Risk Factors Update Summary

• Added mention of "debt" and "tenant" relief laws increasing risk of loss. This change highlights potential bankruptcy risks.
• Hiring and retaining qualified loan originators is now emphasized, which may impact operations.
• Emphasized risks associated with venture investments, including fraud, misconduct, and changes in control, impacting financial stability.
• Counterparties for critical financial relationships include both domestic and international institutions, increasing financial risks.
• Increased focus on cybersecurity: Potential business disruption and data compromise risks highlighted.
• Clarified the impact of borrower bankruptcy on mortgage loans, emphasizing potential losses based on collateral value.
• Concentration of investments in real estate sector and property types may increase risk exposure.
• The allocation of capital among business lines may vary, affecting financial performance.
• Legal proceedings risk: Litigation may be lengthy, expensive, and disruptive to operations.
• Rule change: No more than 20% of assets may consist of TRS stock and securities.
• Highlighted the risks associated with leverage, including potential limitations on business strategies and increased exposure to market fluctuations.
• Market demand may limit the company's ability to issue CLOs and access associated financing capacity.
• Highlighted the importance of provisions for loan losses and the impact on financial performance, especially with CECL standards.
• Risks related to taxation as a REIT include potential substantial tax liability if not qualified.
• Transition from LIBOR to SOFR may adversely impact the company's results, with $430.1 million tied to LIBOR and $82.9 million to SOFR.
• Change in dividend policy: Quarterly distributions in cash or stock to comply with REIT requirements.
• Impact of AI: Adoption risks and potential harm to business reputation and customers discussed.
• Noted the potential impact of changes in market conditions on lease renewals and rental rates, affecting cash flow.
• Market risks related to investments now include government policies and laws impact.
• Increased focus on the impact of insurance costs on property value and net operating income, potentially affecting returns.
• Changes in interest rates and credit spreads could impact financial performance and investments.
• Potential tax benefits: Reduced tax rates for qualified dividends and deductions for REIT dividends.
• Compliance risk: Failure to obtain or renew licenses may lead to penalties and regulatory investigations.
• Increased focus on risks related to hedging and potential losses from hedging transactions.
• Failure to comply with ESG standards may result in reputational damage and hinder access to capital.
• Hedging transactions may fail to protect against risks, leading to potential losses and increased costs.
• Ownership limitations and transfer restrictions could impact shareholder actions and prevent a change in control.
• Failure to qualify as a REIT could result in substantial tax liability, reducing cash available for distribution.