Financial Data and Key Metrics Changes - For Q3 2025, the company reported a GAAP net loss of $0.07 per share and a distributable loss of $0.15 per share, with distributable earnings prior to realized gains and losses at $0.04 per share [9][10] - The held-for-investment loan portfolio decreased to $4.3 billion at September 30 from $5 billion at June 30, primarily due to four loan resolutions and the reclassification of one loan to held for sale [9][10] - Total borrowings were reduced by $1.4 billion, and the net debt-to-equity ratio improved to 1.9x from 2.2x at June 30 [14][15] Business Line Data and Key Metrics Changes - The company resolved nine watchlist loans totaling $1.1 billion of UPB and achieved $2.3 billion in total resolutions year-to-date, including $81 million in partial repayments [8][11] - Liquidity improved by $283 million to $385 million as of November 4, 2025, with unencumbered assets increasing to $548 million from $456 million [8][15] Market Data and Key Metrics Changes - The commercial real estate market is showing signs of stabilization and recovery, with increased transaction volumes and tighter lending spreads due to recent Fed rate cuts [5][6] - The multifamily sector is viewed positively, supported by long-term supply-demand dynamics and persistent housing affordability constraints [6][7] Company Strategy and Development Direction - The company is focused on resolving watchlist loans, enhancing liquidity, and deleveraging the portfolio, with a target of addressing the August 2026 term loan B maturity [8][15] - There is an emphasis on monetizing select multifamily REO assets and implementing operational and capital improvements to enhance value [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, indicating that the company is well-positioned to create value through strategic actions [5][6] - The company is actively evaluating refinancing options for its term loan B and anticipates providing further details in the coming months [15][30] Other Important Information - The company entered into an amendment to the terms of its term loan B, modifying certain financial covenants through March 31, 2026, and making a principal repayment of $150 million [16] - The company has reclassified its New York hotel portfolio to held-for-investment amid evolving market conditions [12] Q&A Session Summary Question: Impact of reversal of accruals on non-accrual loan - The reversal of accrued interest receivable on the non-accrual loan was about $4.5 million [20] Question: When will NII see a trough? - Management indicated that they are transitioning the portfolio and aggressively moving out of 4 and 5 rated loans, suggesting a lumpy recovery in NII [21][24] Question: Update on term loan and liquidity post-repayment - The outstanding balance of the term loan is about $712 million, and after the $150 million repayment, liquidity is expected to be around $230 million to $235 million [30] Question: Expectations around RISK-IV and RISK-V loans - The company anticipates an increase in the REO portfolio and is actively negotiating with borrowers to improve loan ratings [35][36] Question: Changes in the status of the California multifamily loan - The loan moved to anticipated REO due to the borrower's unwillingness to support the asset, leading to a decision to take ownership [45][46] Question: Any significant repayments expected before year-end? - Management indicated that there are possibilities for significant repayments in the near term, driven by healthy capital markets [48][49]

Financial Performance - GAAP net loss was $95 million, or $007 per share[4] - Distributable loss was $215 million, or $015 per share[4] - Distributable earnings prior to realized gains and losses were $59 million, or $004 per share[4] Loan Portfolio - Total loan commitments were $45 billion as of September 30, 2025, compared to $50 billion as of June 30, 2025[6] - The weighted average all-in yield was 67%[6] - Floating rate loans comprised 97% of the portfolio[6] - Senior loans also represented 97% of the portfolio[6] Loan Resolution - During the quarter, four loans were resolved, totaling $7160 million of UPB[4] - Year-to-date, 18 loans were resolved, totaling $22 billion of UPB, with $808 million in partial loan repayments[4] Liquidity and Leverage - Total available liquidity increased to $385 million as of November 4, 2025, including $340 million in cash[4, 15] - Unfunded loan commitments decreased to $348 million as of September 30, 2025, an ~82% reduction from December 31, 2022[4, 21] - Net debt to equity ratio decreased to 19x[4] - Total leverage ratio decreased to 24x[4] Risk Management - Risk rated 5 loans had a total UPB of $978 million, with an average specific CECL reserve of 172%[4, 38] - Risk rated 4 loans had an average general CECL reserve of 99%[4, 41]

