteristics and historical loss experience adjusted for the expected trend in the current market environment. Credit losses are pooled by property type as it represents the most similar and reliable risk characteristics in our portfolio. The amortized cost of mortgage loans by year of origination by aging category are shown below:
| Amortized Cost Basis by Origination Year |  |
| 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  | Total
As of June 30, 2025: | (Dollars in millions)
Commercial mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |
Current | $ | 239 |  |  | $ | 376 |  |  | $ | 678 |  |  | $ | 2,069 |  |  | $ | 1,131 |  |  | $ | 4,015 |  |  | $ | 8,508 |
30 - 59 days past due | — |  |  | 82 |  |  | — |  |  | 10 |  |  | — |  |  | 15 |  |  | 107 |
60 - 89 days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 42 |  |  | 42 |
Non-accrual | — |  |  | — |  |  | 12 |  |  | 6 |  |  | 20 |  |  | 132 |  |  | 170 |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 207 |  |  | 330 |  |  | 572 |  |  | 843 |  |  | 203 |  |  | 123 |  |  | 2,278 |
30 - 59 days past due | 3 |  |  | 6 |  |  | 20 |  |  | 32 |  |  | 6 |  |  | 4 |  |  | 71 |
60 - 89 days past due | — |  |  | 1 |  |  | 8 |  |  | 29 |  |  | 4 |  |  | 2 |  |  | 44 |
Non-accrual | — |  |  | 1 |  |  | 78 |  |  | 72 |  |  | 12 |  |  | 9 |  |  | 172 |
Total mortgage loans on real estate | $ | 449 |  |  | $ | 796 |  |  | $ | 1,368 |  |  | $ | 3,061 |  |  | $ | 1,376 |  |  | $ | 4,342 |  |  | 11,392 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  | (138) |
Total, net of allowance |  |  |  |  |  |  |  |  |  |  |  |  | $ | 11,254 |
| Amortized Cost Basis by Origination Year |  |
| 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |  | Total
As of December 31, 2024: | (Dollars in millions)
Commercial mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |
Current | $ | 487 |  |  | $ | 649 |  |  | $ | 2,204 |  |  | $ | 1,270 |  |  | $ | 943 |  |  | $ | 3,736 |  |  | $ | 9,289 |
30 - 59 days past due | — |  |  | 25 |  |  | 4 |  |  | — |  |  | 10 |  |  | 48 |  |  | 87 |
60 - 89 days past due | — |  |  | — |  |  | 50 |  |  | 30 |  |  | — |  |  | — |  |  | 80 |
Non-accrual | — |  |  | 8 |  |  | 42 |  |  | 16 |  |  | 6 |  |  | 48 |  |  | 120 |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 294 |  |  | 790 |  |  | 970 |  |  | 222 |  |  | 121 |  |  | 7 |  |  | 2,404 |
30 - 59 days past due | 3 |  |  | 41 |  |  | 45 |  |  | 2 |  |  | 4 |  |  | — |  |  | 95 |
60 - 89 days past due | — |  |  | 7 |  |  | 20 |  |  | 2 |  |  | 4 |  |  | 5 |  |  | 38 |
Non-accrual | 3 |  |  | 51 |  |  | 76 |  |  | 18 |  |  | 8 |  |  | 3 |  |  | 159 |
Total mortgage loans on real estate | $ | 787 |  |  | $ | 1,571 |  |  | $ | 3,411 |  |  | $ | 1,560 |  |  | $ | 1,096 |  |  | $ | 3,847 |  |  | 12,272 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  | (155) |
Total, net of allowance |  |  |  |  |  |  |  |  |  |  |  |  | $ | 12,117 |
Generally, mortgage loans are secured by first liens on income-producing real estate with a loan-to-value ratio of up to 75%. It is the Company’s policy to not accrue interest on loans that are 90 days delinquent and where amounts are determined to be uncollectible. As of June 30, 2025 and December 31, 2024, 318 mortgage loans and 263 mortgage loans, respectively, were past due over 90 days or in nonaccrual status. The Company’s commercial and residential mortgage loans may be subject to loan modifications. Loan modifications may be granted to borrowers experiencing financial difficulty and could include principal forgiveness, interest rate reduction, an other-than-significant delay or a term extension. A loan modification typically does not result in a change in valuation allowance as it is already incorporated into the Company’s allowance methodology. However, if the Company grants a borrower experiencing financial difficulty principal forgiveness, the amount of principal forgiven would be written off, which would reduce the amortized cost of the loan and result in an adjustment to the valuation allowance. The carrying amount of mortgage loans experiencing financial difficulty, for which modifications have been granted, was $89 million and $85 million for the six months ended June 30, 2025 and 2024, respectively. 6. Private Loans The following table summarizes the credit ratings of our private loans:
| June 30, 2025 |  | December 31, 2024
| (Dollars in millions)
A or higher | $ | 2,175 |  |  | $ | 1,443 |
BBB | 1,409 |  |  | 669 |
BB and below | 2,060 |  |  | 710 |
Unrated (1) | 2,476 |  |  | 2,910 |
Total | $ | 8,120 |  |  | $ | 5,732 |
(1)Due to the nature of private loans, external agency credit ratings may not be readily available. Where appropriate, the Company obtains non-published credit ratings from one or more third-party rating agencies, which are determined based on an independent evaluation of the transaction. For other loans without published or private credit ratings, the Company assigns internal risk ratings, based on its investment selection and monitoring process and policies. These internal risk ratings are categorized as “Unrated” above. Allowance for Credit Losses The rollforward of the allowance for credit losses for private loans for the three and six months ended June 30, 2025 and 2024 is shown below:
| 2025 |  | 2024
| (Dollars in millions)
Balance at January 1 | $ | (66) |  |  | $ | (8) |
Provision | (11) |  |  | 1 |
Writeoffs charged against the allowance | — |  |  | — |
Balance at March 31 | (77) |  |  | (7) |
Acquisition from business combination | — |  |  | — |
Provision | (8) |  |  | (14) |
Writeoffs charged against the allowance | (2) |  |  | — |
Recoveries of amounts previously written off | — |  |  | — |
Balance at June 30 | $ | (87) |  |  | $ | (21) |
The Company’s private loans may be subject to loan modifications. Loan modifications may be granted to borrowers experiencing financial difficulties and could include term extensions. For the six months ended June 30, 2025 and 2024, the Company did not have a significant amount of private loans that it modified to borrowers experiencing financial difficulty. Impaired loans were not significant for any of the periods presented.

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