Claros Mortgage Trust(CMTG) - 2024 Q3 - Quarterly Results

Third Quarter 2024 Results Overview This section summarizes Claros Mortgage Trust's Q3 2024 financial performance, operational highlights, subsequent events, and CEO commentary Third Quarter 2024 Financial Performance Claros Mortgage Trust, Inc. reported a GAAP net loss of $56.2 million, or $0.40 per share, and a Distributable Loss (non-GAAP) of $24.6 million, or $0.17 per share, for the third quarter of 2024 | Metric | Q3 2024 Amount | Per Share (Q3 2024) | | :---------------------------------------- | :------------------ | :------------------ | | GAAP Net Loss | $(56.2) million | $(0.40) | | Distributable Loss (non-GAAP) | $(24.6) million | $(0.17) | | Distributable Earnings prior to realized losses (non-GAAP) | $31.0 million | $0.22 | - GAAP net loss was $56.2 million, or $0.40 per share[1] - Distributable Loss (non-GAAP) was $24.6 million, or $0.17 per share[1] - Distributable Earnings prior to realized losses was $31.0 million, or $0.22 per share[1] Third Quarter 2024 Operational Highlights Q3 2024 operational highlights include managing a $6.3 billion loan portfolio, $374 million in repayments, $86 million in new funding, and a $79 million CECL provision | Metric | Q3 2024 Value | | :---------------------------------------- | :------------------ | | Loan Portfolio (weighted avg. all-in yield) | $6.3 billion (8.4%) | | Loan Repayments Received | $374 million | | Funded on Existing Commitments | $86 million | | Loans Reclassified to Held-for-Sale | $356 million | | Total Liquidity | $116 million | | Unencumbered Loan & REO Assets | $604 million | | Reduced Outstanding Financing (net) | $197 million | | Provision for CECL Reserves | $79 million | | Total CECL Reserve (% of UPB) | 3.7% | | Cash Dividend per Share | $0.10 | | Book Value per Share | $14.83 | - Loan portfolio of $6.3 billion with a weighted average all-in yield of 8.4%[1] - Provision for CECL reserves approximated $79 million, or $0.56 per share, for the quarter, bringing the total CECL reserve to 3.7% of unpaid principal balance[1] - Paid a cash dividend of $0.10 per share of common stock and reported a book value of $14.83 per share[1] Subsequent Events Post-quarter, CMTG sold two held-for-sale loans for $142 million and received $29 million in loan repayments, generating $61 million in net liquidity - Sold two held-for-sale loans for $142 million, generating net liquidity of $51 million[2] - Received full loan repayments of two loans representing $29 million unpaid principal balance, generating net liquidity of $10 million[2] CEO Commentary CEO Richard Mack expressed optimism for commercial real estate, citing strong fundamentals, $1.2 billion in year-to-date realizations, and anticipated transaction acceleration in 2025 - CEO sees increasing positive momentum in commercial real estate with anticipated liquidity and borrowing cost relief[2] - Reported $1.2 billion in realizations on a year-to-date basis[2] - Expects transaction volumes to accelerate in 2025 and looks forward to capitalizing on opportunities to create value for stockholders[2] Company Profile This section describes Claros Mortgage Trust, Inc. as a REIT specializing in originating loans for transitional commercial real estate assets About Claros Mortgage Trust, Inc. CMTG is a REIT focused on originating senior and subordinate loans for transitional commercial real estate assets in major U.S. markets, externally managed by Claros REIT Management LP - CMTG is a real estate investment trust (REIT) focused on originating senior and subordinate loans on transitional commercial real estate assets in major U.S. markets[4] - Externally managed and advised by Claros REIT Management LP, an affiliate of Mack Real Estate Credit Strategies, L.P.