Financial Data and Key Metrics Changes - The company reported a GAAP net loss attributable to common shareholders of $155.5 million or $2.03 per share for the year, with distributable earnings of negative $106.6 million or negative $1.39 per share [12] - For Q4 2020, GAAP net income was $14.6 million, with net income allocable to shareholders of $6.6 million or $0.09 per share, and distributable earnings of $11.7 million or $0.15 per diluted share [23] - Book value per share declined to $16.50, a decrease of $0.28 due to a special dividend and credit loss expense [23][24] Business Line Data and Key Metrics Changes - The company originated five loans totaling approximately $437 million prior to COVID-19, but faced challenges leading to a net loss for the year [12] - Interest collections in Q4 were 96.7%, with only two loans being non-paying [16] - Loan repayments in 2020 totaled $885.6 million, contributing to a strong liquidity position [16] Market Data and Key Metrics Changes - The company is actively reviewing nearly $3.5 billion of new opportunities, with a focus on multifamily loans due to strong demographic trends [17][18] - Competition among private debt funds and public commercial mortgage REITs remains strong, particularly in multifamily, industrial, and life science sectors [18] - The company noted spread compression due to abundant liquidity and low interest rates in the market [18] Company Strategy and Development Direction - The strategic plan for 2021 focuses on active asset management, robust originations, and optimizing the capital structure to drive profitability [20] - The company aims to reduce reliance on mark-to-market financing and extend the duration of liabilities [20] - The management team is committed to maintaining a disciplined view on credit and focusing on quality assets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the rollout of vaccinations but acknowledged uncertainty due to emerging COVID strains and the pace of economic recovery [14] - The company is positioned to reenter the lending market, which is now a primary focus [13] - Management remains cautious regarding credit reserves, reflecting a conservative stance on economic reopening [14][24] Other Important Information - The company increased its CECL reserve in Q4 2020 to 127 basis points of total loan commitments, up from 109 basis points in Q3 2020 [14] - The company has a strong liquidity position with $342.6 million at year-end, primarily in cash [16] - The management team is undergoing a transition with the retirement of the CEO, who will remain as an advisor during the transition period [4][5] Q&A Session Summary Question: Portfolio growth and repayment expectations - The company expects annual repayments to range between $1 billion and $2 billion, with some loans likely to extend [36] Question: Series B preferred stock refinancing - The company aims to retire the Series B preferred stock by evaluating lower-cost capital options, with a focus on refinancing by May 2022 [42][43] Question: Asset type mix for maturities - The repayment behavior has been heavily weighted on multifamily loans, which is expected to continue [49] Question: Additional credit reserves on near-term maturities - The company is comfortable with its current level of reserves and believes it is conservative compared to competitors [53]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38156 TPG RE Finance Trust, Inc. (Exact name of Registrant as specified in its Charter) Maryland 36-4796967 (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - The company reported GAAP earnings per basic share of $0.40 and $0.39 per diluted share, with core earnings at $0.42 per share, reflecting a $0.19 increase from the prior quarter [21][22] - Book value per share increased by $0.23 to $16.78 per share, with core earnings exceeding the dividend by an average of 1.63 times over the past two quarters [22] - The company collected 100% of scheduled interest payments, with a quarter-over-quarter decline in interest expense of $4.4 million due to a decrease in LIBOR [23] Business Line Data and Key Metrics Changes - The company had eight loans with partial PIK interest totaling an UPB of $526 million, an increase from four loans and $254 million in the previous quarter [8] - REIT collections for office loans declined slightly to 91%, while multifamily loans remained steady at 92% [9] - Hotel occupancy and RevPAR have steadily increased, with the underlying asset's occupancy reaching 60% in October [11] Market Data and Key Metrics Changes - The company received $200 million in repayments during the third quarter, with year-to-date repayments totaling $830 million [13] - Cash position increased to $226 million at quarter-end, with unfunded commitments of $194 million for the next six months [14] - The company has a leverage ratio of 2.76:1, which is approximately 21% below its long-standing ceiling of 3.5:1 [28] Company Strategy and Development Direction - The company is focused on liquidity, proactive asset management, and reducing mark-to-market exposure of liabilities [19] - The company plans to begin deploying cash in the new year, as it sees interesting lending opportunities emerging [19] - The company aims to maintain a high-quality portfolio and believes that assets most impacted by the pandemic still hold significant value [18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution due to ongoing uncertainties related to the pandemic and political environment, indicating a