Core Insights - Investors in the Real Estate - Operations sector should consider TPG RE Finance Trust (TRTX) and Corporacion Inmobiliaria Vesta, S.A.B. de C.V. Sponsored ADR (VTMX) for potential value opportunities [1] Valuation Metrics - TRTX has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while VTMX has a Zacks Rank of 5 (Strong Sell), suggesting a negative earnings outlook [3] - TRTX's forward P/E ratio is 8.39, significantly lower than VTMX's forward P/E of 15.97, indicating TRTX may be undervalued [5] - TRTX has a PEG ratio of 2.28 compared to VTMX's PEG ratio of 4.15, suggesting TRTX offers better value relative to its expected earnings growth [5] - TRTX's P/B ratio is 0.59, while VTMX's P/B ratio is 8.81, further indicating TRTX's more attractive valuation [6] - Based on these metrics, TRTX holds a Value grade of B, whereas VTMX has a Value grade of F, highlighting TRTX as the superior option for value investors [6][7]

Portfolio Overview - The loan investment portfolio totals $3.4 billion[6] - The weighted average all-in yield is 8.22%[6] - The weighted average credit spread is 3.66%[6] - 99.7% of the portfolio consists of floating rate loans[6] - The weighted average LTV (Loan-to-Value) is 66.1%[6] Liquidity and Capitalization - Available liquidity stands at $457.6 million[6] - 91.0% of financing is non-mark-to-market[6] - The debt-to-equity ratio is 2.2x[6] Dividend and Earnings - The common stock dividend declared for 1Q25 is $0.24 per share[6] - GAAP income per diluted share for 1Q25 is $0.12[6] - Distributable earnings per diluted share for 1Q25 is $0.24[6]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported GAAP net income of $10 million or $0.12 per common share, with a book value per common share of $11.19 and distributable earnings of $0.24 per common share, aligning with the quarterly dividend [14][15] - The company maintained a 100% performing loan portfolio and an unchanged weighted average risk rating of 3.0, with no credit migration [15][18] - The general reserve increased to $67.2 million or 199 basis points from $64 million or 187 basis points, reflecting higher interest rates and potential economic recession risks [18] Business Line Data and Key Metrics Changes - The company closed two multifamily loans totaling $131 million after the quarter end and executed term sheets on another $310 million of transactions [10][15] - The capital markets segment issued a new $1.1 billion CRE CLO, increasing the proportion of non mark to market non recourse term match liabilities to 91% [15][19] - The company repurchased approximately $9 million worth of shares, boosting book value per share by $0.05 [15] Market Data and Key Metrics Changes - The company noted that real estate credit spreads have moved in sympathy with broader credit markets, but real estate credit is viewed as a safer investment compared to corporate credit [7][12] - The investment pipeline has grown significantly, particularly as some lenders have paused their activities due to market pullbacks [12][13] Company Strategy and Development Direction - The company continues to prefer the housing sector, especially multifamily, due to its stable net operating income profile, while also pursuing transactions across various property types and geographies [8][10] - The company is focused on optimizing shareholder returns through the monetization of its REO portfolio, with plans to sell two California office buildings [18][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertain market and capturing special lending opportunities, supported by strong liquidity and a stable balance sheet [21] - The company is positioned to drive growth in net earning assets and distributable earnings without relying on loan repayments [21] Other Important Information - The company has $2 billion of financing capacity available to support loan investment activity and is in compliance with all financial covenants [20] - Liquidity was reported at $457.6 million, which includes cash in excess of covenant requirements [20] Q&A Session Summary Question: Can you provide insights on the risk profile of current originations compared to previous years? - Management noted that the current market has a more disciplined borrower mentality, with lower loan-to-value ratios compared to 2021 and 2022, and elevated borrowing costs [24][25][27] Question: Why were there no originations in the first quarter? - Management indicated that a combination of tighter loan spreads and longer closing times due to heavy refinancing volume contributed to the lack of originations in Q1 [34][35] Question: What is the status of the REO portfolio and expected sales? - Management confirmed plans to stick to the previously described cadence for REO sales, despite increased market uncertainty [37] Question: How do the transaction prices of the upcoming REO sales compare to carrying values? - Management stated that historically, REO has been sold at prices exceeding carrying values, but specific transaction details will be disclosed upon closing [41]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported GAAP net income of $10 million or $0.12 per common share, with a book value per common share of $11.19 and distributable earnings of $0.24 per common share, aligning with the quarterly dividend [14][15] - The company maintained a 100% performing loan portfolio and an unchanged weighted average risk rating of 3.0, with no credit migration [15][18] - The general reserve increased to $67.2 million or 199 basis points from $64 million or 187 basis points, reflecting higher interest rates and potential economic recession risks [18] Business