“With regards to CML loan maturities, we now have successfully resolved 69% of the portfolio's schedule to mature in 2023, and our expectation is for minimal losses on the portfolio.”

In context

“eal estate team updated all U.S. office valuation through June 30, assuming a 25% peak to trough valuation decline. We believe it was prudent to focus our efforts here in the quarter given the heightened attention this has received. As expected, LTVs increased slightly as a result with our CML portfolio now in an average LTV of 62%, up from 58% in the first quarter of ‘23, and an average debt service coverage ratio of 2.3 times down slightly from 2.4 times in 1Q ‘23. The modest increase in LTVs coupled with the resiliency and robustness of the debt service coverage ratio is another indicator of the disciplined approach we take to investing in this asset class. The quality of our CML portfolio remains strong with only 2% of the loans having LTVs more than 80% and DSCRs less than one times. With regards to CML loan maturities, we now have successfully resolved 69% of the portfolio's schedule to mature in 2023, and our expectation is for minimal losses on the portfolio. Now let's switch gears to discuss expenses on Page 9. This chart shows a comparison of our direct expense ratio for full year 2022, as well as Q1 of '23 and Q2 of '23, which had a ratio of 12.2%. As you have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. Our Q2 direct expense ratio benefited from solid top-line growth and ongoing expense discipline. We remain committed to achieving a full year direct expense ratio of 12.6% or below in 2023, demonstrating our consistent execution and focus on an efficiency mindset. I will now discuss our cash and capital positions on Page 10. Cash and liquid assets at the holding companies were approximately $4.2 billion at June 30, which is above our t”