defensive approach [37] - The company anticipates that repayments will continue, projecting slightly over $1 billion for the year, similar to the current year's level [49] - Management is optimistic about the potential for asset growth countering any portfolio shrinkage [51] Other Important Information - The company recorded a specific reserve of $12.8 million on a defaulted loan related to land parcels on the Las Vegas Strip [12] - The CECL reserve increased to $59.3 million, reflecting a cautious macroeconomic outlook due to the ongoing pandemic [29][30] Q&A Session Summary Question: Timeline for resolution on the Las Vegas asset - Management is evaluating options including foreclosure and deed in lieu, but cannot provide a specific timeline [34] Question: Interest income contribution from the Las Vegas loan - Management will provide the interest income figure later due to technical difficulties [35] Question: New investment opportunities versus stock repurchase - Management is currently cautious and will evaluate the situation based on market conditions and potential returns [36] Question: Future funding commitments on moderate transitional loans - Management indicated that loan modifications correlate more with property type impact from the pandemic rather than loan categorization [60]

Financial Performance - Total assets decreased to $5.15 billion as of September 30, 2020, down from $5.89 billion at December 31, 2019, reflecting a decline of approximately 12.5%[15] - Net interest income for the three months ended September 30, 2020, was $48.4 million, compared to $44.5 million for the same period in 2019, representing an increase of about 4.1%[18] - Interest income for the nine months ended September 30, 2020, was $221.7 million, down from $257.2 million in 2019, a decrease of approximately 13.8%[18] - Net income attributable to TPG RE Finance Trust, Inc. for the three months ended September 30, 2020, was $32.2 million, compared to $33.0 million in 2019, a slight decrease of about 2.4%[18] - The company reported a net loss of $151.4 million for the nine months ended September 30, 2020, compared to a net income of $93.4 million for the same period in 2019[18] - The company reported a net loss of $232.79 million for the period[20] - The company reported a net income of $28,412 thousand for the period, reflecting a significant increase compared to previous periods[22] - For the three months ended September 30, 2020, the Company recognized a net income attributable to common stockholders of $30.8 million, compared to $32.9 million for the same period in 2019, reflecting a decrease of approximately 6.5%[194] Equity and Dividends - The company declared dividends payable of $15.4 million for the three months ended September 30, 2020, down from $32.8 million in the same period of 2019, a decrease of approximately 53%[15] - The company declared dividends on common stock at $0.20 per share, totaling $15.44 million[20] - Dividends declared on common stock were $31,160 thousand, with a per share dividend of $0.43[22] - The Company issued up to 13,000,000 shares of 11.0% Series B Preferred Stock for an aggregate cash purchase price of up to $325 million as part of an investment agreement[195] - Series B Preferred Stock bears an 11% annual dividend, payable quarterly in cash, with up to 2.0% of the liquidation preference payable in additional shares[198] Assets and Liabilities - Total liabilities decreased to $3.67 billion as of September 30, 2020, from $4.39 billion at December 31, 2019, a reduction of approximately 16.4%[15] - Total equity as of June 30, 2020, was $1.27 billion, reflecting a decrease from previous periods[20] - Total equity increased to $1,474,554 thousand, up from $1,443,549 thousand in the prior quarter, indicating a growth of approximately 2.15%[22] - The total number of common shares outstanding as of June 30, 2020, was approximately 76.79 million[20] Credit Losses and Risk Management - The allowance for credit losses was $56.7 million as of September 30, 2020, reflecting a proactive approach to potential credit risks[15] - The allowance for credit losses was adjusted to $(56,660,000) as of September 30, 2020, reflecting a cumulative impact from the adoption of ASU 2016-13[91] - The allowance for credit losses totaled $59,329,000 as of September 30, 2020, reflecting an increase of $19.6 million due to the adoption of the CECL methodology[110] - The Company employs a model-based approach for estimating credit losses, utilizing historical data from over 100,000 commercial real estate loans[54] - The Company maintains a separate allowance for credit losses from unfunded loan commitments, which is included in accrued expenses[58] Loan Portfolio - As of September 30, 2020, the Company had a total loan portfolio balance of $4,939,369,000, with total loan commitments amounting to $5,581,448,000[95] - The Company originated loans held for investment totaling $351.650 million, a decrease from $1.783 billion in the prior year[24] - The Company reported a net loan balance of $4,871,809,000 after accounting for the allowance for credit losses as of September 30, 2020[98] - The weighted average loan-to-value (LTV) ratio was 65.8% as of September 30, 2020[95] - The Company had 63 loans in its portfolio, all of which were floating rate loans indexed to LIBOR[95] Cash Flow and Liquidity - Net cash provided by operating activities increased to $102.118 million from $87.866 million year-over-year[24] - The company reported net cash provided by