At March 31, 2023, we were obligated under ten non-cancelable operating leases with expiration dates through 2031 for $20 million of cumulative lease payments. For the three-month periods ended March 31, 2023 and 2022 our operating lease expense was $1 million and $1 million, respectively.


(In Thousands)	March 31, 2023
2023 (9 months)	$	3,699
2024	4,554
2025	3,629
2026	3,520
2027	2,588
2028 and thereafter	1,991
Total Lease Commitments	19,981
Less: Imputed interest	(2,343)
Operating Lease Liabilities	$	17,638

During the three months ended March 31, 2023, we entered into one new office lease. At March 31, 2023, our operating lease liabilities were $18 million, which were a component of Accrued expenses and other liabilities, and our operating lease right-of-use assets were $15 million, which were a component of Other assets.

We determined that none of our leases contained an implicit interest rate and used a discount rate equal to our incremental borrowing rate on a collateralized basis to determine the present value of our total lease payments. As such, we determined the applicable discount rate for each of our leases using a swap rate plus an applicable spread for borrowing arrangements secured by our real estate loans and securities for a length of time equal to the remaining lease term on the lease commencement date. At March 31, 2023, the weighted-average remaining lease term and weighted-average discount rate for our leases was 5 years and 5.2%, respectively.

As of March 31, 2023, we had commitments to fund up to $811 million of additional advances on existing BPL bridge loans. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the borrower and other terms regarding advances that must be met before we fund the commitment. At March 31, 2023, we carried a $1 million contingent liability related to these commitments to fund construction advances. During the three months ended March 31, 2023, we recorded a net market valuation gain of $0.4 million related to this liability through Mortgage banking activities, net on our consolidated statements of income.

In 2018, we invested in two partnerships created to acquire and manage certain mortgage servicing related assets. See Note 11 for additional detail on these investments. In connection with these investments, we are required to fund future net servicer advances related to the underlying mortgage loans. The actual amount of net servicer advances we may fund in the future is subject to significant uncertainty and will be based on the credit and prepayment performance of the underlying loans.

At March 31, 2023, we had flow purchase agreements with HEI originators with $8 million of cumulative purchase commitments outstanding. These purchase agreements specify monthly minimum and maximum amounts of HEIs subject to such purchase commitments. We account for these investments under the fair value option. See Note 10 for additional detail on these investments.

In the first quarter of 2022, we entered into a $25 million commitment to an investment fund with the mission of providing quality workforce housing opportunities in several California urban communities, including the San Francisco Bay Area. At March 31, 2023, we had funded $15 million of this commitment. This investment is included in Other investments on our consolidated balance sheets.

In 2021, we entered into a commitment to fund a $5 million RWT Horizons investment. At March 31, 2023, we had funded $1 million of this commitment. This investment is included in Other investments on our consolidated balance sheets.

As part of the consideration for our acquisition of Riverbend, we may make earnout payments payable in cash, based on generating specified revenues over a threshold amount during the two-year period ending July 1, 2024, up to a maximum potential amount payable of $25.3 million. These contingent earnout payments are classified as a contingent consideration liability on our consolidated balance sheets and carried at fair value. At March 31, 2023, our estimated fair value of this contingent liability was zero.

During 2015 and 2016, we sold conforming loans to the Agencies with an original unpaid principal balance of $3.19 billion, subject to our risk-sharing arrangements with the Agencies. At March 31, 2023, the maximum potential amount of future payments we could be required to make under these arrangements was $44 million and this amount was partially collateralized by assets we transferred to pledged accounts and is presented as pledged collateral in Other assets on our consolidated balance sheets. We have no recourse to any third parties that would allow us to recover any amounts related to our obligations under the arrangements. At March 31, 2023, we had incurred less than $100 thousand of cumulative losses under these arrangements. For the three months ended March 31, 2023, other income related to these arrangements was $0.2 million.

All of the loans in the reference pools subject to these risk-sharing arrangements were originated in 2014 and 2015, and at March 31, 2023, the loans had an unpaid principal balance of $429 million, a weighted average FICO score of 759 (at origination), and LTV ratio of 74% (at origination). At March 31, 2023, $9 million of the loans were 90 or more days delinquent, of which five of these loans with an unpaid principal balance of $1 million were in foreclosure. At March 31, 2023, the carrying value of our guarantee obligation was $6 million and included $5 million designated as a non-amortizing credit reserve, which we believe is sufficient to cover current expected losses under these obligations.

Our consolidated balance sheets include assets of special purpose entities ("SPEs") associated with these risk-sharing arrangements (i.e., the "pledged collateral" referred to above) that can only be used to settle obligations of these SPEs for which the creditors of these SPEs (the Agencies) do not have recourse to us. At both March 31, 2023 and December 31, 2022, assets of such SPEs totaled $30 million, and liabilities of such SPEs totaled $6 million.

We maintain a repurchase reserve for potential obligations arising from representation and warranty violations related to residential and business purpose loans we have sold to securitization trusts or third parties and for conforming residential loans associated with MSRs that we have purchased from third parties. We do not originate residential loans and we believe the initial risk of loss due to loan repurchases (i.e., due to a breach of representations and warranties) would generally be a contingency to the companies from whom we acquired the loans. However, in some cases, for example, where loans were acquired from companies that have since become insolvent, repurchase claims may result in our being liable for a repurchase obligation.

At March 31, 2023 and December 31, 2022, our repurchase reserve associated with our residential loans and MSRs was $6 million and $6 million, respectively, and was recorded in Accrued expenses and other liabilities on our consolidated balance sheets. During the three months ended March 31, 2023 and 2022, we received one and zero repurchase request(s), respectively, and repurchased five and zero loan(s), respectively. During the three months ended March 31, 2023, we recorded a repurchase provision expense of zero. During the three months ended March 31, 2022, we recorded repurchase provision expense of $0.2 million, which was recorded in Mortgage banking activities, net, and Other income on our consolidated statements of income.

At March 31, 2023 and December 31, 2022, our repurchase reserve associated with business purpose loans sold to third-parties was zero and $1 million, respectively. During the three months ended March, 31, 2023 and 2022, we received four and zero repurchase requests, respectively, for business purpose loans sold to third parties. During the three months ended March 31, 2023 and 2022, we repurchased eleven and zero business purpose loans, respectively, that had been sold to third parties. The business purpose loans repurchased in the first quarter of 2023, resolved the open repurchase requests related to loans sold to third-parties that were outstanding as of December 31, 2022, for which the $1 million reserve was previously established. No incremental repurchase provision was recorded in the first quarter of 2023 and, at March 31, 2023, no open repurchase requests were outstanding for business purpose loans sold to third parties.