[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Third Quarter 2025 Financial Performance](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Performance) SmartFinancial reported significant Q3 2025 net income and operating earnings growth, reflecting improved operational performance Key Financial Performance (Q3 2025 vs. Prior Periods) | Metric | Q3 2025 | Q3 2024 | Q2 2025 | | :-------------------------- | :------ | :------ | :------ | | Net Income | $13.7M | $9.1M | $11.7M | | Diluted EPS | $0.81 | $0.54 | $0.69 | | Operating Earnings | $14.5M | $9.1M | $11.7M | | Operating Diluted EPS | $0.86 | $0.54 | $0.69 | [Strategic Highlights and Management Commentary](index=1&type=section&id=Strategic%20Highlights%20and%20Management%20Commentary) SmartFinancial achieved its $50 million quarterly revenue target early, demonstrating strong operational execution, organic growth, and strategic balance sheet enhancements - Achieved over **$50 million** in quarterly operating revenue, ahead of schedule[3](index=3&type=chunk)[6](index=6&type=chunk) - Demonstrated sixth consecutive quarter of **positive operating leverage**[3](index=3&type=chunk) - Reported **10% annualized organic loan growth** and **15% annualized deposit growth** quarter-over-quarter[3](index=3&type=chunk)[6](index=6&type=chunk) - Tangible book value per common share rose **26%** quarter over quarter annualized[3](index=3&type=chunk)[6](index=6&type=chunk) - Strategic actions included a **$4.0 million pre-tax gain** from the sale of SBK Insurance (SBKI), repositioning **$85 million** of available-for-sale securities (resulting in a **$3.9 million pre-tax loss**), and a **$100 million subordinated debt issuance** to retire existing debt and fund growth[3](index=3&type=chunk)[6](index=6&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) [Net Interest Income and Net Interest Margin](index=1&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income increased from earning asset growth, but net interest margin slightly decreased due to rising liability costs Net Interest Income and Margin Trends | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :-------------------------------- | :------ | :------ | :----------- | | Net Interest Income | $42.4M | $40.3M | +$2.1M | | Tax Equivalent Net Interest Margin | 3.25% | 3.29% | (0.04)% | | Yield on Loans and Leases (FTE) | 6.05% | 5.99% | +0.06% | | Cost of Interest-Bearing Liabilities | 3.07% | 2.99% | +0.08% | - Average earning assets totaled **$5.23 billion**, an increase of **$271.4 million** from the prior quarter, primarily from an increase in average loans and leases of **$121.0 million** and average interest-earning cash of **$152.6 million**[4](index=4&type=chunk) - Average interest-bearing liabilities increased by **$249.4 million** from the prior quarter, primarily attributable to an increase in average interest-bearing deposits of **$207.4 million** and average subordinated debt of **$45.4 million**[4](index=4&type=chunk) [Provision for Credit Losses and Credit Quality](index=3&type=section&id=Provision%20for%20Credit%20Losses%20and%20Credit%20Quality) Allowance for credit losses decreased, provision for credit losses significantly reduced, though nonperforming assets increased slightly Credit Quality Indicators | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (QoQ) | | :------------------------------------------------ | :----------- | :----------- | :----------- | | Allowance for Credit Losses | $39.1M | $39.8M | -$0.7M | | Allowance for Credit Losses to Total Loans & Leases | 0.93% | 0.96% | (0.03)% | | Provision for Credit Losses | $351K | $1,747K | -$1,396K | | Nonperforming Loans & Leases to Total Loans & Leases | 0.24% | 0.19% | +0.05% | | Total Nonperforming Assets to Total Assets | 0.22% | 0.19% | +0.03% | [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Noninterest income slightly decreased quarter-over-quarter, primarily from securities losses and reduced commissions, partially offset by an SBKI sale gain Noninterest Income (Q3 2025 vs. Q2 2025) | Category | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :-------------------------- | | Total Noninterest Income | $8,637 | $8,898 | $(261) | | Loss on sale of securities | $(3,715) | $(4) | $(3,711) | | Gain on sale of SBKI | $3,955 | $0 | $3,955 | | Insurance commissions | $1,049 | $1,554 | $(505) | [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense increased quarter-over-quarter, mainly driven by restructuring expenses incurred in the third quarter Noninterest Expense (Q3 2025 vs. Q2 2025) | Category | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) (in thousands) | | :------------------------ | :--------------------- | :--------------------- | :-------------------------- | | Total Noninterest Expense | $33,869 | $32,569 | $1,300 | | Restructuring expenses | $1,310 | $0 | $1,310 | [Income Tax Expense](index=6&type=section&id=Income%20Tax%20Expense) Income tax expense increased in the third quarter of 2025 compared to the prior quarter Income Tax Expense (Q3 2025 vs. Q2 2025) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) (in thousands) | | :--------------- | :--------------------- | :--------------------- | :-------------------------- | | Income Tax Expense | $3,285 | $2,556 | $729 | [Balance Sheet Trends](index=6&type=section&id=Balance%20Sheet%20Trends) [Assets](index=6&type=section&id=Assets) Total assets increased significantly since December 31, 2024, primarily due to growth in loans and leases, cash and cash equivalents, and securities Asset Trends (Sep 30, 2025 vs. Dec 31, 2024) | Metric | Sep 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Increase (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :---------------------- | | Total Assets | $5,784,983 | $5,275,904 | $509,079 | | Loans and leases | $4,222,369 | $3,906,340 | $316,029 | | Cash and cash equivalents | $557,127 | $387,570 | $169,557 | | Securities | $634,459 | $608,987 | $25,472 | [Liabilities](index=6&type=section&id=Liabilities) Total liabilities increased since December 31, 2024, mainly driven by substantial growth in total deposits and an increase in subordinated debt Liability Trends (Sep 30, 2025 vs. Dec 31, 2024) | Metric | Sep 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Increase (in thousands) | | :---------------- | :-------------------------- | :-------------------------- | :---------------------- | | Total Liabilities | $5,246,501 | $4,784,443 | $462,058 | | Total Deposits | $5,050,897 | $4,686,483 | $364,414 | | Subordinated Debt | $138,604 | $39,684 | $98,920 | - Deposit growth was primarily driven by increases in money market deposits (**+$178.8 million**), other time deposits (**+$174.4 million**), and interest-bearing demand deposits (**+$92.7 million**)[19](index=19&type=chunk) [Shareholders' Equity](index=6&type=section&id=Shareholders%27%20Equity) Shareholders' equity increased since December 31, 2024, primarily due to net income and a positive change in accumulated other comprehensive loss, partially offset by dividends paid Shareholders' Equity Trends (Sep 30, 2025 vs. Dec 31

[Amendment Agreement Details](index=1&type=section&id=Amendment%20Agreement%20Details) This section outlines the parties involved and the specific purpose of the second amendment to the Shareholders' Agreement [Parties to the Agreement](index=1&type=section&id=Parties%20to%20the%20Agreement) This Amendment Agreement is made between four key parties: Saudi Arabian Mining Company (Ma'aden), Ivanhoe Electric Mena Holdings Ltd. (IE Mena), Ivanhoe Electric Inc. (IE Parent), and Ma'aden Ivanhoe Electric Exploration and Development Limited Company - The parties involved in this amendment are **Ma'aden**, **IE Mena**, **IE Parent**, and **Ma'aden Ivanhoe Electric Exploration and Development Limited Company**[2](index=2&type=chunk)[5](index=5&type=chunk) [Purpose and Scope of Amendment](index=1&type=section&id=Purpose%20and%20Scope%20of%20Amendment) This document represents the second amendment to the Shareholders' Agreement (SHA) originally dated July 6, 2023, primarily modifying specific terms concerning exploration licenses - This is **Amendment 2** to the Shareholders' Agreement (SHA) dated July 6, 2023, with a previous amendment on November 1, 2023[1](index=1&type=chunk)[5](index=5&type=chunk) - The amendment specifically targets **Part 1 Exploration Licenses of Schedule 6 (Ma'aden Land Area)** of the SHA[5](index=5&type=chunk) [Schedule 6 Amendments: Exploration Licenses](index=1&type=section&id=Schedule%206%20Amendments%3A%20Exploration%20Licenses) This section details the addition of new exploration licenses to Schedule 6, categorized into converted applications and newly introduced licenses [Group A Additions: Converted Exploration Licenses](index=1&type=section&id=Group%20A%20Additions%3A%20Converted%20Exploration%20Licenses) This section details the addition of numerous exploration licenses that were previously applications and have now been converted into active licenses, primarily in Najran and Wadi Ad Dawasir A regions - The amendment includes the **insertion of a table into Part 1 of Schedule 6**, reflecting the addition of **new Exploration Licenses from previously applied applications**[5](index=5&type=chunk) [Najran Exploration Licenses](index=1&type=section&id=Najran%20Exploration%20Licenses) Fifty exploration licenses have been added in the Najran region, covering approximately 4,199.99 km², issued between January 1-3, 2025, and expiring between December 2029 and January 2030 Summary of Najran Exploration Licenses (Group A) | Metric | Value | | :--- | :--- | | Number of Licenses | 50 | | Total Area | ~4,199.99 km² | | Issue Dates | Jan 1-3, 2025 | | Expiry Dates | Dec 2029 - Jan 2030 | [Wadi Ad Dawasir A Exploration Licenses](index=3&type=section&id=Wadi%20Ad%20Dawasir%20A%20Exploration%20Licenses) Sixty-three exploration licenses have been added in the Wadi Ad Dawasir A region (Riyadh), encompassing approximately 6,284.99 km², issued between January 1-3, 2025, and expiring between December 2029 and January 2030 Summary of Wadi Ad Dawasir A Exploration Licenses (Group A) | Metric | Value | | :--- | :--- | | Number of Licenses | 63 | | Total Area | ~6,284.99 km² | | Issue Dates | Jan 1-3, 2025 | | Expiry Dates | Dec 2029 - Jan 2030 | [Group B Additions: New Exploration Licenses](index=7&type=section&id=Group%20B%20Additions%3A%20New%20Exploration%20Licenses) This section introduces a new set of exploration licenses, categorized as 'Group B Additions,' located across various regions including Madinah and Hail, with different issue and expiry dates - The amendment includes **'Group B Additions'** which are **new exploration licenses**[11](index=11&type=chunk) [Al Mahad Exploration Licenses](index=7&type=section&id=Al%20Mahad%20Exploration%20Licenses) Three new exploration licenses have been added in the Al Mahad group within the Madinah region, covering approximately 146.103 km², issued on June 9, 2021, and expiring on April 16, 2026 Summary of Al Mahad Exploration Licenses (Group B) | Metric | Value | | :--- | :--- | | Number of Licenses | 3 | | Total Area | ~146.103 km² | | Issue Date | Jun 9, 2021 | | Expiry Date | Apr 16, 2026 | [Baara Exploration Licenses](index=7&type=section&id=Baara%20Exploration%20Licenses) One new exploration license has been added in the Baara group within the Madinah region, covering an area of approximately 99.831 km², issued on June 9, 2021, and expiring on April 16, 2026 Summary of Baara Exploration License (Group B) | Metric | Value | | :--- | :--- | | Number of Licenses | 1 | | Total Area | ~99.831 km² | | Issue Date | Jun 9, 2021 | | Expiry Date | Apr 16, 2026 | [La Huf Exploration Licenses](index=7&type=section&id=La%20Huf%20Exploration%20Licenses) Two new exploration licenses have been added in the La Huf group within the Madinah region, covering approximately 152.91 km², issued on August 1, 2020, and expiring on June 6, 2025, with a renewal application pending Summary of La Huf Exploration Licenses (Group B) | Metric | Value | | :--- | :--- | | Number of Licenses | 2 | | Total Area | ~152.91 km² | | Issue Date | Aug 1, 2020 | | Expiry Date | Jun 6, 2025 | | Status | Under renewal application | [Musayna'ah Exploration Licenses](index=7&type=section&id=Musayna%27ah%20Exploration%20Licenses) Twelve new exploration licenses have been added across the Musayna'ah groups within the Hail region, covering approximately 945.91 km², with various issue and expiry dates Summary of Musayna'ah Exploration Licenses (Group B) | Metric | Value | | :--- | :--- | | Number of Licenses | 12 | | Total Area | ~945.91 km² | | Issue Dates | Jun 9, 2021; Jul 28, 2022; Jun 28, 2022 | | Expiry Dates | Apr 16, 2026; Jun 4, 2027; May 6, 2027 | [General Terms and