Investors interested in stocks from the Real Estate - Operations sector have probably already heard of TPG RE Finance Trust (TRTX) and Smith Douglas Homes Corp. (SDHC) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an em ...

Core Viewpoint - TPG RE Finance Trust, Inc. announced the retirement of CFO Robert R. Foley at the end of the year, with Brandon Fox set to take over as interim CFO starting October 1, 2025 [1] Company Transition - Robert R. Foley will transition to a senior advisor role within TPG's real estate credit business after his retirement [1] - Brandon Fox, currently the chief accounting officer, will assume the responsibilities of interim chief financial officer [1]

Dividend Announcements - Ralph Lauren has declared a quarterly dividend of $0.9125 per share, payable on October 10, 2025, to shareholders of record as of September 26, 2025 [1] - Graco's Board of Directors declared a quarterly dividend of $0.275 per share, payable on November 5, 2025, to shareholders of record as of October 20, 2025, with approximately 165.7 million shares outstanding [2] - TPG RE Finance Trust announced a cash dividend of $0.24 per share for Q3 2025, payable on October 24, 2025, to common stockholders of record as of September 26, 2025 [3] - Pegasystems announced a quarterly cash dividend of $0.03 per share, to be paid on October 15, 2025, to shareholders of record as of October 1, 2025 [4] - Bentley Systems declared a dividend of $0.07 per share for Q3 2025, payable on September 30, 2025, to all stockholders of record as of September 23, 2025 [5]

Core Viewpoint - TPG RE Finance Trust (NYSE: TRTX) has experienced a significant rally over the past month, reducing the gap to its book value per share, which was previously at 31% [1] Group 1: Company Performance - The recent performance of TRTX indicates a strong recovery in its stock price, suggesting potential for further growth [1] - The equity market's daily price fluctuations contribute to long-term wealth creation or destruction, highlighting the importance of market dynamics [1] Group 2: Investment Strategy - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Technical Analysis - TPG RE Finance Trust, Inc. (TRTX) has reached a key level of support, indicating potential bullish momentum [1] - A "golden cross" has occurred, with TRTX's 50-day simple moving average crossing above its 200-day simple moving average, suggesting a possible bullish breakout [1] Market Performance - TRTX has experienced a rally of 12.8% over the past four weeks, indicating positive market sentiment [3] - The company currently holds a 2 (Buy) rating on the Zacks Rank, further supporting the bullish outlook [3] Earnings Outlook - Positive earnings outlook for the current quarter, with no earnings estimates decreasing in the past two months and two revisions higher [3] - The Zacks Consensus Estimate has also increased, reinforcing the bullish case for TRTX [3][4] Investment Consideration - The combination of favorable earnings estimate revisions and technical indicators suggests that investors should monitor TRTX for potential gains in the near future [4]

Core Viewpoint - TPG RE Finance Trust reported mixed financial results for Q2 2025, with distributable earnings per share exceeding analyst expectations, but total distributable earnings declining, indicating a need for strategic focus on loan origination and portfolio management [1][10]. Business Overview and Strategic Focus - TPG RE Finance Trust is a real estate investment trust (REIT) that specializes in providing commercial first mortgage loans to institutional borrowers, focusing on high-quality properties across the U.S. [2] - The company is managed by TPG Real Estate, which enhances its access to institutional capital and market expertise [2]. - Key priorities include maintaining REIT compliance, optimizing the floating rate loan portfolio, and disciplined loan origination [3]. Quarterly Performance: Portfolio Growth, Credit, and Capital Actions - In Q2 2025, the company originated seven new first mortgage loans totaling $695.6 million, with a weighted average spread of 2.86% over Term SOFR and a loan-to-value (LTV) ratio of 67.6% [4]. - The company received $172.3 million in repayments from three loans across various property types, and committed to additional loans totaling $112.3 million post-quarter-end, indicating a healthy deal pipeline [5]. - Asset quality remained stable with a weighted average risk rating of 3.0, and reserves increased to $68.8 million, representing 1.76% of loan commitments [6]. Capital Management and Liquidity - The company executed two real estate owned (REO) property sales, generating $39.4 million in proceeds and a $7.0 million gain, enhancing liquidity [7]. - A significant share repurchase program was implemented, with 1.66 million shares bought back for $12.5 million, and an additional 0.83 million shares for $6.8 million, increasing book value per share to $11.20 [8]. - Total liquidity stood at $236.4 million, down from $457.6 million in the previous quarter, primarily due to the absence of proceeds from a CRE CLO issuance [9]. Dividend and Outlook - The REIT declared a quarterly cash dividend of $0.24 per share, fully covered by distributable earnings, maintaining stability in line with REIT regulatory requirements [10]. - Management did not provide numerical guidance for future quarters, leaving investors focused on the company's ability to enhance distributable earnings and maintain loan origination levels [11][12].

Financial Data and Key Metrics Changes - TRTX reported GAAP net income of $16.9 million or $0.21 per common share, with distributable earnings of $0.24 per common share, covering the quarterly dividend [12] - Book value per common share was $11.2, slightly down from $11.19 in the previous quarter [12] - The CECL reserve rate declined to 176 basis points from 199 basis points, reflecting a 12% decrease [16] Business Line Data and Key Metrics Changes - The loan portfolio grew by 15% during the second quarter, driven by strong origination volume [15] - Seven new loans were originated with total commitments of $695.6 million and a weighted average credit spread of 2.86% [13] - The REO carrying value declined by $32.5 million or approximately 12% due to the sale of two REO properties, generating a GAAP gain of $7 million [14] Market Data and Key Metrics Changes - U.S. equity markets rallied, with the S&P 500 reaching an all-time high, while corporate credit markets tightened [6] - Real estate credit markets experienced widening in loan spreads due to tariff volatility, impacting lending dynamics [6] Company Strategy and Development Direction - The company aims to leverage its liquidity position and capital deployment strategies to drive earnings growth [10] - TRTX is focused on multifamily and industrial sectors, which are seen as liquid and resilient during economic cycles [39] - The company plans to continue selling REO properties and has a strategy in place for managing and improving the performance of these assets [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the loan portfolio, with no credit migration expected [48] - The company anticipates an elevated pace of new investments in the coming quarters, supported by a strong pipeline [25] - Management noted strong fundamentals in the multifamily sector, driven by slowing new construction and elevated borrowing rates [42] Other Important Information - TRTX's share price performance has led its peers with a cumulative return of 68% since January 2023 [19] - The company maintains a 100% performing loan portfolio and a stable liability structure that is 95% non mark to market [18] Q&A Session Summary Question: Future quarterly origination volumes - Management indicated that elevated origination volumes are expected to continue due to attractive lending opportunities as banks pull back [24] Question: Loan size targeting - The company has maintained a consistent scale in loan sizes, with larger loans providing diversification benefits [27] Question: REO sales and potential gains - Management noted a history of selling REO properties at book gains and plans to move several remaining properties to market soon [32] Question: Portfolio opportunity and repositioning - The focus remains on multifamily and industrial sectors, with ongoing monitoring of refinancing trends and potential acquisition loans [40] Question: Credit risk migration - Management stated that current reserves reflect future expectations, and no significant credit migration is anticipated [47]

Core Viewpoint - TPG RE Finance Trust reported quarterly earnings of $0.24 per share, matching the Zacks Consensus Estimate, but down from $0.28 per share a year ago, indicating a decline in profitability [1][2] Financial Performance - The company posted revenues of $36.2 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.9% and down from $39.3 million year-over-year [2] - TPG RE Finance Trust has not surpassed consensus EPS estimates over the last four quarters, indicating consistent underperformance [2] Stock Performance - TPG RE Finance Trust shares have decreased by approximately 1.5% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26, with expected revenues of $38.14 million, and for the current fiscal year, the estimate is $0.98 on revenues of $150.43 million [7] - The estimate revisions trend for TPG RE Finance Trust was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting potential outperformance in the near future [6] Industry Context - The Real Estate - Operations industry, to which TPG RE Finance Trust belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, which may negatively impact stock performance [8]

