TPG RE Finance Trust, Inc.

Previous wording

We continue to evaluate the effects of macroeconomic conditions, including, without limitation: a period of sustained high interest rates; the potential impact of tariffs; inflation; structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe; geopolitical tensions; concerns of an economic recession in the near term; and changes to the way commercial tenants use real estate, specifically office buildings. Rising interest rates, structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declines in commercial property values, and elevated geopolitical risk led us to continue to curtail our loan origination volume and maintain high levels of liquidity during 2024 and continuing through 2025.

Current wording

We continue to evaluate the effects of macroeconomic conditions, including, without limitation: a period of sustained high interest rates; the potential impact of tariffs; inflation; structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe; geopolitical tensions and conflicts; concerns of an economic recession in the near term; and changes to the way commercial tenants use real estate, specifically office buildings. Rising interest rates, structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declines in commercial property values, and elevated geopolitical risk all informed our loan origination volumes and our assessment of the appropriate levels of liquidity when managing our capital allocation process during the first half of 2025. As a result, we originated seven first mortgage loans, with aggregate total loan commitments of $695.6 million, an aggregate initial unpaid principal balance of $670.5 million, and aggregate unfunded commitments at closing of $25.1 million during the three months ended June 30, 2025, while maintaining what we believe to be adequate levels of liquidity.

Previous wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $246 billion in assets under management as of December 31, 2024. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s management committee.

Current wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $251 billion in assets under management as of March 31, 2025. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s management committee.

Previous wording

•Recognized Net income attributable to common stockholders of $10.0 million, compared to $6.9 million for the three months ended December 31, 2024, an increase of $3.1 million.

Current wording

•Recognized Net income attributable to common stockholders of $16.9 million, compared to $10.0 million for the three months ended March 31, 2025, an increase of $6.9 million.

Previous wording

•Produced Net interest income of $24.9 million, resulting from interest income of $68.0 million and interest expense of $43.1 million. Net interest income increased $0.2 million compared to the three months ended December 31, 2024.

Current wording

•Produced Net interest income of $25.1 million, resulting from interest income of $70.7 million and interest expense of $45.5 million. Net interest income increased $0.2 million compared to the three months ended March 31, 2025.

Previous wording

•Generated Distributable Earnings of $19.4 million, compared to $7.8 million for the three months ended December 31, 2024, an increase of $11.6 million.

Current wording

•Generated Distributable Earnings of $19.0 million, compared to $19.4 million for the three months ended March 31, 2025, a decrease of $0.4 million.

Previous wording

•Recorded an increase to our allowance for credit losses on our loan portfolio of $3.2 million, for a total allowance for credit losses of $67.2 million, or 199 basis points of total loan commitments of $3.4 billion.

Current wording

•Recorded an increase to our allowance for credit losses on our loan portfolio of $1.6 million, for a total allowance for credit losses of $68.8 million, or 176 basis points of total loan commitments of $3.9 billion.

Previous wording

•Loan portfolio activity included $13.6 million of future funding obligations associated with existing loans and partial principal payments of $21.5 million related to two loans.

Current wording

•Funded $8.8 million of future funding obligations associated with existing loans.

Previous wording

•Maintained substantial near-term liquidity of $457.6 million, as of March 31, 2025, comprised of:

Current wording

•Maintained substantial near-term liquidity of $236.4 million, as of June 30, 2025, comprised of:

Previous wording

•$363.0 million of cash-on-hand, of which $348.0 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Current wording

•$165.9 million of cash-on-hand, of which $145.1 million was available for investment, net of $20.7 million held to satisfy liquidity covenants under our secured financing agreements.

Previous wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $22.7 million under secured credit agreements with two lenders, and $2.7 million under other financing arrangements.

Current wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $66.1 million under secured credit agreements with two lenders, and $2.7 million under other financing arrangements.