Line Data and Key Metrics Changes - The company closed two multifamily loans totaling $131 million after the quarter end and executed term sheets on another $310 million of transactions [10][15] - The capital markets segment issued a new $1.1 billion CRE CLO, increasing the proportion of non mark-to-market non-recourse term match liabilities to 91% [15][19] - Share repurchases amounted to approximately $9 million, boosting book value per share by $0.05 [15] Market Data and Key Metrics Changes - The company noted that real estate credit is viewed as a safe haven compared to corporate credit and equity risk, with investor sentiment indicating a preference for real estate credit amid broader market disruptions [7][12] - The liquidity position was strong at $457.6 million, representing 11.6% of total assets, which supports the capital allocation strategy [20][21] Company Strategy and Development Direction - The company continues to focus on the housing sector, particularly multifamily, while also exploring transactions across various property types and geographies [8][12] - The strategic goals include deploying excess liquidity, utilizing untapped financing capacity, recycling equity in REO, and creating additional liquidity via capital markets activity [11][12] - The company is positioned to take advantage of the attractive real estate credit market, with a significant investment pipeline due to competitors slowing their activity [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the current market, highlighting the importance of downside protection and tail risks amid a protracted global trade war [6][8] - The company is well-positioned to navigate market uncertainties and capture lending opportunities, with strong liquidity and a stable risk profile [21] Other Important Information - The company redeemed FL3 and issued FL6, generating net liquidity of $260 million for future deployment [12][19] - The total leverage slightly increased to 2.2 times from 2.1 times in the previous quarter, with $2 billion of financing capacity available [20] Q&A Session Summary Question: Can you provide insights on the risk profile of current originations compared to previous years? - Management noted that the entry point for loans is more favorable now, with borrowers being more disciplined about debt levels due to market uncertainties [24][27] Question: What is the expected levered return on equity for new bridge loans? - Management indicated that gross ROEs are generally in the low to mid-teens range, benefiting from favorable timing in locking in bond spreads [28][29] Question: Why were there no originations in the first quarter? - Management explained that a combination of tighter loan spreads and longer closing times due to market dislocation contributed to the lack of originations [34][35] Question: What is the outlook for the REO portfolio reduction? - Management confirmed plans to stick to the previously described cadence for REO sales, despite increased market uncertainty [37] Question: How do the transaction prices for the two REOs compare to carrying values? - Management refrained from disclosing specific transaction prices but indicated a history of selling REOs at prices exceeding carrying values [41]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported GAAP net income of $10 million or $0.12 per common share, with a book value per common share of $11.19 and distributable earnings of $0.24 per common share, aligning with the quarterly dividend [11] - The company maintained a 100% performing loan portfolio and an unchanged weighted average risk rating of 3.0, with no credit migration [12][14] - The general reserve increased to $67.2 million or 199 basis points from $64 million or 187 basis points, reflecting higher interest rates and potential economic recession risks [14] Business Line Data and Key Metrics Changes - The company closed two multifamily loans totaling $131 million after the quarter end and executed term sheets on another $310 million of transactions [7][12] - The capital markets segment issued a new $1.1 billion CRE CLO, increasing the proportion of non mark-to-market non-recourse term match liabilities to 91% [12][16] - The company repurchased approximately $9 million worth of common shares, boosting book value per share by $0.05 [12] Market Data and Key Metrics Changes - The investment pipeline grew significantly as certain lenders paused or slowed their activity due to broader market pullback, providing TRTX with a comparative advantage [9] - The company reported a cumulative return of 47% since January 2023, outperforming peers [13] Company Strategy and Development Direction - The company remains focused on the housing sector, particularly multifamily, due to its resilient and stable NOI profile, while also pursuing transactions across various property types and geographies [6] - The company aims to drive growth in distributable earnings through capital allocation strategies, including deploying excess liquidity and recycling equity [8][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market environment is characterized by elevated borrowing costs, but borrowers are being more disciplined regarding the amount of debt they are willing to take on [22][23] - The company is well-positioned to navigate the uncertain market and capture special situation lending opportunities, with strong liquidity and a 100% performing loan portfolio [18] Other Important Information - The company has $2 billion of financing capacity available to support loan investment activity and is in compliance with all financial covenants [17] - Liquidity was reported at $457.6 million, including cash in excess of covenant requirements [17] Q&A Session Summary Question: Can you provide insights on the risk profile in current originations compared to previous years? - Management highlighted that the entry point for loans is more favorable now, with no significant proceeds creep observed compared to 2021 and 2022 [21][22] Question: Why were there no originations in Q1 despite having live investment opportunities? - Management explained that the lack of originations was due to tighter loan spreads and longer closing times caused by market dislocation [30][32] Question: What is the status of the REO portfolio and its expected reduction? - Management confirmed plans to stick to the previously described cadence for REO sales, despite increased market uncertainty [36] Question: How do the transaction prices for the two REOs compare to carrying values? - Management stated that they generally sell REO at prices exceeding carrying value, but specific transaction details will be disclosed upon closing [39]

Core Insights - TPG RE Finance Trust reported a revenue of $37.03 million for Q1 2025, reflecting a year-over-year decline of 4.9% and an EPS of $0.24, down from $0.30 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $37.24 million, resulting in a surprise of -0.56%, while the EPS also missed the consensus estimate of $0.26 by -7.69% [1] Financial Performance Metrics - Net Interest Income was $24.90 million, below the average estimate of $26.08 million from two analysts [4] - Other income, net, was reported at $1.85 million, compared to the average estimate of $2.45 million from two analysts [4] - Total other revenue reached $12.13 million, exceeding the average estimate of $10.59 million from two analysts [4] - Revenue from real estate owned operations was $10.28 million, surpassing the estimated $8.14 million from two analysts [4] Stock Performance - TPG RE Finance Trust shares have returned -9.1% over the past month, contrasting with the Zacks S&P 500 composite's -0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - TPG RE Finance Trust reported quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.26 per share, and down from $0.30 per share a year ago, representing an earnings surprise of -7.69% [1] - The company posted revenues of $37.03 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.56%, and down from $38.93 million year-over-year [2] - Over the last four quarters, TPG RE Finance Trust has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Group 2: Stock Performance and Outlook - TPG RE Finance Trust shares have declined approximately 12.8% since the beginning of the year, compared to a -6% decline in the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.25 on revenues of $37.52 million, and for the current fiscal year, it is $1.03 on revenues of $149.72 million [7] Group 3: Industry Context - The Real Estate - Operations industry, to which TPG RE Finance Trust belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact TPG RE Finance Trust's stock performance [5][6]

```markdown Cover and Disclosures [Forward-Looking Statements and Other Disclosures](index=3&type=section&id=Forward-Looking%20Statements%20and%20Other%20Disclosures) This section outlines forward-looking statements and potential risks from market, interest rate, real estate, financing, and regulatory factors - The company identifies numerous risk factors that could materially affect its financial results and performance[4](index=4&type=chunk) - **Fluctuations in interest rates and credit spreads** are key risks[4](index=4&type=chunk) - **Adverse changes in the real estate and capital markets** pose significant risks[4](index=4&type=chunk) - **Difficulty in obtaining financing or raising capital** is a potential risk[4](index=4&type=chunk) - **Reductions in investment yields and increases in financing costs** are identified risks[4](index=4&type=chunk) - **Events leading to increases in the current expected credit loss (CECL) reserve** are a risk factor[4](index=4&type=chunk) - **Reduced demand for office space due to remote/hybrid work schedules** is a concern[4](index=4&type=chunk) - **Defaults by borrowers on debt service or principal payments** are also listed as risks[4](index=4&type=chunk) Financial and Portfolio Overview [Q1 2025 Highlights](index=5&type=section&id=TRTX%20By%20the%20Numbers) As of March 31, 2025, TRTX reported a **$3.4 billion** loan investment portfolio and **$457.6 million** in liquidity, declaring a **Q1 2025** common stock dividend of **$0.24** per share matching distributable earnings, with the portfolio characterized by a weighted average risk rating of **3.0** and **99.7%** floating rate Key Metrics as of March 31, 2025 | Category | Metric | Value | | :--- | :--- | :--- | | **Loan Portfolio** | Loan Investment Portfolio | $3.4 billion | | | Weighted Average Risk Rating | 3.0 | | | % Floating Rate | 99.7% | | | Weighted Average LTV | 66.1% | | **Liquidity & Capitalization** | Total Liquidity | $457.6 million | | | Financing Capacity | $4.8 billion | | | Debt-to-Equity Ratio | 2.2x | | | % Non-Mark-to-Market Financing | 91.0% | | **Dividend & Earnings** | 1Q25 Common Stock Dividend | $0.24 | | | 1Q25 GAAP Income per Diluted Share | $0.12 | | | 1Q25 Distributable Earnings per Diluted Share | $0.24 | | | Book Value per Share | $11.19 | [Q1 2025 Operating Results](index=7&type=section&id=1Q25%20Operating%20Results) For the first quarter of **2025**, **TRTX** reported GAAP Net Income Attributable to Common Stockholders of **$10.0 million**, or **$0.12** per diluted share, with Distributable Earnings of **$19.4 million**, or **$0.24** per diluted share, and book value per share slightly decreased from **$11.27** to **$11.19** primarily due to dividends and credit loss expense Q1 2025 Operating Results ($ in millions, except per share data) | Item | Net Income Attributable to Common Stockholders | Distributable Earnings | | :--- | :--- | :--- | | Net Interest Income | $24.9 | $24.9 | | Net Income Before Credit Loss Expense | $13.4 | $19.4 | | Credit Loss Expense | ($3.4) | - | | **Total** | **$10.0** | **$19.4** | | **Per Common Share, Diluted** | **$0.12** | **$0.24** | QoQ Change in Book Value per Share | Description | Amount per Share | | :--- | :--- | | Book Value 12/31/24 | $11.27 | | Net Income, Excluding Credit Loss Benefit | $0.21 | | Dividends on Common Shares | ($0.24) | | Dividends on Preferred Shares | ($0.04) | | Credit Loss Expense | ($0.04) | | Other (Issuance, Retirement, Equity Comp) | ($0.01) | | **Book Value 3/31/25** | **$11.19** | [Liquidity and Leverage](index=9&type=section&id=Liquidity%20and%20Leverage) As of March 31, 2025, the company's available liquidity increased to **$457.6 million** from **$320.8 million** in the previous quarter, while both the Debt-to-Equity ratio and Total Leverage Ratio rose to **2.23x** from **2.02x** - **Available liquidity** saw a significant increase in **Q1 2025**, rising to **$457.6 million**, primarily driven by an increase in cash and CLO reinvestment cash[14](index=14&type=chunk)[15](index=15&type=chunk) Leverage Ratio Trends | Date | Debt-to-Equity Ratio | Total Leverage Ratio | | :--- | :--- | :--- | | 12/31/2024 | 2.02x | 2.02x | | 3/31/2025 | 2.23x | 2.23x | [Loan Portfolio Overview](index=11&type=section&id=Loan%20Portfolio) The loan portfolio, with total commitments of **$3.4 billion**, is primarily composed of **multifamily properties (52.3%)**, followed by office (**17.3%**) and hotel (**10.3%**), concentrated in the West (**37.0%**) and East (**31.4%**) regions, with **99.7%** of loans being floating rate Portfolio Metrics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total Loan Commitments | $3.4B | | Outstanding Principal Balance | $3.3B | | Weighted Average All-in Yield | 8.22% | | % Floating Rate Loans | 99.7% | - The loan portfolio is heavily weighted towards **multifamily properties**, which constitute **over half** of the total composition[19](index=19&type=chunk) Loan Portfolio Composition by Property Type | Property Type | Percentage | | :--- | :--- | | Multifamily | 52.3% | | Office | 17.3% | | Hotel | 10.3% | | Life Science | 10.9% | | Other | 9.2% | [Portfolio Risk Ratings](index=13&type=section&id=Risk%20Ratings) The weighted average risk rating of the loan portfolio remained **stable at 3.0** as of March 31, 2025, with the vast majority of loans (**42 out of 45**) rated '3' (Medium Risk), and the office portfolio carrying the highest average risk rating at **4.0** - The overall risk profile of the loan portfolio remained **stable quarter-over-quarter**, with a weighted average risk rating of **3.0**[28](index=28&type=chunk)[31](index=31&type=chunk) Dispersion of Risk Ratings (by Loan Count) | Risk Rating | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 1 (Very Low) | 1 | 1 | | 2 (Low) | 0 | 0 | | 3 (Medium) | 42 | 42 | | 4 (High) | 2 | 2 | | 5 (Default) | 0 | 0 | - The weighted average risk rating for the **Office property portfolio was 4.0**, significantly higher than other property types like Multifamily (**3.1**) and Hotel (**3.0**)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [CECL Reserve](index=15&type=section&id=CECL%20Reserve) The allowance for credit losses (**CECL reserve**) increased to **$67.2 million** as of March 31, 2025, up from **$64.0 million** at the end of the prior quarter, representing **199 basis points** of total loan commitments, with no specifically identified loans requiring a reserve - The **CECL reserve increased by $3.2 million** during **Q1 2025**, from **$64.0 million** to **$67.2 million**[32](index=32&type=chunk) QoQ CECL Reserve Trend | Date | Reserve ($M) | Reserve as bps of Total Loan Commitments | | :--- | :--- | :--- | | 12/31/2024 | $64.0 | 187 | | 3/31/2025 | $67.2 | 199 | [Loan Financing Structure](index=17&type=section&id=Loan%20Financing) **TRTX** has a total financing capacity of **$4.8 billion**, with an outstanding principal balance of **$2.8 billion**, where **91.0%** of this financing is **non-mark-to-market**, primarily through Collateralized Loan Obligations (**CLOs**), and no significant debt maturities until **2027** - The company's financing is predominantly **non-mark-to-market (91.0%)**, providing stability against market volatility[36](index=36&type=chunk) - The company's debt maturity profile shows **no significant maturities until 2027**, indicating a well-laddered structure[37](index=37&type=chunk)[38](index=38&type=chunk) [Real Estate Owned (REO) Portfolio](index=19&type=section&id=Real%20Estate%20Owned) The Real Estate Owned (**REO**) portfolio has a current carrying value of **$272.2 million** and a net book equity of **$241.0 million** as of March 31, 2025, consisting of seven properties acquired between April **2023** and December **2024** REO Portfolio Summary (as of March 31, 2025) | Metric | Value ($ in millions) | | :--- | :--- | | Fair Value at Acquisition | $287.9 | | Carrying Value | $272.2 | | Mortgage Debt Outstanding | $31.2 | | Net Book Equity | $241.0 | [Interest Rate Sensitivity](index=21&type=section&id=Impact%20of%20Changing%20Rates) A **100 basis point (1.00%)** increase in the index rate (Term SOFR) is projected to have a positive impact of **$0.01** per share per quarter on net interest income, while a **100 