Claros Mortgage Trust(CMTG) - 2025 Q2 - Quarterly Results

Financial Highlights For the second quarter of 2025, Claros Mortgage Trust reported a significant GAAP net loss of $181.7 million, or $1.30 per share, with a non-GAAP Distributable Loss of $110.1 million, or $0.77 per share, primarily due to a substantial $189.5 million provision for CECL reserves, while Distributable Earnings prior to realized losses remained positive at $14.8 million, or $0.10 per share, and the company's book value stood at $12.27 per share Financial Performance Summary | Metric | Q2 2025 | Per Share | | :--- | :--- | :--- | | GAAP Net Loss | $(181.7) million | $(1.30) | | Distributable Loss (Non-GAAP) | $(110.1) million | $(0.77) | | Distributable Earnings prior to realized losses | $14.8 million | $0.10 | - A provision for CECL reserves of $189.5 million, or $1.33 per share, was recorded for the quarter, bringing total CECL reserves to $332.7 million, representing approximately 6.4% of the loan portfolio's Unpaid Principal Balance (UPB)[3] - Book value was reported at $12.27 per share as of June 30, 2025[3] Operational and Portfolio Highlights The company demonstrated significant progress in managing its portfolio during the second quarter and year-to-date, resolving $1.0 billion and $1.9 billion of loans, respectively, which substantially improved liquidity from $224 million at quarter-end to $323 million by early August 2025 - Key loan resolution activities in Q2 2025 totaled $1.0 billion of UPB, comprising: - Four full repayments ($480.0 million) - Two discounted payoffs ($88.6 million) - Two loan sales ($303.9 million) - Two mortgage foreclosures ($146.7 million)[3] - Year-to-date 2025, the company resolved fifteen loans totaling $1.9 billion of UPB, an amount exceeding the total resolution activity from each of the prior three full years[3] - Total liquidity significantly improved, standing at $224 million at quarter-end (June 30, 2025) and increasing further to $323 million by August 5, 2025[3] Key Portfolio Metrics | Portfolio Metric | Value | | :--- | :--- | | Loan Portfolio Size | $5.0 billion | | Weighted Average All-in Yield | 7.0% | | Unencumbered Loan UPB | $398 million | | Unencumbered REO Carrying Value | $115 million | Management Commentary CEO Richard Mack expressed optimism, citing signs of a more constructive capital markets environment in commercial real estate despite elevated interest rates, emphasizing the significant increase in portfolio resolution activity during the quarter, which has more than doubled the company's liquidity since the end of 2024 and positions CMTG for continued positive progress in the second half of 2025 - Management is observing signs of a "more constructive capital markets environment in commercial real estate," despite the prolonged period of high interest rates[4] - The second quarter saw a "meaningful uptick in portfolio activity," including the resolution of eight loans[4] - As a result of recent activities, the company has more than doubled its liquidity position since year-end 2024 and is well-positioned for the second half of 2025[4] Reconciliation of GAAP Net Loss to Non-GAAP Distributable Loss The company provides a detailed reconciliation from its GAAP Net Loss of $181.7 million to its non-GAAP Distributable Loss of $110.1 million for Q2 2025, with primary adjustments including adding back the $189.5 million provision for credit losses and other non-cash items, partially offset by $120.8 million in principal charge-offs and other realized losses, as Distributable Earnings (Loss) is a key non-GAAP metric used by management to evaluate performance and assess the ability to pay dividends GAAP Net Loss to Non-GAAP Distributable Loss Reconciliation (Q2 2025) | Reconciliation Item (Q2 2025) | Amount (in thousands) | | :--- | :--- | | Net loss (GAAP) | $ (181,707) | | Provision for current expected credit loss reserve | $ 189,489 | | Non-cash stock-based compensation expense | $ 4,762 | | Other Adjustments | $ 2,305 | | Distributable Earnings prior to realized losses | $ 14,849 | | Principal charge-offs | $ (120,817) | | Other Realized Losses | $ (4,093) | | Distributable Loss (Non-GAAP) | $ (110,061) | - Distributable Earnings (Loss) is a non-GAAP measure defined as GAAP net income excluding non-cash items like stock-based compensation, depreciation, unrealized gains/losses, and the provision for credit losses[10] - While the provision for credit losses is excluded from Distributable Earnings, actual charge-offs of principal and interest are recognized through this metric when a loan is resolved or an amount is deemed non-recoverable[13] Corporate Information Claros Mortgage Trust, Inc. (CMTG) is a real estate investment trust (REIT) focused on originating senior and subordinate loans for transitional commercial real estate in major U.S. markets, externally managed by an affiliate of Mack Real Estate Credit Strategies, L.P., with an earnings conference call scheduled for August 7, 2025, to discuss these results - CMTG is a REIT primarily focused on originating loans on transitional commercial real estate assets in major U.S. markets[8] - The company will host a conference call to discuss its financial results on Thursday, August 7, 2025, at 9:00 a.m. ET[5]