TPG RE Finance Trust, Inc. Stock

Welcome to the TPG Real Estate Finance Trust Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to Ashvin Rao. You may begin.

Thank you. Good morning, and welcome to the TPG Real Estate Finance Trust Earnings Call for the Second Quarter of 2026. I'm joined by Doug Bouquard, our Chief Executive Officer; Brandon Fox, our Interim Chief Financial Officer; and Ryan Roberto, our Head of Portfolio Management and Capital Markets. Doug, Brandon, and Ryan will provide commentary regarding the company, its performance, and the general economy, and will answer questions from call participants.

Yesterday afternoon, we filed our Form 10-Q, issued a press release and shared an earnings supplemental, all of which are available on the company's website in the Investor Relations section. This morning's call and webcast are being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX and any unauthorized broadcast or reproduction in any form is strictly prohibited.

This morning's call will include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially from those set forth in or implied by these forward-looking statements. For discussion of risks that could affect results, please see the Risk Factors section of the company's latest Form 10-K and Form 10-Q. The company does not undertake any duty to update our forward-looking statements unless required to do so by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our Form 10-Q, our earnings release, and in our earnings supplemental, all of which are available in the Investor Relations section of our website.

Now I'll turn the call over to Doug.

Good morning and thank you for joining the call. Over the past quarter, market activity was shaped by several competing forces, including heightened geopolitical tensions and continued debate around the path of inflation and interest rates. Despite this uncertainty, both equity and credit markets have remained broadly resilient. In real estate, the environment has remained largely consistent with prior quarters. Elevated interest rates and ongoing rate volatility continue to suppress transaction activity, while the gap between buyer and seller expectations remains wide.

As a result, lending demand continues to be driven primarily by refinancing activity, particularly within the multifamily and industrial sectors, 2 of the most liquid areas of the real estate market. Importantly, this activity continues to be supported by both bank balance sheets and CRE CLO bond buyers where credit spreads tightened further during the quarter.

Against this market backdrop, TRTX continues to differentiate itself through disciplined growth and prudent risk management. Over the past year, we have closed $1.7 billion of new loan investments, driving $551 million or 15% net asset growth. During the second quarter, we closed $466 million of new loan investments and an additional $72 million subsequent to quarter end, continuing the steady growth of our earning asset base. Looking ahead, we have approximately $380 million of executed term sheets, providing good visibility into future deployment opportunities. We remain focused on prudently growing the portfolio while maintaining the disciplined underwriting and risk management approach that has differentiated TRTX throughout the cycle.

From a credit perspective, portfolio performance remains stable with CECL reserves and risk ratings largely unchanged quarter to quarter. Meanwhile, the balance sheet transformation we have discussed over the past several years continues to advance. As of June 30, 69% of our portfolio is comprised of loans originated in 2023 or later. This continued reinvestment into newer vintage assets enhances the overall credit profile of the portfolio and further differentiates TRTX relative to many of our peers.

The second quarter also marked an important milestone in the continued evolution of our liability structure. During the quarter, we issued a $400 million Term Loan B with a 7-year maturity, added a new $100 million corporate revolving credit facility, upsized 2 existing secured financing arrangements by a combined $600 million and entered into a new $500 million secured financing arrangement. Importantly, these actions were effectively leverage and cost of funds neutral, allowing us to significantly strengthen and diversify our liability structure without sacrificing current earnings power.

Beyond enhancing liquidity and financial flexibility, these transactions introduced a new source of long duration, covenant-light corporate capital and further broadened our funding base. The expanding financing toolkit positions us to continue growing earning assets while maintaining our target leverage profile, particularly as we execute on our REO monetization strategy and recycle capital into new investment opportunities.

Collectively, these transactions demonstrate the strength of the TRTX platform and our ability to access multiple forms of capital, including bank, syndicated loan and public bond markets, representing another important step in TRTX's evolution as a corporate borrower. Finally, we continue to view share repurchases as an attractive tool for creating shareholder value. During the quarter, we repurchased 1.3 million shares of common stock for a total consideration of $10.8 million at an average share price of $8.26 per share, which allows us to invest additional capital into our business at what we believe is a meaningful discount to intrinsic value.

As we enter the second half of 2026, we are operating from a position of strength. We have continued to grow the portfolio, maintained stable credit performance, enhanced our financing profile, and increased our financial flexibility. At the same time, we continue to see attractive investment opportunities and believe our competitive position has never been stronger. While market conditions remain dynamic, our strategy remains clear and consistent, responsibly grow earning assets, maintain disciplined risk management, strengthen our balance sheet, and allocate capital in a manner that maximizes long-term shareholder value.

We continue to believe the market is not fully recognizing the earnings power of our platform, including the strength of our balance sheet, the breadth of TPG's integrated real estate debt and equity investment platform and our unique ability to take advantage of the current opportunities relative to competitors. We believe the foundation we have built and the strategy we have executed over the past several years leaves us well-positioned for continued success over the long term.

With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Thank you, Doug, and good morning. For the second quarter of 2026, TRTX reported GAAP net income of $9.4 million. Distributable earnings for the quarter was $17.6 million or $0.23 per common share. For the full year 2026, distributable earnings was $37.1 million, or $0.48 per common share, covering our common stock dividend of $0.48 per common share through June 30.

As Doug mentioned, we repurchased 1.3 million shares of common stock during the quarter and have $9.3 million remaining on the company's share repurchase plan at June 30. Book value per common share was $10.95 at quarter end. During the second quarter, we originated 3 first mortgage loans with total commitments of $466 million at a weighted average credit spread of 2.79% and received loan repayments of $274.4 million, including one full office loan repayment of $227.1 million, which reduced our office exposure to 4.3% of total loan commitments as of June 30.

Quarter over quarter, net assets increased $190.4 million or 5% to $4.3 billion. Over a year, our net assets have grown 15% or $551.4 million. At quarter end, our loan portfolio was 100% performing. During the quarter, we did not have any credit migration in our loan portfolio. Our weighted average risk rating for the loan portfolio is unchanged at 3.0. Our CECL reserve was flat quarter over quarter at 179 basis points. In total, our CECL reserve increased $3.5 million to $80.7 million, primarily due to net asset growth quarter over quarter. As of June 30, 2026, our loan portfolio was 76.4% multifamily and industrial collateralized assets. Office now only makes up 4.3% of our loan portfolio at quarter end, down from 52.9% in June of 2021.