Core Insights - Claros Mortgage Trust, Inc. reported a GAAP net loss of $9.5 million, or $0.07 per share, for the third quarter of 2025 [1] - The company experienced a Distributable Loss of $21.5 million, or $0.15 per share, while Distributable Earnings prior to realized gains and losses were $5.9 million, or $0.04 per share [1] Financial Performance - Total liquidity at the end of the quarter was $353 million, including $340 million in cash [5] - The loan portfolio stood at $4.3 billion with a weighted average all-in yield of 6.7% [5] - The book value per share was reported at $12.24 [5] Loan Resolutions and Asset Management - The company resolved loans totaling $716 million of UPB, including one full repayment of $167.6 million and a discounted payoff of $390 million [5] - Two mortgage foreclosures were executed, amounting to $158.4 million of UPB, both related to watchlist loans [5] - The company improved total liquidity by $283 million since the end of 2024 [6] Strategic Initiatives - The CEO highlighted significant progress on strategic priorities, exceeding the full-year goal of $2 billion in resolutions [6] - The company reduced financing UPB by $1.4 billion, including $317 million of deleveraging [5] Subsequent Events - As of November 4, 2025, total liquidity increased to $385 million, with unencumbered assets of $548 million [5] - The company resolved 18 loans totaling $2.2 billion of UPB and received $81 million in partial loan repayments [5]

Financial Performance - For the quarter ended September 30, 2025, the Company reported a GAAP net loss of $9.5 million, or $0.07 per share, and a Distributable Loss of $21.5 million, or $0.15 per share[2]. - The book value per share was reported at $12.24[6]. Loan Resolutions - The Company achieved loan resolutions totaling $716.0 million of UPB, including one full repayment of $167.6 million and a discounted payoff of $390.0 million[6]. - The Company resolved 18 loans totaling $2.2 billion of UPB, receiving $81 million in partial loan repayments[6]. - The Company has exceeded its full-year goal of $2 billion in resolutions, significantly improving liquidity and deleveraging its portfolio[7]. Liquidity and Debt Management - As of September 30, 2025, total liquidity was $353 million, with $340 million in cash, and the Company had a loan portfolio of $4.3 billion with a weighted average yield of 6.7%[6]. - The Company improved total liquidity by $283 million since the end of 2024, and the net debt/equity ratio was 1.9x as of September 30, 2025[13]. Reserves and Foreclosures - The provision for CECL reserves for the quarter was $24.2 million, with total CECL reserves of $307.7 million on loans receivable, representing approximately 6.8% of UPB[6]. - Four remaining watchlist multifamily loans with a total UPB of $640.3 million are expected to be resolved through foreclosure in upcoming quarters[13]. Asset Sales - The Company executed the sale of two floors of office space, resulting in gross proceeds of $13.8 million[6].

Financial Performance - For the three months ended September 30, 2025, the company reported a net loss per share of $0.07, compared to a net loss per share of $1.30 for the previous quarter [201]. - For the three months ended September 30, 2025, the net loss was $9,528,000, compared to a net loss of $181,707,000 for the previous quarter [209]. - Distributable Earnings prior to realized gains and losses for the quarter were $5,850,000, down from $14,849,000 in the previous quarter [209]. - The company reported a Distributable Loss of $21,547,000 for the quarter, compared to a Distributable Loss of $110,061,000 for the previous quarter [209]. - The company recorded a net loss of $9.5 million for the three months ended September 30, 2025, compared to a net loss of $181.7 million in the previous quarter, representing an improvement of $172.2 million [272]. - Net loss for the nine months ended September 30, 2025, was $269.9 million, compared to a net loss of $120.6 million in the same period in 2024 [284]. Dividends and REIT Compliance - The company did not declare any dividends for the quarter ended September 30, 2025, consistent with the previous quarter [201]. - The company aims to maintain its status as a REIT by distributing at least 90% of its REIT taxable income as dividends [205]. - The company has elected to be taxed as a REIT and must distribute at least 90% of its REIT taxable income annually to maintain its status [331]. - As of September 30, 2025, the company was in compliance with