Affirmations](index=8&type=section&id=General%20Terms%20and%20Affirmations) This section clarifies the impact of the amendment on license applications, affirms the continuity of the original agreement, and outlines applicable clauses and required actions [Effect of Amendment on License Applications](index=8&type=section&id=Effect%20of%20Amendment%20on%20License%20Applications) The amendment stipulates that 'Group A Additions,' now converted to exploration licenses, will be removed from Part 2 (Exploration License Applications) of Schedule 6 of the Shareholders' Agreement - **Exploration License Applications corresponding to 'Group A Additions'** are to be **removed from Part 2 of Schedule 6**, as they have been **converted to Exploration Licenses**[12](index=12&type=chunk) [Continuity of Original Shareholders' Agreement](index=8&type=section&id=Continuity%20of%20Original%20Shareholders%27%20Agreement) Except for the specific changes outlined in this amendment, all other provisions of the original Shareholders' Agreement (SHA) remain fully effective and confirmed - The amendment constitutes a **variation of the SHA in accordance with Clause 36.7 (Amendment) of the SHA**[12](index=12&type=chunk) - **All other provisions of the SHA (as amended) are confirmed and remain in full force and effect**[12](index=12&type=chunk) [Applicable Clauses and Further Actions](index=8&type=section&id=Applicable%20Clauses%20and%20Further%20Actions) The parties agree that specific clauses from the original SHA will apply to this Amendment Agreement, and all parties are obligated to undertake necessary actions to fully implement its terms - **Specific clauses from the original SHA (1.2, 31, 32, 33, 35, 36.5, 36.7, 36.8, 36.9, 36.10)** are incorporated into this Amendment Agreement[12](index=12&type=chunk) - **Each party is responsible for doing all acts, executing documents, and taking necessary steps to give full effect to this Agreement**[12](index=12&type=chunk) [Execution of Agreement](index=9&type=section&id=Execution%20of%20Agreement) This section documents the formal execution of the Amendment Agreement by all involved parties and their authorized representatives [Signatures of Parties](index=9&type=section&id=Signatures%20of%20Parties) The Amendment Agreement was formally entered into by all parties on June 25, 2025, with authorized representatives providing their signatures and titles - The Agreement was entered into on **June 25, 2025 (29/12/1446H)**[1](index=1&type=chunk)[13](index=13&type=chunk) Authorized Signatories | Party | Name | Title | | :--- | :--- | :--- | | SAUDI ARABIAN MINING COMPANY (MA'ADEN) | Robert Wilt | Chief Executive Officer | | Ivanhoe Electric Inc. | Taylor Melvin | President and CEO | | IVANHOE ELECTRIC MENA HOLDINGS LTD. | Graham Boyd | Director | | MA'ADEN IVANHOE ELECTRIC EXPLORATION AND DEVELOPMENT LIMITED COMPANY | Louis Irvine | Chairman | | MA'ADEN IVANHOE ELECTRIC EXPLORATION AND DEVELOPMENT LIMITED COMPANY | Quentin Markin | Board Member |

[Form 8-K Filing Details](index=1&type=section&id=Form%208-K%20Filing%20Details) This section provides the foundational details of the Form 8-K filing, including registrant identification and filing specifics [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides the core identification details for Supernus Pharmaceuticals, Inc. as the registrant, including its incorporation state, commission file number, principal executive offices, and securities registered on Nasdaq - Registrant: **Supernus Pharmaceuticals, Inc.**[2](index=2&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | State of Incorporation | Delaware | | Commission File Number | 001-35518 | | I.R.S. Employer Identification No. | 20-2590184 | | Principal Executive Offices | 9715 Key West Ave, Rockville MD 20850 | | Registrant's Telephone Number | (301) 838-2500 | Registered Securities | Title of Class | Trading Symbol | Exchange | | :--- | :--- | :--- | | Common Stock, $0.001 par value per share | SUPN | The Nasdaq Stock Market LLC | [Filing Specifics](index=1&type=section&id=Filing%20Specifics) The report confirms the filing date and indicates that Supernus Pharmaceuticals, Inc. is not an emerging growth company - Date of Report (Date of earliest event reported): **October 21, 2025**[2](index=2&type=chunk) - The registrant is not an emerging growth company[3](index=3&type=chunk) [Current Report Items](index=2&type=section&id=Current%20Report%20Items) This section details the specific events reported in the Form 8-K, covering financial results and required exhibits [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Supernus Pharmaceuticals, Inc. announced its plan to release third-quarter 2025 business results and host a conference call and webcast on November 4, 2025, to discuss these financial and business outcomes - Supernus Pharmaceuticals, Inc. expects to report its **Q3 2025 business results** after market close on **Tuesday, November 4, 2025**[4](index=4&type=chunk) - A conference call and webcast will be held on **Tuesday, November 4, 2025, at 4:30 p.m. E.T.** to discuss the results[4](index=4&type=chunk) - A press release dated **October 21, 2025**, is furnished as **Exhibit 99.1**[4](index=4&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits filed with the Form 8-K, including the press release regarding Q3 2025 results and the Inline XBRL formatted cover page Exhibits Filed | Exhibit Number | Description | | :--- | :--- | | 99.1 | Press Release dated October 21, 2025 filed as an Exhibit pursuant to Item 2.02 hereof | | 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | [Signatures](index=3&type=section&id=Signatures) This section confirms the official authorization and signatory details for the Form 8-K filing [Authorization and Signatory](index=3&type=section&id=Authorization%20and%20Signatory) The report was duly signed on behalf of Supernus Pharmaceuticals, Inc. by Timothy C. Dec, Senior Vice President and Chief Financial Officer, on October 21, 2025 - Report signed on behalf of **Supernus Pharmaceuticals, Inc.**[9](index=9&type=chunk) - Signatory: **Timothy C. Dec**, Senior Vice President and Chief Financial Officer[10](index=10&type=chunk) - Date of Signature: **October 21, 2025**[10](index=10&type=chunk)

Financial Performance - Net income for Q3 2025 was $16.3 million, representing a 26.3% increase from $12.9 million in Q3 2024, with diluted earnings per share rising to $0.86 from $0.68[3] - Net income for Q3 2025 reached $16,258,000, up 26.3% compared to $12,875,000 in Q3 2024[13] - Basic net income per share increased to $0.87 in Q3 2025 from $0.68 in Q3 2024, reflecting a growth of 27.9%[19] - Net income for the nine months ended September 30, 2025, was $45,572,000, a significant increase of 21.4% from $37,552,000 in 2024[20] - Basic earnings per share improved to $2.41 for the nine months ended September 30, 2025, compared to $1.90 in the same period of 2024[21] Interest Income and Margin - Net interest income increased by 11.5% year-over-year to $43.1 million, driven by higher loan yields and effective deposit cost management[4] - Net interest income for Q3 2025 was $43,119,000, an increase of 10.3% from $38,671,000 in Q3 2024[13] - Net interest income for the nine months ended September 30, 2025, was $125,238,000, up from $113,037,000 in the same period of 2024, representing a growth of 10.4%[20] - Total interest income rose to $193,322,000, compared to $181,407,000 in the previous year, marking an increase of 6.3%[20] - The net interest margin expanded to 2.79%, up 18 basis points from 2.61% in Q3 2024, reflecting improved asset yields[6] - The net interest margin improved to 2.71% for the nine months ended September 30, 2025, compared to 2.52% in the prior year[30] Asset Quality - Nonperforming loans (NPLs) decreased to $18.5 million, or 0.36% of total loans, down from $19.4 million, or 0.38%, in the previous year[9] - Provision for credit losses decreased to $250,000 in Q3 2025 from $500,000 in Q3 2024, showing improved asset quality[13] - Nonperforming loans to total loans remained stable at 0.36% in Q3 2025, compared to 0.38% in Q3 2024[13] - Total nonperforming loans reached $18,477 thousand, up from $17,910 thousand in the prior quarter, indicating an increase of 3.2%[24] - The coverage ratio improved to 280.8% from 267.3% in the previous quarter, indicating stronger asset quality management[25] Shareholder Value - Book value per share increased to $37.30, a 6.0% rise from $35.19 a year earlier[8] - The book value per share at the end of Q3 2025 was $37.30, up from $35.19 at the end of Q3 2024[16] - TrustCo repurchased 467 thousand shares, or 2.5% of total outstanding shares, under its stock repurchase program, with an additional 533 thousand shares available for future repurchases[8] - The market price per share increased to $36.30 at the end of Q3 2025, compared to $33.07 at the end of Q3 2024[16] Efficiency and Cost Management - The efficiency ratio (GAAP) improved to 54.89% in Q3 2025 from 60.09% in Q3 2024, indicating better cost management[13] - The adjusted efficiency ratio improved to 55.98% for the nine months ended September 30, 2025, compared to 60.80% in the same period last year, indicating better expense control relative to revenue[35] Liquidity and Deposits - The bank's liquidity position remains strong, supporting future growth while managing evolving funding dynamics[6] - Average loans rose by $125.9 million, or 2.5%, while average deposits increased by $251.1 million, or 4.8%, compared to the same period in 2024[7] - Total deposits decreased to $5,481,273,000 from $5,490,314,000, a decline of 0.2%[22] - Demand deposits rose to $777,573 thousand, reflecting a strong liquidity position for the company[30]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) This section presents KKR Real Estate Finance Trust Inc.'s unaudited condensed consolidated financial statements and management's analysis of its financial condition and operational results [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements of KKR Real Estate Finance Trust Inc. and its subsidiaries, including the balance sheets, statements of income, changes in equity, and cash flows, along with detailed notes explaining the company's business, significant accounting policies, and specific financial line items [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This table presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates | Metric | September 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | **Assets** | | | | Cash and cash equivalents | $204,094 | $104,933 | | Commercial real estate loans, held-for-investment, net | $5,139,266 | $5,771,519 | | Total Assets | $6,484,974 | $6,350,398 | | **Liabilities** | | | | Secured financing agreements, net | $2,699,119 | $2,798,674 | | Collateralized loan obligations, net | $1,324,409 | $1,766,104 | | Secured term loan, net | $633,541 | $333,853 | | Total Liabilities | $5,202,861 | $4,951,519 | | **Equity** | | | | Total KKR Real Estate Finance Trust Inc. Stockholders' Equity | $1,229,763 | $1,345,030 | | Total Equity | $1,282,113 | $1,398,879 | [Condensed Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) This table presents the company's financial performance, detailing revenues, expenses, and net income over specific periods | Metric | Three Months Ended Sep 30, 2025 (in thousands) | Three Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2025 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Interest income | $108,019 | $140,150 | $334,258 | $441,019 | | Interest expense | $82,685 | $103,145 | $247,412 | $324,437 | | Total net interest income | $25,334 | $37,005 | $86,846 | $116,582 | | Total other income | $6,080 | $10,015 | $15,655 | $24,850 | | Total operating expenses | $18,642 | $54,257 | $126,051 | $126,458 | | Net Income (Loss) Attributable to KKR Real Estate Finance Trust Inc. and Subsidiaries | $13,778 | $(7,388) | $(20,809) | $15,336 | | Net Income (Loss) Attributable to Common Stockholders | $8,079 | $(12,991) | $(37,896) | $(1,507) | | Net Income (Loss) Per Share of Common Stock (Basic and Diluted) | $0.12 | $(0.19) | $(0.56) | $(0.02) | | Dividends Declared per Share of Common Stock | $0.25 | $0.25 | $0.75 | $0.75 | [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)) This table details changes in the company's equity, including net income, dividends, and share repurchases, over specific periods | Metric | Balance at Dec 31, 2024 (in thousands) | Balance at Sep 30, 2025 (in thousands) | | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Total KKR Real Estate Finance Trust Inc. Stockholders' Equity | $1,345,030 | $1,229,763 | | Noncontrolling Interests in Equity of Consolidated Joint Ventures | $53,849 | $52,350 | | Total Equity | $1,398,879 | $1,282,113 | | Common Stock Repurchase and Retirement | $(9,831) (Q1 2025) | $(20,064) (Q2 2025) | $(4,236) (Q3 2025) | | Net Income (Loss) | $(4,861) (Q1 2025) | $(29,726) (Q2 2025) | $13,778 (Q3 2025) | | Common Dividends Declared ($0.25 per share) | $(16,956) (Q1 2025) | $(16,419) (Q2 2025) | $(16,307) (Q3 2025) | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This table summarizes the company's cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Nine Months Ended Sep 30, 2025 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | | :----------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $55,548 | $114,241 | | Net cash provided by (used in) investing activities | $399,764 | $708,640 | | Net cash provided by (used in) financing activities | $(354,723) | $(860,051) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $100,589 | $(37,170) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $207,136 | $111,143 | - **Cash paid for interest decreased** from **$308,807 thousand** in 2024 to **$243,838 thousand** in 2025 for the nine months ended September 30[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations of the company's business, significant accounting policies, and specific financial statement line items [Note 1. Business and Organization](index=11&type=section&id=Note%201.