From a capital markets perspective, this was an active and transformational quarter. During the quarter, we closed one, a $400 million Term Loan B due in 2033, priced at 99.75%, carrying a 2.75% credit spread. Two, a $100 million corporate revolver due in 2031 with a 2.00% credit spread. Three, an upsize of 2 existing secured financing arrangements by a total of $600 million. And four, a new $500 million secured financing arrangement. As part of these capital markets transactions, we were able to amend and align our financial covenants across our capital structure to industry-leading terms, including maximum total debt to total assets ratio of 83.33% and an interest coverage ratio of not less than 1.3x. We accomplished this capital structure transformation while remaining leverage and cost of funds neutral.

We ended the quarter with near-term liquidity of $488.2 million, consisting of $65.6 million of cash on hand, including amounts held to satisfy liquidity covenants, undrawn capacity under secured financing arrangements of $317.4 million, $100 million of undrawn capacity on the corporate revolver and CRE CLO reinvestment proceeds of $5.2 million. Additionally, we held unencumbered loan investments with an unpaid principal balance of $186 million that are eligible to be pledged under our existing financing arrangements. The company's liability structure is now 85.2% non-mark-to-market across 11 financing sources and carries a weighted average cost of funds of 1.83%. Total leverage increased to 3.32x from 3.1x at March 31, 2026, as a result of our investment activity during the quarter. At quarter end, we had $1.8 billion of financing capacity available to support loan investment activity, and we're in compliance with all of our financial covenants.

With that, we welcome your questions. Operator?

[Operator Instructions] And our first question today will come from Gabe Poggi with Raymond James.

Can you talk about loan origination repayment timing in the quarter. It looks like the large New York office loan was repaid early in the quarter, and you had a couple loans close very late. Just help us kind of reconcile timing as it pertains to 1Q run rate to 2Q run rate and how you think about that in the back half of the year?

Yes, sure. So I think, as always, Gabe, you're sort of spot on. And from a timing perspective, it was a pretty chunky group of repayments that all happened within the first 3 weeks of the month, the largest of which was that New York City office deal that paid off. And then as we, you know, sort of saw that repayment coming, we began to sign deals up. But really about 70% of our new originations closed in the last 3 days of the quarter. So that really is the kind of short version for what drove that drop in sort of DE quarter over quarter is just largely due to timing, which, as you said in the past, is just going to be the nature of the beast as we scale and grow our balance sheet.

We're going to be making investments and risk decisions based on high quality credits and aren't going to push the envelope. So for us, this is a unique moment where we had, again, a sort of chunky flow of repayments the first few weeks of the quarter and then the loans that closed all closed, or largely all closed at the end of the quarter.

The only thing I'll add to that is, you know, with investment activity and kind of as we look through to the rest of the year, it's very clear to us, as we mentioned in prior calls, that a lot of the activity in our market remains refinancing. And as those that have lived and breathed the lending business know, when it's a refinancing, sometimes the pressure for the borrower to close can be eased. So what we've seen is just longer times from when we execute term sheets to closing, which can sometimes expose us to maybe a small amount of difference relative to our expected run rate.

But I think when you kind of get to maybe your final question around the next few quarters, I mean look, I think looking at our sort of aggregate net asset growth, combined with our aggregate debt to equity ratio is sort of a better sign for where we're headed in terms of our expected DE. And again, we're going to be growing prudently and carefully, and there can be times where there are these sort of gaps between, again, when we receive repayments and when we make new investments.

That's helpful. A follow-up to what you kind of just said is total leverage is 3.3x. Considering the macro, I know you guys have talked about 3.5x to 3.75x. Is that still the zone for kind of the here and now with rate vol and what you just talked about with the refinancing environment, et cetera? Are we still on target for that target leverage ratio?

Yes, I'd say, you know, the short answer is yes. And where we've been really consistent, and I would say that there's really no change at all to kind of how we're thinking about our strategy. I would say that, you know, first and foremost, our sort of investment paradigm is centered on making great credit investments. And that will continue to kind of drive both the sort of growth in our balance sheet and also the timing of our DE growth over time.

Next, we'll hear from Hong Zhang with JPMorgan Chase & Company.

Yes, hey, this is Hong on for Rick Shane. I guess, could you provide an update on your REO portfolio? I think last quarter you talked about potentially looking forward to selling a couple of assets by the end of the year. I'm just wondering if that's still the expectation.

Yes, thanks. This is Ryan. As we communicated last quarter, you are correct. We continue to make good progress on the REO front. We still continue to expect to monetize and recycle a portion of that portfolio this year. So in the interim, operating fundamentals continue to improve. We hope to share an update in the coming months on that.

Got it. If I could sneak one other question in. I mean, your office loan exposure shrunk dramatically with the repayments. I guess, looking forward, do you expect to just reduce your office exposure further potentially zero? Or are you okay with that level going forward?

That's a great question. Yes, I mean, look, I think that really the substantial reduction in office has been primarily, or I'd say exclusively really driven by, I'll call it kind of legacy office deals that we had originated many years ago. When we think about new investments, although we do not have any office deals currently signed up, there are office deals in our pipeline more broadly that we are evaluating. I wouldn't say that we are a no to office. I'd say that simply put, we're just being very selective. Frankly, it wouldn't surprise me if we did an office deal or two between now and year end, but again, nothing signed up and just being very, very selective in that sector.

Thank you. And next, I'll move to Tom Catherwood with BTIG.

Maybe building on Gabe's first question, how did the balance sheet optimization, all the work you did there, impact 2Q results? And what else needs to happen to get the balance sheet to where you kind of are in a perfectly optimized state?

Yes, thanks. This is Ryan. I'll answer the first part of this question, and maybe Doug can add on. But, you know, this quarter, as you kind of noted, we opportunistically kind of accessed the corporate loan market, what we believe are historically attractive terms. I think as to like, why now? Why did we do it this quarter?

It was a unique period of time where we could immediately deploy the $400 million that we raised without really creating any earnings drag or increasing our cost of capital. So what we were able to do is on a leverage neutral basis, and really a cost of funds basis, deploy $400 million to retire a legacy liability structure that was just in amortization mode and getting more expensive via each repayment. So, if you think long term, there'll be a lot of accretion to the balance sheet over time. So that's kind of the rationale. And again, there wasn't much of an impact from that from a P&L standpoint.

