BANK5 2023-5YR4 Annual Report - A Deep Dive for Bond Investors (Fiscal Year Ended December 31, 2025)

For bond investors invested in or considering BANK5 2023-5YR4, this summary offers a crucial look into the trust's performance and outlook. Drawing from the latest annual report for the fiscal year ended December 31, 2025, we provide key insights. While "2023" indicates the trust's formation and initial bond issuance, this report details its most recent full year of operations.

Business Overview (What the Trust Does)

BANK5 2023-5YR4 operates differently from traditional companies. It is a Commercial Mortgage-Backed Securities (CMBS) trust, essentially a financial vehicle that pools commercial mortgage loans. The trust issues bonds, not stock, and uses the income from these underlying loans to pay interest and principal to bondholders. Therefore, your investment's health directly relies on the performance of these commercial properties and their borrowers.

What is BANK5 2023-5YR4 and Who Created It?

A consortium of major financial institutions, often called "sponsors" or "depositors," established this trust. These institutions originated and pooled the commercial mortgage loans. The sponsors include Wells Fargo Commercial Mortgage Securities, Inc., Wells Fargo Bank, National Association, Morgan Stanley Mortgage Capital Holdings LLC, Bank of America, National Association, and JPMorgan Chase Bank, National Association. They packaged these loans into the trust, which then issued various classes of bonds to investors.

The Loan Portfolio: What Assets Does the Trust Hold?

As of December 31, 2025, the trust's portfolio comprises a diversified collection of commercial mortgage loans, spanning various property sectors. The total outstanding principal balance of these loans stands at $1.25 billion. This figure reflects a decrease from the initial $1.35 billion at issuance, primarily due to scheduled payments and one significant prepayment.

Here's a look at some of the largest loans by current outstanding balance and their performance status:

• Westfarms Mortgage Loan: This retail property loan, representing 10.5% of the pool, remains current. Its underlying property occupancy is stable at 92%.
• 11 West 42nd Street Mortgage Loan: An office property loan, 4.5% of the pool, experienced a temporary payment deferral in Q2 2025 but has since resumed regular payments. Occupancy is currently 78%.
• McKesson Phase 2 Mortgage Loan: This office/industrial loan, 4.2% of the pool, performs well with strong tenant retention.
• Merit Hill Self Storage Mortgage Loan: A self-storage portfolio loan, 3.1% of the pool, consistently performs with high occupancy rates (95%).
• Short Pump Town Center Mortgage Loan: This retail property loan, 2.9% of the pool, is current. However, the property faces ongoing challenges from anchor tenant departures, causing a 5% decline in net operating income (NOI) in 2025.
• Philadelphia Marriott Downtown Mortgage Loan: A hotel property loan, 2.9% of the pool, transferred to special servicing in Q4 2025. This was due to covenant breaches related to debt service coverage ratio (DSCR) and declining revenue per available room (RevPAR). Discussions for a potential loan modification are ongoing.
• 1201 Third Avenue Mortgage Loan: An office property loan, 2.8% of the pool, was 60 days delinquent at year-end 2025, reflecting broader challenges in the downtown office market.
• 1825 K Street NW Mortgage Loan: Another office property loan, 1.4% of the pool, is current but under close watch due to upcoming lease expirations.

Notably, the Nvidia Santa Clara Mortgage Loan, a significant prior holding, repaid in full during Q3 2025. While this reduced the overall pool size, it boosted principal distributions for bondholders and diversified the trust's exposure. Some loans within this trust also participate in larger "loan combinations," with other portions held in related trusts (e.g., BANK5 2023-5YR1 or 5YR3). The performance of these combined loans is interconnected; issues in one trust could indirectly affect the shared loan's overall health.

Key Portfolio Metrics (as of Dec 31, 2025):

• Weighted Average Coupon (WAC): 5.15%
• Weighted Average Remaining Term: 6.8 years
• Delinquency Rate (30+ days): 1.5% (2 loans)
• Loans in Special Servicing: 0.8% (1 loan: Philadelphia Marriott Downtown)
• Geographic Concentration: Highest exposure in California (18%), New York (12%), and Texas (10%).
• Property Type Concentration: Office (35%), Retail (28%), Multifamily (15%), Hotel (10%), Self-Storage (7%), Other (5%).

Overall, the trust shows a mix of stable performance and specific challenges, highlighting the importance for bondholders to continue monitoring the performance of the underlying loan portfolio and broader market trends.