%20Business%20and%20Organization) This note describes KKR Real Estate Finance Trust Inc.'s formation, business model as a mortgage REIT, and external management structure - KKR Real Estate Finance Trust Inc. (KREF) is a Maryland corporation formed in October 2014, operating as a **mortgage REIT** focused on originating and acquiring **transitional senior loans** secured by **commercial real estate (CRE) assets**[26](index=26&type=chunk) - KREF is **externally managed** by **KKR Real Estate Finance Manager LLC**, an indirect subsidiary of KKR & Co. Inc., which provides management and investment advisory services[28](index=28&type=chunk)[249](index=249&type=chunk) - As of September 30, 2025, KKR beneficially owned **15.3%** of KREF's outstanding common stock[29](index=29&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing KREF's financial statements, including consolidation and credit loss recognition - KREF's financial statements are prepared in accordance with **GAAP** for interim financial information and include accounts of KREF and its consolidated subsidiaries, with intercompany transactions eliminated[33](index=33&type=chunk) - KREF **consolidates entities it controls** through majority ownership, voting rights, or as the **primary beneficiary** of **Variable Interest Entities (VIEs)**, including certain Commercial Mortgage-Backed Securities (CMBS) trusts and Collateralized Loan Obligations (CLOs)[35](index=35&type=chunk)[38](index=38&type=chunk)[44](index=44&type=chunk) - KREF recognizes and measures the allowance for credit losses under the **Current Expected Credit Loss (CECL) model**, using the **Weighted-Average Remaining Maturity (WARM) method**, which considers historical loss data, expected repayments, future funding, and macroeconomic conditions[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - A new accounting pronouncement, **ASU No. 2024-03**, effective for KREF in **2027**, requires **disaggregated expense disclosures** in financial statement notes[110](index=110&type=chunk)[356](index=356&type=chunk) [Note 3. Commercial Real Estate Loans](index=23&type=section&id=Note%203.%20Commercial%20Real%20Estate%20Loans) This note provides detailed information on KREF's commercial real estate loan portfolio, including outstanding balances, changes, and credit loss allowances Commercial Real Estate Loans, Held-for-Investment (in thousands) | Metric | September 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Outstanding Principal | $5,310,411 | $5,900,163 | | Amortized Cost | $5,296,610 | $5,888,622 | | Carrying Value (net of allowance) | $5,139,266 | $5,771,519 | | Loan Count | 52 | 51 | | Weighted Average Floating Rate Loan % | 98.6% | 98.6% | | Weighted Average Coupon | 7.4% | 7.5% | | Weighted Average Life (Years) | 1.7 | 2.0 | Changes in Loan Portfolio (Nine Months Ended Sep 30, 2025, in thousands) | Activity | Amount (in thousands) | | :------------------------------------ | :-------------------- | | Balance at December 31, 2024 | $5,888,622 | | Originations and future fundings, net | $706,368 | | Proceeds from loan repayments | $(1,113,990) | | (Provision for) Reversal of credit losses | $(75,069) | | Write-offs charged | $(34,828) | | Transfer to real estate owned | $(162,847) | | Balance at September 30, 2025 | $5,296,610 | - The **average risk rating of KREF's loan portfolio was 3.1** as of September 30, 2025, **consistent with December 31, 2024**, weighted by outstanding loan principal[122](index=122&type=chunk)[281](index=281&type=chunk) Allowance for Credit Losses (Nine Months Ended Sep 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------ | :------------------ | :------------------ | | Balance at December 31, 2024/2023 | $117,103 | $210,470 | | Provision for (reversal of) credit losses, net | $75,069 | $75,187 | | Write-offs charged | $(34,828) | $(137,869) | | Balance at September 30 | $157,344 | $148,013 | - The **CECL provision for the nine months ended September 30, 2025, was $75.7 million**, primarily due to additional reserves for **risk-rated 5 loans** in the **life science and office sectors**[126](index=126&type=chunk) [Note 4. Real Estate Owned](index=27&type=section&id=Note%204.%20Real%20Estate%20Owned) This note details KREF's Real Estate Owned (REO) properties, including acquisitions, sales, and their classification as held for investment or sale - KREF acquired several Real Estate Owned (REO) properties through foreclosure or assignment-in-lieu of foreclosure, including a **Portland, OR retail/redevelopment property**, a **Mountain View, CA office property**, and a **Raleigh, NC multifamily property**, which are **held for investment**[134](index=134&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - KREF **sold portions of its Portland, OR retail property for $6.0 million**, **recognizing a $0.7 million gain**, and a **Philadelphia office portfolio for $25.3 million**, **recognizing a $0.5 million gain**[135](index=135&type=chunk)[140](index=140&type=chunk) - Two properties, **Philadelphia, PA Office and West Hollywood, CA Condo**, were classified as **held for sale** as of September 30, 2025, resulting in **loan write-offs of $14.4 million and $20.4 million**, respectively, upon acquisition[137](index=137&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) REO Assets and Liabilities (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------ | :----------------- | :----------------- | | **Real estate owned, held for investment** | | | | Real estate owned, net | $338,937 | $262,479 | | Total Assets (held for investment) | $342,726 | $265,877 | | Total Liabilities (held for investment) | $7,935 | $4,298 | | **Real estate owned, held for sale** | | | | Total Assets (held for sale) | $127,871 | $56,554 | | Total Liabilities (held for sale) | $1,132 | $1,328 | [Note 5. Debt Obligations](index=30&type=section&id=Note%205.%20Debt%20Obligations) This note describes KREF's various debt obligations, including secured financing agreements, their terms, and compliance with financial covenants Secured Financing Arrangements (in thousands) | Facility Type | September 30, 2025 Outstanding Principal | September 30, 2025 Carrying Value | December 31, 2024 Carrying Value | | :-------------------------- | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Master Repurchase Agreements | $1,090,710 | $1,087,195 | $1,704,665 | | Term Loan Facility | $527,166 | $527,085 | $675,566 | | Term Lending Agreements | $730,633 | $729,867 | $934,850 | | Asset Specific Financing | $358,268 | $357,078 | $343,216 | | Revolving Credit Agreement | $0 | $0 | $80,000 | | Total | $2,706,777 | $2,699,119 | $2,798,674 | - The **weighted average funding cost for secured financing agreements was 6.3%** as of September 30, 2025[150](index=150&type=chunk) - KREF's **Revolver borrowing capacity increased from $610.0 million to $660.0 million** in March 2025, and further to **$700.0 million** in September 2025[153](index=153&type=chunk) - As of September 30, 2025, KREF was in **compliance with all financial debt covenants**, including interest income to expense ratio, consolidated tangible net worth, total indebtedness, and cash liquidity[161](index=161&type=chunk)[162](index=162&type=chunk) [Note 6. Collateralized Loan Obligations](index=33&type=section&id=Note%206.%20Collateralized%20Loan%20Obligations) This note explains KREF's use of managed Collateralized Loan Obligations (CLOs) for financing, detailing their structure and net interest income - KREF utilizes **managed CLOs** (KREF 2021-FL2 and KREF 2022-FL3) to finance loan participations, providing **match-term, non-mark-to-market, and non-recourse financing**[165](index=165&type=chunk) CLO Collateral Assets and Borrowings (in thousands) | CLO | September 30, 2025 Outstanding Principal | September 30, 2025 Carrying Value | December 31, 2024 Carrying Value | | :---------------- | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | KREF 2021-FL2 | $735,614 | $735,544 | $930,070 | | KREF 2022-FL3 | $588,865 | $588,865 | $836,034 | | Total | $1,324,479 | $1,324,409 | $1,766,104 | CLO Net Interest Income (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income | $32,307 | $48,468 | $103,522 | $146,163 | | Interest expense | $21,822 | $34,009 | $69,164 | $102,127 | | Net interest income | $10,485 | $14,459 | $34,358 | $44,036 | [Note 7. Secured Term Loan, Net](index=34&type=section&id=Note%207.%20Secured%20Term%20Loan,%20Net) This note details the refinancing and upsizing of KREF's secured term loan, including its principal, carrying value, and total cost - In March 2025, KREF **refinanced its existing secured term loan of $339.5 million with a new $550.0 million loan** due March 2032. In September 2025, the loan was **upsized to $650.0 million**, and the **spread was reduced by 0.75% to S+2.5%**[170](index=170&type=chunk) Secured Term Loan (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :-------------------- | :----------------- | :----------------- | | Principal | $648,375 | $339,500 | | Deferred financing costs | $(11,934) | $(2,988) | | Unamortized discount | $(2,900) | $(2,659) | | Carrying value | $633,541 | $333,853 | - The **total cost of the secured term loan**, inclusive of discount and issuance cost amortization, was **S+2.9%** as of September 30, 2025[171](index=171&type=chunk) [Note 8. Variable Interest Entity Assets and Liabilities, CMBS Trust, at Fair Value](index=35&type=section&id=Note%208.%20Variable%20Interest%20Entity%20Assets%20and%20Liabilities,%20CMBS%20Trust,%20at%20Fair%20Value) This note describes KREF's consolidation of a CMBS trust as a Variable Interest Entity (VIE) and the fair value accounting for its assets and liabilities - KREF **consolidated a CMBS trust** from June 18, 2025, after determining it was a **VIE** and KREF was the **primary beneficiary**, electing the **fair value option** for its assets and liabilities[174](index=174&type=chunk) Consolidated CMBS Trust Assets and Liabilities (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------------ | :----------------- | :----------------- | | **Assets** | | | | Commercial real estate loans, at fair value | $503,418 | $0 | | Total Variable interest entity assets | $505,820 | $0 | | **Liabilities** | | | | Commercial mortgage-backed securities, at fair value | $494,397 | $0 | | Total Variable interest entity liabilities | $496,703 | $0 | Change in Net Assets of Consolidated CMBS Trust (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2025 | | :---------------------------------------------------- | :------------------------------ | :----------------------------- | | Net interest income | $293 | $334 | | Unrealized gain (loss) | $54 | $54 | | Change in net assets of consolidated variable interest entity, CMBS trust | $347 | $388 | [Note 9. Other Assets and Liabilities](index=37&type=section&id=Note%209.%20Other%20Assets%20and%20Liabilities) This note provides a breakdown of KREF's other assets and liabilities, including restricted cash, deferred financing costs, and allowances for unfunded commitments Other Assets (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------ | :----------------- | :----------------- | | Restricted cash | $3,042 | $1,614 | | Deferred financing cost, Revolver | $6,242 | $2,811 | | Loan principal repayments held by a servicer | $1,500 | $0 | | Assets related to real estate owned, held for investment | $1,902 | $2,651 | | Other | $2,274 | $1,777 | | Total Other Assets | $14,960 | $8,853 | Other Liabilities (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------------ | :----------------- | :----------------- | | Liabilities related to real estate owned, held for investment | $7,935 | $4,298 | | Allowance for credit losses on unfunded commitments | $3,095 | $2,478 | | Other | $1,848 | $1,748 | | Total Other Liabilities | $12,878 | $8,524 | [Note 10. Consolidation and Equity Method Investments](index=38&type=section&id=Note%2010.