[4] Forward-Looking Statements This section notes the press release contains forward-looking statements subject to risks and uncertainties, covered by safe harbor provisions, with no obligation to update - The press release contains forward-looking statements covered by applicable safe harbor provisions[5] - Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from projections[5] - CMTG does not undertake any obligation to update or revise any forward-looking statements, except as required by law[5] Non-GAAP Financial Measures This section defines Distributable Earnings (Loss) as a non-GAAP measure used to evaluate performance and assess dividend capacity Definition of Distributable Earnings (Loss) Distributable Earnings (Loss) is a non-GAAP measure excluding non-cash items and GAAP adjustments, used to evaluate operating performance, dividend capacity, and REIT status - Distributable Earnings (Loss) is a non-GAAP measure excluding non-cash stock-based compensation, real estate owned depreciation and amortization, unrealized gains or losses, one-time GAAP events, and certain non-cash items[6] - It is used to compare operating performance, assess the ability to declare and pay dividends, and determine compliance with financial covenants, and is a key factor for the Board in determining quarterly dividends[6][7] - While Distributable Earnings (Loss) excludes the impact of CECL reserve provision, charge-offs of principal and/or accrued interest receivable are recognized when deemed non-recoverable[7] Financial Reconciliation This section provides a reconciliation of GAAP net loss to Distributable (Loss) Earnings, highlighting key adjustments and quarter-over-quarter changes Reconciliation of Net Loss to Distributable (Loss) Earnings The reconciliation shows a Q3 2024 GAAP net loss of $(56,218) thousand, adjusted to a Distributable Loss of $(24,573) thousand, or $(0.17) per share, reflecting a significant QoQ decline Reconciliation of Net Loss to Distributable (Loss) Earnings (QoQ Comparison) | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Jun 30, 2024 (in thousands) | Change (QoQ) (in thousands) | | :---------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------- | | Net loss | $(56,218) | $(11,554) | $(44,664) | | Non-cash stock-based compensation expense | $4,972 | $3,999 | $973 | | Provision for current expected credit loss reserve | $78,756 | $33,928 | $44,828 | | Depreciation and amortization expense | $2,628 | $2,623 | $5 | | Amortization of above and below market lease values, net | $354 | $354 | $0 | | Unrealized loss on interest rate cap | $287 | $94 | $193 | | Loss on extinguishment of debt | $262 | $999 | $(737) | | Distributable Earnings prior to realized losses | $31,041 | $30,443 | $598 | | Loss on extinguishment of debt | $(262) | $(999) | $737 | | Principal charge-offs | $(55,352) | $(561) | $(54,791) | | Distributable (Loss) Earnings | $(24,573) | $28,883 | $(53,456) | | Diluted Distributable Earnings per share prior to realized losses | $0.22 | $0.21 | $0.01 | | Diluted Distributable (Loss) Earnings per share | $(0.17) | $0.20 | $(0.37) | - Net loss increased significantly from $(11,554) thousand in Q2 2024 to $(56,218) thousand in Q3 2024[8] - Provision for current expected credit loss reserve increased from $33,928 thousand in Q2 2024 to $78,756 thousand in Q3 2024[8] - Principal charge-offs dramatically increased from $(561) thousand in Q2 2024 to $(55,352) thousand in Q3 2024, including a $23.2 million charge-off of accrued interest receivable[8] Additional Information This section provides details regarding the Q3 2024 earnings teleconference and company contact information Teleconference Details Claros Mortgage Trust held a conference call on November 8, 2024, at 10:00 a.m. ET to discuss Q3 2024 results, accessible via phone and webcast - A conference call to discuss financial results was held on Friday, November 8, 2024, at 10:00 a.m. ET[2] - The conference call was accessible by dialing 1-833-470-1428 (access code 426287) and broadcast live over the internet via the Investor Relations section of CMTG's website[2][3] - An earnings presentation and webcast replay were made available on the company's website[3] Contact Information Investor relations inquiries can be directed to Anh Huynh, and media relations to Kelly McAndrew, with contact details provided - Investor Relations contact: Anh Huynh, Claros Mortgage Trust, Inc., 212-484-0090, cmtgIR@mackregroup.com[8] - Media Relations contact: Kelly McAndrew, Financial Profiles, 203-613-1552, Kmcandrew@finprofiles.com[8]