Previous wording

We have financed our loan investments as of March 31, 2025 utilizing three CRE CLOs totaling $2.5 billion, $252.5 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, and $29.1 million under asset-specific financing arrangements. As of March 31, 2025, 89.9% of our borrowings were pursuant to our CRE CLO vehicles, 9.1% were pursuant to our secured credit agreements and secured revolving credit facility and 1.0% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 91.0% of total loan portfolio borrowings as of March 31, 2025.

Current wording

We have financed our loan investments as of June 30, 2025 utilizing three CRE CLOs totaling $2.5 billion, $156.7 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, $29.1 million under asset-specific financing arrangements, and $367.8 million under our $375.0 million secured revolving credit facility. As of June 30, 2025, 81.6% of our borrowings were pursuant to our CRE CLO vehicles, 17.4% were pursuant to our secured credit agreements and secured revolving credit facility and 1.0% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 94.8% of total loan portfolio borrowings as of June 30, 2025.

Previous wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of March 31, 2025, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 2.03% (2.03% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.8 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Current wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of June 30, 2025, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.97% (1.90% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.6 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Previous wording

For the three months ended March 31, 2025, we recorded net income attributable to common stockholders of $0.12 per diluted common share, an increase of $0.03 per diluted common share from the three months ended December 31, 2024, of which $0.04 per diluted common share relates to an increase in revenue from real estate owned operations primarily due to revenue earned from the sale of a historical tax credit during the first quarter of 2025.

Current wording

For the three months ended June 30, 2025, we recorded net income attributable to common stockholders of $0.21 per diluted common share, an increase of $0.09 per diluted common share from the three months ended March 31, 2025, of which $0.09 per diluted common share relates to gain on sale of real estate owned, net due to the sale of two office real estate owned properties during the second quarter of 2025.

Previous wording

Distributable Earnings per diluted common share was $0.24 for the three months ended March 31, 2025, an increase of $0.14 per diluted common share from the three months ended December 31, 2024. The increase in Distributable Earnings per diluted common share was primarily due to an increase in realized losses on loan write-offs and REO conversions of $0.12 per diluted common share during the fourth quarter of 2024.

Current wording

Distributable Earnings per diluted common share was $0.24 for the three months ended June 30, 2025, consistent with the three months ended March 31, 2025.

Previous wording

Our book value per common share as of March 31, 2025 was $11.19, a decrease of $0.08 per common share from our book value per common share as of December 31, 2024 of $11.27, primarily due to an increase in credit loss expense during the three months ended March 31, 2025 of $3.4 million, or $0.04 per common share.

Current wording

Our book value per common share as of June 30, 2025 was $11.20, a decrease of $0.07 per common share from our book value per common share as of December 31, 2024 of $11.27, primarily due to an increase in credit loss expense during the six months ended June 30, 2025 of $5.2 million, or $0.07 per common share. Additionally, book value per common share increased $0.09 per common share due to share repurchases during the six months ended June 30, 2025, but was partially offset by a decrease of $0.07 per common share due to the issuance of common stock during the six months ended June 30, 2025.

Previous wording

Our interest-earning assets are comprised of a portfolio of primarily floating rate, first mortgage loans, or in two instances, contiguous mezzanine loans. As of March 31, 2025, our loans held for investment portfolio consisted of 45 first mortgage loans (or interests therein) totaling $3.4 billion of commitments with an unpaid principal balance of $3.3 billion. As of March 31, 2025, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans. In two instances, a first mortgage loan and contiguous mezzanine loan are both owned by us. As of March 31, 2025, we had $109.8 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Current wording

Our interest-earning assets are comprised of a portfolio of primarily floating rate, first mortgage loans, or in two instances, contiguous mezzanine loans. As of June 30, 2025, our loans held for investment portfolio consisted of 49 first mortgage loans (or interests therein) totaling $3.9 billion of commitments with an unpaid principal balance of $3.8 billion. As of June 30, 2025, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans. In two instances, a first mortgage loan and contiguous mezzanine loan are both owned by us. As of June 30, 2025, we had $116.4 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Previous wording

We may hold REO as a result of taking title to a loan's collateral. As of March 31, 2025, we owned four office properties and four multifamily properties with an aggregate carrying value of $272.2 million.