Got it. No, no, please go ahead. I was just going to ask if that accretion to the balance sheet was from the structure of the way it is today, or was that retiring that older CLO and then kind of getting a new CLO out the door just to make the cost of capital more efficient? What drives that accretion?

I think just having a piece of our liability structure that is long-dated, low-cost, non-mark-to-market. We know that over the next 7 years, spreads are going to move in probably both directions. So just having a very stable part of our liability structure that will allow us to be offensively oriented. I think it's just a good thing to have long term. So we think just again, as we try to position the company for earnings growth and kind of an all weather balance sheet, we think it's just the right thing to do. So that's at least how we thought about it.

Yes. I was going to add one other thing is, you know, huge credit to Ryan, who leads our capital markets team and our whole franchise on just what we were able to do on the liability side of our balance sheet. I think on Page 12 of our supplemental, there's a sort of updated pretty thoughtful summary. But when you look at sort of all corners of it in terms of, you know, the really high percentage of non-mark-to-market, the long duration of the liability set and we really have built I'd say a sort of fortress liability structure. And I think a lot of that is a credit to a you know sort of de-risked balance sheet that we have relative to competitors.

But then also, I think it was great to get the acknowledgement from the corporate loan market that, in fact, we have a clear strategy. We have a very low-risk balance sheet. And again, I think we've been kind of rewarded by what I'll call the sort of debt side of our balance sheet very resoundingly. So a big thanks to Ryan and the team.

Got it, appreciate that color. And then last one for me, maybe Doug, a bit of a broader question on rates and the impact on CRE. You mentioned that almost 70% of your portfolio is newer vintage post-2023 loans. But as the 10-year stays 4.6% and above, how does that increase the potential for some of those legacy loans to just not be able to refinance? There's no equity left, and we end up getting more watchlist migration. Or on the flip side, are you seeing kind of new origination opportunities where buyers would normally be going to agency financing, and they're choosing bridge loans just because the rates are more attractive than what they would get in a longer-term fixed rate? How is it impacting both sides of the equation right now?

Sure. Yes. I mean, I'll say first, if, you know, again, I guess we'll find out later today exactly the sort of path of the Fed. So, you know, it'll be interesting. I think first and foremost, I think the current rate complex is definitely driving 2 very clear trends in our market. I think one is both marginally elevated rates, but more particularly actually rate volatility tends to reduce transaction activity.

And I think that reduced transaction activity, I think, has led to 2 things. One is, I'd say we are on the margin seeing slower repayments. But then you know, two, I think what you're seeing is just frankly you know a new origination market where we're still seeing primarily refinancing. So this is kind of the 2 kind of like first order effects.

When I think about our balance sheet versus the market, probably where we're different is if we had a portfolio of, let's just say 100% loans that were originated, let's say, pre-Fed hike, I think a move higher in rates could really kind of exacerbate the sort of breaking of those capital structures and potentially some further credit stress, whereas our balance sheet is generally different from the rest of the market in that close to about 70% of it is originated post-Fed hikes. So in some ways, we view, you know, a higher rate complex as on the margin a positive for us. Cause you know, that ultimately I think it's on Page 14 of the supplemental, you can look at, you know, sort of moves in any index rate and how that affects our earnings and simply put as SOFR goes higher, that's going to be a net positive for our platform.

So again, we're somewhat unique in that I think because we have newer vintage collateral, that is, you know, we've done $1.7 billion of new loans over the past year. We're going to have, I think, probably a more positive earnings outcome if rates do either stay or frankly rise from here.

And next we'll hear from Chris Muller with Citizens Capital Markets.

Congrats on all the progress on the balance sheet. So I guess following up on a prior question on the new financings, I hear you guys on the cost of funds and leverage neutral. But were there fees or any drag on earnings that hit in the quarter? I'm just trying to think through the earnings run rate and if there was an impact from that in the quarter or not.

Yes, that's a very good question. And obviously there were fees associated with the transaction. The transaction closed mid-quarter, so middle of May, and you will have some amortization of the fees in the quarter for the quarter. And within our debt footnote, you can see the components of it, but there were about $8 million or so of fees that got partially amortized in, and it's over the life of the instrument itself, so between 5 and 7 years, given the term loan and the corporate revolver maturity dates.

Got it, that's helpful. And then I guess changing gears a little bit to repayment. So repayments excluding the large office loan were pretty low. So I guess, what are you guys expecting in terms of repayments in the back half of the year? And is the slower pace of repayments just due to a slower lending pace you guys did back in '23 and '24?

I think there's a few things. I think one does dovetail with what I mentioned earlier as it relates to Tom's question. From a balance sheet perspective, because we have again, largely kind of post-Fed hike collateral. What we're seeing is that those loans are more recently originated, and in many cases have call protection. So we're just going to see, just from like an organic perspective, I think a lower level of repayments versus competitors that probably have more pre-Fed hike exposure. That's one.

And then two, look, I think that it can be idiosyncratic, as I've shared. I mean, even that New York City office deal that I'd mentioned paid off early in the quarter. I mean, the sort of timing on that was definitely moving around. We sort of knew it was going to happen, but at the same time, sometimes, as you know, kind of getting a buyer and a seller and a new lender all in the same room to close in the same day can be challenging. And that's kind of what we're seeing. So I think it's that dynamic, I think combined with -- look, I think that conviction level, I think, across our borrower base is not incredibly high right now. I mean, we're obviously both a debt and equity platform, so we're seeing kind of both sides of the coin. I think that if you're on the real estate equity side of the coin right now, I mean, it's a tricky market to really want to deploy capital in the face of a lot of the different kind of trends that are happening. So I think those are the 2 factors that I'd probably highlight as it relates to repayments.

I think, again, the last thing I'll add perhaps is when we look at our repayments going forward, again, I think that we have also primarily multifamily and industrial collateral. And the business plans there are relatively straightforward and sort of allow for us to have perhaps a better window into what that repayment profile is going to look like over the next coming quarter.

There are no further questions at this time. I would like to turn the floor back to management for closing remarks.

This is Doug Bouquard. And again, just wanted to thank everyone for taking the time this morning on the call, and we look forward to updating you on further progress. Thank you very much.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

Greetings. Welcome to TPG RE Finance Trust First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Dan Kasell. Thank you. You may begin.