%20Consolidation%20and%20Equity%20Method%20Investments) This note explains KREF's consolidation of Variable Interest Entities (VIEs) and Real Estate Owned (REO) joint ventures, along with its equity method investments - KREF **consolidates CMBS trusts and CLO issuers as Variable Interest Entities (VIEs)** where it is the **primary beneficiary**, controlling significant activities and absorbing losses or receiving benefits[180](index=180&type=chunk)[181](index=181&type=chunk) - KREF **consolidates two Real Estate Owned (REO) joint ventures**, including a **Portland retail property (90% interest)** and a **Mountain View office property (68.9% interest)**, due to decision-making power and significant economic interests[182](index=182&type=chunk)[183](index=183&type=chunk) - KREF accounts for its **74.6% economic interest in a Seattle life science property**, held through a Tenant-in-Common (TIC) agreement with a KKR affiliate, as an **equity method investment**[184](index=184&type=chunk) - KREF holds a **3.5% interest in RECOP I**, an **unconsolidated VIE** that primarily acquires junior tranches of CMBS, accounted for as an **equity method investment**[185](index=185&type=chunk) [Note 11. Equity](index=39&type=section&id=Note%2011.%20Equity) This note details KREF's equity structure, including common shares outstanding, share repurchase activity, and dividends declared for common and preferred stock - As of September 30, 2025, KREF had **65,227,255 common shares issued and outstanding**[188](index=188&type=chunk) - Under its share repurchase program, KREF **repurchased and retired 3,508,881 common shares for $34.0 million** during the nine months ended September 30, 2025, with **$56.0 million remaining capacity**[190](index=190&type=chunk) - KREF **did not issue or sell any common stock** under its At the Market (ATM) offering program during the nine months ended September 30, 2025, with **$93.2 million remaining available**[192](index=192&type=chunk) Common Stock Dividends Declared ($0.25 per share, in thousands) | Declaration Date | Record Date | Payment Date | Amount (in thousands) | | :--------------- | :---------- | :----------- | :-------------------- | | March 14, 2025 | March 31, 2025 | April 15, 2025 | $16,956 | | June 10, 2025 | June 30, 2025 | July 15, 2025 | $16,419 | | September 11, 2025 | September 30, 2025 | October 15, 2025 | $16,307 | | **Total 2025** | | | **$49,682** | | **Total 2024** | | | **$51,994** | Series A Preferred Stock Dividends Declared ($0.41 per share, in thousands) | Declaration Date | Record Date | Payment Date | Amount (in thousands) | | :--------------- | :---------- | :----------- | :-------------------- | | January 31, 2025 | February 28, 2025 | March 14, 2025 | $5,326 | | April 21, 2025 | May 30, 2025 | June 13, 2025 | $5,326 | | July 17, 2025 | August 29, 2025 | September 15, 2025 | $5,326 | | **Total 2025** | | | **$15,978** | | **Total 2024** | | | **$15,978** | [Note 12. Stock-based Compensation](index=41&type=section&id=Note%2012.%20Stock-based%20Compensation) This note describes KREF's stock-based compensation plans, including the 2025 Omnibus Incentive Plan, and the recognized and unrecognized compensation expense - KREF's **2025 Omnibus Incentive Plan** replaced the Prior Plan, making **2,750,000 common shares available** for awards to directors and Manager employees, with no new awards under the Prior Plan after April 25, 2025[198](index=198&type=chunk)[199](index=199&type=chunk) - During the nine months ended September 30, 2025, KREF **recognized $6.4 million in stock-based compensation expense**, with **$7.7 million of unrecognized expense remaining**, expected to be recognized **over 0.9 years**[203](index=203&type=chunk)[205](index=205&type=chunk) Restricted Stock Unit (RSU) Activity | Metric | Restricted Stock Units | Weighted Average Grant Date Fair Value Per RSU | | :-------------------------- | :--------------------- | :--------------------------------------------- | | Unvested as of Dec 31, 2024 | 1,248,813 | $12.35 | | Granted | 61,935 | $8.88 | | Vested | (56,350) | $9.76 | | Forfeited / cancelled | (1,250) | $11.27 | | Unvested as of Sep 30, 2025 | 1,253,148 | $12.30 | [Note 13. Earnings (Loss) per Share](index=43&type=section&id=Note%2013.%20Earnings%20(Loss)%20per%20Share) This note explains KREF's calculation of basic and diluted earnings per share, including the two-class method for participating securities - KREF calculates **basic EPS using the two-class method**, treating **unvested share-based payment awards with nonforfeitable dividend rights as participating securities**[211](index=211&type=chunk) Net Income (Loss) Attributable to Common Stockholders and EPS (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Income (Loss) Attributable to Common Stockholders | $8,079 | $(12,991) | $(37,896) | $(1,507) | | Basic and Diluted Common Share EPS | $0.12 | $(0.19) | $(0.56) | $(0.02) | | Diluted Weighted Average Common Shares Outstanding | 65,876,727 | 69,434,938 | 67,267,388 | 69,414,990 | [Note 14. Commitments and Contingencies](index=44&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note outlines KREF's future funding commitments for commercial real estate loans, investments in CMBS B-Pieces, and legal proceedings - As of September 30, 2025, KREF had **future funding commitments of $426.3 million** related to **commercial real estate loans**, primarily for construction projects, capital improvements, tenant improvements, and leasing commissions[218](index=218&type=chunk) - KREF had a **remaining commitment of $4.3 million to RECOP I**, an aggregator vehicle for CMBS B-Pieces, as of September 30, 2025[219](index=219&type=chunk) - KREF is involved in various claims and legal actions in the ordinary course of business but was **not involved in any material legal proceedings** as of September 30, 2025[215](index=215&type=chunk)[216](index=216&type=chunk) [Note 15. Related Party Transactions](index=45&type=section&id=Note%2015.%20Related%20Party%20Transactions) This note details KREF's transactions with related parties, including management fees, expense reimbursements, and investments with KKR affiliates - KREF's **Manager is entitled to a quarterly management fee** (greater of $62,500 or **0.375% of weighted average adjusted equity**) and **quarterly incentive compensation (20.0% of trailing 12-month distributable earnings exceeding a 7.0% Hurdle Rate)**[224](index=224&type=chunk) Fees Incurred with Affiliates (in thousands) | Fee Type | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Management fees | $5,619 | $5,901 | $17,153 | $18,614 | | Expense reimbursements | $1,073 | $890 | $3,701 | $2,967 | | Structuring fees (KCM) | $1,604 | $0 | $6,655 | $0 | | Diligence and servicing fees (K-Star) | $124 | $0 | $319 | $0 | | Total | $8,420 | $6,791 | $27,828 | $21,581 | - In June 2025, KREF and a KKR affiliate invested in securities issued by a CMBS trust, with the **KKR affiliate holding $54.6 million in fair value of CMBS securities** as of September 30, 2025[232](index=232&type=chunk) [Note 16. Fair Value of Financial Instruments](index=47&type=section&id=Note%2016.%20Fair%20Value%20of%20Financial%20Instruments) This note provides fair value disclosures for KREF's financial assets and liabilities, including valuation methods and unobservable inputs for Level 3 measurements Fair Value of Financial Assets (in thousands) | Asset | September 30, 2025 Carrying Value | September 30, 2025 Fair Value (Total) | December 31, 2024 Carrying Value | December 31, 2024 Fair Value (Total) | | :---------------------------------------------------- | :-------------------------------- | :----------------------------------- | :-------------------------------- | :----------------------------------- | | Cash and cash equivalents | $204,094 | $204,094 | $104,933 | $104,933 | | Commercial real estate loans, held-for-investment, net | $5,139,266 | $5,150,536 | $5,771,519 | $5,768,648 | | Variable interest entity assets, CMBS trust, at fair value | $503,418 | $503,418 | $0 | $0 | | Total Assets | $5,846,778 | $5,858,048 | $5,876,452 | $5,873,581 | Fair Value of Financial Liabilities (in thousands) | Liability | September 30, 2025 Carrying Value | September 30, 2025 Fair Value (Total) | December 31, 2024 Carrying Value | December 31, 2024 Fair Value (Total) | | :------------------------------------------------------ | :-------------------------------- | :----------------------------------- | :-------------------------------- | :----------------------------------- | | Secured financing agreements, net | $2,699,119 | $2,699,119 | $2,798,674 | $2,798,674 | | Collateralized loan obligations, net | $1,324,409 | $1,314,678 | $1,766,104 | $1,745,561 | | Secured term loan, net | $633,541 | $647,973 | $333,853 | $341,198 | | Variable interest entity liabilities, CMBS trust, at fair value | $494,397 | $494,397 | $0 | $0 | | Total Liabilities | $5,151,466 | $5,156,167 | $4,898,631 | $4,885,433 | Level 3 Unobservable Inputs for Valuation (September 30, 2025) | Asset/Liability | Valuation Method | Unobservable Input | Weighted Average | Range | | :------------------------------------------------------ | :--------------- | :----------------- | :--------------- | :------------ | | Commercial real estate loans, held-for-investment | Discounted cash flow | Discount margin | 4.0% | 2.4% - 5.7% | | | | Discount rate | 11.0% | n.a. | | | | Capitalization rate | 9.9% | 9.4% - 10.3% | | Variable interest entity assets/liabilities, CMBS trust, at fair value | Discounted cash flow | Yield | 6.1% | 4.3% - 32.9% | | | | Duration | 6.9 | 2.3 - 7.3 | [Note 17. Income Taxes](index=49&type=section&id=Note%2017.%20Income%20Taxes) This note explains KREF's REIT tax election, its implications for federal and state income taxes, and the tax status of its consolidated subsidiaries - KREF has **elected to be taxed as a REIT since December 31, 2014**, generally **avoiding U.S. federal and state income tax on distributed income** if **at least 90% of its REIT taxable income is distributed**[242](index=242&type=chunk) - Certain consolidated subsidiaries, including joint ventures and taxable REIT subsidiaries, are subject to federal, state, and local income taxes[103](index=103&type=chunk)[243](index=243&type=chunk) - As of September 30, 2025, KREF **did not have any material deferred tax assets or liabilities or uncertain tax positions**[104](index=104&type=chunk)[105](index=105&type=chunk)[243](index=243&type=chunk) [Note 18. Subsequent Event](index=50&type=section&id=Note%2018.