[Forward-Looking Statements and Other Disclosures](index=3&type=section&id=Forward-Looking%20Statements%20and%20Other%20Disclosures) This section provides a standard disclaimer regarding forward-looking statements, highlighting inherent risks, uncertainties, and other factors that could cause actual results to differ materially from projections - The presentation contains forward-looking statements subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from expectations[3](index=3&type=chunk)[4](index=4&type=chunk) - Key risk factors include general economic and market conditions, interest rate fluctuations, real estate market changes, financing difficulties, and regulatory developments[4](index=4&type=chunk) [Company Highlights (TRTX By the Numbers)](index=5&type=section&id=TRTX%20By%20the%20Numbers) This section provides a snapshot of TPG RE Finance Trust's key financial and operational metrics as of June 30, 2025, covering its loan portfolio, liquidity, capitalization, and dividend/earnings performance TRTX Key Metrics (2Q25) | Metric | Value | | :--- | :--- | | **Loan Portfolio:** | | | Loan Investment Portfolio | $3.9 billion | | Average Loan Size | $79.6 million | | Performing Portfolio | 100% | | Weighted Average Risk Rating | 3.0 | | Weighted Average All-in Yield | 8.04% | | Floating Rate Loans | 99.7% | | Weighted Average LTV | 66.1% | | **Liquidity & Capitalization:** | | | of Liquidity | $236.4 million | | Non-Mark-to-Market Financing | 94.8% | | Debt-to-Equity Ratio | 2.6x | | Available Financing Capacity | $1.7 billion | | **Dividend & Earnings:** | | | 2Q25 Common Stock Dividend Declared | $0.24 | | 2Q25 GAAP Income per Diluted Share | $0.21 | | 2Q25 Distributable Earnings per Diluted Share | $0.24 | | Annualized Dividend Yield | 12.4% | | Dividend Yield on Book Value per Share | 8.6% | | Book Value per Share at June 30, 2025 | $11.20 | [2Q25 Operating Results](index=7&type=section&id=2Q25%20Operating%20Results) The company reported a GAAP income of $0.21 per diluted share and distributable earnings of $0.24 per diluted share for Q2 2025 [Net Income and Distributable Earnings](index=7&type=section&id=Net%20Income%20and%20Distributable%20Earnings) For Q2 2025, Net Income Attributable to Common Stockholders was $16.9 million ($0.21 per diluted share), while Distributable Earnings totaled $19.0 million ($0.24 per diluted share) 2Q25 Operating Results (in millions, except per share data) | Metric | Net Income Attributable to Common Stockholders | Adjustments | Distributable Earnings | Per Common Share, Diluted | | :--- | :--- | :--- | :--- | :--- | | Interest Income | $70.7 | $- | $70.7 | $0.88 | | Interest Expense | (45.5) | - | (45.5) | (0.57) | | Net Interest Income | $25.1 | $- | $25.1 | $0.31 | | Management and Incentive Fees | (5.2) | - | (5.2) | (0.06) | | Stock Compensation Expense | (2.0) | 2.0 | - | - | | Revenue and Expense from REO operations, net | (2.0) | 3.4 | 1.4 | 0.02 | | Other Income & Expenses | (0.5) | - | (0.5) | (0.01) | | Gain on Sale of Real Estate Owned, net | 7.0 | (5.1) | 1.9 | 0.02 | | Preferred Stock Dividends & Participating Securities' Share in Earnings | (3.8) | - | (3.8) | (0.05) | | Net Income Before Credit Loss Expense | $18.7 | $0.3 | $19.0 | $0.24 | | Credit Loss Expense | (1.8) | 1.8 | - | - | | Total | $16.9 | $2.1 | $19.0 | $0.24 | | Per Common Share, Diluted | $0.21 | $0.03 | $0.24 | | [Quarter-over-Quarter Change in Book Value](index=7&type=section&id=QoQ%20Change%20in%20Book%20Value) Book value per share remained stable at $11.20 at June 30, 2025, compared to $11.19 at March 31, 2025, influenced by net income, dividends, and equity compensation QoQ Change in Book Value per Share (3/31/25 to 6/30/25) | Metric | Value | | :--- | :--- | | Book Value 3/31/25 | $11.19 | | Retired Common Stock Shares | $0.08 | | Issuance of Common Stock | ($0.07) | | Net Income, Excluding Credit Loss Benefit | $0.28 | | Dividends on Common Shares | ($0.24) | | Dividends on Preferred Shares | ($0.04) | | Equity Compensation | $0.02 | | Credit Loss Expense | ($0.02) | | Book Value 6/30/25 | $11.20 | [Liquidity and Leverage](index=9&type=section&id=Liquidity%20and%20Leverage) The company maintained $236.4 million in available liquidity as of June 30, 2025, with its Debt-to-Equity ratio at 2.63x, showing a slight increase from the previous quarter [Available Liquidity](index=9&type=section&id=Available%20Liquidity) Available liquidity decreased to $236.4 million at June 30, 2025, from $457.6 million at March 31, 2025, primarily due to a reduction in undrawn capacity Available Liquidity ($ in millions) | Metric | 9/30/2024 | 12/31/2024 | 3/31/2025 | 6/30/2025 | | :--- | :--- | :--- | :--- | :--- | | Covenant Cash | $15.0 | $15.0 | $15.0 | $20.7 | | Cash | $211.3 | $175.2 | $348.0 | $145.1 | | Undrawn Capacity | $130.7 | $130.6 | $25.4 | $68.8 | | CLO Reinvestment Cash | $0.0 | $0.0 | $69.2 | $1.8 | | Total Available Liquidity | $357.0 | $320.8 | $457.6 | $236.4 | [Leverage Ratios](index=9&type=section&id=Leverage%20Ratios) The Debt-to-Equity Ratio increased to 2.63x at June 30, 2025, from 2.23x in the prior quarter, while the Total Leverage Ratio also rose to 2.63x Leverage Ratios | Metric | 9/30/2024 | 12/31/2024 | 3/31/2025 | 6/30/2025 | | :--- | :--- | :--- | :--- | :--- | | Debt-to-Equity Ratio | 2.02x | 2.14x | 2.23x | 2.63x | | Total Leverage Ratio | 2.02x | 2.14x | 2.23x | 2.63x | [Loan Portfolio Analysis](index=11&type=section&id=Loan%20Portfolio) The loan portfolio totaled $3.9 billion in commitments, with 99.7% floating rate loans and a weighted average LTV of 66.1%, alongside a stable weighted average risk rating of 3.0 [Portfolio Metrics and Composition](index=11&type=section&id=Portfolio%20Metrics) The total loan commitments stood at $3.9 billion, with an outstanding principal balance of $3.8 billion, predominantly floating rate (99.7%) with an 8.04% weighted average all-in yield and 66.1% LTV Loan Portfolio Metrics (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Loan Commitments | $3.9 billion | | Outstanding Principal Balance | $3.8 billion | | MSA Concentrations (Top 25 / Top 10) | 58.5% / 34.3% | | Weighted Average All-in Yield | 8.04% | | Weighted Average Credit Spread | 3.48% | | Weighted Average Interest Rate Floor | 2.19% | | Weighted Average Borrower Interest Rate Cap | 4.28% | | % Floating Rate Loans | 99.7% | | Weighted Average LTV | 66.1% | [Loan Category and Geographic Exposure](index=11&type=section&id=Loan%20Category%20and%20Geographic%20Exposure) The loan portfolio is primarily composed of Bridge (51.7%), Moderate Transitional (24.8%), and Light Transitional (23.5%) loans, with largest geographic exposures in the Southwest (38.3%), East (29.9%), and Southeast (15.2%) regions Loan Category Distribution (by total loan commitment) | Loan Category | Percentage | | :--- | :--- | | Bridge | 51.7% | | Moderate Transitional | 24.8% | | Light Transitional | 23.5% | Loan Exposure by Region (by total loan commitment) | Region | Percentage | | :--- | :--- | | Southwest | 38.3% | | East | 29.9% | | Southeast | 15.2% | | West | 11.6% | | Midwest | 5.1% | [Loan Portfolio Activity and Migration](index=13&type=section&id=Loan%20Portfolio%20Activity%20and%20Migration) Q2 2025 saw $695.6 million in loan originations and $172.3 million in repayments, with portfolio migration showing increased multifamily exposure and decreased office and life science exposure - 2Q25 total loan originations of **$695.6 million**, with a weighted average interest rate of Term SOFR + 2.86% and as-is LTV of 67.6%[27](index=27&type=chunk) - 2Q25 total loan repayments of **$172.3 million**, including full repayments of **$147.4 million** and partial repayments of **$24.9 million**[27](index=27&type=chunk) - Portfolio migration shows an increase in Multifamily exposure (**18%**) and a decrease in Office (**18.4% to 15.0%**) and Life Science exposure (**10.4% to 8.9%**) from Jun 30, 2024 to Jun 30, 2025[26](index=26&type=chunk)[28](index=28&type=chunk) [Loan Portfolio Walk](index=15&type=section&id=Loan%20Portfolio%20Walk) Over the trailing twelve months, total loan commitments increased to $3,899.3 million at June 30, 2025, driven by $1.1 billion in originations, partially offset by repayments and REO conversions - TTM loan originations totaled **$1.1 billion**, driving net asset growth[31](index=31&type=chunk) Loan Commitments Evolution (in millions) | Date | Total Loan Commitments | Deferred Fundings and New Loan Originations | Repayments/Sales/REO Conversion | | :--- | :--- | :--- | :--- | | 6/30/2024 | $3,205.9 | $127.9 | ($99.2) | | 9/30/2024 | $3,284.5 | $139.6 | ($21.5) | | 12/31/2024 | $3,276.6 | $109.8 | ($149.3) | | 3/31/2025 | $3,385.9 | $116.4 | ($172.3) | | 6/30/2025 | $3,899.3 | | | [Risk Ratings](index=17&type=section&id=Risk%20Ratings) The weighted average risk rating for the loan portfolio remained stable at 3.0 as of June 30, 2025, consistent with previous quarters, with 95% of loans rated 3 (Medium Risk) - Weighted Average Risk Rating remained stable at **3.0** for 2Q25, consistent with the trailing four-quarter average[34](index=34&type=chunk)[37](index=37&type=chunk) Dispersion of Risk Ratings by Amortized Cost (June 30, 2025) | Risk Rating | Percentage | | :--- | :--- | | 1 (Very Low Risk) | 0% | | 2 (Low Risk) | 2% | | 3 (Medium Risk) | 95% | | 4 (High Risk/Potential for Loss) | 3% | | 5 (Default/Loss Likely) | 0% | [CECL Reserve](index=19&type=section&id=CECL%20Reserve) The allowance for credit losses increased to $68.8 million at June 30, 2025, up $1.6 million from $67.2 million as of March 31, 2025, representing 199 bps of total loan commitments - Allowance for credit losses increased by **$1.6 million** to **$68.8 million** at June 30, 2025, from **$67.2 million** at March 31, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) QoQ CECL Reserve (in millions) | Metric | 9/30/2024 | 12/31/2024 | 3/31/2025 | 6/30/2025 | | :--- | :--- | :--- | :--- | :--- | | Reserve as $M | $64.0 | $67.2 | $69.3 | $68.8 | | Reserve as bps of Total Loan Commitments | 176 | 187 | 205 | 199 | [Loan Financing](index=21&type=section&id=Loan%20Financing) The company utilizes diverse financing sources, with 94.8% being non-mark-to-market financing, a total capacity of $4.7 billion, and debt maturities spread across 2025-2029 and thereafter [Diverse Financing Sources](index=21&type=section&id=Diverse%20Financing%20Sources) TPG RE Finance Trust relies heavily on non-mark-to-market financing, constituting 94.8% of its financing sources, with a total capacity of $4.7 billion and an outstanding principal balance of $3.0 billion - **94.8%** of financing is Non-Mark-to-Market (Non-MTM) financing[42](index=42&type=chunk) Financing Capacity and Metrics | Metric | Value | | :--- | :--- | | Total Financing Capacity | $4.7 billion | | Outstanding Principal Balance | $3.0 billion | | Weighted Average Credit Spread | 1.94% | | Weighted Average Approved Advance Rate | 81.7% | [Expected Debt Maturities](index=21&type=section&id=Expected%20Debt%20Maturities) The company's debt maturities are distributed over several years, with significant amounts in 2025 and 2026, and a substantial portion thereafter Expected Debt Maturities ($ in millions) | Year | MTM Financing (credit only) | Non-MTM Financing | | :--- | :--- | :--- | | 2025 | $0 | ~$400 | | 2026 | $0 | ~$800 | | 2027 | $0 | ~$600 | | 2028 | $0 | ~$400 | | 2029 | $0 | ~$200 | | Thereafter | $0 | ~$600 | [Real Estate Owned (REO)](index=23&type=section&id=Real%20Estate%20Owned) The REO portfolio had an acquisition date fair value of $247.9 million and a current carrying value of $237.1 million as of June 30, 2025, following the sale of two office properties for $39.4 million in net proceeds and a $7.0 million gain - REO portfolio had a total acquisition date fair value of **$247.9 million** and a current carrying value of **$237.1 million** as of June 30, 2025[48](index=48&type=chunk) - Sold two office properties during 2Q25 for net proceeds of **$39.4 million**, resulting in a gain on sale of real estate, net of **$7.0 million**[48](index=48&type=chunk) Real Estate Owned Portfolio Summary (as of June 30, 2025, in thousands) | Metric | Total Office | Total Multifamily | Total Portfolio | | :--- | :--- | :--- | :--- | | Fair Value at Acquisition | $86,041 | $161,904 | $247,945 | | Carrying Value | $84,243 | $152,906 | $237,149 | | Mortgage Debt Outstanding | $31,200 | $- | $31,200 | | Net Book Equity | $53,043 | $152,906 | $205,949 | [Impact of Changing Rates](index=25&type=section&id=Impact%20of%20Changing%20Rates) A static analysis indicates that a +1.00% change in the index rate (Term SOFR at 4.32% as of June 30, 2025) would result in a $0.02 per share per quarter increase in net interest income, while a -1.00% change would result in a $0.02 per share per quarter decrease - A **+1.00%** change in the index rate (Term SOFR: **4.32%** at June 30, 2025) would result in a **$0.02 per share per quarter increase** in Net Interest Income[51](index=51&type=chunk)[52](index=52&type=chunk) - A **-1.00%** change in the index rate would result in a **($0.02) per share per quarter decrease** in Net Interest Income[51](index=51&type=chunk)[52](index=52&type=chunk) [Appendix](index=27&type=section&id=Appendix) This section provides supplementary information, including detailed definitions of key financial terms, a comprehensive list of the TRTX loan portfolio, reconciliations for per share calculations, and the consolidated financial statements [TRTX Loan Portfolio Details](index=29&type=section&id=TRTX%20Loan%20Portfolio) The appendix lists individual loans within the TRTX portfolio, detailing commitment, balance, interest rate, maturity, location, property type, LTV, and risk rating for each, with a total loan commitment of $3,899.3 million, weighted average LTV of 66.1%, and risk rating of 3.0 Top 10 TRTX Loan Portfolio Details (as of June 30, 2025) | Loan Name | Commitment ($M) | Balance ($M) | Interest Rate | Extended Maturity | Location | Property Type | LTV | Risk Rating | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Loan 1 | $256.3 | $253.4 | S + 3.6% | 2.1 years | San Jose, CA | Multifamily | 72.6% | 3 | | Loan 2 | $227.1 | $227.1 | S + 3.0% | 1.2 years | New York, NY | Office | 65.2% | 3 | | Loan 3 | $200.0 | $194.5 | S + 3.2% | 5.0 years | Various, Various | Industrial | 62.8% | 3 | | Loan 4 | $194.5 | $194.5 | S + 4.0% | 2.9 years | Daly City, CA | Life Science | 63.1% | 3 | | Loan 5 | $173.0 | $161.0 | S + 2.7% | 5.0 years | Los Angeles, CA | Multifamily | 72.1% | 3 | | Loan 6 | $130.5 | $130.5 | S + 3.5% | 2.6 years | New York, NY | Office | 65.2% | 3 | | Loan 7 | $129.0 | $115.5 | S + 3.4% | 4.5 years | Various, Various | Industrial | 55.3% | 3 | | Loan 8 | $113.0 | $113.0 | S + 3.5% | 0.9 years | Towson, MD | Multifamily | 70.2% | 3 | | Loan 9 | $113.0 | $110.0 | S + 3.3% | 4.4 years | Various, Various | Multifamily | 64.6% | 3 | | Loan 10 | $106.0 | $106.0 | S + 3.5% | 1.1 years | Various, NJ | Multifamily | 71.3% | 3 | | Total Loans (53) | $3,899.3 | $3,783.6 | S +3.5% | 2.7 years | | | 66.1% | 3.0 | [Per Share Calculations](index=31&type=section&id=Per%20Share%20Calculations) This section provides a reconciliation of GAAP net income to GAAP Net Income Attributable to Common Stockholders and Distributable Earnings, along with detailed per share metrics for basic and diluted shares Per Share Data (Three Months Ended June 30, 2025) | Metric | Value | | :--- | :--- | | Net Income Attributable to Common Stockholders | $16,881 thousand | | Earnings Per Common Share, Basic | $0.21 | | Earnings Per Common Share, Diluted | $0.21 | | Distributable Earnings | $18,978 thousand | | Distributable Earnings per Common Share, Basic | $0.24 | | Distributable Earnings per Common Share, Diluted | $0.24 | | Book Value per Common Share (June 30, 2025) | $11.20 | [Consolidated Financial Statements](index=33&type=section&id=Consolidated%20Financial%20Statements) This sub-section presents the company's consolidated balance sheets, statements of income and comprehensive income, and statements of cash flows for the reported periods, providing a detailed view of its financial position, performance, and liquidity [Consolidated Balance Sheets](index=33&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $4.16 billion from $3.73 billion at December 31, 2024, primarily driven by an increase in loans held for investment, with total liabilities also increasing to $3.07 billion from $2.62 billion due to higher collateralized loan obligations Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS:** | | | | Cash and cash equivalents | $165,850 | $190,160 | | Loans held for investment, net | $3,707,729 | $3,217,030 | | Real estate owned, net | $223,235 | $256,404 | | Total Assets | $4,162,066 | $3,731,429 | | **LIABILITIES:** | | | | Collateralized loan obligations, net | $2,442,868 | $1,681,660 | | Secured financing agreements, net | $520,987 | $670,727 | | Total Liabilities | $3,071,229 | $2,617,388 | | **EQUITY:** | | | | Total Stockholders' Equity | $1,090,837 | $1,114,041 | [Consolidated Statements of Income and Comprehensive Income](index=35&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended June 30, 2025, net income was $20.6 million, down from $24.7 million in the prior year, with net interest income decreasing to $25.1 million from $27.5 million, partially offset by a $7.0 million gain on sale of real estate owned Consolidated Statements of Income (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Interest income | $70,668 | $78,115 | | Interest expense | (45,524) | (50,588) | | Net interest income | $25,144 | $27,527 | | Total other revenue | $11,055 | $11,775 | | Total other expenses | $20,632 | $19,024 | | Gain on sale of real estate owned, net | $6,970 | $- | | Credit loss (expense) benefit, net | (1,778) | $4,537 | | Net income | $20,631 | $24,715 | | Net Income Attributable to Common Stockholders | $16,881 | $21,026 | | Earnings per Common Share, Diluted | $0.21 | $0.26 | [Consolidated Statements of Cash Flows](index=37&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $43.9 million, a decrease from $62.9 million in the prior year, with investing activities resulting in a net cash outflow of $457.7 million and financing activities providing $389.8 million Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $43,859 | $62,924 | | Net cash (used in) provided by investing activities | ($457,730) | $554,984 | | Net cash provided by (used in) financing activities | $389,810 | ($565,190) | | Net change in cash, cash equivalents, and restricted cash | ($24,061) | $52,718 | | Cash, cash equivalents and restricted cash at end of period | $166,422 | $259,736 | [Definitions](index=39&type=section&id=Definitions) This section provides detailed definitions for key financial and operational terms used throughout the report, including Distributable Earnings, financial covenants, geographic diversity classifications, leverage ratios, Loan-to-Value (LTV), various loan categories, property types, and the Loan Risk Ratings scale - Distributable Earnings is a non-GAAP measure, defined as GAAP net income (loss) attributable to common stockholders, adjusted for realized gains/losses from loan resolutions, non-cash stock compensation, depreciation/amortization, unrealized gains/losses (including credit loss expense), and certain other non-cash items[70](index=70&type=chunk) - Loan Risk Ratings are assigned on a 5-point scale (1-Very Low Risk to 5-Default/Loss Likely) based on factors like loan/credit structure, real estate value/cash flow, business plan performance, loan modifications, capital market changes, and sponsor quality[76](index=76&type=chunk) [Company Information](index=47&type=section&id=Company%20Information) TPG RE Finance Trust, Inc. is a commercial real estate finance company focused on first mortgage loans secured by institutional properties in the U.S., externally managed by TPG RE Finance Trust Management, L.P - TPG RE Finance Trust, Inc. is a commercial real estate finance company that originates, acquires, and manages primarily first mortgage loans secured by institutional properties in primary and select secondary markets in the United States[79](index=79&type=chunk) - The company is externally managed by TPG RE Finance Trust Management, L.P., part of TPG Real Estate[79](index=79&type=chunk)

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides the basic identification details for TPG RE Finance Trust, Inc. (TRTX) as an accelerated filer, including its incorporation state, IRS Employer Identification Number, principal executive offices, and registered securities on the New York Stock Exchange - TPG RE Finance Trust, Inc. (**TRTX**) is an accelerated filer, incorporated in **Maryland**, with its principal executive offices in **New York, New York**[4](index=4&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :---------------------------------------- | :---------------- | :---------------------------------------- | | Common Stock, par value $0.001 per share | TRTX | New York Stock Exchange | | 6.25% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share | TRTX PRC | New York Stock Exchange | - As of July 25, 2025, there were **78,590,582 shares of common stock** outstanding[5](index=5&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers that the Form 10-Q contains forward-looking statements subject to various risks and uncertainties, which could cause actual results to differ materially from projections - Forward-looking statements are identified by words like '**outlook**,' '**believe**,' '**expect**,' '**potential**,' '**continue**,' '**may**,' '**should**,' '**seek**,' '**approximately**,' '**predict**,' '**intend**,' '**will**,' '**plan**,' '**estimate**,' '**anticipate**,' and their negatives[8](index=8&type=chunk) - Key risks and uncertainties include **fluctuations in interest rates and credit spreads**, **adverse changes in real estate and capital markets**, **difficulty in obtaining financing**, and **adverse economic trends** such as inflation, slower growth, or recession[9](index=9&type=chunk) - The Company undertakes **no obligation to publicly update or revise** any forward-looking statements, except as required by law[11](index=11&type=chunk) [Table of Contents](index=4&type=section&id=TABLE%20OF%20CONTENTS) This section provides an organized listing of all the items and their corresponding page numbers included in the Form 10-Q, dividing the report into Part I (Financial Information) and Part II (Other Information) [Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of TPG RE Finance Trust, Inc. for the periods ended June 30, 2025, and December 31, 2024, including the balance sheets, statements of income and comprehensive income, statements of changes in equity, and statements of cash flows, along with detailed notes explaining significant accounting policies and financial statement line items [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of the Company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total assets | $4,162,066 | $3,731,429 | | Loans held for investment, net | $3,707,729 | $3,217,030 | | Total liabilities | $3,071,229 | $2,617,388 | | Collateralized loan obligations, net | $2,442,868 | $1,681,660 | | Total stockholders' equity | $1,090,837 | $1,114,041 | - Total assets increased by approximately **$430.6 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in loans held for investment[18](index=18&type=chunk) - Total