Good morning, and welcome to TPG RE Finance Trust Earnings Call for the first quarter of 2026. Today's speakers are Doug Bouquard, Chief Executive Officer; Brandon Fox, Interim Chief Financial Officer; and Ryan Roberto, Head of Portfolio Management and Capital Markets.

Doug, Brandon and Ryan will provide commentary regarding the company, its performance and the general economy, and we'll answer questions from call participants. Yesterday afternoon, we filed our Form 10-Q, issued a press release and shared an earnings supplemental, all of which are available on the company's website in the Investor Relations section. This morning's call and webcast is being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website.

Recordings are the property of TRTX and any unauthorized broadcast or reproduction in any form is strictly prohibited. This morning's call will include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For a comprehensive discussion of risks that could affect results, please see the Risk Factors section of the company's latest Form 10-K.

The company does not undertake any duty to update our forward-looking statements or projections unless required by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our earnings release and our earnings supplemental, both of which are available in the Investor Relations section of our website. Now I'll turn the call over to Doug.

Good morning, and thank you for joining the call. The broader economic backdrop during the first quarter of the year continued to provide an encouraging environment for investment activity within the real estate sector. While concern over private credit and broader geopolitical tensions have permeated the market, real estate credit has been relatively stable.

As we survey market opportunities, we are closely monitoring capital flows in both real estate and credit, which will allow us to identify real-time trends that will drive the investment landscape. These insights are further augmented by the depth and breadth of TPG's global alternative investment platform.

While real estate values have reset and our lending pipeline is robust, the recent steepening of the yield curve has put modest pressure on new acquisition activity. That being said, many of the key themes we've previously described continue to remain in place, including heavy refinance volume driven by broken capital structures and reset values, which have been further exacerbated by sustained elevated interest rates and supported by a consistent supply of back leverage for bank balance sheets.

Building on the momentum of 2025, a year where TRTX closed $1.9 billion of new investments and achieved 25% year-over-year growth in earning assets. We are pleased to report a strong start to 2026. For the first quarter, our performance reflects our disciplined approach to risk management as we maintain stable risk ratings and 100% performing loan portfolio at quarter end.

We saw no negative credit migration in the quarter with risk ratings unchanged at 3.0 and CECL reserves essentially flat quarter-over-quarter. In April, TRTX received the full payment of 575 Fifth Avenue, which was our largest office exposure and the material partial repayment on another office loan. And as a result, our office exposure is now less than 5% of our current balance sheet. As a natural consequence, the vintage of our balance sheet continues to compare favorably to our competitive set with 67% of our balance sheet comprised of 2023 and new loan originations.

This is a direct result of the proactive risk management we've been consistent with over the past few years, combined with our strategic and measured approach to making new investments. As I look at our origination and repayment pace for this year, I expect we will finish 2026 with a substantial majority of the balance sheet comprised of 2023 and newer loan origination dates, which will provide shareholders with a new vintage portfolio and attractive credit profile.

Of note, we've been able to achieve this balance sheet transformation while generating steady earnings and remaining underlevered relative to our peers. From an investment perspective, thus far this year, we've closed $324 million of loans and have another $535 million of executed term sheets, the majority of which are multifamily and industrial collateral, sectors we continue to target given their strong downside protection and solid long-term fundamentals. Since the start of Q4 2025, we originated 12 loans with total commitments of $1.25 billion, with more than 90% of these from repeat borrowers, underscoring the deep relationships we've cultivated within the real estate ecosystem, further amplified by the breadth of TPG's integrated real estate debt and equity investment platform.

Furthermore, within the $535 million of executed term sheets that we have this quarter, the majority of those new investments are collateralized by multifamily and industrial exposure and are sponsored by high-quality borrowers across the U.S. From a liability perspective, we continue to expand our lender relationships and optimize the durability of our capital structure.

Building on the 2 Series CLOs issued in 2025, which provide ample reinvestment capacity at an attractive cost of funds, we ended Q1 2026 with $173 million of liquidity, 78% non-mark-to-market financing and a debt-to-equity ratio of 3.1x.

This positioning affords TRTX flexibility to pursue accretive investment opportunities while maintaining balance sheet discipline. Our company is in an advantageous position from a capital allocation standpoint. Given our strong liquidity position, we are able to both increase net earning assets while also repurchasing shares that we believe are undervalued.

Since the year began through April 27, we repurchased over 1 million shares of common stock for a total consideration of $8.7 million at an average price of $8.07 per share. While we are proud of the foundation laid in 2025 and the strong start in Q1 2026, we remain focused on building on the success throughout the year.

Our objective remains to continue to grow net assets and the earnings power of our company. With the insights and reach of TPG's real estate investment platform, a stable balance sheet and an attractive opportunity set, we are confident in our ability to deliver continued strong performance.

Despite the strength of our balance sheet and our growing earnings power, our stock trades at a valuation that we believe significantly undervalues our position relative to competitors and offers compelling value on an outright basis as well. Simply put, our balance sheet looks remarkably different from our peers with a newer vintage loan portfolio that provides steady earnings and credit stability.

Relative to our peers, we continue to distinguish ourselves, particularly when you look at a number of important metrics, including loan vintage as a percentage of the portfolio, multifamily and industrial exposure, office exposure, unfunded loan commitments, REO as a percentage of assets and total debt-to-equity ratio.

The offensive posture we've embraced rooted in the strategic approach we laid out years ago positions us well to sustain our momentum. Our performance in 2025 set a high bar, and we entered the remainder of 2026 with the capital, the team and the drive to continue creating value for our shareholders. With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Thank you, Doug, and good morning. For the first quarter of 2026, TRTX reported GAAP net income of $15.2 million. Distributable earnings for the quarter was $19.5 million or $0.25 per common share, a 1.04x coverage ratio of our first quarter common stock dividend of $0.24 per share.

During the quarter, we repurchased 557,000 shares (sic) [ 556,592 ] of common stock at a weighted average price of $8.06 per share for a total consideration of $4.5 million, which increased book value by $0.02 per share.