all REIT requirements [332]. Book Value and Equity - As of September 30, 2025, the company's book value per share was $12.24, and the adjusted book value per share was $13.28 [200]. - The book value per share decreased to $12.24 as of September 30, 2025, from $14.12 as of December 31, 2024 [212]. - Adjusted Book Value per share was $13.28 as of September 30, 2025, down from $15.17 as of December 31, 2024 [212]. - The total equity as of September 30, 2025, was $1,748,811,000, compared to $2,008,086,000 as of December 31, 2024 [212]. Debt and Leverage Ratios - The Net Debt-to-Equity Ratio was reported at 1.9x, while the Total Leverage Ratio stood at 2.4x as of September 30, 2025 [200]. - Net debt-to-equity ratio improved to 1.9x as of September 30, 2025, down from 2.4x at the end of 2024 [301]. - Total leverage ratio decreased to 2.4x as of September 30, 2025, compared to 2.8x at the end of 2024 [301]. Loan Portfolio and Credit Losses - The company focuses on originating loans ranging from $50 million to $300 million on transitional commercial real estate assets located in U.S. markets [197]. - The unpaid principal balance of loans receivable held-for-investment at the end of the period was $4,518,241,000, down from $5,213,147,000 at the beginning of the period [224]. - The total unpaid principal balance of loans receivable held-for-investment is $4,866,018,000 as of September 30, 2025 [225]. - The weighted average loan-to-value (LTV) ratio at origination is 70.5%, excluding risk-rated 5 loans [227]. - The company recorded a provision for current expected credit losses of $254.8 million, including a $201.3 million increase in specific CECL reserves [242]. - As of September 30, 2025, the total current expected credit loss reserve was $360.4 million, reflecting potential credit losses in the loan portfolio [243]. - The weighted average risk rating of the loans receivable held-for-investment portfolio was 3.6 as of September 30, 2025, indicating moderate risk [240]. Revenue and Expenses - Total net revenue for the three months ended September 30, 2025, decreased by $5.6 million to $46.1 million, primarily due to a $9.1 million decline in net interest income [273]. - Interest and related income for the three months ended September 30, 2025, was $88.9 million, down from $108.1 million in the previous quarter, reflecting a decrease of $19.2 million [272]. - Revenue from real estate owned increased by $3.5 million to $29.0 million, attributed to multifamily properties foreclosed on in July 2025 [273]. - Operating expenses increased by $3.6 million during the three months ended September 30, 2025, primarily due to higher operating expenses from real estate owned [276]. - Total net revenue decreased by $47.1 million to $141.1 million for the nine months ended September 30, 2025, compared to the same period in 2024 [285]. - Total expenses rose by $4.2 million to $126.6 million, primarily due to a $5.6 million increase in operating expenses from real estate owned [286]. Asset Management and Risk Management - The asset management team rigorously monitors the loan portfolio, focusing on both quantitative and qualitative analyses to manage risks effectively [238]. - The company emphasizes prudent risk management with a conservative loan-to-value ratio to mitigate credit risk, focusing on extensive due diligence [355]. - The company seeks to manage risks through underwriting, loan structuring, and asset management processes to protect investor capital [370]. Market Conditions and Economic Impact - The U.S. Federal Reserve increased benchmark interest rates by 5.25% by the end of 2023, impacting interest expenses and borrower debt servicing capabilities [353]. - Future compliance with financial covenants may be impacted by macroeconomic conditions and high benchmark interest rates [263]. - Real estate market values are subject to volatility due to various factors, including interest rates and economic conditions, which could lead to losses from foreclosures or loan restructurings [370]. Liquidity and Financing - As of September 30, 2025, total sources of liquidity amounted to $353.2 million, a significant increase from $101.7 million as of December 31, 2024 [304]. - The company has a contractual obligation of $3.7 billion related to secured financings and term loan agreements, with $1.6 billion due in less than one year [320]. - The company maintains cash and liquidity to comply with minimum liquidity covenants and meet primary liquidity needs, including loan origination and acquisitions [315]. - The company has not received any margin calls under its repurchase agreements since inception through September 30, 2025 [254].