investing activities of $637.826 million, a significant recovery from a net cash used of $1.262 billion in the previous year[24] - The Company ended the period with cash, cash equivalents, and restricted cash totaling $225.554 million, up from $99.697 million at the end of the previous year[24] - The Company is required to maintain minimum cash of $10 million or 5% of aggregate recourse indebtedness, holding $21.7 million as of September 30, 2020[82] Market Conditions and Economic Impact - The ongoing impact of COVID-19 has created significant uncertainty regarding the company's financial condition and results of operations[29] - The Company’s estimate of expected credit losses increased due to recessionary macroeconomic conditions influenced by the COVID-19 pandemic[111] Securities and Financing - The Company recorded losses of $203.4 million from the sale of CRE debt securities with an aggregate face value of $781.7 million, impacting its financial performance for the period[179] - The Company transferred 100% of senior mortgage loans on a non-recourse basis to third-party lenders, accounting for these syndications as sales under GAAP[65] - The Company had a total of $4,732,038 thousand in secured credit facilities as of December 31, 2019, with an outstanding balance of $2,537,054 thousand[141] Compliance and Regulations - The Company qualifies as a REIT and must distribute at least 90% of its REIT taxable income to avoid federal income taxes[74] - The Company was in compliance with all financial covenants as of September 30, 2020, despite challenges posed by COVID-19[163]

Financial Data and Key Metrics Changes - For Q2 2020, the company generated GAAP net income of $42.9 million or $0.52 per diluted common share, with net income available to common shareholders also at $40.1 million, reflecting a core earnings of $17.5 million or $0.23 per diluted common share [26][27] - The net interest margin (NIM) increased by 2.1% from the prior quarter to $44.2 million, driven by the benefits of in-the-money LIBOR floors on loans [29] - Book value at quarter end was $16.55 per share, an increase of $0.49 per share, primarily due to the issuance of warrants and GAAP earnings exceeding the common dividend [28] Business Line Data and Key Metrics Changes - The company modified six loans with a total unpaid principal balance of $458 million during the quarter, resulting in an accrual of $551,000 of interest [18][50] - Office property rent collections averaged about 90%, while multifamily rent collections also averaged over 90%, indicating strong performance in these segments [19] Market Data and Key Metrics Changes - The company noted that office rent collections remained stable, with borrowers not requesting modifications as seen in the hotel sector [63] - The company is focused on liquidity, with $321 million in repayments during the first half of the year, but noted that borrowers are not rushing to repay loans due to expectations of improved NOI [11][12] Company Strategy and Development Direction - The company is taking a defensive approach by focusing on liquidity and asset management, including the addition of senior management to strengthen operations [9][10] - The company aims to maximize the performance of its loan book while maintaining and increasing liquidity during uncertain times [24] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the pace of economic recovery, citing factors such as virus spread, vaccine development, and geopolitical relations as influencing elements [8] - The company remains cautious about the economic environment and its impact on commercial real estate performance, indicating that further modifications may be necessary if conditions do not improve [111] Other Important Information - The company has a CECL reserve of $58.7 million, reflecting a net reduction of $24.3 million over the prior quarter, primarily due to the sale of a loan [43][44] - The company raised $225 million of preferred stock to bolster its capital base during uncertain times [36] Q&A Session Summary Question: Discussion on loan modifications - Management provided details on the six loan modifications, indicating that four involved interest deferrals, with significant equity contributions required from borrowers [52][53] Question: Performance of office properties - Management noted that office rent collections are stable, with no significant requests for modifications from office borrowers, contrasting with the hotel sector [63] Question: CECL reserve assumptions - Management explained that the CECL reserve was conservative, and the sale of a loan reflected a more favorable market view than their own [64][66] Question: Future loan modifications - Management indicated that further modifications may be necessary if economic conditions do not improve, but borrowers are currently contributing cash to support their properties [111] Question: Government support for borrowers - Most hotel borrowers qualified for PPP funds, while other borrowers, being large institutional entities, did not require government assistance [118] Question: Starwood Capital Group financing options - Management stated that any drawdown from the financing options would be for defensive reasons, depending on the economic outlook [120][121]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2020. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38156 TPG RE Finance Trust, Inc. (Exact name of registrant as specified in its charter) Maryland 36-4796967 (State or other jur ...