Current wording

We may hold REO as a result of taking title to a loan's collateral. As of June 30, 2025, we owned two office properties and four multifamily properties with an aggregate carrying value of $237.1 million.

Previous wording

During the three months ended March 31, 2025, loan fundings included $13.6 million of deferred future fundings related to previously originated loans. We received principal amortization of $21.5 million across two loans.

Current wording

During the three months ended June 30, 2025, we originated seven mortgage loans with aggregate total loan commitments of $695.6 million, an aggregate initial unpaid principal balance of $670.5 million, and aggregate unfunded commitments at closing of $25.1 million. Loan fundings included $8.8 million of deferred future fundings related to previously originated loans. We received proceeds from three loan repayments in full of $147.4 million, and principal amortization of $24.9 million across two loans, for total loan repayments of $172.3 million during the period.

Previous wording

For the three months ended March 31, 2025, we generated interest income of $68.0 million and incurred interest expense of $43.1 million, which resulted in net interest income of $24.9 million.

Current wording

For the three months ended June 30, 2025, we generated interest income of $70.7 million and incurred interest expense of $45.5 million, which resulted in net interest income of $25.1 million.

Previous wording

(2)Unpaid principal balance includes PIK interest of $0.5 million related to one loan as of March 31, 2025.

Current wording

(2)Unpaid principal balance includes PIK interest of $0.7 million related to one loan as of June 30, 2025.

Previous wording

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of March 31, 2025, based on the unpaid principal balance of our total loan exposure, 23.6% of our loans were subject to yield maintenance or other prepayment restrictions and 76.4% were open to repayment without penalty.

Current wording

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of June 30, 2025, based on the unpaid principal balance of our total loan exposure, 40.6% of our loans were subject to yield maintenance or other prepayment restrictions and 59.4% were open to repayment without penalty.

Previous wording

(1)Excludes capitalized interest of $0.5 million related to one loan.

Current wording

(1)Excludes capitalized interest of $0.7 million related to one loan.

Previous wording

As of March 31, 2025, we owned four office properties and four multifamily properties, each of which previously served as collateral for first mortgage loans. During the three months ended March 31, 2025, we did not acquire or sell any REO properties.

Current wording

As of June 30, 2025, we owned two office properties and four multifamily properties, each of which previously served as collateral for first mortgage loans. During the three and six months ended June 30, 2025, we did not acquire any REO properties. We sold two office properties during the three and six months ended June 30, 2025 to third parties.

Previous wording

Our allowance for credit losses is influenced by the size and weighted average maturity date of our loans, loan quality, risk rating, delinquency status, loan-to-value ratio, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three months ended March 31, 2025, we recorded an increase of $3.2 million in our allowance for credit losses resulting in an aggregate CECL reserve of $67.2 million at quarter-end. This increase was primarily attributable to an increase in the general reserve which reflects the impact of an uncertain macroeconomic environment and includes macroeconomic assumptions that include ongoing concerns about growing geopolitical tensions, the potential impact of market volatility and tariffs, the general level of interest rates and slope of the yield curve, the possibility of an economic recession, limited liquidity in the capital markets, structural shifts and regulatory changes in the banking sector and a slowdown in investment sales, and loan specific property-level performance trends such as shifting office market fundamentals and inflationary pressures that may cause operating margins to narrow.

Current wording

Our allowance for credit losses is influenced by the size and weighted average maturity date of our loans, loan quality, risk rating, delinquency status, loan-to-value ratio, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three and six months ended June 30, 2025, we recorded an increase of $1.6 million and $4.8 million, respectively, in our allowance for credit losses resulting in an aggregate CECL reserve of $68.8 million at quarter-end. This increase was primarily attributable to an increase in the general reserve which reflects our loan activity and the impact of an uncertain macroeconomic environment, which includes macroeconomic assumptions that include ongoing concerns about growing geopolitical tensions and conflicts, the potential impact of market volatility and tariffs, the general level of interest rates and slope of the yield curve, the possibility of an economic recession, limited liquidity in the capital markets, structural shifts and regulatory changes in the banking sector and a slowdown in investment sales, and loan specific property-level performance trends such as shifting office market fundamentals and inflationary pressures that may cause operating margins to narrow.