liabilities increased by approximately **$453.8 million**, largely due to a significant increase in collateralized loan obligations[18](index=18&type=chunk) [Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) The Consolidated Statements of Income and Comprehensive Income present the Company's financial performance for the three and six months ended June 30, 2025, and June 30, 2024, detailing revenues, expenses, and net income Key Income Statement Data (in thousands, except per share data) | Item | 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 | $25,144 | $27,527 | $50,046 | $54,330 | | Total other revenue | $11,055 | $11,775 | $23,185 | $23,899 | | Total other expenses | $20,632 | $19,024 | $40,465 | $36,461 | | Gain on sale of real estate owned, net | $6,970 | $0 | $6,970 | $0 | | Credit loss (expense) benefit, net | $(1,778) | $4,537 | $(5,202) | $181 | | Net income | $20,631 | $24,715 | $34,350 | $41,459 | | Net income attributable to common stockholders | $16,881 | $21,026 | $26,841 | $34,081 | | Earnings per common share, basic | $0.21 | $0.26 | $0.33 | $0.43 | - Net income attributable to common stockholders decreased by **$4.1 million** for the three months ended June 30, 2025, compared to the same period in 2024, and by **$7.2 million** for the six months ended June 30, 2025, compared to the same period in 2024[22](index=22&type=chunk) - The Company recognized a significant gain on sale of real estate owned of **$7.0 million** in Q2 2025, which was not present in Q2 2024[22](index=22&type=chunk) [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) This section details the changes in the Company's equity accounts for the three and six months ended June 30, 2025, and June 30, 2024, including common stock, preferred stock, additional paid-in capital, and accumulated deficit, reflecting transactions such as stock issuance, repurchases, net income, and dividend declarations Changes in Total Stockholders' Equity (in thousands) | Item | January 1, 2025 | March 31, 2025 | June 30, 2025 | | :--------------------------------- | :-------------- | :------------- | :------------ | | Total stockholders' equity | $1,114,041 | $1,103,531 | $1,090,837 | | Net income | — | $13,719 | $20,631 | | Dividends on common stock | — | $(19,915) | $(19,484) | | Dividends on preferred stock | — | $(3,148) | $(3,148) | | Retired common stock | — | $(3,185) | $(12,500) | - Total stockholders' equity decreased from **$1.11 billion** at January 1, 2025, to **$1.09 billion** at June 30, 2025[25](index=25&type=chunk) - Common stock shares issued and outstanding decreased from **81,003,693** at January 1, 2025, to **79,420,606** at June 30, 2025, partly due to retired common stock[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and June 30, 2024, providing insight into the Company's liquidity and capital management Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $43,859 | $62,924 | | Net cash (used in) provided by investing activities | $(457,730) | $554,984 | | Net cash provided by (used in) financing activities | $389,810 | $(565,190) | | Net change in cash, cash equivalents, and restricted cash | $(24,061) | $52,718 | - Cash flows from investing activities shifted from a net inflow of **$554.98 million** in H1 2024 to a net outflow of **$457.73 million** in H1 2025, primarily due to increased loan originations and reduced principal repayments[29](index=29&type=chunk) - Cash flows from financing activities shifted from a net outflow of **$565.19 million** in H1 2024 to a net inflow of **$389.81 million** in H1 2025, largely driven by proceeds from collateralized loan obligations[29](index=29&type=chunk) [Notes to the Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations and disclosures supporting the consolidated financial statements, covering the Company's business, significant accounting policies, specific financial instrument details, related party transactions, and other material financial information [Note 1. Business and Organization](index=10&type=section&id=Note%201.%20Business%20and%20Organization) TPG RE Finance Trust, Inc. operates as a REIT, primarily originating and acquiring a diversified portfolio of commercial real estate-related credit investments, mainly first mortgage loans and senior participation interests in institutional-quality properties in the U.S. It maintains an exclusion from Investment Company Act registration - The Company operates as a **REIT** for U.S. federal income tax purposes, generally **not subject to federal income taxes** on distributed REIT taxable income[32](index=32&type=chunk) - Its principal business is originating and acquiring commercial real estate-related credit investments, primarily **first mortgage loans and senior participation interests**[33](index=33&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the consolidated financial statements, including basis of presentation, use of estimates, revenue recognition, credit loss measurement (CECL model), real estate owned accounting, fair value measurements, and policies for various financial instruments and equity components - The Company operates in a **single operating and reportable segment**, with the CEO as the chief operating decision maker[36](index=36&type=chunk) - The Company applies the **Current Expected Credit Loss (CECL) model** for its allowance for credit losses on loans held for investment[44](index=44&type=chunk) - Loans are rated on a **5-point scale** (1=least risk, 5=greatest risk), with a **general initial rating of '3' (Medium Risk)**[47](index=47&type=chunk)[48](index=48&type=chunk) - Real estate acquired through foreclosure (**REO**) is initially measured at **fair value** and subsequently subject to **impairment analysis**[61](index=61&type=chunk)[67](index=67&type=chunk) - The Company uses a **three-tier fair value hierarchy (Level I, II, III)** for financial instruments, with **Level III valuations** based on unobservable and significant inputs[71](index=71&type=chunk)[72](index=72&type=chunk) - The Company qualifies as a **REIT** for U.S. federal income tax purposes and generally distributes at least **90% of its REIT taxable income**[77](index=77&type=chunk) - The FASB issued **ASU 2024-03 (Expense Disaggregation Disclosures)** and **ASU 2023-09 (Income Tax Disclosures)**, effective for the Company in **2027** and **2025**, respectively, with impacts currently being evaluated[94](index=94&type=chunk)[95](index=95&type=chunk) [Note 3. Loans Held for Investment and the Allowance for Credit Losses](index=22&type=section&id=Note%203.%20Loans%20Held%20for%20Investment%20and%20the%20Allowance%20for%20Credit%20Losses) This note details the Company's loan portfolio, including origination and repayment activity, overall statistics, seniority, risk ratings, and the allowance for credit losses. It highlights the increase in the allowance due to loan origination and macroeconomic uncertainty - During the six months ended June 30, 2025, the Company originated **seven mortgage loans** with aggregate commitments of **$695.6 million** and initial unpaid principal balance of **$670.5 million**[98](index=98&type=chunk) - Total loan repayments for the six months ended June 30, 2025, amounted to **$193.8 million**[98](index=98&type=chunk) Loans Held for Investment Portfolio Statistics (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Number of loans | 49 | 45 | | Total loan commitment | $3,899,345 | $3,412,016 | | Unpaid principal balance | $3,783,609 | $3,284,510 | | Unfunded loan commitments | $116,428 | $127,866 | | Amortized cost | $3,774,686 | $3,278,588 | | Weighted average credit spread | 3.5 % | 3.7 % | | Weighted average all-in yield | 8.0 % | 8.3 % | | Weighted average term to extended maturity (in years) | 2.7 | 2.4 | - The weighted average risk rating for the loan portfolio remained at **3.0** as of June 30, 2025, unchanged from December 31, 2024[109](index=109&type=chunk) - The allowance for credit losses increased by **$4.8 million** during the six months ended June 30, 2025, reaching **$68.8 million**, primarily due to loan origination activity and macroeconomic uncertainty[117](index=117&type=chunk) - As of June 30, 2025, **none** of the Company's first mortgage loans were on non-accrual status or subject to individual assessment under the CECL framework[120](index=120&type=chunk) [Note 4. Real Estate Owned](index=29&type=section&id=Note%204.%20Real%20Estate%20Owned) This note details the Company's Real Estate Owned (REO) portfolio, including the number and types of properties, their carrying values, and the results of REO operations. It also covers the sale of two office properties during the period and the associated gains - As of June 30, 2025, the Company held **six REO properties**: **four multifamily** and **two office** properties[125](index=125&type=chunk) - During the three and six months ended June 30, 2025, the Company sold **two office properties** for net cash proceeds of **$39.4 million**, recognizing a net gain of **$7.0 million**[126](index=126&type=chunk) REO Assets and Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Real estate owned, net | $223,235 | $256,404 | | Total assets (REO-related) | $264,581 | $300,964 | | Mortgage loan payable, net | $30,766 | $30,695 | | Total liabilities (REO-related) | $38,672 | $40,567 | REO Operations Net Loss (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from real estate owned operations | $8,231 | $8,281 | $18,510 | $15,503 | | Expenses from real estate owned operations | $10,256 | $8,882 | $20,606 | $17,228 | | Net (loss) from REO | $(2,025) | $(601) | $(2,096) | $(1,725) | [Note 5. Variable Interest Entities and Collateralized Loan Obligations](index=32&type=section&id=Note%205.%20Variable%20Interest%20Entities%20and%20Collateralized%20Loan%20Obligations) This note details the Company's use of Collateralized Loan Obligations (CLOs) through its Sub-REIT subsidiary, including the issuance of new CLOs (TRTX 2025-FL6), the redemption of older ones (TRTX 2019-FL3), and the consolidation of these Variable Interest Entities (VIEs) - On March 28, 2025, the Company issued a new **$1.1 billion CLO (TRTX 2025-FL6)** with **$962.5 million** of investment-grade bonds, providing additional liquidity for new loan investments[140](index=140&type=chunk) - On March 17, 2025, **TRTX 2019-FL3 was redeemed**, with **$114.6 million** of investment-grade bonds outstanding, and three loans were refinanced by TRTX 2025-FL6[145](index=145&type=chunk) - The Company consolidates the CLO Issuers as **VIEs** because it controls their significant activities and has the obligation to absorb losses and right to receive benefits[146](index=146&type=chunk) Sub-REIT Total Assets and Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Total assets | $2,917,419 | $2,120,953 | | Loans held for investment, net | $2,800,033 | $1,917,210 | | Total liabilities | $2,457,099 | $1,696,469 | | Collateralized loan obligations, net | $2,442,868 | $1,681,660 | - Assets held by these VIEs are restricted to settle their own obligations, and their liabilities are **non-recourse** to the Company[148](index=148&type=chunk) [Note 6. Investment Portfolio Financing](index=36&type=section&id=Note%206.