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Mortgage Loans on Real Estate
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Mortgage Loans on Real Estate
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, 2025December 31, 2024
(Dollars in millions)
Commercial mortgage loans$8,827 $9,576 
Residential mortgage loans2,565 2,696 
Total11,392 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, 2025December 31, 2024
AmountPercentageAmountPercentage
(Dollars in millions)
Geographic distribution
Pacific$2,015 22.8 %$2,060 21.5 %
Mountain1,436 16.3 %1,678 17.5 %
West North Central266 3.0 %280 2.9 %
West South Central1,372 15.5 %1,443 15.1 %
East North Central864 9.8 %1,012 10.6 %
East South Central136 1.5 %144 1.5 %
Middle Atlantic547 6.2 %591 6.2 %
South Atlantic1,746 19.8 %1,993 20.8 %
New England141 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 %
Apartment2,248 25.5 %2,325 24.3 %
Hotel1,024 11.6 %1,246 13.0 %
Industrial1,691 19.2 %1,859 19.4 %
Office1,329 15.1 %1,425 14.9 %
Parking251 2.8 %326 3.4 %
Retail1,473 16.7 %1,572 16.4 %
Storage152 1.7 %176 1.8 %
Other213 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 $1 million of uncollectible accrued interest receivable on our mortgage loan portfolios for the three and six months ended June 30, 2024.
The rollforward of the allowance for credit losses for mortgage loans for the three and six months ended June 30, 2025 and 2024 is shown below:
20252024
Commercial
Mortgage
Loans		Residential
Mortgage
Loans		Commercial
Mortgage
Loans		Residential
Mortgage
Loans
(Dollars in millions)
Balance, as of January 1$(146)$(9)$(53)$— 
Provision(1)(1)(1)— 
Writeoffs charged against the allowance3 — — — 
Recoveries of amounts previously written off— — — — 
Balance, as of March 31(144)(10)(54)— 
Provision15 (3)— — 
Writeoffs charged against the allowance— — — — 
Recoveries of amounts previously written off4 — — — 
Balance, as of June 30$(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
20252024202320222021PriorTotal
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
Current207 330 572 843 203 123 2,278 
30 - 59 days past due3 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
20242023202220212020PriorTotal
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
Current294 790 970 222 121 7 2,404 
30 - 59 days past due3 41 45 2 4 — 95 
60 - 89 days past due— 7 20 2 4 5 38 
Non-accrual3 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, 2025December 31, 2024
(Dollars in millions)
A or higher$2,175 $1,443 
BBB1,409 669 
BB and below2,060 710 
Unrated (1)2,476 2,910 
Total$8,120 $5,732 
(1)Due to the nature of private loans, external agency credit ratings may not be readily available. Where appropriate, the Company obtains non-published credit ratings from one or more third-party rating agencies, which are determined based on an independent evaluation of the transaction. For other loans without published or private credit ratings, the Company assigns internal risk ratings, based on its investment selection and monitoring process and policies. These internal risk ratings are categorized as “Unrated” above.
Allowance for Credit Losses
The rollforward of the allowance for credit losses for private loans for the three and six months ended June 30, 2025 and 2024 is shown below:
20252024
(Dollars in millions)
Balance at January 1$(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.