As of March 31, book value per share was $11.06. During the first quarter, we originated 2 loans with total commitments of $148.4 million at a weighted average credit spread of 2.73% and received loan repayments of $123.6 million, including 2 full loan repayments of $92.7 million where the underlying collateral was 40% multifamily, 35% hotel and 25% industrial. Subsequent to quarter end, we originated a hotel loan with a total loan commitment and unpaid principal balance of $175.4 million at a weighted average credit spread of 3.0% and received 2 office loan repayments totaling $262.3 million, reducing our office loan exposure on a pro forma basis to less than 5%.

Quarter-over-quarter, net assets remained flat at $4.1 billion. Year-over-year, our net assets have grown 26% or $868.0 million. At quarter end, our loan portfolio was 100% performing. During the quarter, we did not have any credit migration in our loan portfolio. Our weighted average risk rating for the loan portfolio is unchanged at 3.0.

Our CECL reserve decreased slightly quarter-over-quarter to 179 basis points compared to 180 basis points at December 31, 2025. We ended the quarter with near-term liquidity of $172.8 million, consisting of $77 million of cash on hand available for investment, net of $15 million held to satisfy liquidity covenants, undrawn capacity under secured financing arrangements of $39.7 million and CRE CLO reinvestment proceeds of $41.2 million.

Additionally, we held unencumbered loan investments with unpaid principal balance of $106.8 million that are eligible to be pledged under our existing financing arrangements. The company's liability structure is 78% non-mark-to-market across 10 financing sources and carries a weighted average cost of funds of 1.80%.

Total leverage increased slightly quarter-over-quarter to 3.1x from 3.02x. At quarter end, we had $1.5 billion of financing capacity available to support loan investment activity, and we're in compliance with all of our financial covenants. With that, we welcome your questions. Operator?

[Operator Instructions] Our first question is from John Nickodemus with BTIG.

Doug and Brandon, you both provided some great color about sort of what you're seeing for originations looking ahead. Doug, I know you mentioned the $535 million of executed term sheets. With the portfolio kind of flat quarter-over-quarter, but obviously up year-over-year.

I'd love to hear just some more thoughts on how we could see portfolio growth trending throughout 2026, particularly with those term sheets in mind, but also the large repayment that's already come in, in the second quarter.

Yes, sure. So look, I think that from a quarter-to-quarter perspective, obviously, we had a pretty substantial Q4 and then Q1, I think probably a touch of seasonality mix in there, resulted in perhaps a lighter number relative to Q4. But I really think the sort of big story is the trend, right? I mean the trend is growth the trend remains that we have -- even having $535 million of term sheets executed at this point, that also doesn't reflect the pipeline that we have beyond that.

So when we think about earnings growth and our ability to really grow the company, our -- the stability of our balance sheet, the durability of our liability structure puts us in a great place. And when you combine that with the sourcing and resources of TPG's broader platform, we feel really excited about our ability to kind of continue on our path.

Great. Really appreciate that, Doug. And then just one more for me. I believe on the last call, you mentioned that we should see some further progress on the REO portfolio this year. There's nothing huge, 5 assets, but I was just curious if there are any assets like 1 or 2 in particular of those 5 that we could expect to see come off sooner rather than later in 2026.

This is Ryan. I'll take that one. Thanks for the question. As we demonstrated last year, we sold 2 office assets. And I think our plan this year kind of remains the same as Doug iterated last quarter, which is our plan is to sell some assets this year as well.

The majority of our REO is focused on multifamily, which there is some seasonality to leasing and some other things that we're kind of nearing the corner on. So we'll look to kind of update everyone with some progress there. But again, it remains the plan to sell some REO this year.

[Operator Instructions] Our next question comes from Chris Muller with Citizens Capital Markets.

Congrats on a really solid quarter here. So looking at the subsequent origination at $175 million, that's, I guess, above what your portfolio average is at about $80 million, but you guys do have other loans in that size range. So I guess the question is, are you guys starting to push into that larger loan space? Or is this more of a one-off deal?

Yes. So look, I think from a loan size perspective, we've kind of generally averaged somewhere in the sort of $85 million to $90 million range historically. So I think that really -- when I think about going forward, it will just be a mix. We're still looking at loans that are $30 million, $40 million, $50 million, $60 million.

But if we see a really compelling high-quality asset or portfolio that is between $100 million and $200 million, we're also happy to pursue that. So I'd say in short, it basically has been a mix in the past and will continue to, frankly, remain a mix of, again, that sort of $30 million to $60 million range combined with some that again, just sort of warrant larger exposure based on borrower quality, asset quality and sort of how it fits into our portfolio.

Got it. And it looks like multifamily and industrial have been the bulk of the recent activity, I guess, aside from that 2Q origination. How is competition for these assets these days? And are there other asset types that you guys find attractive right now?

Sure. Yes. So I think first on the competitive front, I think multifamily and industrial does have some competition. But that being said, I think we have a pretty tremendous sourcing edge at TPG. And also I think where we've probably been able to find some incremental value recently has been in the industrial space.

I think that is a marginally less trafficked part of the market that I think people have a little bit less understanding of. We benefit from a fully integrated debt and equity platform that's both an owner of industrial and also a lender on industrial. So we feel like we have a particular edge there. So I would say that multifamily, I'd say it's sort of been pretty steady in terms of the competitive dynamic there. I think industrial is a little bit spottier, and that's where we found probably on the margin a little bit more value.

Outside of multifamily and industrial, I think a lot of what we've done in the past, we will continue to do so, which is right now with the funding of this recent hotel well, that gets our pro forma hotel exposure to about 9%.

We've generally kind of tended to keep that sort of below 10% to 15% as a target. So we will look at other sectors. We're very selective. But I think at the core of where we're focusing our energy is finding assets that have substantial downside protection in particularly 2 asset classes that we do feel like have strong long-term fundamentals.

Got it. And if I could just squeeze a quick housekeeping one in probably for Brandon. Do you have the earnings contribution from the REO assets, handy?

Thanks, Chris, for the question. We do have the incremental distributable earnings contribution for the REO assets. On a quarterly basis, it is positive. I would say that you can probably expect, depending on seasonality to Ryan's point, between, call it, $0.02 and $0.03 per quarter as a good run rate.

[Operator Instructions]

I just want to thank everyone for joining the call this morning, and we look forward to updating you on our further progress. Thank you very much.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Greetings, and welcome to the TPG RE Finance Trust Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to pass it off to our host, Dan Pasesell. Thank you. You may begin.