basis point** decrease would have a negative impact of **$0.01** per share per quarter Portfolio Net Interest Income Sensitivity ($ Impact per Share per Quarter) | Change in Index Rate | Impact per Share | | :--- | :--- | | +1.00% | $0.01 | | +0.50% | $0.01 | | 0.00% | $0.00 | | -0.50% | ($0.01) | | -1.00% | ($0.01) | Appendix [Detailed Loan Portfolio](index=25&type=section&id=TRTX%20Loan%20Portfolio) This section provides a detailed breakdown of the company's **45** loans, totaling **$3.39 billion** in commitments, with the top **10** loans representing a significant portion and primarily secured by **multifamily**, office, and life science properties in key markets, and an overall portfolio weighted average LTV of **66.1%** and a risk rating of **3.0** Top 10 Loans by Commitment (as of March 31, 2025) | Loan | Commitment ($M) | Property Type | Location | Risk Rating | | :--- | :--- | :--- | :--- | :--- | | 1 | $256.3 | Multifamily | San Jose, CA | 3 | | 2 | $227.1 | Office | New York, NY | 3 | | 3 | $215.0 | Life Science | Daly City, CA | 3 | | 4 | $130.5 | Office | New York, NY | 3 | | 5 | $129.0 | Industrial | Various | 3 | | 6 | $113.0 | Multifamily | Towson, MD | 3 | | 7 | $113.0 | Multifamily | Various | 3 | | 8 | $106.0 | Multifamily | Various, NJ | 3 | | 9 | $102.6 | Life Science | Hayward, CA | 3 | | 10 | $96.0 | Multifamily | Phoenix, AZ | 3 | [Reconciliation of GAAP to Non-GAAP Measures](index=27&type=section&id=Per%20Share%20Calculations) This section provides reconciliations from GAAP Net Income to Distributable Earnings, where **Q1 2025** GAAP Net Income of **$13.7 million** was adjusted for non-cash items like stock compensation (**$2.0M**), depreciation (**$4.0M**), and credit loss expense (**$3.4M**) to arrive at Distributable Earnings of **$19.4 million**, and details the book value per common share of **$11.19** Reconciliation to Distributable Earnings (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | Net Income Attributable to Common Stockholders | $9,960 | | Non-Cash Stock Compensation Expense | $2,019 | | Depreciation and Amortization | $3,992 | | Credit Loss Expense (Benefit) | $3,424 | | **Distributable Earnings** | **$19,395** | Book Value Per Common Share Calculation (as of March 31, 2025, in thousands) | Description | Amount | | :--- | :--- | | Total Stockholders' Equity | $1,103,531 | | Less: Preferred Stock Liquidation Preference | ($201,375) | | Stockholders' Equity, Net of Preferred Stock | $902,156 | | Common Shares Outstanding | 80,626,997 | | **Book Value per Common Share** | **$11.19** | [Consolidated Balance Sheets](index=29&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of March 31, 2025, shows total assets of **$3.96 billion**, an increase from **$3.73 billion** at year-end **2024**, driven by a rise in cash and **CLO** proceeds, while total liabilities increased to **$2.86 billion** from **$2.62 billion** mainly due to higher **CLO** balances, and total stockholders' equity slightly decreased to **$1.10 billion** Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,961,943** | **$3,731,429** | | Cash and cash equivalents | $363,023 | $190,160 | | Loans held for investment, net | $3,206,817 | $3,217,030 | | Real estate owned, net | $254,441 | $256,404 | | **Total Liabilities** | **$2,858,412** | **$2,617,388** | | Collateralized loan obligations, net | $2,503,552 | $1,681,660 | | **Total Stockholders' Equity** | **$1,103,531** | **$1,114,041** | [Consolidated Statements of Income](index=31&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended March 31, 2025, the company generated net interest income of **$24.9 million**, down from **$26.8 million** in the same period of **2024**, resulting in net income of **$13.7 million** compared to **$16.7 million** in **Q1 2024**, and a diluted EPS of **$0.12** for **Q1 2025**, down from **$0.17** in **Q1 2024** Consolidated Income Statement (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $24,902 | $26,803 | | Total other revenue | $12,130 | $12,124 | | Total other expenses | $19,833 | $17,437 | | Credit loss expense, net | ($3,424) | ($4,356) | | **Net income** | **$13,719** | **$16,744** | | **Net Income Attributable to Common Stockholders** | **$9,960** | **$13,055** | | **Earnings per Common Share, Diluted** | **$0.12** | **$0.17** | [Consolidated Statements of Cash Flows](index=33&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, net cash provided by operating activities was **$19.1 million**, investing activities provided **$7.5 million** primarily from loan repayments, and financing activities provided a net **$146.3 million** driven by **CLO** proceeds, resulting in a net increase in cash of **$173.0 million** Consolidated Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,132 | $37,371 | | Net cash provided by investing activities | $7,548 | $365,515 | | Net cash provided by (used in) financing activities | $146,277 | ($406,542) | | **Net change in cash** | **$172,957** | **($3,656)** | [Definitions](index=35&type=section&id=Definitions) This section defines key non-GAAP metrics and terms used throughout the report, including 'Distributable Earnings' as GAAP net income adjusted for non-cash items, 'Leverage Ratios' based on outstanding borrowings relative to equity, and 'Loan Risk Ratings' on a **5-point** scale - **Distributable Earnings**: A non-GAAP measure defined as GAAP net income attributable to common stockholders, adjusted to exclude non-cash stock compensation, depreciation, unrealized gains/losses (including CECL), and other certain non-cash items. It is a key measure for evaluating performance and determining dividend policy[65](index=65&type=chunk) - **Leverage Ratios**: The Debt-to-Equity Ratio is calculated as total outstanding borrowings less cash, divided by total stockholders' equity[69](index=69&type=chunk) - **Loan Risk Ratings**: A **5-point** scale from **1** (Very Low Risk) to **5** (Default/Loss Likely) used to evaluate loan risk quarterly. New loans are typically assigned a rating of '**3**' (Medium Risk) at origination[71](index=71&type=chunk) [Company Information](index=43&type=section&id=Company%20Information) **TPG RE Finance Trust, Inc.