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $232.8 million or $3.05 per diluted share for Q1 2020, with core earnings of $168.3 million or $2.20 per diluted share [28] - Net interest income from the transitional lending business was $40.8 million, up 5.9% from the prior quarter [28] - The overall portfolio risk rating increased to 3.1 due to the impact of COVID-19, with many operating hotels downgraded [21] Business Line Data and Key Metrics Changes - In Q1, the company originated $437 million of loans, primarily in multi-family assets (90%) and office assets (10%) [16] - 68% of the portfolio is secured by bridge and light transitional assets, with one construction loan having future funding obligations of $15 million [13] - 99.5% of the loan portfolio paid interest in April, with only one loan late, which is senior to an institutionally owned mezzanine loan [14] Market Data and Key Metrics Changes - The company’s portfolio is primarily composed of office (49%) and multi-family loans (24%), with hotel and retail loans representing 13% and 0.6% respectively [12] - The weighted average loan-to-value (LTV) ratio is 65.7%, consistent with prior quarters, indicating a focus on quality properties in major markets [39] Company Strategy and Development Direction - The company is focusing on protecting the value of its portfolio and providing modifications to borrowers needing payment relief during the lockdown [17] - The company has retained Houlihan Lokey to help source new capital to navigate the current economic environment and prepare for future opportunities [26] - The management emphasized the importance of working with borrowers and lenders to manage the economic strain caused by COVID-19 [22] Management Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented challenges posed by the COVID-19 pandemic, stating that the economic strain on tenants and landlords will not disappear quickly [22] - The company expressed confidence in the long-term value of its portfolio, anticipating that cash flow disruptions will begin to ease as lockdowns are lifted [26] - Management noted that market conditions are too uncertain to originate new loans at this time [17] Other Important Information - The company recorded an impairment charge of $167.3 million against the $767.3 million face value of bonds owned at quarter-end [30] - The company has no margin calls and is in active discussions with lenders to implement re-margening holidays [22] - Liquidity at quarter-end was $168.8 million, primarily in cash and near-term availability under credit facilities [45] Q&A Session Summary Question: Can you provide more details on the five-rated loan in Houston? - The loan is a Class A multi-family property that has underperformed due to market conditions and rent concessions [51] Question: What is the timeline for the deed in lieu process? - The process is in early stages and could take several weeks to months, depending on negotiations [54][92] Question: Can you discuss the ongoing concern related to funding due in a year? - The company is comfortable with its plans and has successfully extended its facility with Morgan Stanley [60] Question: Are there any other loans on non-accrual? - Currently, there is only one loan that is late, and no other loans are on non-accrual [67] Question: How does the company view cash management going forward? - The company plans to hoard cash and prioritize paying down the most vulnerable loans, particularly those financing hotels [75] Question: What is the status of the dividend? - The company has not announced any suspension of dividends, but the first quarter dividend was deferred [116]

Financial Performance - TPG RE Finance Trust, Inc reported a GAAP net loss attributable to common stockholders of $233.1 million, or $(3.05) per diluted common share[13] - The company's book value per common share at March 31, 2020, was $16.06[13] - Net interest margin on investments increased to $43.3 million, a 16.4% increase from $37.2 million for the three months ended March 31, 2019[14] - The Current Expected Credit Losses (CECL) reserve totaled $83.0 million, or $1.08 per share, at March 31, 2020, producing a net CECL expense of $63.3 million, or $(0.83) per share, for the quarter[14,32] Investment Activity - The company closed five new loan commitments totaling $437.4 million, with an average loan size of $87.5 million, an initial unpaid principal balance of $353.5 million, a weighted average credit spread of 284 bps, and a weighted average loan-to-value of 73.5%[14] - Losses on CRE debt securities were $203.5 million, including $36.2 million