Previous wording

As of March 31, 2025, non-mark-to-market financing sources accounted for 91.0% of our total loan portfolio borrowings. The remaining 9.0% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of March 31, 2025, we did not have any non-consolidated senior interests.

Current wording

As of June 30, 2025, non-mark-to-market financing sources accounted for 94.8% of our total loan portfolio borrowings. The remaining 5.2% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of June 30, 2025, we did not have any non-consolidated senior interests.

Previous wording

As of March 31, 2025, aggregate borrowings outstanding under our secured credit agreements totaled $0.3 billion. As of March 31, 2025, the overall weighted average interest rate was the benchmark interest rate plus 2.03% per annum and the overall weighted average advance rate was 77.6%. As of March 31, 2025, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 2.8 years assuming the exercise of all extension options and term-out provisions. These secured credit agreements are generally 25.0% recourse to Holdco.

Current wording

As of June 30, 2025, aggregate borrowings outstanding under our secured credit agreements totaled $0.2 billion. As of June 30, 2025, the overall weighted average interest rate was the benchmark interest rate plus 1.90% per annum and the overall weighted average advance rate was 79.9%. As of June 30, 2025, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 2.4 years assuming the exercise of all extension options and term-out provisions. These secured credit agreements are generally 25.0% recourse to Holdco.

Previous wording

As of March 31, 2025, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit agreements taken as a whole) was 22.4% compared to 22.4% as of December 31, 2024.

Current wording

As of June 30, 2025, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit agreements taken as a whole) was 20.1% compared to 22.4% as of December 31, 2024.

Previous wording

On February 22, 2022, we closed a $250.0 million secured revolving credit facility with a syndicate of five banks to provide interim funding of up to 180 days for newly originated and existing loans. During the fourth quarter of 2022, an additional lender was added to the facility, increasing the borrowing capacity to $290.0 million. During the first quarter of 2025, we amended the facility to extend the maturity by three years and increased the borrowing capacity to $375.0 million with a syndicate of seven lenders. This facility has maturity of February 13, 2028, an interest rate of Term SOFR plus 2.00% that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0%. During the three months ended March 31, 2025, the weighted average unused fee was 20 basis points. This facility is 100% recourse to Holdco. As of March 31, 2025, we did not have any outstanding borrowings under our secured revolving credit facility.

Current wording

On February 22, 2022, we closed a $250.0 million secured revolving credit facility with a syndicate of five banks to provide interim funding of up to 180 days for newly originated and existing loans. During the fourth quarter of 2022, an additional lender was added to the facility, increasing the borrowing capacity to $290.0 million. During the first quarter of 2025, we amended the facility to extend the maturity by three years and increased the borrowing capacity to $375.0 million with a syndicate of seven lenders. This facility has maturity of February 13, 2028, an interest rate of Term SOFR plus 2.00% that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0%. During the three and six months ended June 30, 2025, the weighted average unused fee was 20 and 20 basis points, respectively. This facility is 100% recourse to Holdco. As of June 30, 2025, we pledged four loan investments with an aggregate collateral principal balance of $490.5 million and had outstanding Term SOFR-based borrowings of $367.8 million.

Previous wording

(1)Net of $0.03 million unamortized deferred financing costs.

Current wording

(1)Net of $0.01 million unamortized deferred financing costs.

Previous wording

As of March 31, 2025, we had three collateralized loan obligations, TRTX 2025-FL6, TRTX 2022-FL5, and TRTX 2021-FL4, totaling $2.5 billion, financing $2.8 billion, or 84.9%, of our loans held for investment portfolio. As of March 31, 2025, our CRE CLOs provide low cost, non-mark-to-market, non-recourse financing for 89.9% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of Term SOFR plus 1.93%, and have a weighted average advance rate of 83.2%. Each CRE CLO included a reinvestment feature that allowed us to contribute existing or new loan investments in exchange for proceeds from loan repayments held by the CRE CLOs.