** (NYSE: **TRTX**) is a commercial real estate finance company focused on originating, acquiring, and managing **first mortgage loans** in the U.S., externally managed by a part of **TPG Real Estate**, with contact information and analyst coverage from firms including **BofA Securities**, **JP Morgan**, and **Wells Fargo** - **TRTX** is a commercial real estate finance company that primarily deals with **first mortgage loans** on institutional properties in the U.S. and is externally managed by TPG RE Finance Trust Management, L.P., part of TPG Inc. (NASDAQ: TPG)[74](index=74&type=chunk) - The company is covered by analysts from **BofA Securities, Citizens JMP, Wells Fargo, JP Morgan, and BTIG**[76](index=76&type=chunk) ```

Part I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter ended March 31, 2025, show total assets of $4.0 billion, a net income of $13.7 million, and net cash provided by operating activities of $19.1 million, with total liabilities increasing to $2.9 billion and stockholders' equity slightly decreasing to $1.1 billion [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $3.96 billion, an increase from $3.73 billion at year-end 2024, driven by a rise in cash and collateralized loan obligation proceeds, while total liabilities increased to $2.86 billion from $2.62 billion, mainly due to higher collateralized loan obligations, which grew to $2.50 billion, and total stockholders' equity saw a slight decrease to $1.10 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $363,023 | $190,160 | | Loans held for investment, net | $3,206,817 | $3,217,030 | | Real estate owned, net | $254,441 | $256,404 | | **Total Assets** | **$3,961,943** | **$3,731,429** | | Collateralized loan obligations, net | $2,503,552 | $1,681,660 | | Secured financing agreements, net | $248,764 | $670,727 | | **Total Liabilities** | **$2,858,412** | **$2,617,388** | | **Total Stockholders' Equity** | **$1,103,531** | **$1,114,041** | - The company's consolidated Total Assets and Liabilities include assets and liabilities of Variable Interest Entities (VIEs) of **$3.2 billion** and **$2.5 billion**, respectively, as of March 31, 2025, with these assets restricted to satisfying the obligations of the VIEs[19](index=19&type=chunk) [Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended March 31, 2025, the company reported a net income of $13.7 million, a decrease from $16.7 million in the same period of 2024, with net interest income at $24.9 million, down from $26.8 million year-over-year, and diluted earnings per share at $0.12, compared to $0.17 in Q1 2024 Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $24,902 | $26,803 | | Total Other Revenue | $12,130 | $12,124 | | Credit Loss Expense, net | $(3,424) | $(4,356) | | **Net Income** | **$13,719** | **$16,744** | | Net Income Attributable to Common Stockholders | $9,960 | $13,055 | | **Earnings Per Share, Diluted** | **$0.12** | **$0.17** | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total stockholders' equity decreased from $1.114 billion at the start of 2025 to $1.104 billion at the end of Q1 2025, primarily driven by dividends on common and preferred stock totaling $23.1 million and common stock retirements of $3.2 million, partially offset by net income of $13.7 million Changes in Equity for Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | Beginning Equity (Jan 1, 2025) | $1,114,041 | | Net Income | $13,719 | | Dividends on Preferred Stock | $(3,148) | | Dividends on Common Stock ($0.24/share) | $(19,915) | | Retired Common Stock | $(3,185) | | Amortization of Stock Compensation | $2,019 | | **Ending Equity (Mar 31, 2025)** | **$1,103,531** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash provided by operating activities was $19.1 million, investing activities provided $7.5 million mainly from loan repayments, and financing activities provided a significant $146.3 million, driven by $890.9 million in proceeds from collateralized loan obligations, which offset large repayments on other financing agreements, resulting in a net increase in cash of $173.0 million Consolidated Cash Flow Summary (in thousands) | Cash Flow Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $19,132 | $37,371 | | Net Cash from Investing Activities | $7,548 | $365,515 | | Net Cash from Financing Activities | $146,277 | $(406,542) | | **Net Change in Cash** | **$172,957** | **$(3,656)** | | Cash at Beginning of Period | $190,483 | $207,018 | | **Cash at End of Period** | **$363,440** | **$203,362** | - A major financing activity in Q1 2025 was the **$890.9 million** in proceeds from collateralized loan obligations, which was a significant inflow compared to none in Q1 2024, partially offset by large repayments on secured financing agreements (**$471.7 million**) and asset-specific financing (**$157.4 million**)[28](index=28&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, particularly for credit losses (CECL model), loan portfolio composition, financing arrangements, and stockholder equity, including a $3.3 billion loan portfolio with a $67.2 million allowance for credit losses, $2.8 billion in