realized from sales in March 2020 and an impairment charge of $167.3 million related to CRE debt securities owned as of March 31, 2020[14] - The company reduced its portfolio of CRE debt securities to zero, with losses sustained after quarter-end equaling the impairment charge of $167.3 million recorded at March 31, 2020[15] Liquidity and Capitalization - The company had cash on hand of $103.6 million, of which $45.2 million was available for investment[32] - The company issued 0.6 million common shares via its at-the-market (ATM) continuous offering program, generating proceeds of $12.9 million at a weighted average price per share of $20.53, before dealer commissions[14] - An existing secured revolving repurchase agreement with Morgan Stanley Bank was extended through May 4, 2021, with a commitment amount of $500 million[15]

[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) The financial statements for the quarter ended March 31, 2020, reflect a significant net loss of **$232.8 million**, a stark contrast to the **$28.4 million** net income in the prior-year period, primarily driven by **$203.5 million** in securities impairments and a **$63.3 million** credit loss expense largely due to the economic impact of the COVID-19 pandemic, resulting in a slight decrease in total assets to **$5.83 billion**, an increase in total liabilities to **$4.59 billion**, and a reduction in stockholders' equity from **$1.50 billion** to **$1.23 billion**, following the adoption of the new CECL accounting standard which increased the allowance for credit losses by **$19.6 million** at the period's start [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited) | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $103,622 | $79,182 | | Loans Held for Investment, net | $5,020,695 | $4,980,389 | | Allowance for Credit Losses | ($75,658) | — | | Investment in AFS CRE Debt Securities, net | $604,801 | $787,552 | | **Total Assets** | **$5,826,301** | **$5,892,870** | | **Liabilities & Equity** | | | | Total Liabilities | $4,594,888 | $4,388,916 | | Total Stockholders' Equity | $1,231,413 | $1,503,954 | - Total Stockholders' Equity decreased significantly from **$1.50 billion** at year-end 2019 to **$1.23 billion** at the end of Q1 2020, primarily due to a large accumulated deficit resulting from net losses during the quarter[15](index=15&type=chunk) [Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Consolidated Income Statement Highlights (Unaudited) | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Net Interest Income | $43,292 | $37,234 | | Securities Impairments | ($203,493) | — | | Credit Loss Expense | ($63,348) | — | | **Net Income (Loss)** | **($232,790)** | **$28,412** | | **Diluted Earnings (Loss) per Common Share** | **($3.05)** | **$0.42** | - The company reported a substantial net loss of **$232.8 million**, or **($3.05)** per share, for Q1 2020, driven by significant securities impairments and credit loss expenses, which were absent in the same period of 2019[18](index=18&type=chunk) [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) - Total equity decreased from **$1.504 billion** at the start of 2020 to **$1.231 billion** at March 31, 2020. The decline was primarily driven by a net loss of **$232.8 million** and the adoption of ASU 2016-13 (CECL), which had a negative impact of **$19.6 million** on the accumulated deficit[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $37,526 | $26,033 | | Net Cash Used in Investing Activities | ($183,132) | ($590,071) | | Net Cash Provided by Financing Activities | $170,472 | $579,149 | | **Net Change in Cash** | **$24,866** | **$15,111** | [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) - The company's business is primarily originating and acquiring commercial real estate first mortgage loans and CRE debt securities. It operates as a REIT[24](index=24&type=chunk)[25](index=25&type=chunk) - The COVID-19 pandemic has adversely impacted global commercial activity and financial markets, creating significant uncertainty for the company's financial condition and results of operations[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - On January 1, 2020, the company adopted the CECL accounting standard (ASU 2016-13), resulting in a cumulative-effect adjustment that increased the allowance for credit losses by **$17.8 million** and the liability for unfunded commitments by **$1.9 million**, with a corresponding **$19.6 million** reduction to retained earnings (accumulated deficit)[88](index=88&type=chunk)[90](index=90&type=chunk) - Subsequent to quarter-end, from April 1 to April 29, 2020, the