Current wording

As of June 30, 2025, we had three collateralized loan obligations, TRTX 2025-FL6, TRTX 2022-FL5, and TRTX 2021-FL4, totaling $2.5 billion, financing $2.8 billion, or 75.3%, of our loans held for investment portfolio. As of June 30, 2025, our CRE CLOs provide low cost, non-mark-to-market, non-recourse financing for 81.6% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of Term SOFR plus 1.94%, and have a weighted average advance rate of 82.9%. Each CRE CLO included and with respect to TRTX 2025-FL6, includes, a reinvestment feature that allowed us to contribute existing or new loan investments in exchange for proceeds from loan repayments held by the CRE CLOs.

Previous wording

(1)Includes REO investments held in our CRE CLOs and excludes other REO investments of $17.2 million held within the Sub-REIT.

Current wording

(1)Includes REO investments held in our CRE CLOs.

Previous wording

(4)Collateral loan investment assets of FL4, FL5 and FL6 represent 21.2%, 32.2% and 31.5% of the aggregate unpaid principal balance of our loans held for investment portfolio as of March 31, 2025.

Current wording

(4)Collateral loan investment assets of FL4, FL5 and FL6 represent 19.6%, 26.7% and 29.0%, respectively, of the aggregate unpaid principal balance of our loans held for investment portfolio as of June 30, 2025.

Previous wording

(5)During the three months ended March 31, 2025, we recognized interest expense of $27.6 million, which includes $0.6 million of discount and deferred financing cost amortization.

Current wording

(5)During the three months ended June 30, 2025, we recognized interest expense of $39.9 million, which includes $0.7 million of discount and deferred financing cost amortization. During the six months ended June 30, 2025, we recognized interest expense of $67.5 million, which includes $1.3 million of discount and deferred financing cost amortization.

Previous wording

The reinvestment period for TRTX 2021-FL4 ended on March 11, 2023. The reinvestment period for TRTX 2022-FL5 ended on February 9, 2024. The reinvestment period for TRTX 2025-FL6 will end on September 18, 2027.

Current wording

During the six months ended June 30, 2025, we utilized our eligible reinvestment feature related to TRTX 2025-FL6 three times, recycling $103.0 million of principal payments received. The reinvestment period for TRTX 2021-FL4 ended on March 11, 2023. The reinvestment period for TRTX 2022-FL5 ended on February 9, 2024. The reinvestment period for TRTX 2025-FL6 will end on September 18, 2027.

Previous wording

Through a wholly owned special purpose subsidiary, we are the borrower under a $31.2 million mortgage loan secured by a deed of trust against an REO asset. The first mortgage loan was provided by an institutional lender, has an interest-only five-year term with a maturity date of July 6, 2028 and bears interest at a rate of 7.7%. As of March 31, 2025, the carrying value of the loan was $30.7 million.

Current wording

Through a wholly owned special purpose subsidiary, we are the borrower under a $31.2 million mortgage loan secured by a deed of trust against an REO asset. The first mortgage loan was provided by an institutional lender, has an interest-only five-year term with a maturity date of July 6, 2028 and bears interest at a rate of 7.7%. As of June 30, 2025, the carrying value of the loan was $30.8 million.

Previous wording

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices. Accordingly, rising interest rates will generally increase our net interest income, while declining interest rates will generally decrease our net interest income, subject to the impact of interest rate floors in our mortgage loan investment portfolio. As of March 31, 2025, 99.7% of our loan investments by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in $0.5 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans. The floating rate liabilities do not have interest rate floors. The weighted average interest rate floor on the mortgage loan investment portfolio was 1.90% as of March 31, 2025. Subject to the specific footnote disclosures in the preceding tables describing our revolving credit facilities, secured financing arrangements, asset-specific financing arrangements and CRE CLOs, and the table that follows, our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in floating benchmark interest rates that varies based on the relative proportion of floating rate assets and liabilities.