Financial Data and Key Metrics Changes - For Q2 2025, the company reported a GAAP net loss of $1.3 per share and a distributable loss of $0.77 per share, with distributable earnings prior to realized losses at $0.10 per share [13] - The held for investment loan portfolio decreased to $5 billion at June 30 from $5.9 billion at March 31, primarily due to loan resolutions [13][14] - Total liquidity increased to $323 million as of August 5, representing a $221 million increase compared to December 31 [9][29] Business Line Data and Key Metrics Changes - The company resolved eight loans totaling $873 million of UPB during the second quarter, including four loans paid off in full and four watch list loans [6][7] - Year-to-date resolutions total $1.9 billion of UPB, consisting of $1.55 billion of loan repayments and sales, and $305 million of multifamily property foreclosures [17][29] - The watch list loans decreased to 17 loans and $2.1 billion of UPB, a net decline of $758 million of UPB and seven loans from the first quarter [7][17] Market Data and Key Metrics Changes - The elevated rate environment remains a headwind for commercial real estate, but investor sentiment has improved and transaction volumes have been recovering [5] - The company has seen significant turnover in its loan portfolio, with a higher percentage of resolutions compared to peers [65] Company Strategy and Development Direction - The company outlined three strategic priorities for 2025: resolving watch list loans, improving liquidity, and redeploying capital [5] - The management believes that their experience as a value-add owner and operator of real estate assets provides a competitive advantage in evaluating opportunities [10] - The company is optimistic about monetizing multifamily REO assets in the coming quarters [11][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the healing of the real estate capital markets and the potential for continued loan resolutions and liquidity generation [5][32] - The company is focused on addressing the upcoming maturity of its Term Loan B in August 2026, with potential uses for liquidity including partial paydowns or replacement financing [28][29] Other Important Information - The total CECL reserve on loans increased to $333 million or 6.4% of UPB at June 30, compared to $243 million or 4.1% at March 31, reflecting a conservative outlook amidst market uncertainty [22] - The company completed the commercial condomization of a mixed-use building in New York City, generating $29 million in gross proceeds [10] Q&A Session Summary Question: Does the liquidity number reflect the discounted payoff of the New York City multifamily? - Yes, the $323 million amount reflects the liquidity generated by the New York multifamily loan in July [31] Question: What is the outlook for continued resolutions and liquidity generation in the second half? - The capital markets are healing, and additional payoffs are expected, but the company will rely more on regular repayments moving forward [32][34] Question: What are the signposts for deploying liquidity? - The company will continue to focus on deleveraging the balance sheet and may consider stock buybacks, but will prioritize resolving watch list assets [35][36] Question: Can you provide an update on the REO balance and strategies for the assets? - The REO balance is approximately $525 million, and the company is pursuing various strategies for asset sales and operational improvements [40][41] Question: How is the term loan refinancing process progressing? - The company is engaging with private credit providers and expects to reduce the size of the financing, while also considering preferred equity in the future [72]

Financial Performance - GAAP net loss was $181.7 million, or $1.30 per share; distributable loss was $110.1 million, or $0.77 per share; distributable earnings prior to realized losses was $14.8 million, or $0.10 per share[2, 16] - Provision for CECL reserves was $189.5 million, or $1.33 per share, primarily driven by specific reserves[2] - Book value was $12.27 per share[2] Loan Portfolio and Resolutions - Loan portfolio totaled $5.0 billion, with 98% floating-rate and 98% senior loans[2, 3] - Year-to-date loan resolutions amounted to $1.9 billion of UPB, including $1.0 billion during the quarter[2] - Loans with a risk rating of 4 or 5 were 42% of the loan portfolio ($2.1 billion of UPB, 17 loans), compared to 48% as of June 30, 2025 ($2.6 billion of UPB, 20 loans)[2] - CECL reserves on loans receivable were $332.7 million, or $2.32 per share, approximating 6.4% of UPB[2] Liquidity and Capitalization - Total liquidity was $224 million, including $209 million of cash as of June 30, 2025, increasing to $323 million, including $310 million of cash by August 5, 2025[2, 9] - Unencumbered assets included $398 million of loan UPB and $115 million of REO carrying value[2] - Net unfunded loan commitments declined to $123 million[2] - Outstanding financings decreased by $652 million during the quarter, including $188 million of deleveraging payments[2] - Net debt / equity ratio declined to 2.2x, and total leverage ratio declined to 2.6x[2] Real Estate Owned (REO) - Mixed-use REO generated $29 million of gross proceeds primarily related to the sale of five floors of office space[2, 38] - Refinanced debt