Good morning, and welcome to the TPG RE Finance Trust Earnings Call for the Fourth Quarter of 2025. Today's speakers are Doug Bouquard, Chief Executive Officer; and Brandon Fox, Interim Chief Financial Officer and Chief Accounting Officer. Doug and Brandon are joined by Ryan Roberto, Head of Capital Markets and Asset Management. Doug and Brandon will provide commentary regarding the company, its performance and the general economy, and we'll answer questions from call participants.

Yesterday afternoon, we filed our Form 10-K, issued a press release and shared an earnings supplemental, all of which are available on the company's website in the Investor Relations section. This morning's call and webcast is being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX and any unauthorized broadcast or reproduction in any form is strictly prohibited.

This morning's call will include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For a comprehensive discussion of risks that could affect results, please see the Risk Factors section of the company's Form 10-K. The company does not undertake any duty to update our forward-looking statements or projections unless required by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our earnings release and our earnings supplemental, both of which are available in the Investor Relations section of our website.

Now I'll turn the call over to Doug.

Good morning, everyone, and thank you for joining the call. The broader economic backdrop continues to provide a solid foundation for investment activity within the real estate sector. With dislocation in certain parts of the corporate credit market appearing, we are observing a marginal trend of capital allocation oriented towards real estate credit.

As we have observed at the start of the year, the combination of increased dry powder, a 10-year treasury hovering just above 4% and favorable real estate fundamentals should be drivers of continued growth and investment activity for TRTX. Increased transaction volume is the essential catalyst for true price discovery and as more real estate assets trade, investors can more clearly triangulate where valuations have reset, replacing speculation with hard market clearing data. While we are almost 4 years removed from when the Fed began hiking rates, this price transparency forms the backdrop for what is shaping up to be an incredibly active year for both borrowers and lenders.

2025 was an important turning point for TRTX. We closed $1.9 billion of new investments, drove 25% year-over-year growth in earning assets and generated distributable earnings of $0.97 per share, which outearned our dividend for the year. Furthermore, we were able to achieve this while maintaining stable risk ratings, further diversifying our liability structure and ending the year with a 100% performing loan portfolio.

From a recent investment perspective, the fourth quarter was incredibly active with $927 million of new loans closed, consisting of 62% multifamily and 38% industrial collateral, 2 thematic sectors that we continue to target. As a testament to the strength of our franchise, this quarter's investment activity was not only one of the most active quarters we've had since the company's founding, but over 90% of our new originations were with repeat borrowers. This demonstrates our deep relationships within the real estate ecosystem, further enhanced by the depth and breadth of TPG's real estate debt and equity investment platform.

Capital markets velocity remains healthy on our balance sheet as we received just under $1 billion of repayments this past year. Driven by the robust volume of newly originated loans in 2025 and the repayment of older vintage loans, our balance sheet has undergone a substantial evolution. For context, at the beginning of 2022, 30% of our balance sheet was exposed to multifamily and industrial collateral, whereas today, we have increased our combined exposure to those sectors to over 72% of our current balance sheet. In recent years, we've been able to accomplish this transformation toward newer vintage loans while generating consistent earnings and maintaining a steady credit profile.

From a liability perspective, we continue to grow our lender relationships, optimize our existing capital structure and are fortunate to have recently issued 2 Series C loans in 2025, which afford the company ample reinvestment capacity over the next 2 years at an attractive cost of funds. While we are proud that 2025 was a year where we delivered on our strategic goals, we remain laser-focused on continuing to build on the success in 2026.

With the insights of TPG's real estate investment platform, combined with a stable balance sheet and an attractive opportunity set, we are confident in our ability to deliver continued strong performance. Tactically, we plan to continue to pull the many levers for growth at our disposal, which include continued net asset growth through prudent investment and risk management, increasing our leverage ratio towards our target of full investment and utilizing untapped liquidity.

In summary, the offensive posture we were able to embrace this year is a direct result of the strategic approach we laid out years ago. Our performance in 2025 has set a high bar, and we enter 2026 with the capital, the team and the momentum to continue to drive value for our shareholders.

With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Thank you, Doug, and good morning. For the fourth quarter of 2025, TRTX reported GAAP net income of $0.2 million. Distributable earnings for the quarter was $18.5 million or $0.24 per common share. For the full year ending December 31, 2025, TRTX reported GAAP net income of $45.5 million or $0.57 per share and distributable earnings of $76.8 million or $0.97 per common share, a 1.01x coverage ratio of our annual dividend of $0.96 per share.

We have covered our common stock dividend for each of the last 2 years. Book value per common share decreased quarter-over-quarter to $11.07 from $11.25. Our net asset growth during 2025 continues to reflect our focus on allocating capital to new loan investments and actively managing our portfolio. For the full year 2025, we originated 20 loans with total commitments of $1.9 billion at a weighted average credit spread of 2.82% and received loan repayments of $987.9 million, including full loan repayments of $931.5 million on 15 loans where the underlying collateral was 64% multifamily, 20% hotel, 14% office and 2% industrial. Year-over-year, we grew our net assets from $3.3 billion to $4.1 billion or 25%. At year-end, our loan portfolio was 100% performing. Our weighted average risk rating for the loan portfolio is unchanged at 3.0.

During the quarter, we upgraded 2 multifamily loans from a risk rating of 3 to 2 based on their continued strong operating performance and downgraded 1 multifamily loan from a risk rating of 3 to 4 due to operational challenges in the quarter. This loan represents approximately 1% of our total loan commitments at year-end. Our CECL reserve slightly increased quarter-over-quarter to 180 basis points compared to 176 basis points at September 30. We ended the quarter with near-term liquidity of $143 million, consisting of $72.6 million of cash on hand available for investment, net of $15 million held to satisfy liquidity covenants, undrawn capacity under secured financing arrangements of $51.4 million and CRE CLO reinvestment proceeds of $4 million.

Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $127.1 million that are eligible to pledge under our existing financing arrangements. The company's liability structure is 82% non-mark-to-market, an increase of 6% from 77% at December 31, 2024. Year-over-year, our cost of funds declined 18 basis points or 9% from 2.0% to 1.82%. The continued improvements to our liability structure in 2025 are primarily due to the issuance of our 2 CRE CLOs, TRTX, FL6 and FL7 totaling $2.2 billion. Total leverage increased quarter-over-quarter to 3.02x from 2.64x as a result of our substantial loan origination volume in the current quarter. At year-end, we had $1.6 billion of financing capacity available to support loan investment activity, and we're in compliance with all of our financial covenants.