Current wording

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices. Accordingly, rising interest rates will generally increase our net interest income, while declining interest rates will generally decrease our net interest income, subject to the impact of interest rate floors in our mortgage loan investment portfolio. As of June 30, 2025, 99.8% of our loan investments by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in $0.8 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans. The floating rate liabilities do not have interest rate floors. The weighted average interest rate floor on the mortgage loan investment portfolio was 2.19% as of June 30, 2025. Subject to the specific footnote disclosures in the preceding tables describing our revolving credit facilities, secured financing arrangements, asset-specific financing arrangements and CRE CLOs, and the table that follows, our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in floating benchmark interest rates that varies based on the relative proportion of floating rate assets and liabilities.

Previous wording

(2)Additional information regarding our consolidated results of operations and financial performance for the three months ended December 31, 2024 can be found in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 18, 2025.

Current wording

(2)Additional information regarding our consolidated results of operations and financial performance for the three months ended March 31, 2025 can be found in our Quarterly Report on Form 10-Q for the three months ended March 31, 2025 filed with the SEC on April 29, 2025.

Previous wording

Net interest income increased by $0.2 million to $24.9 million during the three months ended March 31, 2025 compared to $24.7 million for the three months ended December 31, 2024. The increase was primarily attributable to interest savings on our investment portfolio financing arrangements due to a decrease in our weighted average cost of funds from 2.00% as of December 31, 2024 to 1.94% as of March 31, 2025 and a decrease in the index rate.

Current wording

Net interest income increased by $0.2 million to $25.1 million during the three months ended June 30, 2025 compared to $24.9 million for the three months ended March 31, 2025. The increase was primarily attributable to an increase in the loan portfolio size, partially offset by an increase in our investment portfolio financing arrangements.

Previous wording

Other revenue increased $2.1 million for the three months ended March 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase in revenue from real estate owned operations due to revenue earned from the sale of a historical tax credit and an entire quarter's ownership of three real estate owned multifamily properties acquired during the fourth quarter of 2024.

Current wording

Other revenue decreased $1.1 million for the three months ended June 30, 2025 compared to the three months ended March 31, 2025, due primarily to a decrease in revenue from real estate owned operations due to revenue earned from the sale of a historical tax credit during the first quarter of 2025. This decrease was partially offset by an increase in other income, net attributable to an increase in interest earned on our cash balances during the three months ended June 30, 2025.

Previous wording

Credit loss expense decreased by $0.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, due to a $3.4 million expense recognized during the three months ended March 31, 2025 compared to a $4.4 million expense recognized during the comparable period. Credit loss expense during the three months ended March 31, 2025, was primarily due to an increase of $3.4 million which reflects the impact of an uncertain macroeconomic environment. Credit loss expense during the three months ended March 31, 2024, was primarily due to an increase of $4.5 million related to macroeconomic assumptions employed in determining the general CECL reserve, partially offset by a net decrease of $0.1 million related to our loan activity during the quarter. See Note 3 to our Consolidated Financial Statements included in this Form 10-Q for additional details regarding our allowance for credit losses and risk ratings.

Current wording

Credit loss expense decreased by $1.6 million for the three months ended June 30, 2025 compared to the three months ended March 31, 2025. The decrease was primarily due to a $1.8 million expense recorded during the three months ended June 30, 2025 compared to $3.4 million of expense during the comparable period. Credit loss expense during the three months ended June 30, 2025 was primarily due to a net increase of $1.9 million in our allowance for credit losses related to our loan origination and repayment activity during the quarter, partially offset by a decrease of $0.1 million related to improved asset-level performance and changes to the macroeconomic environment. Credit loss expense during the three months ended March 31, 2025 was due to an increase of $3.4 million which reflects the impact of an uncertain macroeconomic environment. See Notes 3 and 15 to our Consolidated Financial Statements included in this Form 10-Q for additional details regarding our allowance for credit losses, risk ratings, and property type concentration risk.