related to the real estate owned hotel portfolio with a $235 million non-recourse loan[2, 38]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the second quarter of 2025, Claros Mortgage Trust reported a significant GAAP net loss of $181.7 million, or $1.30 per share, with a non-GAAP Distributable Loss of $110.1 million, or $0.77 per share, primarily due to a substantial $189.5 million provision for CECL reserves, while Distributable Earnings prior to realized losses remained positive at $14.8 million, or $0.10 per share, and the company's book value stood at $12.27 per share Financial Performance Summary | Metric | Q2 2025 | Per Share | | :--- | :--- | :--- | | GAAP Net Loss | $(181.7) million | $(1.30) | | Distributable Loss (Non-GAAP) | $(110.1) million | $(0.77) | | Distributable Earnings prior to realized losses | $14.8 million | $0.10 | - A provision for CECL reserves of **$189.5 million**, or **$1.33 per share**, was recorded for the quarter, bringing total CECL reserves to **$332.7 million**, representing approximately **6.4%** of the loan portfolio's Unpaid Principal Balance (UPB)[3](index=3&type=chunk) - Book value was reported at **$12.27 per share** as of June 30, 2025[3](index=3&type=chunk) [Operational and Portfolio Highlights](index=1&type=section&id=Operational%20and%20Portfolio%20Highlights) The company demonstrated significant progress in managing its portfolio during the second quarter and year-to-date, resolving $1.0 billion and $1.9 billion of loans, respectively, which substantially improved liquidity from $224 million at quarter-end to $323 million by early August 2025 - Key loan resolution activities in Q2 2025 totaled **$1.0 billion** of UPB, comprising: - Four full repayments (**$480.0 million**) - Two discounted payoffs (**$88.6 million**) - Two loan sales (**$303.9 million**) - Two mortgage foreclosures (**$146.7 million**)[3](index=3&type=chunk) - Year-to-date 2025, the company resolved fifteen loans totaling **$1.9 billion** of UPB, an amount exceeding the total resolution activity from each of the prior three full years[3](index=3&type=chunk) - Total liquidity significantly improved, standing at **$224 million** at quarter-end (June 30, 2025) and increasing further to **$323 million** by August 5, 2025[3](index=3&type=chunk) Key Portfolio Metrics | Portfolio Metric | Value | | :--- | :--- | | Loan Portfolio Size | $5.0 billion | | Weighted Average All-in Yield | 7.0% | | Unencumbered Loan UPB | $398 million | | Unencumbered REO Carrying Value | $115 million | [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Richard Mack expressed optimism, citing signs of a more constructive capital markets environment in commercial real estate despite elevated interest rates, emphasizing the significant increase in portfolio resolution activity during the quarter, which has more than doubled the company's liquidity since the end of 2024 and positions CMTG for continued positive progress in the second half of 2025 - Management is observing signs of a "more constructive capital markets environment in commercial real estate," despite the prolonged period of high interest rates[4](index=4&type=chunk) - The second quarter saw a "meaningful uptick in portfolio activity," including the resolution of eight loans[4](index=4&type=chunk) - As a result of recent activities, the company has more than doubled its liquidity position since year-end 2024 and is well-positioned for the second half of 2025[4](index=4&type=chunk) [Reconciliation of GAAP Net Loss to Non-GAAP Distributable Loss](index=3&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Distributable%20Loss) The company provides a detailed reconciliation from its GAAP Net Loss of $181.7 million to its non-GAAP Distributable Loss of $110.1 million for Q2 2025, with primary adjustments including adding back the $189.5 million provision for credit losses and other non-cash items, partially offset by $120.8 million in principal charge-offs and other realized losses, as Distributable Earnings (Loss) is a key non-GAAP metric used by management to evaluate performance and assess the ability to pay dividends GAAP Net Loss to Non-GAAP Distributable Loss Reconciliation (Q2 2025) | Reconciliation Item (Q2 2025) | Amount (in thousands) | | :--- | :--- | | **Net loss (GAAP)** | **$ (181,707)** | | Provision for current expected credit loss reserve | $ 189,489 | | Non-cash stock-based compensation expense | $ 4,762 | | Other Adjustments | $ 2,305 | | **Distributable Earnings prior to realized losses** | **$ 14,849** | | Principal charge-offs | $ (120,817) | | Other Realized Losses | $ (4,093) | | **Distributable Loss (Non-GAAP)** | **$ (110,061)** | - Distributable Earnings (Loss) is a non-GAAP measure defined as GAAP net income excluding non-cash items like stock-based compensation, depreciation, unrealized gains/losses, and the provision for credit losses[10](index=10&type=chunk) - While the provision for credit losses is excluded from Distributable Earnings, actual charge-offs of principal and interest are recognized through this metric when a loan is resolved or an amount is deemed non-recoverable[13](index=13&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) Claros Mortgage Trust, Inc. (CMTG) is a real estate investment trust (REIT) focused on originating senior and subordinate