financing (primarily non-recourse CRE CLOs), and a $25.0 million share repurchase program, with the company operating as a single segment and maintaining its REIT status - The company's principal business is originating and acquiring commercial real estate credit investments, primarily first mortgage loans, operating as a REIT[32](index=32&type=chunk)[33](index=33&type=chunk) - The allowance for credit losses is determined using the Current Expected Credit Loss (CECL) model, which involves significant estimates regarding economic conditions, property values, and borrower performance[44](index=44&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - The company finances its portfolio using various methods, including collateralized loan obligations (CLOs), secured credit agreements, and asset-specific financing, with three active CRE CLOs as of March 31, 2025[68](index=68&type=chunk)[130](index=130&type=chunk) - In Q1 2025, the company repurchased **379,868 shares** of common stock for **$3.2 million** under its **$25.0 million** share repurchase program[212](index=212&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In Q1 2025, the company reported net income of $10.0 million ($0.12/share) and Distributable Earnings of $19.4 million ($0.24/share), with the loan portfolio at $3.3 billion and an allowance for credit losses of $67.2 million (199 bps of commitments), enhancing liquidity by issuing a $1.1 billion CRE CLO and extending its secured revolving credit facility, maintaining primarily non-mark-to-market financing (91.0%) with a debt-to-equity ratio of 2.23x, and declaring a $0.24 per share common dividend consistent with Distributable Earnings [First Quarter 2025 Activity](index=52&type=section&id=First%20Quarter%202025%20Activity) Key activities in Q1 2025 included generating $10.0 million in net income, issuing a $1.1 billion CRE CLO (TRTX 2025-FL6), redeeming $114.6 million of bonds from a 2019 CLO, extending and upsizing its secured revolving credit facility to $375.0 million, and maintaining near-term liquidity of $457.6 million Q1 2025 Operating Results Highlights | Metric | Value | | :--- | :--- | | Net Income to Common Stockholders | $10.0 million | | Distributable Earnings | $19.4 million | | Common Stock Dividend Declared | $0.24 per share | | Allowance for Credit Losses Increase | $3.2 million | - Issued TRTX 2025-FL6, a **$1.1 billion** managed CRE CLO with a **30-month** reinvestment period and a weighted average interest rate of Term SOFR plus **1.83%**[242](index=242&type=chunk) - Maintained substantial near-term liquidity of **$457.6 million**, comprised of **$363.0 million** in cash-on-hand and undrawn capacity on credit facilities[242](index=242&type=chunk) [Investment Portfolio Overview](index=55&type=section&id=Investment%20Portfolio%20Overview) As of March 31, 2025, the loan portfolio consisted of 45 first mortgage loans with $3.4 billion in commitments and an unpaid principal balance of $3.3 billion, with 99.7% of the loans being floating rate, a weighted average LTV of 66.1%, and a weighted average risk rating of 3.0, while the company also holds eight REO properties with a carrying value of $272.2 million Loan Portfolio Statistics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Number of Loans | 45 | | Total Loan Commitments | $3.4 billion | | Unpaid Principal Balance | $3.3 billion | | Floating Rate Loans | 99.7% | | Weighted Average LTV | 66.1% | | Weighted Average All-in Yield | 8.2% | - The company holds **eight** Real Estate Owned (REO) properties with a total carrying value of **$272.2 million**, consisting of four office and four multifamily properties[257](index=257&type=chunk)[266](index=266&type=chunk) [Investment Portfolio Financing](index=60&type=section&id=Investment%20Portfolio%20Financing) The company's $2.8 billion in financing as of March 31, 2025, is dominated by non-mark-to-market sources (91.0%), primarily three CRE CLOs totaling $2.5 billion, with the remaining financing including $252.5 million from secured credit agreements (subject to credit marks only) and $29.1 million from asset-specific arrangements, a structure designed to match-fund assets and minimize risk from market volatility Financing Arrangements by Type (March 31, 2025, in thousands) | Financing Type | Outstanding Principal Balance | | :--- | :--- | | Collateralized loan obligations | $2,513,550 | | Secured credit agreements | $252,476 | | Asset-specific financing arrangements | $29,110 | | Mortgage loan payable | $31,200 | | **Total** | **$2,826,336** | - As of March 31, 2025, non-mark-to-market financing sources accounted for **91.0%** of total loan portfolio borrowings, reducing exposure to margin calls from general market volatility[278](index=278&type=chunk)[279](index=279&type=chunk) - The company's three CRE CLOs provide low-cost, non-recourse financing for **89.9%** of its loan portfolio borrowings, with a weighted average interest rate of Term SOFR plus **1.93%**[299](index=299&type=chunk) [Results of Operations](index=70&type=section&id=Results%20of%20Operations) Comparing Q1 2025 to Q4 2024, net income attributable to common stockholders increased by $3.1 million to $10.0 million, driven by higher revenue from REO operations and lower credit loss expense, while year-over-year, net income decreased by $3.1 million from Q1 2024, primarily due to lower net interest income as a result of a smaller loan portfolio and changes in interest rates Results of Operations Comparison (in thousands) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $24,902 | $24,680 | $26,803 | | Credit Loss Expense, net | $(3,424) | $(4,629) | $(4,356) | | Net