%20Investment%20Portfolio%20Financing) This note details the Company's financing arrangements for its investment portfolio, including collateralized loan obligations, secured credit agreements, a secured revolving credit facility, asset-specific financing arrangements, and a mortgage loan payable Investment Portfolio Financing Summary (in thousands) | Financing Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Collateralized loan obligations | $2,452,377 | $1,682,288 | | Secured credit agreements | $156,711 | $585,042 | | Asset-specific financing arrangements | $29,110 | $186,500 | | Secured revolving credit facility | $367,841 | $86,625 | | Mortgage loan payable | $31,200 | $31,200 | | Total | $3,037,239 | $2,571,655 | - The Company repaid **$332.6 million** of borrowings under secured credit agreements and **$157.4 million** under asset-specific financing arrangements due to collateral contributions to TRTX 2025-FL6[163](index=163&type=chunk)[181](index=181&type=chunk) - The secured revolving credit facility was amended in Q1 2025, extending maturity by **three years** to **February 13, 2028**, and increasing borrowing capacity to **$375.0 million**[174](index=174&type=chunk) - The Company was in **compliance with all financial covenants** for its investment portfolio financing arrangements as of June 30, 2025, and December 31, 2024[187](index=187&type=chunk) [Note 7. Schedule of Maturities](index=40&type=section&id=Note%207.%20Schedule%20of%20Maturities) This note provides a schedule of future principal payments for the Company's total indebtedness, disaggregated by financing type, for the next five years and thereafter, as of June 30, 2025 Future Principal Payments (in thousands) | Year | Total indebtedness | Collateralized loan obligations | Secured credit agreements | Secured revolving credit facility | Asset-specific financing arrangements | Mortgage loan payable | | :--- | :----------------- | :------------------------------ | :------------------------ | :-------------------------------- | :------------------------------------ | :-------------------- | | 2025 | $113,849 | $63,449 | $50,400 | $0 | $0 | $0 | | 2026 | $899,189 | $899,189 | $0 | $0 | $0 | $0 | | 2027 | $580,840 | $531,390 | $20,340 | $0 | $29,110 | $0 | | 2028 | $829,233 | $344,221 | $85,971 | $367,841 | $0 | $31,200 | | 2029 | $362,027 | $362,027 | $0 | $0 | $0 | $0 | | Thereafter | $252,101 | $252,101 | $0 | $0 | $0 | $0 | | Total | $3,037,239 | $2,452,377 | $156,711 | $367,841 | $29,110 | $31,200 | - The Company plans to meet debt obligations through strategies including exercising extension options, negotiating extensions, accessing capital markets, issuing new structured finance vehicles, establishing new financing arrangements, and selling assets[374](index=374&type=chunk) [Note 8. Fair Value Measurements](index=41&type=section&id=Note%208.%20Fair%20Value%20Measurements) This note provides information on the fair value of the Company's financial assets and liabilities, categorizing them into Level I, II, and III based on the observability of inputs - Cash equivalents and restricted cash are classified as **Level I** fair value measurements[191](index=191&type=chunk) - Loans held for investment, CLOs, secured credit agreements, and asset-specific financing arrangements are considered **Level III** fair value measurements[191](index=191&type=chunk) - As of June 30, 2025, the estimated fair value of the Company's loans held for investment portfolio was **$3.7 billion**, approximating its carrying value[192](index=192&type=chunk) [Note 9. Income Taxes](index=42&type=section&id=Note%209.%20Income%20Taxes) This note discusses the Company's income tax status as a REIT, its ownership of Taxable REIT Subsidiaries (TRSs), and the recognition of deferred tax assets and liabilities - The Company qualifies as a **REIT** and generally avoids U.S. federal income tax on distributed REIT taxable income[195](index=195&type=chunk) - **Excess Inclusion Income (EII)** from CLOs is allocated to a **Taxable REIT Subsidiary (TRS)** and not to common stockholders, incurring an approximate **21% tax liability**[198](index=198&type=chunk) Income Tax Expense (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense, net | $(128) | $(100) | $(184) | $(490) | - As of June 30, 2025, the Company has **$194.1 million** in capital losses carried forward, with **$174.3 million** expiring at the end of 2025 and **$19.8 million** expiring in 2028[201](index=201&type=chunk) [Note 10. Related Party Transactions](index=43&type=section&id=Note%2010.%20Related%20Party%20Transactions) This note details the Company's financial arrangements with its external Manager, TPG RE Finance Trust Management, L.P., including base management fees, incentive compensation, and expense reimbursements - The Company pays its Manager a base management fee of **1.50% per annum** of its 'Equity' (or **$250,000 per annum**, whichever is greater) and is eligible for incentive compensation based on Core Earnings[203](index=203&type=chunk) Management Fees Incurred (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Management fees incurred | $5,194 | $5,044 | $10,347 | $10,031 | | Incentive management fee incurred | $0 | $0 | $0 | $0 | - **No incentive management fee** was earned during the three and six months ended June 30, 2025, and 2024[206](index=206&type=chunk) - The Company reimbursed the Manager **$0.4 million** and **$0.8 million** for personnel expenses for services rendered during the three and six months ended June 30, 2025, respectively[208](index=208&type=chunk) [Note 11. Earnings per Share](index=45&type=section&id=Note%2011.%20Earnings%20per%20Share) This note details the calculation of basic and diluted earnings per common share using the two-class method, accounting for preferred stock dividends and participating securities - Basic and diluted earnings per share are calculated using the **two-class method**, which allocates earnings to common shares and participating securities[213](index=213&type=chunk) - All Warrants were exercised on a net settlement basis on **May 8, 2024**, resulting in the issuance of **2,647,059 common shares**, and **no Warrants were outstanding** as of June 30, 2025[214](index=214&type=chunk) Earnings Per Common Share (in thousands, except per share data) | Item | 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 income attributable to common stockholders | $16,881 | $21,026 | $26,841 | $34,081 | | Weighted average common shares outstanding, basic | 79,474,862 | 79,456,745 | 80,221,098 | 78,662,740 | | Weighted average common shares outstanding, diluted | 80,208,877 | 80,907,705 | 80,918,798 | 79,604,665 | | Earnings per common share, basic | $0.21 | $0.26 | $0.33 | $0.43 | | Earnings per common share, diluted | $0.21 | $0.26 | $0.33 | $0.43 | [Note 12. Stockholders' Equity](index=46&type=section&id=Note%2012.%20Stockholders'%20Equity) This note details the Company's Series C Preferred Stock, including its issuance, dividend rate, and redemption terms. It also covers the exercise of Series B Warrants, the common stock repurchase program, and dividend declarations for both common and preferred stock - The Company's Series C Preferred Stock has a **6.25% dividend rate** and a **$25.00 per share liquidation preference**, redeemable at the Company's option on or after **June 14, 2026**[219](index=219&type=chunk)[220](index=220&type=chunk) - All Warrants to purchase common stock were exercised on **May 8, 2024**, resulting in the issuance of **2,647,059 common shares**, with **no Warrants outstanding** as of June 30, 2025[224](index=224&type=chunk) - Under its share repurchase program, the Company repurchased **1,658,317 common shares** for **$12.5 million** during the three months ended June 30, 2025, with **$9.3 million** remaining capacity[225](index=225&type=chunk) - The Board declared a cash dividend of **$0.24 per common share** (**$19.5 million total**) and **$0.3906 per Series C Preferred Stock share** (**$3.1 million total**) for Q2 2025[227](index=227&type=chunk)[228](index=228&type=chunk) [Note 13. Stock-based Compensation](index=48&type=section&id=Note%2013.%20Stock-based%20Compensation) This note describes the Company's stock-based compensation arrangements for non-employee directors and Manager affiliates, primarily under the 2025 Equity Incentive Plan - The Company does not have employees; stock-based compensation is granted to **Manager affiliates** and **Board members** under the **2025 Equity Incentive Plan**[232](index=232&type=chunk)[233](index=233&type=chunk) Outstanding Common Stock Awards | Item | Common Stock | Weighted Average Grant Date Fair Value per Share | | :-------------------------- | :------------- | :----------------------------------------------- | | Balance as of December 31, 2024 | 2,377,123 | $7.98 | | Granted | 10,403 | $7.06 | | Vested | (854,456) | $8.24 | | Forfeited | (62,690) | $7.77 | | Balance as of June 30, 2025 | 1,470,380 | $7.76 | - Total unrecognized compensation costs were **$11.0 million** as of June 30, 2025, expected to be recognized over a weighted average period of **1.2 years**[238](index=238&type=chunk) [Note 14. Commitments and Contingencies](index=49&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note outlines the Company's unfunded loan commitments and its status regarding litigation. It specifies the aggregate amount of unfunded commitments and confirms no material legal proceedings or accrued liabilities for loss contingencies - Aggregate unrecognized unfunded loan commitments totaled **$116.4 million** as of June 30, 2025[239](index=239&type=chunk) - An allowance for credit losses of **$1.8 million** was recorded for non-cancellable unfunded loan commitments as of June 30, 2025[240](index=240&type=chunk) - As of June 30, 2025, the Company was **not involved in any material legal proceedings** and had **not recorded any accrued liability for loss contingencies**[242](index=242&type=chunk) [Note 15. Concentration of Credit Risk](index=49&type=section&id=Note%2015.