%20Subsequent%20Event) This note reports a significant event occurring after the reporting period, specifically the payment of common stock dividends in October 2025 - In **October 2025**, KREF **paid $16.3 million in common stock dividends ($0.25 per share)** for the third quarter of 2025[245](index=245&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on KREF's financial condition and operational results, highlighting its investment strategy, macroeconomic environment, key financial measures, portfolio performance, financing activities, and liquidity. It also discusses critical accounting policies and recent accounting pronouncements [Overview](index=51&type=section&id=Overview) This section provides an overview of KREF's business model, investment strategy, and the impact of the macroeconomic environment on its operations - KREF is a **real estate finance company** focused on **originating and acquiring transitional senior loans** secured by **commercial real estate (CRE) assets**, aiming for **capital preservation and attractive risk-adjusted returns primarily through dividends**[248](index=248&type=chunk) - The **macroeconomic environment, characterized by inflation, elevated interest rates, and slowing economic growth, has adversely impacted the real estate industry**, leading to lower demand for office space and increased vacancy/default rates[250](index=250&type=chunk) - The **Federal Reserve lowered interest rates multiple times in 2024 and once in September 2025**, but **rates remain elevated**, creating uncertainty for future changes and potential impacts on KREF's net income and borrower performance[251](index=251&type=chunk) [Key Financial Measures and Indicators](index=52&type=section&id=Key%20Financial%20Measures%20and%20Indicators) This section presents key financial metrics, including net income per share, distributable earnings, and book value per share, to assess KREF's performance Net Income (Loss) Per Share and Dividends Declared (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Jun 30, 2025 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) attributable to common stockholders | $8,079 | $(35,425) | | Weighted-average number of shares of common stock outstanding, basic and diluted | 65,876,727 | 67,191,309 | | Net income (loss) per share, basic and diluted | $0.12 | $(0.53) | | Dividends declared per share | $0.25 | $0.25 | - **Distributable Earnings, a non-GAAP measure**, is used to **assess KREF's ability to pay quarterly dividends** and determine their amount, **excluding non-cash equity compensation, depreciation/amortization, unrealized gains/losses, and certain one-time items**[254](index=254&type=chunk)[255](index=255&type=chunk) Distributable Earnings (Loss) Reconciliation (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Per Diluted Share | Three Months Ended Jun 30, 2025 | Per Diluted Share | | :------------------------------------------------- | :------------------------------ | :---------------- | :------------------------------ | :---------------- | | Net Income (Loss) Attributable to Common Stockholders | $8,079 | $0.12 | $(35,425) | $(0.53) | | Adjustments (Non-cash equity comp, D&A, Unrealized G/L, Provision for credit losses, Gain on sale) | $3,175 | $0.05 | $50,995 | $0.76 | | Distributable Earnings before realized gains or losses | $12,144 | $0.18 | $16,350 | $0.24 | | Realized loss on loan write-offs, net | $(14,394) | $(0.22) | $(20,434) | $(0.30) | | Realized gain on sale of investments | $0 | $0.00 | $1,192 | $0.02 | | Distributable Earnings (Loss) | $(2,250) | $(0.03) | $(2,892) | $(0.04) | Book Value per Share (in thousands, except share and per share data) | Metric | September 30, 2025 | December 31, 2024 | | :------------------------------------------ | :----------------- | :----------------- | | KKR Real Estate Finance Trust Inc. stockholders' equity | $1,229,763 | $1,345,030 | | Series A preferred stock (liquidation preference) | $(327,750) | $(327,750) | | Common stockholders' equity | $902,013 | $1,017,280 | | Shares of common stock issued and outstanding at period end | 65,227,255 | 68,713,596 | | Add: Deferred stock units | 239,922 | 206,112 | | Total shares outstanding at period end | 65,467,177 | 68,919,708 | | Book value per share | $13.78 | $14.76 | [Our Portfolio](index=54&type=section&id=Our%20Portfolio) This section details KREF's loan portfolio, including its size, composition, interest payment collection rates, and key statistics - As of September 30, 2025, KREF's **portfolio totaled $5,850.8 million**, primarily consisting of **senior commercial real estate loans**, with **100% of interest payments collected** during the quarter[262](index=262&type=chunk)[263](index=263&type=chunk) - The loan portfolio's **average risk rating was 3.1**, and **multifamily and industrial loans comprised 58% of the portfolio**, with substantially all loans earning a floating rate of interest[263](index=263&type=chunk)[265](index=265&type=chunk) Quarterly Loan Activity (in thousands) | Activity | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Loan originations | $131,850 | $210,650 | $376,270 | $0 | | Loan fundings | $84,149 | $230,232 | $405,667 | $53,044 | | Loan repayments | $(479,658) | $(450,053) | $(183,595) | $(457,033) | | Net fundings | $(395,509) | $(219,821) | $222,072 | $(403,989) | | Net write-offs | $(14,394) | $(20,434) | $0 | $(35,902) | | Transfer to REO | $(71,081) | $(91,766) | $0 | $0 | | Total activity | $(480,574) | $(331,652) | $222,474 | $(439,503) | Loan Portfolio Statistics (September 30, 2025, in thousands) | Metric | Total | Floating Rate Loans | Fixed Rate Loans | | :------------------------------------ | :---------- | :------------------ | :--------------- | | Number of loans | 52 | 52 | 0 | | Principal balance | $5,310,411 | $5,236,011 | $74,400 | | Amortized cost | $5,296,610 | $5,222,210 | $74,400 | | Unfunded loan commitments | $426,348 | $421,348 | $5,000 | | Weighted average cash coupon | 7.4% | S + 3.3% | * | | Weighted average all-in yield | 7.8% | S + 3.6% | * | | Weighted average maximum maturity (years) | 1.7 | 1.7 | 0.8 | | Weighted average LTV | 65% | 65% | n.a. | [Portfolio Surveillance and Credit Quality](index=59&type=section&id=Portfolio%20Surveillance%20and%20Credit%20Quality) This section describes KREF's process for monitoring portfolio credit quality, including risk ratings and specific loan modifications - KREF's **Manager actively monitors portfolio credit quality quarterly**, **evaluating property performance, comparable asset valuations, sponsor financial strength, and macroeconomic trends** to assess default risk[277](index=277&type=chunk)[280](index=280&type=chunk) - Loans are assigned a **risk rating from 1 (Very Low Risk) to 5 (Impaired/Loss Likely)**; as of September 30, 2025, the **average risk rating was 3.1, consistent with December 31, 2024**[280](index=280&type=chunk)[281](index=281&type=chunk) Loan Portfolio Risk Ratings (in thousands) | Risk Rating | Sep 30, 2025 Number of Loans | Sep 30, 2025 Carrying Value | Sep 30, 2025 Outstanding Principal | Dec 31, 2024 Number of Loans | Dec 31, 2024 Carrying Value | Dec 31, 2024 Outstanding Principal | | :---------- | :----------------------------- | :-------------------------- | :-------------------------------- | :----------------------------- | :-------------------------- | :-------------------------------- | | 1 | 0 | $0 | $0 | 0 | $0 | $0 | | 2 | 3 | $465,393 | $465,264 | 0 | $0 | $0 | | 3 | 44 | $4,175,536 | $4,185,101 | 47 | $5,393,333 | $5,400,698 | | 4 | 3 | $301,488 | $301,565 | 2 | $193,687 | $193,727 | | 5 | 2 | $354,193 | $358,481 | 2 | $301,602 | $305,738 | | Total | 52 | $5,296,610 | $5,310,411 | 51 | $5,888,622 | $5,900,163 | | Allowance for credit losses | | $(157,344) | | | $(117,103) | | - KREF **modified a risk-rated 5 mezzanine office loan in Boston, MA, and a senior life science loan in San Carlos, CA**, resulting in **write-offs of certain subordinated notes**[284](index=284&type=chunk)[285](index=285&type=chunk) [Total Financing](index=60&type=section&id=Total%20Financing) This section outlines KREF's financing structure, including non-mark-to-market sources, master repurchase agreements, and changes in borrowing capacity - As of September 30, 2025, **77% of KREF's total financing came from Non-Mark-to-Market Financing Sources** (term loan facility, term lending agreements, CLOs, secured term loan, warehouse facility, asset specific financing, and corporate Revolver), with the remaining **23% from master repurchase agreements subject only to credit marks**[288](index=288&type=chunk) Financing Agreements Summary (in thousands) | Financing Type | Sep 30, 2025 Outstanding Principal | Dec 31, 2024 Outstanding Principal | | :-------------------------- | :--------------------------------------- | :-------------------------------- | | Master Repurchase Agreements | $1,090,710 | $1,704,665 | | Collateralized Loan Obligations | $1,324,479 | $1,766,231 | | Term Lending Agreements | $730,633 | $789,647 | | Term Loan Facility | $527,166 | $553,966 | | Warehouse Facility | $0 | $0 | | Asset Specific Financing | $358,268 | $343,216 | | Revolver | $0 | $80,000 | | Secured Term Loan | $648,375 | $339,500 | | Total leverage | $4,679,631 | $4,910,626 | - KREF's **master repurchase agreements are subject to 'credit mark-to-market' features**, which may require additional collateral or margin calls if underlying collateral value decreases, though KREF has not received any to date[293](index=293&type=chunk) - The **corporate Revolver was upsized to $700.0 million** in September 2025 and the **secured term loan was upsized to $650.0 million in September 2025 with a reduced spread**[298](index=298&type=chunk)[300](index=300&type=chunk) [Real Estate Assets, Held For Investment](index=63&type=section&id=Real%20Estate%20Assets,%20Held%20For%20Investment) This section details KREF's Real Estate Owned (REO) properties held for investment, including acquisitions and joint venture interests - KREF took title to a **Portland retail property** in December 2021, contributing a portion to a **joint venture where KREF holds a 90% interest and a priority of distributions up to $79.7 million**[308](index=308&type=chunk) - In June 2024, KREF and a KKR affiliate acquired a **Mountain View office property** through a deed-in-lieu of foreclosure, with **KREF holding a 68.9% interest**[309](index=309&type=chunk) - In August 2025, KREF acquired a **Raleigh multifamily property** through an assignment-in-lieu of foreclosure[310](index=310&type=chunk) [Real Estate Assets, Held For Sale](index=63&type=section&id=Real%20Estate%20Assets,%20Held%20For%20Sale) This section identifies KREF's Real Estate Owned (REO) properties classified as held for sale, including sales and acquisition details - As of September 30, 2025, the **Philadelphia, PA Office and West Hollywood, CA Condo properties were classified as held for sale**, suspending depreciation and amortization[311](index=311&type=chunk)[142](index=142&type=chunk) - KREF **sold a portion of the Philadelphia office portfolio** in June 2024, providing seller financing, and **another portion in May 2025 for $25.3 million, recognizing a $0.5 million gain**[313](index=313&type=chunk)[314](index=314&type=chunk) - KREF acquired a **West Hollywood multifamily property** in April 2025 through an assignment-in-lieu of foreclosure[314](index=314&type=chunk) [Real Estate Asset, Equity Method Investment](index=64&type=section&id=Real%20Estate%20Asset,%20Equity%20Method%20Investment) This section describes KREF's equity method investment in a Seattle life science property acquired through a Tenant-in-Common (TIC) agreement - In June 2024, KREF and a KKR affiliate acquired a **Seattle life science property** through a deed-in-lieu of foreclosure under a **Tenant-in-Common (TIC) agreement**, with **KREF holding a 74.6% economic interest** and **accounting for it as an equity method investment**[315](index=315&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) This section analyzes KREF's financial performance, comparing results across different reporting periods for key income and expense items [Three Months Ended September 30, 2025 Compared to Three Months Ended June 30, 2025](index=65&type=section&id=Three%20Months%20Ended%20September%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202025) This section compares KREF's financial results for the three months ended September 30, 2025, against the prior quarter, highlighting changes in net interest income and operating expenses Changes in Results of Operations (QoQ, in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Change (Dollars) | Change (Percentage) | | :------------------------------------------------- | :----------- | :----------- | :--------------- | :------------------ | | Interest income | $108,019 | $112,272 | $(4,253) | (4)% | | Interest expense | $82,685 | $82,101 | $584 | 1% | | Total net interest income | $25,334 | $30,171 | $(4,837) | (16)% | | Total other income | $6,080 | $5,700 | $380 | 7% | | Total operating expenses | $18,642 | $66,444 | $(47,802) | (72)% | | Net Income (Loss) Attributable to Common Stockholders | $8,079 | $(35,425) | $43,504 | 123% | | Net Income (Loss) Per Share of Common Stock (Basic and Diluted) | $0.12 | $(0.53) | $0.65 | 123% | - **Net interest income decreased by $4.8 million** due to loans on nonaccrual status and a decline in overall portfolio size[318](index=318&type=chunk) - **Total operating expenses decreased by $47.8 million**, primarily driven by a **$48.9 million change in the provision for credit losses**[320](index=320&type=chunk) [Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024](index=67&type=section&id=Nine%20Months%20Ended%20September%2030,%202025%20Compared%20to%20Nine%20Months%20Ended%20September%2030,%202024) This section compares KREF's financial results for the nine months ended September 30, 2025, against the same period in the prior year, focusing on changes in net interest income and other income Changes in Results of Operations (YoY, in thousands) | Metric | Sep 30, 2025 | Sep 30, 2024 | Change (Dollars) | Change (Percentage) | | :------------------------------------------------- | :----------- | :----------- | :--------------- | :------------------ | | Interest income | $334,258 | $441,019 | $(106,761) | (24)% | | Interest expense | $247,412 | $324,437 | $(77,025) | (24)% | | Total net interest income | $86,846 | $116,582 | $(29,736) | (26)% | | Total other income | $15,655 | $24,850 | $(9,195) | (37)% | | Total operating expenses | $126,051 | $126,458 | $(407) | (0)% | | Net Income (Loss) Attributable to Common Stockholders | $(37,896) | $(1,507) | $(36,389) | (2,415)% | | Net Income (Loss) Per Share of Common Stock (Basic and Diluted) | $(0.56) | $(0.02) | $(0.54) | (2,700)% | - **Net interest income decreased by $29.7 million**, primarily due to a reduced loan portfolio size and lower index rates[323](index=323&type=chunk) - **Total other income decreased by $9.2 million**, mainly due to a **$7.6 million decrease in REO operations revenue and a $3.0 million operating loss from an equity method investment**, partially offset by a **$1.2 million gain on REO sales**[324](index=324&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses KREF's liquidity sources, capital structure, and contractual obligations, assessing its ability to meet financial commitments - KREF's **primary liquidity sources include $204.1 million in cash**, **$700.0 million available on its corporate Revolver**, **$28.9 million in available borrowings**, and **$300.6 million in total unencumbered assets** as of September 30, 2025[327](index=327&type=chunk)[335](index=335&type=chunk) - KREF believes its **current liquidity will be sufficient to meet anticipated financing, operating, and other expenditures in the short- and long-term**[328](index=328&type=chunk) Debt-to-Equity and Total Leverage Ratios | Ratio | September 30, 2025 | December 31, 2024 | | :------------------ | :----------------- | :----------------- | | Debt-to-equity ratio | 1.8x | 1.6x | | Total leverage ratio | 3.6x | 3.6x | Cash Flows (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :------------------------------------------------- | :--------- | :--------- | | Cash Flows From Operating Activities | $55,548 | $114,241 | | Cash Flows From Investing Activities | $399,764 | $708,640 | | Cash Flows From Financing Activities | $(354,723) | $(860,051) | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $100,589 | $(37,170) | Contractual Obligations and Commitments (September 30, 2025, in thousands) | Obligation Type | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | Thereafter | | :-------------------------- | :---------- | :--------------- | :----------- | :----------- | :--------- | | Total secured financing agreements | $2,706,776 | $275,627 | $1,929,352 | $453,157 | $48,640 | | Collateralized Loan Obligations | $1,324,479 | $0 | $0 | $0 | $1,324,479 | | Secured Term Loan | $648,375 | $6,500 | $13,000 | $13,000 | $615,875 | | Interest payable | $985,862 | $276,206 | $376,329 | $271,537 | $61,790 | | Future funding obligations | $426,348 | $312,181 | $106,429 | $7,738 | $0 | | CMBS investments | $4,324 | $4,324 | $0 | $0 | $0 | | Total | $6,096,164 | $874,838 | $2,425,110 | $745,432 | $2,050,784 | [Critical Accounting Policies and Use of Estimates](index=72&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) This section highlights KREF's critical accounting policies and the significant management estimates involved, particularly for credit losses and asset impairment - KREF's financial statements rely on **management estimates and assumptions**, particularly for **allowance for credit losses, asset impairment, and fair value**, with actual results potentially differing materially[350](index=350&type=chunk) - The **Current Expected Credit Loss (CECL) model** requires **estimating expected credit losses based on historical experience, current conditions, and forward-looking forecasts**, primarily using the **Weighted-Average Remaining Maturity (WARM) method**[351](index=351&type=chunk)[352](index=352&type=chunk) - For **collateral-dependent loans**, expected losses are measured based on the **difference between the collateral's fair value and the loan's amortized cost**, with significant judgment involved in determining financial difficulty and collectability[354](index=354&type=chunk) [Recent Accounting Pronouncements](index=73&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses new accounting standards relevant to KREF, specifically ASU No. 2024-03, and its future impact on expense disclosures - **ASU No. 2024-03, effective for KREF in 2027**, mandates **disaggregated disclosures of certain expense categories** in financial statement notes[356](index=356&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines KREF's exposure to various market risks, including credit risk, credit yield risk, interest rate risk, prepayment risk, financing risk, and real estate risk, and how these factors could impact its financial performance and investment values [Credit Risk](index=74&type=section&id=Credit%20Risk) This section discusses KREF's exposure to credit risk, including default risk on investments and the impact of macroeconomic factors on collateral values - KREF's investments are subject to **credit risk, including default**, which depends on sponsors' ability to operate collateral properties to generate sufficient cash flows for debt service[358](index=358&type=chunk) - **Inflation, rising interest rates, and increasing costs may negatively impact real estate collateral values and borrowers' ability to perform loan obligations**, exacerbated by global tariff policies and trade tensions[359](index=359&type=chunk) [Credit Yield Risk](index=74&type=section&id=Credit%20Yield%20Risk) This section addresses the risk that increasing supply and reduced demand for credit-sensitive instruments could lead to higher required yields and lower asset prices - **Increasing supply and reduced demand for credit-sensitive financial instruments** can lead to **higher required yields and lower prices** for KREF's holdings[360](index=360&type=chunk) [Interest Rate Risk](index=74&type=section&id=Interest%20Rate%20Risk) This section analyzes KREF's sensitivity to interest rate fluctuations, detailing the impact of rising or declining rates on net income and potential loan defaults - **Rising interest rates generally increase KREF's net income**, while **declining rates decrease it**, though **rate floors on loans may partially offset declines**[361](index=361&type=chunk)[363](index=363&type=chunk) - A **50 basis point decrease in index rates would reduce expected cash flows by approximately $0.7 million ($0.01 per common share)** for the next three months, while a **50 basis point increase would raise them by $0.7 million ($0.01 per common share)**[364](index=364&type=chunk) - **Significant interest rate increases could lead to non-performance or default on floating-rate assets** if collateral cash flows are insufficient for debt service[362](index=362&type=chunk) [Prepayment Risk](index=75&type=section&id=Prepayment%20Risk) This section describes the risk of principal repayment earlier than anticipated, which can affect investment returns and potentially lead to asset sales at a loss - **Prepayment risk involves principal repayment earlier than anticipated**, potentially **reducing returns on investments**, as premiums are amortized faster, while discounts are accreted faster[365](index=365&type=chunk) - **Higher interest rates may decrease prepayment speeds and increase borrower extension options**, potentially extending beyond KREF's financing terms and **forcing asset sales at a loss**[366](index=366&type=chunk) [Financing Risk](index=75&type=section&id=Financing%20Risk) This section discusses the risk that weakness or volatility in financial markets could reduce available financing, increase costs, or trigger market-to-market adjustments - **Weakness or volatility in financial, CRE, or mortgage markets** could adversely affect lenders, potentially **reducing available financing, increasing costs, or leading to market-to-market adjustments**[367](index=367&type=chunk) [Real Estate Risk](index=75&type=section&id=Real%20Estate%20Risk) This section addresses the volatility of commercial real estate market values and how economic conditions and other factors can negatively impact collateral values and lead to losses - **Commercial real estate market values are volatile** and can be **negatively affected by economic conditions, local real estate dynamics, industry slowdowns, construction quality, demographics, and regulatory changes**[368](index=368&type=chunk) - **Decreases in property values reduce collateral value and potential repayment proceeds**, which **could lead to losses for KREF**[368](index=368&type=chunk) [Item 4. Controls and Procedures](index=76&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details KREF's disclosure controls and procedures, confirming their effectiveness as of September 30, 2025, and reporting no material changes in internal control over financial reporting during the quarter - As of September 30, 2025, KREF's **disclosure controls and procedures were evaluated and deemed effective** by management, including the CEO and CFO, to ensure timely and accurate financial reporting[369](index=369&type=chunk)[370](index=370&type=chunk) - **No material changes in internal control over financial reporting occurred** during the quarter ended September 30, 2025[371](index=371&type=chunk) [Part II - Other Information](index=77&type=section&id=Part%20II%20-%20Other%20Information) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=77&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the legal proceedings disclosures in Note 14 of the condensed consolidated financial statements, indicating no material legal actions against KREF as of September 30, 2025 - KREF was **not involved in any material legal proceedings** regarding claims or legal actions as of September 30, 2025[216](index=216&type=chunk)[372](index=372&type=chunk) [Item 1A. Risk Factors](index=77&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive risk factors detailed in KREF's Annual Report on Form 10-K, noting that there have been no material changes to these risks since the last filing - There have been **no material changes to the risk factors previously disclosed** in KREF's Annual Report on Form 10-K[373](index=373&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details KREF's share repurchase program, including the number of shares repurchased and the remaining capacity under the program as of September 30, 2025 - KREF's **share repurchase program allows for repurchases up to an aggregate of $100.0 million of common stock**, with **$50.0 million under a pre-set trading plan and $50.0 million for open market or privately negotiated transactions**[374](index=374&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended Sep 30, 2025) | Period | Total shares purchased | Average price paid per share (USD) | Amounts paid for shares purchased as part of publicly announced program (in thousands) | | :----------------- | :--------------------- | :--------------------------------- | :--------------------------------------------------------------------------------- | | July 1 - July 31, 2025 | 0 | $0 | $0 | | August 1 - August 31, 2025 | 0 | $0 | $0 | | September 1 - Sep 30, 2025 | 448,877 | $9.41 | $4,222 | | Total/Average | 448,877 | $9.41 | $4,222 | - As of September 30, 2025, KREF had **$56.0 million of remaining capacity** to repurchase shares under the program[375](index=375&type=chunk) [Item 3. Defaults Upon Senior Securities](index=77&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were **no defaults upon senior securities**[376](index=376&type=chunk) [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to KREF - **Mine safety disclosures are not applicable**[377](index=377&type=chunk) [Item 5. Other Information](index=77&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - **No other information is reported**[378](index=378&type=chunk) [Item 6. Exhibits](index=78&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including amendments to credit agreements, lender joinder agreements, and certifications - Exhibits include **Amendment No. 1 to Term Loan Credit Agreement** (September 8, 2025) and **Lender Joinder Agreements** (April 19, 2022, and September 10, 2025) related to KREF Holdings X LLC[380](index=380&type=chunk) - **Certificates from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002** are included[380](index=380&type=chunk) [Signatures](index=79&type=section&id=Signatures) This section contains the authorized signatures for the Form 10-Q report, confirming its submission - The report is signed by **Matthew A. Salem, Chief Executive Officer**, and **Kendra L. Decious, Chief Financial Officer and Treasurer**, on **October 21, 2025**[385](index=385&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q ____________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 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 001-00812 ____________________________________ RTX CORPORATION (Exact name of registr ...