With that, we welcome your questions. Operator?

[Operator Instructions] First question comes from Chris Muller with Citizens Capital.

Congrats on a really strong quarter here. So it looks like only one close -- loan closed so far in the first quarter. Do you guys expect originations to slow a little bit in the first quarter? Or will it be more just like later closings past February? And how are you guys thinking about the pace of originations in 2026?

Of the quarter rather. And frankly, a lot of that did actually occur as well within Q4 for us, where we had the bulk of our payoffs in Q4 happened, frankly, in closer to the first month of the quarter and then the bulk of our new fundings occurred really kind of in the last month of the quarter. So we do see that trend continuing. Secondly, as it relates to pipeline, look, our pipeline is incredibly robust. We are seeing a lot of activity really across all property types, all regions, a number of our borrowers, including repeat borrowers have been very active. So I think that from a sort of pacing and investment perspective, I do feel really positive about this year.

I mentioned in my remarks that there are a lot of kind of components that are driving that. I would say, one, we are still seeing a lot of those kind of peak of the market purchases from 2020, '21 and '22. Many of those 5-year loans are now in kind of some stage of either coming due. And when you combine that with the fact that a number of borrowers have generally not sold those assets yet. They're generally coming to us for typically a new financing, in some cases, requiring cash in.

So I think it's really a combination of a lot of those 5-year loans coming due from when there was tremendously high activity. And then I think this year, what's been happening is if you just look from a macro perspective, there's a little bit more clarity around the sort of path of rates. You've got a 10-year hovering around 4%. And all in all, credit spreads are relatively accommodative. So I do feel like that's a pretty nice recipe for a very active year for us.

Got it. So it sounds like the origination volumes in 4Q isn't really showing up in interest income yet, which is really good to hear. I guess the other question I have here is, it looks like spreads on new loans is about 50 basis points below the portfolio average. Do you expect that type of drop-off on spreads for new loans to continue? And is that due to market competition or more so the type of assets you guys are originating?

Yes. I think it's a combination of really a few things. I would say, first, we've been very concentrated within multifamily and industrial and we've been kind of keeping our LTVs in that kind of sub-65% loan-to-value range. I would say, two, although loan spreads, particularly in the fourth quarter were a touch tighter than prior quarters, we've seen our cost of funds really frankly move in line. And that's really been the story of the entire year, which is although loan spreads have come tighter, the demand and competition to provide us back leverage continues to be incredibly robust.

We saw that both in the closing of our Series C loan in Q4 with a weighted average cost of funds of about 1.67. But then also what is maybe less obvious is the number of bank relationships that we have across the broader TPG franchise that are, I would say, incredibly aggressive right now in terms of leading into providing us back leverage. So I think all of that has kind of resulted in despite loan spreads being a touch tighter, our ROEs generated are generally static relative to prior quarters.

Congrats again on a really solid quarter.

The next question comes from Gabe Poggi with Raymond James.

Can you just talk about target leverage again? I know you're at 3x right now. Just remind us of kind of the ballpark comfort zone where you'd like to be as we go through the course of '26. And then just a follow-up, I'll give it to you now is I know that current REO is not a lever you need to pull, you have optionality there. But any color you can provide on the REO assets at TRTX at the asset level and how you're thinking about those assets as the year progresses, especially if transaction volume picks up?

Yes. Sure, absolutely. So I think first, from a target leverage perspective, I would say right now, we're really kind of targeting that 3.5 to 3.75:1 range is a target. I think that once we get to that point is where we will likely reassess, but I feel like that kind of gets us to what I would describe as close to fully invested. And then Secondly, from an REO perspective, last year, we sold 2 office assets. We do have some REO remaining. But I think you said it well, which is that when we kind of think about levers to growth, we kind of, I would say, prioritized kind of getting fully invested given the opportunity set one, and you're kind of seeing us do that quarter-by-quarter. In terms of the REO, we do feel like this year is going to be a relatively attractive year to be continuing to sell down that REO. So you will see further progress out of us on our REO portfolio throughout the year.

The next question comes from Rick Shane with JPMorgan.

I have 2 actually. First is actually, and I'm going to have to get this right after REO. On ROE, your returns right now are about, call it, SOFR plus 5%. I'm curious when you think about the business model long term, what do you think the appropriate ROE target is as a function of a spread to SOFR?

Yes. Look, I mean, I think that we've generally been able to achieve an ROE in excess of that. And I think that when we look at the ROE for a, frankly, a lending business that does require some amount of back leverage, I think that really is the health of the back leverage market continues to, frankly, make our business model incredibly relevant in the market. And so when I think about the sort of longer-term trends, I mean, I think, again, that 500 number isn't too far off from what I would think these businesses, frankly, should look like. I think that when you zoom out more broadly, and obviously, you're kind of hitting on a pretty kind of topical area.

Real estate credit has been going through a pretty interesting evolution probably over the last decade or 2, and that big evolution has been a combination of banks pulling back, agencies growing in the space and then also all the nonbank lenders. We, of course, being one of those nonbank lenders and having a large platform. So when we think about the sort of evolution of real estate lending and real estate credit, we as a platform are very much sort of on the tip of the spear in terms of where that market evolves.

But again, when I think about what's really kind of driving a lot of the nonbank lending activity, I think that the sort of inside baseball does relate to the sort of regulatory capital regime that is orienting banks towards providing back leverage. And I think that, again, is something that we are very focused on. And again, that seems to be a trend that continues to grow.

Got it. Okay. And then second question, and it is related. Obviously, there's been a significant transaction in the space with Apollo planning to sell their assets. You guys are executing well. I would describe it in terms of sort of the continuum of recovery, you guys are very much on the front end of that or leading edge of that, I should say. And your stock is still trading at a, call it, 20% discount to book. I'm curious how you think you can close that value gap? Or does it -- is the ARI transaction an indication that at least one sophisticated player in the space is not convinced that, that is going to happen for the sector?

Look, I mean, I think first thing we've kind of set a very clear record around maximizing shareholder value and have been incredibly clear about our strategic goals. And when you look back about kind of what we achieved last year and seek to achieve this year, I think that we are well on our way of closing that gap, and that's a big focus for us. I think two, when I think about the ARR transaction and just other kind of flows in the market, I can say that TPG broadly as a platform is constantly evaluating opportunities.