%20Concentration%20of%20Credit%20Risk) This note details the concentration of credit risk within the Company's loan portfolio by property type, geographic region, and loan category, providing a breakdown of total loan commitments and unpaid principal balances Loan Portfolio by Property Type (June 30, 2025, in thousands) | Property type | Loan commitment | % of loan commitment | Loan UPB | % of loan UPB | | :------------ | :-------------- | :------------------- | :------- | :------------ | | Multifamily | $2,120,401 | 54.5 % | $2,060,847 | 54.5 % | | Office | $584,547 | 15.0 | $566,737 | 15.0 | | Industrial | $352,169 | 9.0 | $330,223 | 8.7 | | Hotel | $348,400 | 8.9 | $338,825 | 9.0 | | Life Science | $348,053 | 8.9 | $343,477 | 9.0 | | Mixed-Use | $78,775 | 2.0 | $76,500 | 2.0 | | Self Storage | $67,000 | 1.7 | $67,000 | 1.8 | | Total | $3,899,345 | 100.0 % | $3,783,609 | 100.0 % | Loan Portfolio by Geographic Region (June 30, 2025, in thousands) | Geographic region | Loan commitment | % of loan commitment | Loan UPB | % of loan UPB | | :---------------- | :-------------- | :------------------- | :------- | :------------ | | West | $1,405,299 | 36.0 % | $1,367,782 | 36.1 % | | East | $958,749 | 24.6 | $948,348 | 25.1 | | South | $890,697 | 22.8 | $846,876 | 22.4 | | Various | $509,000 | 13.1 | $487,003 | 12.9 | | Midwest | $135,600 | 3.5 | $133,600 | 3.5 | | Total | $3,899,345 | 100.0 % | $3,783,609 | 100.0 % | Loan Portfolio by Loan Category (June 30, 2025, in thousands) | Loan category | Loan commitment | % of loan commitment | Loan UPB | % of loan UPB | | :---------------- | :-------------- | :------------------- | :------- | :------------ | | Bridge | $2,014,274 | 51.7 % | $1,973,327 | 52.2 % | | Moderate Transitional | $967,018 | 24.8 | $926,054 | 24.4 | | Light Transitional | $918,053 | 23.5 | $884,228 | 23.4 | | Total | $3,899,345 | 100.0 % | $3,783,609 | 100.0 % | [Note 16. Subsequent Events](index=51&type=section&id=Note%2016.%20Subsequent%20Events) This note discloses significant events that occurred after June 30, 2025, including new loan closings, full loan repayments, and further share repurchases - Subsequent to June 30, 2025, the Company closed or is closing **two first mortgage loans** with aggregate commitments of **$112.3 million** and initial fundings of **$110.0 million**[246](index=246&type=chunk) - The Company received full repayment of **two first mortgage loans** totaling **$120.8 million** in unpaid principal balance[246](index=246&type=chunk) - From July 1, 2025, to July 25, 2025, the Company repurchased **830,024 common shares** for **$6.8 million**, leaving **$2.5 million** remaining capacity under its share repurchase program[246](index=246&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and cash flows, discussing key performance indicators, investment activities, financing strategies, liquidity, and critical accounting estimates for the periods presented [Overview](index=52&type=section&id=Overview) The Company is a commercial real estate finance company externally managed by TPG, focusing on originating and acquiring floating rate first mortgage loans secured by transitional commercial real estate in North America - The Company's objective is to provide **attractive risk-adjusted returns** through cash distributions and capital appreciation by originating and acquiring **floating rate first mortgage loans** on transitional commercial real estate[248](index=248&type=chunk) - Macroeconomic conditions, including **high interest rates, inflation, and banking sector shifts**, influenced loan origination volumes and capital allocation in H1 2025[250](index=250&type=chunk) - **Seven first mortgage loans** were originated in H1 2025, with aggregate commitments of **$695.6 million** and initial unpaid principal balance of **$670.5 million**[250](index=250&type=chunk) [Our Manager](index=52&type=section&id=Our%20Manager) The Company is externally managed by TPG RE Finance Trust Management, L.P., an affiliate of TPG, a global alternative asset manager. The Manager is responsible for investment selection, financing, and day-to-day operations, with investment decisions approved by an investment committee - The Company is externally managed by **TPG RE Finance Trust Management, L.P.**, an affiliate of TPG, which had **$251 billion** in assets under management as of March 31, 2025[252](index=252&type=chunk) - The Manager is responsible for **investment selection, origination, acquisition, sale of portfolio investments, financing activities**, and providing investment advisory services[252](index=252&type=chunk) [Second Quarter 2025 Activity](index=53&type=section&id=Second%20Quarter%202025%20Activity) This section summarizes the Company's operational, investment, and financing activities during the second quarter of 2025, highlighting net income, distributable earnings, loan originations, repayments, REO sales, and liquidity position - Net income attributable to common stockholders increased by **$6.9 million** to **$16.9 million** in Q2 2025 compared to Q1 2025[256](index=256&type=chunk) - **Distributable Earnings** were **$19.0 million** in Q2 2025, a slight decrease of **$0.4 million** from Q1 2025[256](index=256&type=chunk) - The Company originated **seven first mortgage loans** with aggregate commitments of **$695.6 million** and initial unpaid principal balance of **$670.5 million**[256](index=256&type=chunk) - Total loan repayments amounted to **$172.3 million**, and **two office REO properties** were sold for **$39.4 million**, generating a **$7.0 million gain**[256](index=256&type=chunk) - Near-term liquidity was **$236.4 million** as of June 30, 2025, including **$165.9 million cash-on-hand** and **$66.1 million undrawn capacity** under secured credit agreements[256](index=256&type=chunk) [Key Financial Measures and Indicators](index=54&type=section&id=Key%20Financial%20Measures%20and%20Indicators) This section discusses the Company's key financial performance metrics, including earnings per share, dividends declared, Distributable Earnings (a non-GAAP measure), and book value per common share, providing context for their calculation and significance - Diluted earnings per common share was **$0.21** for Q2 2025, an increase of **$0.09** from Q1 2025, primarily due to a gain on sale of real estate owned[258](index=258&type=chunk) - Distributable Earnings per diluted common share was **$0.24** for Q2 2025, consistent with Q1 2025[259](index=259&type=chunk) - Book value per common share was **$11.20** as of June 30, 2025, a decrease of **$0.07** from December 31, 2024, mainly due to increased credit loss expense[261](index=261&type=chunk) Distributable Earnings Reconciliation (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | | :----------------------------------------------------------------- | :------------------------------- | :-------------------------------- | | Net income attributable to common stockholders | $16,881 | $9,960 | | Non-cash stock compensation expense | $1,997 | $2,019 | | Depreciation and amortization | $3,423 | $3,992 | | Credit loss expense, net | $1,778 | $3,424 | | GAAP Gain on sale of real estate owned, net | $(6,970) | $0 | | Adjusted Gain on sale of real estate owned, net for purposes of Distributable Earnings | $1,869 | $0 | | Distributable earnings | $18,978 | $19,395 | | Distributable earnings per common share, diluted | $0.24 | $0.24 | [Investment Portfolio Overview](index=56&type=section&id=Investment%20Portfolio%20Overview) This section provides an overview of the Company's investment portfolio, primarily consisting of floating rate first mortgage loans. It details loan activity, portfolio statistics, and interest rate floor characteristics as of June 30, 2025 - As of June 30, 2025, the loans held for investment portfolio comprised **49 first mortgage loans** (or interests therein) with **$3.9 billion** in commitments and **$3.8 billion** in unpaid principal balance[272](index=272&type=chunk) - **99.7%** of the loan commitments were **floating rate loans**, all of which were first mortgage loans[272](index=272&type=chunk) Loan Portfolio Activity (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | | :--------------------------------- | :------------------------------- | :-------------------------------- | | Loan originations and acquisitions — initial funding | $670,479 | $0 | | Other loan fundings | $8,785 | $13,603 | | Loan repayments | $(172,268) | $(21,500) | | Total loan activity, net | $506,996 | $(7,897) | - The weighted average interest rate floor on the mortgage loan investment portfolio was **2.19%** as of June 30, 2025[280](index=280&type=chunk) [Real Estate Owned](index=58&type=section&id=Real%20Estate%20Owned) This section provides details on the Company's Real Estate Owned (REO) properties, including their types, locations, and carrying values as of June 30, 2025. It also notes the sale of two office properties during the period - As of June 30, 2025, the Company owned **two office properties** and **four multifamily properties**, with an aggregate carrying value of **$237.1 million**[282](index=282&type=chunk)[283](index=283&type=chunk) - **Two office properties** were sold during the three and six months ended June 30, 2025[282](index=282&type=chunk) [Asset Management](index=59&type=section&id=Asset%20Management) The Company actively manages its portfolio assets from closing to repayment or resolution, utilizing Situs Asset Management, LLC for dedicated asset management and servicing - The Company partners with **Situs Asset Management, LLC** for dedicated asset management and loan servicing, adhering to proprietary guidelines[284](index=284&type=chunk) - Asset management involves monitoring financial, legal, and quantitative aspects of investments, maintaining contact with borrowers and market experts, and enforcing rights as needed[284](index=284&type=chunk) [Loan Portfolio Review](index=59&type=section&id=Loan%20Portfolio%20Review) The Company's Manager conducts a quarterly review of the entire loan portfolio, assigning risk ratings on a 5-point scale (1=least risk, 5=greatest risk). The weighted average risk rating remained stable at 3.0 as of June 30, 2025 - The Manager reviews the entire loan portfolio quarterly, assigning risk ratings from **'1' (least risk)** to **'5' (greatest risk)**[285](index=285&type=chunk) Loan Portfolio by Internal Risk Ratings (in thousands) | Risk rating | Number of loans (June 30, 2025) | Amortized cost (June 30, 2025) | Number of loans (December 31, 2024) | Amortized cost (December 31, 2024) | | :---------- | :------------------------------ | :----------------------------- | :---------------------------------- | :--------------------------------- | | 1 | 0 | $0 | 0 | $0 | | 2 | 1 | $62,767 | 1 | $62,716 | | 3 | 46 | $3,592,984 | 42 | $3,098,671 | | 4 | 2 | $118,935 | 2 | $117,201 | | 5 | 0 | $0 | 0 | $0 | | Totals | 49 | $3,774,686 | 45 | $3,278,588 | - The weighted average risk rating of the loan portfolio was **3.0** as of June 30, 2025, consistent with December 31, 2024[286](index=286&type=chunk) [Loan Modification Activity](index=60&type=section&id=Loan%20Modification%20Activity) The Company engages in loan modifications to address specific loan circumstances, typically involving extensions, waivers of performance tests, or deferrals of principal payments - Loan modifications often include **additional time for refinancing, adjustment/waiver of performance tests, modification of interest rate cap terms, and/or deferral of principal payments**[289](index=289&type=chunk) - In exchange for modifications, the Company typically receives **partial principal repayment, short-term PIK interest, cash infusions for reserves, termination of unfunded commitments, additional call protection, and/or an increased loan coupon**[289](index=289&type=chunk) [Allowance for Credit Losses](index=60&type=section&id=Allowance%20for%20Credit%20Losses) The