[Executive Summary / Q3 2025 Results Overview](index=1&type=section&id=Executive%20Summary%20%2F%20Q3%202025%20Results%20Overview) PennyMac Mortgage Investment Trust delivered strong Q3 2025 financial results, marked by significant net income, increased book value, and strategic investment activities [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) PennyMac Mortgage Investment Trust reported strong financial results for Q3 2025, with significant net income and an increase in book value per common share Q3 2025 Key Financial Highlights | Metric | Q3 2025 Value | | :---------------------------------- | :------------ | | Net income attributable to common shareholders | $47.8 million | | Net income per common share | $0.55 | | Annualized return on average common shareholders' equity | 14% | | Book value per common share (Sep 30, 2025) | $15.16 | | Book value per common share (Jun 30, 2025) | $15.00 | | Total loans acquired (UPB) | $4.6 billion | | Loans from PFSI fulfillment (UPB) | $3.3 billion | | Loans from PFSI production (UPB) | $1.3 billion | - Book value per common share increased to **$15.16** at September 30, 2025, from **$15.00** at June 30, 2025[4](index=4&type=chunk) - Loans acquired totaled **$4.6 billion** in unpaid principal balance (UPB), up **13 percent** from the prior quarter[4](index=4&type=chunk) - Acquired **$3.3 billion** in UPB of conventional conforming and jumbo loan volume from PFSI through their fulfillment agreement, up **8 percent** from the prior quarter[4](index=4&type=chunk) - Acquired **$1.3 billion** in UPB of loans from PennyMac Financial Services, Inc.'s (PFSI) production, up **28 percent** from the prior quarter[4](index=4&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) Chairman and CEO David Spector highlighted outstanding Q3 results, driven by strong income excluding market-driven value changes and effective interest rate risk hedging - Q3 results were primarily driven by strong income excluding market-driven value changes combined with strong interest rate risk hedging results[7](index=7&type=chunk) - Sold **$195 million** of opportunistic investments in GSE-issued CRT, realizing significant gains and freeing up capital for newly created assets with higher projected returns from private label securitization efforts[7](index=7&type=chunk) - Successfully completed four non-Agency securitizations totaling **$1.5 billion** in UPB and retained **$140 million** of newly created securities[7](index=7&type=chunk) - Anticipates earnings per share over the next year to average above the current dividend level, with continued strong performance and modest growth in book value per share[10](index=10&type=chunk) [Notable Activity After Quarter End](index=2&type=section&id=Notable%20Activity%20After%20Quarter%20End) After the quarter end, PMT engaged in significant activities including the creation of new mortgage servicing rights, closing multiple securitizations, and generating new investments - Resulted in the creation of **$46 million** in new mortgage servicing rights (MSRs)[9](index=9&type=chunk) - Closed three Agency-eligible investor loan securitizations and one Jumbo loan securitization with a combined UPB of **$1.5 billion**[9](index=9&type=chunk) - Generated **$84 million** of net new investments in non-Agency subordinate bonds and **$50 million** in non-Agency senior bonds[9](index=9&type=chunk) - Purchased **$876.4 million** of Agency floating rate mortgage-backed securities (MBS)[9](index=9&type=chunk) - Sold the remainder of opportunistic investments in government sponsored enterprise (GSE)-issued credit risk transfer (CRT) for **$195 million**, realizing significant gains[9](index=9&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) An analysis of PMT's Credit Sensitive, Interest Rate Sensitive, Correspondent Production, and Corporate segments reveals varied financial performance and strategic activities in Q3 2025 [Credit Sensitive Strategies Segment](index=4&type=section&id=Credit%20Sensitive%20Strategies%20Segment) The Credit Sensitive Strategies segment reported a decrease in pretax income and net investment income quarter-over-quarter, with declining net gains on investments Credit Sensitive Strategies Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :-------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income | $18,754 | $21,800 | -14.0% | | Net investment income | $18,849 | $21,900 | -14.0% | | Net gains on investments | $17,580 | $19,800 | -11.2% | | Net interest income | $1,297 | $2,100 | -38.2% | - Net gains on investments included **$13.7 million** from organically-created GSE CRT investments and **$4.7 million** from non-Agency subordinate bonds, offset by **$0.8 million** losses from other GSE CRT investments[12](index=12&type=chunk) - Net gains on organically-created CRT investments were **$13.7 million**, down from **$20.3 million** in the prior quarter, with valuation-related gains of **$1.5 million** reflecting relatively flat credit spreads[13](index=13&type=chunk) [Interest Rate Sensitive Strategies Segment](index=4&type=section&id=Interest%20Rate%20Sensitive%20Strategies%20Segment) The Interest Rate Sensitive Strategies segment saw a significant turnaround to pretax income in Q3 2025, driven by higher net investment income and substantial net gains on MBS Interest Rate Sensitive Strategies Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :-------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income (loss) | $32,346 | $(4,900) | N/A (swing to profit) | | Net investment income | $56,540 | $20,700 | +173.1% | | Net loan servicing fees | $15,429 | $23,947 | -35.6% | | Net gains on investments | $46,507 | N/A (not explicitly stated for Q2) | N/A | | Net interest expense | $5,396 | $17,100 | -68.4% | | Segment expenses | $24,194 | $25,600 | -5.5% | - Net loan servicing fees included **$27.0 million** in fair value losses on MSRs and **$27.4 million** in hedging losses, partially offset by **$3.3 million** of MSR recapture income[17](index=17&type=chunk) - Interest income increased to **$173.8 million** from **$137.5 million** in the prior quarter, primarily due to higher retained investments from Agency-eligible investor loan securitizations and the addition of **$876.4 million** of Agency floating rate MBS[19](index=19&type=chunk) [Correspondent Production Segment](index=6&type=section&id=Correspondent%20Production%20Segment) The Correspondent Production segment experienced a decrease in pretax income in Q3 2025, despite increased acquisition of conventional conforming and jumbo loans Correspondent Production Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :----------------------------------- | :--------------------- | :--------------------- | :------------- | | Pretax income | $9,244 | $13,700 | -32.6% | | Loans purchased (UPB) from PFSI fulfillment | $3.3 billion | $3.1 billion | +6.5% | | Loans acquired from PFSI production (UPB) | $1.3 billion | $1.0 billion | +30.0% | | Segment revenues | $22,907 | N/A (not explicitly stated for Q2) | N/A | | Net gains on loans acquired for sale | $14,857 | $17,806 | -16.6% | | Net interest income | $4,857 | N/A (not explicitly stated for Q2) | N/A | | Segment expenses | $13,663 | $13,100 | +4.3% | | Weighted average fulfillment fee rate | 18 basis points | 19 basis points | -1 bp | - PMT purchased **$3.3 billion** in UPB of conventional conforming and jumbo loans through its fulfillment agreement, up **8 percent** compared to the prior quarter[23](index=23&type=chunk) - Acquired **$1.3 billion** in UPB of loans from PFSI's production for inclusion in private label securitizations, up from **$1.0 billion** in the prior quarter[23](index=23&type=chunk) - Net gains on loans acquired for sale decreased **$2.9 million** from the prior quarter, but included gains from increased demand for private label securitization and whole loan execution[24](index=24&type=chunk) [Corporate Segment](index=7&type=section&id=Corporate%20Segment) The Corporate segment reported a pretax loss of $13.3 million, with a slight increase in corporate revenues and relatively stable corporate expenses Corporate Segment Performance (in thousands) | Metric | Q3 2025 (in thousands) | Q2 2025 (in thousands) | Change (QoQ) | | :---------------- | :--------------------- | :--------------------- | :------------- | | Pretax loss | $(13,346) | N/A (not explicitly stated for Q2) | N/A | | Corporate revenues | $936 | $700 | +33.7% | | Corporate expenses | $14,282 | $14,400 | -0.8% | | Management fees | $6,912 | N/A (not explicitly stated for Q2) | N/A | - Corporate expenses consisted of management fees of **$6.9 million** and **$7.4 million** of remaining expenses[27](index=27&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) The financial statements provide a detailed overview of the company's balance sheet and operational performance, highlighting significant changes in assets, liabilities, and net income [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a significant increase in total assets and liabilities quarter-over-quarter and year-over-year, primarily driven by growth in mortgage-backed securities and loans held for investment Consolidated Balance Sheet Highlights (in thousands) | Metric (in thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change | YoY Change | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | :--------- | | Total assets | $18,525,671 | $16,801,119 | $13,055,654 | +10.38% | +41.90% | | Total liabilities | $16,646,362 | $14,935,474 | $11,118,867 | +11.46% | +49.72% | | Total shareholders' equity | $1,879,309 | $1,865,645 | $1,936,787 | +0.73% | -3.00% | | Mortgage-backed securities at fair value | $4,609,164 | $3,967,045 | $4,182,382 | +16.19% | +10.20% | | Loans held for investment at fair value | $5,983,197 | $4,566,532 | $1,429,525 | +31.04% | +318.55% | | Mortgage servicing rights at fair value | $3,668,755 | $3,739,106 | $3,809,047 | -1.88% | -3.68% | | Assets sold under agreements to repurchase | $7,708,183 | $6,826,855 | $5,748,461 | +12.91% | +34.10% | | Asset-backed financing of variable interest entities at fair value | $5,439,582 | $4,176,128 | $1,334,797 | +30.25% | +307.54% | [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant improvement in net income attributable to common shareholders, swinging from a loss to a profit in Q3 2025 Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric (in thousands, except per share) | Q3 2025 | Q2 2025 | Q3 2024 | QoQ Change | YoY Change | | :-------------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net investment income | $99,232 | $70,201 | $80,864 | +41.35% | +22.71% | | Total expenses | $52,234 | $53,195 | $54,330 | -1.81% | -3.86% | | Income before (benefit from) provision for income taxes | $46,998 | $17,006 | $26,534 | +176.37% | +77.19% | | (Benefit from) provision for income taxes | $(11,298) | $9,472 | $(14,873) | N/A (swing to benefit) | N/A (swing to benefit) | | Net income | $58,296 | $7,534 | $41,407 | +673.79% | +40.07% | | Net income (loss) attributable to common shareholders | $47,841 | $(2,921) | $30,952 | N/A (swing to profit) | +54.57% | | Basic earnings (loss) per common share | $0.55 | $(0.04) | $0.36 | N/A (swing to profit) | +52.78% | - Net gains on investments and financings increased significantly to **$64.1 million** in Q3 2025 from **$33.7 million** in Q2 2025 and **$146.7 million** in Q3 2024[38](index=38&type=chunk) - Net interest income turned positive at **$1.7 million** in Q3 2025, compared to a net interest expense of **$(8.7) million** in Q2 2025 and **$(7.4) million** in Q3 2024[38](index=38&type=chunk) [Additional Information](index=7&type=section&id=Additional%20Information) This section provides supplementary details on the company's tax position, its corporate profile, and important disclaimers regarding forward-looking statements [Taxes](index=7&type=section&id=Taxes) PMT recorded a tax benefit of $11.3 million for the quarter, primarily due to fair value declines on MSRs and interest rate hedges held in its taxable REIT subsidiary - Recorded a tax benefit of **$11.3 million**[28](index=28&type=chunk) - The tax benefit was driven primarily by fair value declines on MSRs and interest rate hedges held in PMT's taxable REIT subsidiary[28](index=28&type=chunk) [About PennyMac Mortgage Investment Trust](index=7&type=section&id=About%20PennyMac%20Mortgage%20Investment%20Trust) PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that primarily invests in residential mortgage loans and mortgage-related assets - PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT)[31](index=31&type=chunk) - Invests primarily in residential mortgage loans and mortgage-related assets[31](index=31&type=chunk) - Externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Services, Inc. (PFSI)[31](index=31&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, indicating that the press release contains forward-looking statements subject to change due to various risk factors - The press release contains forward-looking statements regarding financial results, future operations, business plans, and investment strategies, which are subject to change[33](index=33&type=chunk) - Factors that could cause actual results to differ materially include changes in interest rates, housing prices, macroeconomic conditions, compliance with laws and regulations, competition, availability of capital, cybersecurity risks, and the development of artificial intelligence[33](index=33&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements[34](index=34&type=chunk)