loans for transitional commercial real estate in major U.S. markets, externally managed by an affiliate of Mack Real Estate Credit Strategies, L.P., with an earnings conference call scheduled for August 7, 2025, to discuss these results - CMTG is a REIT primarily focused on originating loans on transitional commercial real estate assets in major U.S. markets[8](index=8&type=chunk) - The company will host a conference call to discuss its financial results on Thursday, August 7, 2025, at 9:00 a.m. ET[5](index=5&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements show a significant increase in net loss, driven by a substantial provision for credit losses, alongside decreased total assets and equity [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$5,823,122** | **$6,966,955** | | Loans receivable held-for-investment, net | $4,881,446 | $5,947,262 | | Current expected credit loss reserve | ($326,072) | ($243,030) | | Real estate owned held-for-investment, net | $218,503 | $127,140 | | **Total Liabilities** | **$4,066,092** | **$4,958,869** | | Repurchase agreements | $2,440,057 | $3,190,339 | | Secured term loan, net | $708,378 | $709,777 | | **Total Equity** | **$1,757,030** | **$2,008,086** | - Total assets decreased by approximately **$1.14 billion** from December 31, 2024, to June 30, 2025, primarily due to a reduction in net loans receivable[9](index=9&type=chunk) - Total equity declined by approximately **$251 million** over the same period, largely as a result of the accumulated deficit increasing from net losses[9](index=9&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statement of Operations Summary (in thousands, except per share data) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $26,143 | $41,906 | $54,954 | $86,820 | | Total net revenue | $51,632 | $64,487 | $95,007 | $123,312 | | Provision for current expected credit loss reserve | ($189,489) | ($33,928) | ($230,612) | ($103,888) | | **Net loss** | **($181,707)** | **($11,554)** | **($260,330)** | **($64,349)** | | **Net loss per share (Basic and diluted)** | **($1.30)** | **($0.09)** | **($1.86)** | **($0.48)** | - The net loss for the six months ended June 30, 2025, increased significantly to **$260.3 million** from $64.3 million in the prior-year period[12](index=12&type=chunk) - This was primarily driven by a more than doubling of the provision for current expected credit loss reserve to **$230.6 million** and a decrease in net interest income[12](index=12&type=chunk) [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) - Total equity decreased from **$2,008.1 million** at December 31, 2024, to **$1,757.0 million** at June 30, 2025[15](index=15&type=chunk) - The primary driver of this decrease was a net loss of **$260.3 million** for the six-month period, partially offset by stock-based compensation[15](index=15&type=chunk) - The company did not declare any dividends during the six months ended June 30, 2025, in contrast to the same period in 2024 when dividends of **$71.2 million** were declared[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statement of Cash Flows Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($41,633) | $27,013 | | Net cash provided by investing activities | $1,023,971 | $367,046 | | Net cash used in financing activities | ($887,918) | ($439,551) | | **Net increase (decrease) in cash** | **$94,420** | **($45,492)** | - Cash from investing activities was primarily driven by **$767.7 million** in loan repayments and **$302.5 million** from loan sales[18](index=18&type=chunk) - Cash used in financing activities was mainly due to **$1.5 billion** in repayments of secured financings, which exceeded the **$675.9 million** in proceeds from new secured financings[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company is a Maryland corporation externally managed by Claros REIT Management LP, and it has elected to be taxed as a Real Estate Investment Trust (REIT)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The preparation of financial statements requires significant management estimates, particularly concerning the current expected credit loss (CECL) reserve, fair value of real estate assets, and impairment assessments[30](index=30&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a significant net loss driven by credit loss provisions, a reduction in the loan portfolio, an increase in high-risk loans, and several property acquisitions via foreclosure Key Financial Indicators | Metric | Q2 2025 | As of June 30, 2025 | | :--- | :--- | :--- | | Net Loss per Share | ($1.30) | N/A | | Distributable Loss per Share | ($0.77) | N/A | | Dividends Declared per Share | $0.00 | N/A | | Book Value per Share | N/A | $12.27 | | Adjusted Book Value per Share | N/A | $13.27 | | Net Debt-to-Equity Ratio | N/A | 2.2x | - The company's primary business is originating senior and subordinate loans on transitional commercial real estate (CRE) assets in major U.S. markets[193](index=193&type=chunk)[194](index=194&type=chunk) [Our Portfolio](index=40&type=section&id=Our%20Portfolio) Loan Portfolio Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of Loans | 42 | | Unpaid Principal Balance | $5.21 billion | | Carrying Value | $5.01 billion | | Weighted Average Yield to Maturity | 7.0% | | Weighted Average Risk Rating | 3.8 | - During the first