Company's allowance for credit losses increased by $1.6 million in Q2 2025 and $4.8 million in H1 2025, reaching $68.8 million. This increase reflects loan activity and the impact of an uncertain macroeconomic environment, including geopolitical tensions, market volatility, and shifting office market fundamentals - The allowance for credit losses increased by **$1.6 million** in Q2 2025 and **$4.8 million** in H1 2025, totaling **$68.8 million**[290](index=290&type=chunk) - The increase is primarily attributed to loan activity and the uncertain macroeconomic environment, including **geopolitical tensions, market volatility, sustained higher interest rates, and shifting office market fundamentals**[290](index=290&type=chunk) Allowance for Credit Losses (June 30, 2025, in thousands) | Allowance for credit losses: | Unpaid principal balance | Unfunded commitments | Total commitments | Total basis points | | :--------------------------- | :----------------------- | :------------------- | :---------------- | :----------------- | | General reserve | $3,783,609 | $116,428 | $3,899,345 | 176 bps | | Specific reserve | $0 | $0 | $0 | 0 bps | | Total | $3,783,609 | $116,428 | $3,899,345 | 176 bps | [Investment Portfolio Financing](index=61&type=section&id=Investment%20Portfolio%20Financing) This section details the Company's financing strategies, including secured credit agreements, a secured revolving credit facility, asset-specific arrangements, and collateralized loan obligations (CLOs) - As of June 30, 2025, **94.8%** of the Company's total loan portfolio borrowings were from **non-mark-to-market financing sources**, primarily CLOs[296](index=296&type=chunk) Investment Portfolio Financing Arrangements (in thousands) | Financing Type | June 30, 2025 Outstanding Principal Balance | December 31, 2024 Outstanding Principal Balance | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Collateralized loan obligations | $2,452,377 | $1,682,288 | | Secured credit agreements | $156,711 | $585,042 | | Asset-specific financing arrangements | $29,110 | $186,500 | | Secured revolving credit facility | $367,841 | $86,625 | | Mortgage loan payable | $31,200 | $31,200 | | Total | $3,037,239 | $2,571,655 | - The Company's **three CLOs (TRTX 2025-FL6, TRTX 2022-FL5, TRTX 2021-FL4)** totaled **$2.5 billion**, financing **75.3%** of the loans held for investment portfolio[320](index=320&type=chunk) - The secured revolving credit facility's borrowing capacity increased to **$375.0 million** and its maturity was extended to **February 13, 2028**[315](index=315&type=chunk) [Financial Covenants for Outstanding Borrowings](index=67&type=section&id=Financial%20Covenants%20for%20Outstanding%20Borrowings) This section confirms the Company's compliance with all financial covenants for its investment portfolio financing arrangements as of June 30, 2025, and December 31, 2024 - The Company was in **compliance with all financial covenants** for its investment portfolio financing arrangements as of June 30, 2025, and December 31, 2024[329](index=329&type=chunk) - Failure to satisfy covenants could lead to **default, cross-defaults, acceleration of debt, termination of commitments**, and **limitations on financing alternatives**, potentially impacting REIT qualification[330](index=330&type=chunk) [Floating Rate Loan Portfolio](index=68&type=section&id=Floating%20Rate%20Loan%20Portfolio) The Company's business model aims to minimize interest rate exposure by matching assets and liabilities to similar benchmark indices. As of June 30, 2025, 99.8% of its loan investments were floating rate, resulting in a net floating rate exposure of $769.1 million, subject to interest rate floors on assets - **99.8%** of the Company's loan investments by unpaid principal balance were **floating rate** as of June 30, 2025, financed with floating rate liabilities[332](index=332&type=chunk) - The weighted average interest rate floor on the mortgage loan investment portfolio was **2.19%** as of June 30, 2025[332](index=332&type=chunk) Net Floating Rate Exposure (June 30, 2025, in thousands) | Item | Net exposure | | :-------------------------------- | :----------- | | Floating rate mortgage loan assets | $3,775,167 | | Floating rate mortgage loan liabilities | $(3,006,039) | | Total floating rate mortgage loan exposure, net | $769,128 | [Interest-Earning Assets and Interest-Bearing Liabilities](index=69&type=section&id=Interest-Earning%20Assets%20and%20Interest-Bearing%20Liabilities) This section presents the average balances, interest income/expense, and weighted average yields for the Company's interest-earning assets and interest-bearing liabilities for the three and six months ended June 30, 2025, and March 31, 2025 (QoQ), and June 30, 2024 (YoY) Interest-Earning Assets and Liabilities (QoQ, in thousands) | Item | Average amortized cost (June 30, 2025) | Interest income / expense (June 30, 2025) | Wtd. avg. yield / financing cost (June 30, 2025) | Average amortized cost (March 31, 2025) | Interest income / expense (March 31, 2025) | Wtd. avg. yield / financing cost (March 31, 2025) | | :--------------------------------- | :------------------------------------- | :---------------------------------------- | :----------------------------------------------- | :-------------------------------------- | :----------------------------------------- | :------------------------------------------------ | | First mortgage loans | $3,336,212 | $70,668 | 8.5 % | $3,274,281 | $68,045 | 8.3 % | | Total interest-bearing liabilities | $2,802,397 | $45,524 | 6.5 % | $2,600,366 | $43,143 | 6.6 % | | Net interest income | | $25,144 | | | $24,902 | | Interest-Earning Assets and Liabilities (YoY, in thousands) | Item | Average amortized cost (June 30, 2025) | Interest income / expense (June 30, 2025) | Wtd. avg. yield / financing cost (June 30, 2025) | Average amortized cost (June 30, 2024) | Interest income / expense (June 30, 2024) | Wtd. avg. yield / financing cost (June 30, 2024) | | :--------------------------------- | :------------------------------------- | :---------------------------------------- | :----------------------------------------------- | :-------------------------------------- | :----------------------------------------- | :------------------------------------------------ | | First mortgage loans | $3,305,418 | $138,713 | 8.4 % | $3,368,040 | $160,299 | 9.5 % | | Total interest-bearing liabilities | $2,701,939 | $88,667 | 6.6 % | $2,756,961 | $105,969 | 7.7 % | | Net interest income | | $50,046 | | | $54,330 | | [Our Results of Operations](index=71&type=section&id=Our%20Results%20of%20Operations) This section provides a detailed analysis of the Company's operating results, comparing the three months ended June 30, 2025, with March 31, 2025 (QoQ), and the six months ended June 30, 2025, with June 30, 2024 (YoY), covering net interest income, other revenues and expenses, gains on REO sales, and credit loss expense - Net interest income increased by **$0.2 million** QoQ to **$25.1 million**, primarily due to an increase in loan portfolio size, partially offset by increased financing arrangements[343](index=343&type=chunk) - Other revenue decreased **$1.1 million** QoQ, mainly due to lower revenue from real estate owned operations, partially offset by increased interest on cash balances[345](index=345&type=chunk) - A **$7.0 million gain on sale of real estate owned** was recognized in Q2 2025, with no comparable gain in Q1 2025[347](index=347&type=chunk) - Net interest income decreased by **$4.3 million** YoY to **$50.0 million** for the six months ended June 30, 2025, due to a decrease in the index rate and loan portfolio size[353](index=353&type=chunk) - Credit loss expense increased by **$5.4 million** YoY for the six months ended June 30, 2025, reflecting macroeconomic uncertainty and loan activity[358](index=358&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the Company's capitalization, debt-to-equity ratios, sources and uses of liquidity, and consolidated cash flows. It highlights the primary funding mechanisms and the impact of investment and financing activities on cash balances - As of June 30, 2025, the Company had **$0.9 billion** in stockholders' equity and **$3.0 billion** in outstanding borrowings[361](index=361&type=chunk) Debt-to-Equity and Total Leverage Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Debt-to-equity ratio | 2.63x | 2.14x | | Total leverage ratio | 2.63x | 2.14x | Sources of Near-Term Liquidity (in thousands) | Source | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $165,850 | $190,160 | | Secured credit agreements (undrawn capacity) | $66,099 | $128,130 | | Asset-specific financing arrangements | $2,704 | $2,485 | | Collateralized loan obligation proceeds held at trustee | $1,778 | $0 | | Total | $236,431 | $320,775 | - Cash flows used in investing activities totaled **$457.7 million** in H1 2025, primarily due to new loan originations, while cash flows provided by financing activities totaled **$389.8 million**, mainly from CLO issuance[370](index=370&type=chunk)[371](index=371&type=chunk) [Material Cash Requirements](index=77&type=section&id=Material%20Cash%20Requirements) This section outlines the Company's contractual obligations and commitments, including unfunded loan commitments and principal and interest payments on various financing arrangements Contractual Obligations and Commitments (June 30, 2025, in thousands) | Item | Total obligation | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | | :--------------------------------------- | :--------------- | :--------------- | :----------- | :----------- | :---------------- | | Unfunded loan commitments | $116,428 | $45,243 | $57,685 | $13,500 | $0 | | Collateralized loan obligations—principal | $2,452,377 | $216,337 | $1,549,024 | $687,016 | $0 | | Secured credit agreements—principal | $156,711 | $50,400 | $20,340 | $85,971 | $0 | | Secured revolving credit facility—principal | $367,841 | $0 | $367,841 | $0 | $0 | | Asset-specific financing arrangements—principal | $29,110 | $0 | $29,110 | $0 | $0 | | Mortgage loan payable—principal | $31,200 | $0 | $0 | $31,200 | $0 | | Total | $3,615,219 | $497,699 | $2,245,362 | $872,158 | $0 | - The Company plans to meet obligations through **maturity extensions, capital market access, new structured finance vehicles, asset sales, and loan repayments**[374](index=374&type=chunk) - As a **REIT**, the Company must distribute at least **90% of its taxable income** annually, which may constrain cash accumulation[376](index=376&type=chunk) [Corporate Activities](index=78&type=section&id=Corporate%20Activities) This section details the Company's dividend declarations for both common and Series C Preferred Stock for the second quarter of 2025 and 2024, emphasizing its commitment to REIT distribution requirements - The Board declared a cash dividend of **$0.24 per common share** (**$19.5 million total**) for Q2 2025, paid on July 25, 2025[380](index=380&type=chunk) - A cash dividend of **$0.3906 per Series C Preferred Stock