[FORM 8-K General Information](index=1&type=section&id=FORM%208-K%20General%20Information) This section provides general information about the Form 8-K filing, including the registrant's details and filing purpose [Registrant Information](index=1&type=section&id=Registrant%20Information) This section identifies Cloudastructure, Inc. as the registrant, detailing its incorporation state, address, and contact information, along with its trading symbol and exchange - Cloudastructure, Inc. is incorporated in Delaware with its principal executive offices in Palo Alto, California[1](index=1&type=chunk) Trading Information | Title of Class | Trading Symbol | Name of Exchange On Which Registered | | :--------------- | :------------- | :----------------------------------- | | Class A Common Stock | CSAI | Nasdaq Capital Market | - The registrant is an 'Emerging Growth Company' as defined by Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Securities Exchange Act of 1934[4](index=4&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This item reports that Cloudastructure, Inc. issued a press release on October 15, 2025, detailing its results of operations and financial condition, which is attached as an exhibit to this report - Cloudastructure, Inc. issued a press release on October 15, 2025, regarding its results of operations and financial condition[5](index=5&type=chunk) - The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K[5](index=5&type=chunk) [Item 9.01 Financial Statements, Pro Forma Financial Information, and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%2C%20Pro%20Forma%20Financial%20Information%2C%20and%20Exhibits) This section lists the exhibits filed as part of the Form 8-K, including the press release mentioned in Item 2.02 and the interactive data file for the cover page Exhibits Filed | Exhibit Number | Document | | :--------------- | :----------------------------------------------------------------------------------- | | 99.1 | Press Release dated October 15, 2025 | | 104 | Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document). | [Exhibit Index](index=3&type=section&id=Exhibit%20Index) This index provides a formal listing of all exhibits included in the Form 8-K filing, detailing the exhibit number and a brief description of each document Exhibit Listing | Exhibit Number | Document | | :--------------- | :----------------------------------------------------------------------------------- | | 99.1 | Press Release dated October 15, 2025 | | 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). | [SIGNATURES](index=4&type=section&id=SIGNATURES) This section confirms the due authorization and signing of the report on behalf of Cloudastructure, Inc. by its Chief Financial Officer - The report was signed on October 21, 2025, by Greg Smitherman, Chief Financial Officer of Cloudastructure, Inc[12](index=12&type=chunk) - Greg Smitherman serves as both the Principal Financial Officer and Principal Accounting Officer for the registrant[12](index=12&type=chunk)

Exhibit 99.1 FULTON FINANCIAL CORPORATION FOR IMMEDIATE RELEASE Media Contact: Lacey Dean (717) 735-8688 Investor Contact: Matt Jozwiak (717) 327-2657 Fulton Financial Corporation Announces 2025 Third Quarter Results (October 21, 2025) – Lancaster, PA – Fulton Financial Corporation (NASDAQ: FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $97.9 million, or $0.53 per diluted share, for the third quarter of 2025, an increase of $1.3 million in comparison to the sec ...

PART I FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion, market risk, and controls [ITEM 1. Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(unaudited)) This section presents Pentair's unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows, and equity changes [Condensed Consolidated Statements of Operations and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Pentair reported increased net sales and significant growth in operating income and net income for both the three and nine months ended September 30, 2025, compared to the same periods in 2024, driven by improved gross profit margins and reduced net interest expense | Metric (in millions, except per-share data) | Three months ended Sep 30, 2025 | Three months ended Sep 30, 2024 | Nine months ended Sep 30, 2025 | Nine months ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $1,022.0 | $993.4 | $3,155.5 | $3,109.9 | | Gross profit | $418.6 | $393.2 | $1,278.5 | $1,221.2 | | Operating income | $231.7 | $179.9 | $652.5 | $608.7 | | Net income | $184.3 | $139.6 | $487.7 | $459.0 | | Basic earnings per ordinary share | $1.13 | $0.84 | $2.97 | $2.77 | | Diluted earnings per ordinary share | $1.12 | $0.84 | $2.94 | $2.75 | - Net sales increased by **2.9%** for the three months ended September 30, 2025, and by **1.5%** for the nine months ended September 30, 2025, compared to the prior year periods[8](index=8&type=chunk) - Operating income saw a substantial increase of **28.8%** for the three months and **7.2%** for the nine months ended September 30, 2025, reflecting improved operational efficiency[8](index=8&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2025, Pentair's total assets increased, primarily driven by higher goodwill and intangibles due to acquisitions, while total liabilities also rose, mainly in current liabilities and other non-current liabilities | Metric (in millions) | September 30, 2025 | December 31, 2024 | | :------------------- | :----------------- | :---------------- | | Total current assets | $1,445.1 | $1,436.1 | | Goodwill | $3,528.8 | $3,286.6 | | Intangibles, net | $1,088.0 | $1,033.8 | | Total assets | $6,759.6 | $6,446.5 | | Total current liabilities | $988.2 | $895.1 | | Long-term debt | $1,580.1 | $1,638.7 | | Total liabilities | $2,977.2 | $2,883.6 | | Total equity | $3,782.4 | $3,562.9 | - Goodwill increased by **$242.2 million** from December 31, 2024, to September 30, 2025, primarily due to the Hydra-Stop acquisition[10](index=10&type=chunk)[34](index=34&type=chunk) - Total equity increased by **$219.5 million**, from **$3,562.9 million** at December 31, 2024, to **$3,782.4 million** at September 30, 2025[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Pentair generated significantly more cash from operating activities in the first nine months of 2025 compared to 2024, while cash used in investing activities increased substantially due to acquisitions | Cash Flow Activity (in millions) | Nine months ended Sep 30, 2025 | Nine months ended Sep 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $764.0 | $680.2 | | Net cash used for investing activities | $(354.3) | $(68.2) | | Net cash used for financing activities | $(370.8) | $(560.0) | - Net cash provided by operating activities increased by **$83.8 million (12.3%)** in the first nine months of 2025, primarily reflecting higher net income and favorable changes in working capital[12](index=12&type=chunk)[109](index=109&type=chunk) - Net cash used for investing activities increased by **$286.1 million**, largely due to the **$292.2 million** acquisition of Hydra-Stop in 2025[12](index=12&type=chunk)[111](index=111&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Pentair's total equity increased from December 31, 2024, to September 30, 2025, primarily due to net income, partially offset by share repurchases and dividends declared | Equity Component (in millions) | Balance - Dec 31, 2024 | Balance - Sep 30, 2025 | | :----------------------------- | :--------------------- | :--------------------- | | Ordinary shares | $1.7 | $1.7 | | Additional paid-in capital | $1,501.7 | $1,351.8 | | Retained earnings | $2,336.1 | $2,700.6 | | Accumulated other comprehensive loss | $(276.6) | $(271.7) | | Total | $3,562.9 | $3,782.4 | - Net income contributed **$487.7 million** to retained earnings for the nine months ended September 30, 2025[8](index=8&type=chunk)[14](index=14&type=chunk) - Share repurchases totaled **$175.0 million** for the nine months ended September 30, 2025, reducing additional paid-in capital[14](index=14&type=chunk)[122](index=122&type=chunk) - Dividends declared amounted to **$123.3 million ($0.75 per share)** for the nine months ended September 30, 2025[14](index=14&type=chunk)[124](index=124&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering accounting policies, revenue, acquisitions, debt, and segment information [Note 1. Basis of Presentation and Responsibility for Interim Financial Statements](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Responsibility%20for%20Interim%20Financial%20Statements) The unaudited condensed consolidated financial statements are prepared in accordance with SEC requirements for interim reporting, allowing for condensation or omission of certain GAAP footnotes - Financial statements are prepared following U.S. SEC requirements for interim reporting, allowing for condensed GAAP information[18](index=18&type=chunk) - Management is responsible for the fair presentation of these unaudited condensed consolidated financial statements[19](index=19&type=chunk) - Interim results and trends may not be indicative of a full year due to quarterly variations in revenues, expenses, cash flows, assets, and liabilities[20](index=20&type=chunk) [Note 2. Revenue](index=8&type=section&id=Note%202.%20Revenue) Pentair disaggregates revenue by reportable segment, geographic location, and vertical market, showing increased sales in the U.S. and Residential markets Geographic Net Sales (in millions) | Region | Three months ended Sep 30, 2025 | Three months ended Sep 30, 2024 | Nine months ended Sep 30, 2025 | Nine months ended Sep 30, 2024 | | :-------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | U.S. | $703.9 | $687.6 | $2,236.0 | $2,166.4 | | Western Europe | $126.7 | $117.0 | $371.8 | $375.8 | | Developing | $130.6 | $129.9 | $375.8 | $391.9 | | Other Developed | $60.8 | $58.9 | $171.9 | $175.8 | | Consolidated | $1,022.0 | $993.4 | $3,155.5 | $3,109.9 | Vertical Market Net Sales (in millions) | Market | Three months ended Sep 30, 202