six months of 2025, the company sold three loans with a total unpaid principal balance of **$405.0 million**, resulting in a cumulative principal charge-off/valuation allowance of **$101.2 million**[213](index=213&type=chunk) - The company acquired legal title to two multifamily properties through mortgage foreclosures, which were previously senior loans with combined unpaid principal of **$146.7 million**[225](index=225&type=chunk)[226](index=226&type=chunk) - The total CECL reserve was **$378.5 million** as of June 30, 2025, with a provision of **$230.6 million** for the first six months driven by changes in loss rates, risk ratings, and collateral values[232](index=232&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) - Comparing Q2 2025 to Q1 2025, the net loss increased from **$78.6 million** to **$181.7 million**, primarily due to a significantly higher provision for credit losses[261](index=261&type=chunk)[268](index=268&type=chunk)[270](index=270&type=chunk) - For the six months ended June 30, 2025, compared to the same period in 2024, total net revenue decreased by **$28.3 million** due to a smaller loan portfolio and more non-accrual loans[271](index=271&type=chunk)[272](index=272&type=chunk) - The net loss widened from **$64.3 million** to **$260.3 million**, largely due to the increased credit loss provision[280](index=280&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Leverage Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt-to-Equity Ratio | 2.2x | 2.4x | | Total Leverage Ratio | 2.6x | 2.8x | - Total sources of liquidity increased to **$223.8 million** at June 30, 2025, from **$101.7 million** at year-end 2024, primarily due to an increase in cash and cash equivalents[292](index=292&type=chunk) - As of June 30, 2025, the company had **$394.8 million** in unfunded loan commitments and expects to fund its net commitment of **$122.5 million** over a weighted average period of 1.7 years[302](index=302&type=chunk)[306](index=306&type=chunk) - The company established a **$150.0 million** at-the-market (ATM) stock offering program in May 2024, but had not issued any shares under it as of June 30, 2025[298](index=298&type=chunk)[299](index=299&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate, credit, capital markets, financing, and counterparty risk, with a notable sensitivity of net interest income to SOFR changes Interest Rate Sensitivity Analysis (Annual Impact) | Change in SOFR | Impact on Net Interest Income (in thousands) | | :--- | :--- | | -100 bps | $3,268 | | -50 bps | $1,526 | | +50 bps | ($1,526) | | +100 bps | ($3,052) | - Credit risk is managed through extensive due diligence, conservative loan-to-value ratios, and proactive asset management, leveraging its Sponsor platform for workout scenarios[336](index=336&type=chunk)[339](index=339&type=chunk) - Financing risk is mitigated by diversifying financing sources to counter potential unwillingness from lenders or increased costs, though no margin calls have been received to date[341](index=341&type=chunk)[342](index=342&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[355](index=355&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[354](index=354&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company and its Manager are not currently subject to any legal proceedings expected to have a material financial impact - The company and its Manager are not currently party to any legal proceedings that are expected to have a material financial impact[358](index=358&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the principal risk factors from those disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024[359](index=359&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[360](index=360&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[361](index=361&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[362](index=362&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) The company reported no other material information and no adoption or termination of Rule 10b5-1 trading arrangements by directors or officers - During the three months ended June 30, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[363](index=363&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including financing agreement amendments and officer certifications - The report includes several exhibits, such as amendments to repurchase agreements with Wells Fargo and JPMorgan Chase Bank, and required certifications from the Principal Executive Officer and Principal Financial Officer[364](index=364&type=chunk)

Core Viewpoint - Claros Mortgage Trust, Inc. (CMTG) has experienced a bearish trend, losing 12.3% in the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in the stock price, suggesting that selling pressure may be exhausting [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control [4][5]. - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors [5]. Fundamental Analysis - Recent upward revisions in earnings estimates for CMTG serve as a bullish indicator, correlating strongly with near-term stock price movements [7]. - The consensus EPS estimate for the current year has increased by 3.9% over the last 30 days, indicating analysts' optimism about the company's earnings potential [8]. - CMTG holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].