company sold 39 CRE debt securities for gross proceeds of **$614.8 million**, recording aggregate losses of **$167.3 million**, which equaled the impairment charge taken at March 31[210](index=210&type=chunk)[343](index=343&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights the severe impact of the COVID-19 pandemic, which led to a GAAP Net Loss of **$232.8 million**, or **($3.05)** per share, for Q1 2020, primarily due to **$203.5 million** in securities impairments from the sale and write-down of its CRE debt securities portfolio and a **$63.3 million** credit loss expense under the newly adopted CECL standard, causing significant liquidity pressure from margin calls that prompted the sale of its entire CRE debt securities portfolio, raising substantial doubt about the company's ability to continue as a going concern, though management believes its plans to extend debt maturities are probable of alleviating this doubt, as book value per share dropped to **$16.06** from **$19.78** at year-end 2019 [Overview and COVID-19 Impact](index=44&type=section&id=Overview%20and%20COVID-19%20Impact) - The company focuses on originating and managing commercial mortgage loans and other CRE-related investments, primarily floating-rate first mortgage loans secured by properties undergoing transition[218](index=218&type=chunk) - The COVID-19 pandemic caused significant disruptions, volatility, and widening credit spreads in the real estate securities markets, negatively impacting the company's CRE debt securities portfolio and leading to a reduction in new investment activity[222](index=222&type=chunk) [Going Concern](index=45&type=section&id=Going%20Concern) - The company's financial statements were prepared on a going concern basis, but management noted that conditions raise substantial doubt about the company's ability to continue as a going concern[225](index=225&type=chunk)[227](index=227&type=chunk) - Management projects insufficient liquidity to repay maturing debt of **$432.2 million** and meet obligations over the next year. However, they believe it is probable that they will successfully execute lender extensions to alleviate this doubt[227](index=227&type=chunk)[228](index=228&type=chunk) [Key Financial Measures and Indicators](index=45&type=section&id=Key%20Financial%20Measures%20and%20Indicators) Key Performance Indicators | Metric | Q1 2020 | Q4 2019 | | :--- | :--- | :--- | | Diluted EPS | ($3.05) | $0.44 | | Core Earnings per Share | ($2.20) | $0.45 | | Book Value per Share | $16.06 | $19.78 | | Dividends Declared per Share | $0.43 | $0.43 | - The Q1 2020 dividend of **$0.43** per share was deferred from its original April payment date to July 14, 2020, with the board to determine if it will be paid in cash or a combination of cash and stock[230](index=230&type=chunk) [Portfolio Overview](index=48&type=section&id=Portfolio%20Overview) Loan Portfolio Statistics as of March 31, 2020 | Metric | Value | | :--- | :--- | | Number of loans | 66 | | Total loan commitments | $5.8 billion | | Unpaid principal balance | $5.1 billion | | Weighted average LTV | 65.7% | | Floating rate loans | 100.0% | - The weighted average risk rating of the loan portfolio increased to **3.1** from **2.9** at year-end 2019, primarily due to downgrading nine hotel loans to a risk rating of '4' because of challenges caused by the COVID-19 pandemic[256](index=256&type=chunk) [Investment Portfolio Financing](index=51&type=section&id=Investment%20Portfolio%20Financing) Total Indebtedness by Type | Financing Type | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | Secured revolving repurchase agreements - loans | $1,834,531 | $2,314,417 | | CLO financing | $1,824,521 | $1,820,060 | | Secured revolving repurchase agreements - CRE debt | $608,282 | — | | Senior secured and secured credit agreements | $208,280 | $145,637 | | Asset-specific financing | $77,000 | $77,000 | | **Total Indebtedness** | **$4,552,614** | **$4,357,114** | - The company's debt-to-equity ratio increased to **3.61x** as of March 31, 2020, from **2.84x** at December 31, 2019[296](index=296&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) - Total available liquidity decreased significantly to **$167.9 million** at March 31, 2020, from **$359.8 million** at December 31, 2019[319](index=319&type=chunk) - The company faced significant margin calls on its CRE CLO portfolio, funding **$89.8 million** in cash during the quarter. Unpaid margin calls of **$19.0 million** at quarter-end were satisfied in April[322](index=322&type=chunk)[279](index=279&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate, credit, and