share** (**$3.1 million total**) was declared for Q2 2025, paid on June 30, 2025[381](index=381&type=chunk) - For the six months ended June 30, 2025, common stock dividends of **$39.4 million** and Series C Preferred Stock dividends of **$6.3 million** were declared[383](index=383&type=chunk)[231](index=231&type=chunk) [Critical Accounting Estimates](index=79&type=section&id=Critical%20Accounting%20Estimates) This section discusses the critical accounting estimates that require significant management judgment, particularly the allowance for credit losses under the CECL model and the valuation of Real Estate Owned (REO) - Significant estimates include the adequacy of the **allowance for credit losses** and the **valuation inputs for loans and REO**[386](index=386&type=chunk) - The **CECL reserve** is influenced by loan quality, risk ratings, delinquency, historical losses, and macroeconomic forecasts (e.g., **unemployment, inflation, interest rates, property values**)[392](index=392&type=chunk) - **REO** is initially measured at **fair value**, with subsequent impairment analysis based on estimated future undiscounted cash flows[399](index=399&type=chunk) - The allowance for credit losses was **$68.8 million** as of June 30, 2025, with a **$1.6 million increase** in Q2 2025 and a **$4.8 million increase** in H1 2025[394](index=394&type=chunk) [Recent Accounting Pronouncements](index=81&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for a discussion of recently issued accounting pronouncements, including ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2023-09 (Income Tax Disclosures), which the Company is currently evaluating for impact - The Company is evaluating the impact of **ASU 2024-03 (Expense Disaggregation Disclosures)**, effective for its **2027 annual reporting**[94](index=94&type=chunk)[401](index=401&type=chunk) - The Company is evaluating the impact of **ASU 2023-09 (Income Tax Disclosures)**, effective for annual periods beginning after **December 15, 2024**[95](index=95&type=chunk)[401](index=401&type=chunk) [Subsequent Events](index=81&type=section&id=Subsequent%20Events) This section refers to Note 16 for a discussion of events that occurred after the reporting period, including new loan closings, loan repayments, and further share repurchases - Subsequent events include closing or processing **two new first mortgage loans** totaling **$112.3 million** in commitments and receiving full repayment of **two loans** totaling **$120.8 million**[246](index=246&type=chunk)[402](index=402&type=chunk) - The Company repurchased **830,024 common shares** for **$6.8 million** between July 1 and July 25, 2025, with **$2.5 million** remaining capacity under its share repurchase program[246](index=246&type=chunk)[402](index=402&type=chunk) [Loan Portfolio Details](index=82&type=section&id=Loan%20Portfolio%20Details) This section provides a detailed loan-by-loan breakdown of the Company's loans held for investment portfolio as of June 30, 2025, including origination date, total loan commitment, principal balance, interest rate, all-in yield, maturity, property type, location, LTV, and risk rating - The loan portfolio consists of **49 senior loans** with a total commitment of **$3.9 billion** and an unpaid principal balance of **$3.8 billion**[405](index=405&type=chunk) - The weighted average credit spread for the loans is **3.5%**, and the weighted average extended maturity is **2.7 years**[405](index=405&type=chunk) - The weighted average LTV for the portfolio is **66.1%**, and the weighted average risk rating is **3.0**[405](index=405&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to various market risks, including interest rate risk, credit risk, prepayment risk, extension risk, non-performance risk, real estate risk, liquidity risk, capital markets risk, counterparty risk, and currency risk [Investment Portfolio Risks](index=84&type=section&id=Investment%20Portfolio%20Risks) This subsection addresses risks inherent in the Company's investment portfolio, such as interest rate fluctuations, credit defaults, and the timing of loan repayments. It explains how these risks are monitored and mitigated through underwriting and asset management processes - The Company aims to minimize interest rate exposure by match-indexing assets and liabilities; **rising rates generally increase net interest income**, while **declining rates decrease it**, subject to interest rate floors[407](index=407&type=chunk) Impact of Benchmark Interest Rate Changes on Net Interest Income (in thousands) | Change in Benchmark Rate | 25 Basis Point Increase | 25 Basis Point Decrease | 50 Basis Point Increase | 50 Basis Point Decrease | 75 Basis Point Increase | 75 Basis Point Decrease | | :----------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total change in net interest income | $1,923 | $(1,923) | $3,846 | $(3,755) | $5,769 | $(5,373) | - **Credit risk** is managed through sponsor ability assessment, property cash flow monitoring, and enforcement of rights, while **real estate risk** is managed through underwriting and asset management[410](index=410&type=chunk)[411](index=411&type=chunk)[417](index=417&type=chunk) - **Prepayment risk** arises from principal repayments at different rates than anticipated, potentially reducing returns, while **extension risk** occurs if loan lives extend beyond financing terms, especially in rising interest rate environments[412](index=412&type=chunk)[414](index=414&type=chunk) [Operating and Capital Market Risks](index=85&type=section&id=Operating%20and%20Capital%20Market%20Risks) This subsection covers risks related to the Company's operations and access to capital markets, including liquidity, capital markets, counterparty, and currency risks. It outlines how global macroeconomic conditions can exacerbate these risks and the strategies employed for mitigation - **Liquidity risk** is associated with financing longer-maturity investments with shorter-term borrowings, exposing the Company to margin calls if collateral values decline[418](index=418&type=chunk) - **Capital markets risk** relates to the ability to raise equity and debt capital, which is constrained by REIT distribution requirements and impacted by macroeconomic conditions like **inflation and interest rates**[420](index=420&type=chunk)[421](index=421&type=chunk) - **Counterparty risk** arises from financial institutions not fulfilling obligations and borrowers defaulting on payments, mitigated by engaging high credit-quality institutions and rigorous credit analysis[422](index=422&type=chunk)[423](index=423&type=chunk) - Future foreign currency exposure would be **hedged using forwards** to fix U.S. dollar amounts of foreign currency denominated cash flows[425](index=425&type=chunk)[426](index=426&type=chunk) [Item 4. Controls and Procedures](index=87&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that the Company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level - The Company's **disclosure controls and procedures** were evaluated and deemed **effective** at the reasonable assurance level as of June 30, 2025[428](index=428&type=chunk) - **No material changes** in internal control over financial reporting occurred during the most recently completed fiscal quarter[429](index=429&type=chunk) [Part II. Other Information](index=88&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=88&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company was not involved in any material legal proceedings as of June 30, 2025, and refers to Note 14 for additional information on litigation - As of June 30, 2025, the Company was **not involved in any material legal proceedings**[432](index=432&type=chunk) [Item 1A. Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) This section states that 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 - **No material changes** to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[433](index=433&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's common stock repurchase program during the three months ended June 30, 2025, detailing the number of shares repurchased, average price paid, and remaining capacity Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period beginning | Period ending | Total number of shares repurchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | Amounts paid for shares purchased as part of publicly announced program | Approximate dollar value of shares that may yet be purchased under the program | | :--------------- | :------------ | :--------------------------------- | :--------------------------- | :------------------------------------------------------------------- | :-------------------------------------------------------------------- | :-------------------------------------------------------------------- | | April 1, 2025 | April 30, 2025 | 889,623 | $7.34 | 889,623 | $6,547,356 | $15,231,142 | | May 1, 2025 | May 31, 2025 | 768,694 | $7.72 | 1,658,317 | $5,952,558 | $9,278,584 | | June 1, 2025 | June 30, 2025 | 0 | $0 | 1,658,317 | $0 | $9,278,584 | | Total/Average | | 1,658,317 | $7.52 | | $12,499,914 | | - The Company repurchased **1,658,317 common shares** for **$12.5 million** during the three months ended June 30, 2025[434](index=434&type=chunk) - As of June 30, 2025, **$9.3 million** of remaining capacity was available under the share repurchase program[434](index=434&type=chunk) [Item 3. Defaults Upon Senior Securities](index=88&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - **No defaults** upon senior securities occurred[435](index=435&type=chunk) [Item 4. Mine Safety Disclosures](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are **not applicable** to the Company[436](index=436&type=chunk) [Item 5. Other Information](index=88&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report under this item - **No other information** to report[437](index=437&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including articles of incorporation, bylaws, preferred stock articles supplementary, common stock certificates, equity incentive plans, officer certifications, and XBRL interactive data files - Exhibits include **corporate governance documents** (Articles of Amendment and Restatement, Bylaws, Articles Supplementary for Preferred Stock)[439](index=439&type=chunk) - Key exhibits include the **TPG RE Finance Trust, Inc. 2025 Equity Incentive Plan** and related award agreements[439](index=439&type=chunk) - Officer certifications (**Section 302 and 906 of Sarbanes-Oxley Act**) and **Inline XBRL interactive data files** are also included[439](index=439&type=chunk) [Signatures](index=91&type=section&id=SIGNATURES) This section contains the required signatures of the Company's Chief Executive Officer and Chief Financial Officer, certifying the filing of the Form 10-Q - The report is signed by **Doug Bouquard, Chief Executive Officer (Principal Executive Officer)**, and **Robert Foley, Chief Financial Officer (Principal Financial Officer)**, on **July 29, 2025**[443](index=443&type=chunk)[444](index=444&type=chunk)