Income Attributable to Common Stockholders | $9,960 | $6,909 | $13,055 | - The increase in net income from Q4 2024 to Q1 2025 was primarily due to a **$2.7 million** increase in revenue from REO operations and a **$1.2 million** decrease in credit loss expense[321](index=321&type=chunk)[325](index=325&type=chunk)[327](index=327&type=chunk) - The decrease in net interest income from Q1 2024 was primarily due to a smaller average loan portfolio size and a decrease in the index rate[331](index=331&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had total liquidity of $457.6 million, including $363.0 million in cash, with a debt-to-equity ratio of 2.23x, and primary uses of liquidity including funding $109.8 million in unfunded loan commitments, paying dividends, and executing its share repurchase program, with plans to meet obligations through operational cash flow, refinancing, and accessing capital markets Liquidity and Leverage Ratios | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Liquidity | $457.6 million | $320.8 million | | Debt-to-Equity Ratio | 2.23x | 2.14x | | Total Leverage Ratio | 2.23x | 2.14x | - Primary liquidity needs include **$109.8 million** in unfunded loan commitments, dividend distributions, operating expenses, and share repurchases[343](index=343&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=83&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, where a +/- 25 basis point change in rates would impact net interest income by approximately +/- $1.2 million annually, credit risk monitored through rigorous underwriting and active asset management, and liquidity risk mitigated by using primarily non-mark-to-market financing and maintaining significant cash reserves Interest Rate Sensitivity Analysis (Annual Impact, in thousands) | Change in Benchmark Rate | Impact on Net Interest Income | | :--- | :--- | | +75 Basis Points | $3,549 | | +50 Basis Points | $2,366 | | +25 Basis Points | $1,183 | | -25 Basis Points | $(1,183) | | -50 Basis Points | $(2,274) | | -75 Basis Points | $(3,125) | - The company's business model aims to minimize interest rate exposure by matching the duration and indices of its assets and liabilities, with **99.7%** of loans being floating rate as of March 31, 2025, resulting in a net floating rate exposure of **$473.2 million**[387](index=387&type=chunk)[312](index=312&type=chunk) - Liquidity risk is managed by maintaining diverse funding sources, with a focus on non-recourse, non-mark-to-market CRE CLOs, and holding sufficient cash, while being subject to margin call risk on its secured credit agreements, limited to credit-specific events, not general market movements[398](index=398&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of March 31, 2025, 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, 2025[408](index=408&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the first quarter of 2025[409](index=409&type=chunk) Part II. Other Information [Legal Proceedings](index=87&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2025, the company was not involved in any material legal proceedings - The company reports no material legal proceedings as of the end of the quarter[412](index=412&type=chunk) [Risk Factors](index=87&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported for the period[413](index=413&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the company repurchased 379,868 shares of its common stock at a weighted average price of $8.36 per share, for a total of $3.2 million, with $21.8 million remaining available under the share repurchase program as of March 31, 2025 Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Repurchased | Average Price Paid | Total Amount Paid | | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | — | | Feb 2025 | — | — | — | | Mar 2025 | 379,868 | $8.36 | $3,184,669 | | **Total** | **379,868** | **$8.36** | **$3,184,669** | - As of March 31, 2025, the company had **$21.8 million** of remaining capacity under its share repurchase program[414](index=414&type=chunk) [Other Information](index=87&type=section&id=Item%205.%20Other%20Information) There is no other information to report for this item - None[417](index=417&type=chunk) [Exhibits](index=88&type=section&id=Item%206.%20Exhibits) The report includes several exhibits, such as agreements related to the TRTX 2025-FL6 collateralized loan obligation, and certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act - Key exhibits filed include the Indenture, Collateral Management Agreement, and Servicing Agreement for the TRTX 2025-FL6 CLO[419](index=419&type=chunk) - Certifications by the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[419](index=419&type=chunk)

Core Viewpoint - TPG RE Finance Trust (TRTX) is currently viewed as a superior value option compared to Corporacion Inmobiliaria Vesta, S.A.B. de C.V. Sponsored ADR (VTMX) based on various valuation metrics [1][6]. Valuation Metrics - TRTX has a forward P/E ratio of 6.88, while VTMX has a forward P/E of 10.16 [5]. - The PEG ratio for TRTX is 1.48, indicating a more favorable valuation in relation to its expected earnings growth compared to VTMX's PEG ratio of 2.64 [5]. - TRTX's P/B ratio stands at 0.51, significantly lower than VTMX's P/B ratio of 7.77, suggesting TRTX is undervalued relative to its book value [6]. Earnings Outlook - Both TRTX and VTMX currently hold a Zacks Rank of 2 (Buy), indicating positive revisions to their earnings estimates and improving earnings outlooks [3]. - Despite both companies having solid earnings prospects, TRTX's valuation metrics suggest it is a better investment choice for value investors [6].