liquidity risk, with interest rate risk managed by match-indexing floating-rate assets and liabilities, as **100%** of the loan portfolio is floating rate, creating a net positive exposure to rising rates, while credit risk has increased due to the COVID-19 pandemic, prompting active monitoring of borrower performance, and liquidity risk is significant, highlighted by recent margin calls on secured repurchase agreements which forced asset sales, with the pandemic also heightening prepayment and extension risk as borrowers may delay repayments - The company's business model aims to minimize interest rate risk by match-indexing floating-rate assets and liabilities. As of March 31, 2020, **100%** of loans were floating rate, creating a net positive correlation to rising interest rates[357](index=357&type=chunk) - Liquidity risk is a principal concern, associated with financing longer-maturity investments with shorter-term borrowings like repurchase agreements. The company is subject to margin call risk, which materialized during the quarter, forcing asset sales to maintain liquidity[363](index=363&type=chunk)[364](index=364&type=chunk) - Credit risk is elevated due to the COVID-19 pandemic's impact on borrowers' ability to operate properties and generate cash flow. The company anticipates an increase in delinquencies and defaults[361](index=361&type=chunk)[391](index=391&type=chunk) [Item 4. Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2020, concluding that these controls and procedures were effective at a reasonable assurance level, with no material changes to the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[380](index=380&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2020[381](index=381&type=chunk) [Part II. Other Information](index=76&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2020, the company was not involved in any material legal proceedings - The company reports no material legal proceedings as of the end of the reporting period[384](index=384&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factors discussed are centered on the significant negative impact of the COVID-19 pandemic, with key risks including market and economic disruptions leading to asset value declines, margin calls, and forced asset sales at a loss (**$203.4 million** in aggregate losses from CRE debt securities), as the pandemic is expected to adversely affect borrowers' financial health, increasing delinquencies and defaults, particularly in concentrated sectors like hotels and retail, and the company's liquidity has been strained, impacting its ability to make distributions and potentially causing defaults on financial covenants, which did occur post-quarter end but were subsequently cured and waived - The COVID-19 pandemic has caused significant market disruptions, leading to volatility and illiquidity which negatively impacted the company's CRE debt securities portfolio, resulting in material margin calls and forced sales[386](index=386&type=chunk)[387](index=387&type=chunk) - The company sold its entire CRE debt securities portfolio, recording aggregate losses of **$203.4 million**, to mitigate the impact of market volatility and meet liquidity needs[387](index=387&type=chunk)[388](index=388&type=chunk) - The pandemic is expected to adversely impact borrowers' financial conditions, leading to an anticipated increase in delinquencies and defaults. The company has received requests for loan modifications from several borrowers[391](index=391&type=chunk) - Negative impacts from COVID-19 may cause defaults on financial covenants. The company was not in compliance with its debt-to-equity ratio covenant as of March 31, 2020, but cured the non-compliance on April 2, 2020, and received waivers[401](index=401&type=chunk)[403](index=403&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[405](index=405&type=chunk) [Item 3. Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[406](index=406&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, an amendment to a financing agreement, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act

TPG Real Estate Finance Trust, Inc. (NYSE:TRTX) Q4 2019 Earnings Conference Call February 19, 2020 8:30 AM ET Company Participants Deborah Ginsberg - VP, General Counsel & Secretary Greta Guggenheim - CEO, President & Director Robert Foley - Chief Financial & Risk Officer Conference Call Participants Steven Delaney - JMP Securities Stephen Laws - Raymond James & Associates Jason Weaver - Compass Point Charles Arestia - JPMorgan Chase & Co. Operator Greetings, and welcome to the TPG RE Finance Trust Fourth Q ...