And we are always looking for ways to maximize shareholder value to be creative. Obviously, the firm has a multiple decade background in platform acquisition and being thoughtful around organic and inorganic growth. So I can tell you that we are always thinking about it, and we're going to continue to be searching for opportunities to basically scale and grow.

Look, I realize that's a tricky question, and I apps...

The next question comes from John Nicodemis with BTIG.

Most of my questions have been asked already, but I have one more for the team here. Industrial exposure. I noticed that's gone up a bunch, highlight you did in the prepared remarks. I believe you mentioned 72% of the book is now in either multifamily or industrial. How are you thinking about target levels for industrial? Should we expect to see that continue to rise? Just sort of that trend over the course of 2026. Any details you could provide there would be great.

Yes. Sure. Happy to cover that. Obviously, we have meaningfully grown our industrial exposure from a few years back, frankly, less than 5% generally, and now we're kind of just under 20%. When I think about kind of like an appropriate target level, it's probably somewhere in that kind of 25% to 30% range would be an area where I think that we perhaps touch the brakes a little bit. But right now, what we're seeing is, again, sort of how I mentioned, there are many transactions that were done in really over the last kind of 3 to 5 years where there is some amount of recapitalization needed.

So we still look at multi and industrial together as sectors that we think we can -- we have a particular edge in. Specific to industrial, we -- across our platform have been an owner of industrial assets. So we have a lot of intelligence across the entire market around valuation, leasing activity otherwise. So we do feel like we, as a platform, have a bit of an edge relative to most of the lenders just kind of given the depth and breadth of our franchise. But again, I think you'll see marginally more growth within industrial over time. And I think as we get to that kind of 25% range, we will, of course, assess and kind of take our views in the market at that juncture.

There are no further questions in queue at this time. I would like to turn the floor back to management for closing comments.

I just want to thank everyone for joining the call today, and we look forward to keeping you updated on our progress. Have a great day.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Greetings, and welcome to the TPG Real Estate Finance Trust Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Bob Foley. Thank you. You may begin.

Good morning, and welcome to the TPG RE Finance Trust Earnings Call for the Third Quarter of 2025. Today's speakers are Doug Bouquard, Chief Executive Officer; Brandon Fox, Interim Chief Financial Officer; and Ryan Roberto, Head of Capital Markets and Asset Management.

Doug and Brandon will provide commentary regarding the company, its performance and the general economy in which TRTX operates. Doug, Brandon and Ryan will answer questions from call participants.

Yesterday evening, we filed our Form 10-Q, issued a press release and shared an earnings supplemental, all of which are available on the company's website in the Investor Relations section.

This morning's call and webcast is being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX and any unauthorized broadcast or reproduction in any form is strictly prohibited.

This morning's call will include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For a comprehensive discussion of risks that could affect results, please see the Risk Factors section of the company's latest Form 10-K.

The company does not undertake any duty to update our forward-looking statements or projections unless required by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our earnings release and our earnings supplemental, both of which are available in the Investor Relations section of our website.

Today's earnings call is my last. After more than 12 years with TPG and 10 years as CFO of TRTX, my wife and I decided, I will retire at year-end to become a senior adviser to TPG Real Estate, which was announced via press release 6 weeks ago. As a senior adviser, I will remain a member of the investment review committees of TRTX and our other real estate vehicles.

Brandon Fox has assumed the role of Interim CFO, and Ryan Roberto has assumed all duties regarding capital markets and portfolio management. The succession plan was in place prior to my decision to retire, and Brandon and Ryan have been growing into their new roles for several years.

The final stages of this transition will be complete by the holiday season. I've worked with Brandon and Ryan for 7 and 10 years, respectively, and I have every confidence in their well-developed abilities and judgment. Brandon and Ryan have been strong teammates to Doug as he continues to drive TRTX's success.

It's been a privilege to work with my TPG colleagues since 2015 to transform TRTX from a $25-billion loan portfolio purchased from a bank into a market-leading commercial mortgage REIT. Important memories for me include $17.9 billion of loan investments, TRTX's 2017 initial public offering, early entry into the CRE CLO market and establishment of a strong brand as issuer and collateral manager.

I'm also very proud of TRTX's deeply ingrained culture of disciplined credit investing, portfolio management and liability management and the firm's transparent communication with its shareholders, lenders, bond investors and borrowers. Like most of you on this call, I'm a shareholder, and I look forward to TRTX's continued growth and success. I have the utmost confidence in the TRTX team and its ability to execute its business plan under Doug's thoughtful and energetic leadership.

I've known many of you on today's call for decades, during which the real estate credit market has developed impressive depth, breadth and liquidity. I am appreciative of the confidence and support you have extended to TRTX, to my colleagues and to me. And I am deeply grateful for the many professional relationships and personal friendships developed over the years. I will miss you. Doug?

First, I want to take a moment to thank you, Bob, for your dedicated service to our firm over the past 12 years. Your incredible work ethic and strategic vision have served TRTX shareholders incredibly well. Like many in our industry, you have served a variety of important roles in my life, a thoughtful client, a close mentor, a dedicated colleague and a great friend.

We are excited to have you remain as a senior adviser to the TPG real estate platform and congratulate you and your family on a well-earned retirement. Additionally, I look forward to continuing a close working relationship alongside Brandon as Interim CFO and Ryan as Head of Capital Markets and Asset Management.

Over the past quarter, the equity market again hit multiple all-time highs, while the 10-year treasury rallied nearly 40 bps to hover near 4%. Meanwhile, the real estate equity market continues to heal, albeit not at the ferocious pace of the broader asset market. As a result, the backdrop for real estate credit continues to remain attractive on an absolute and relative value basis. This market dynamic continues to be driven by a combination of reset valuations, reduced lending appetite from the banking sector and elevated risk premium driven by the uneven recovery across real estate property types and geographies.

In the third quarter, TRTX's investment activity accelerated. We closed $279 million of new investments during the quarter, another $197 million subsequent to quarter end. And beyond that, we currently have over $670 million of loans expected to close in the fourth quarter. To dimension our investment momentum this year, when you combine our closed loans year-to-date of $1.1 billion and the loans we expect to close in Q4, this totals over $1.8 billion of new investments during 2025.

This steady growth in activity will drive TRTX earnings growth and demonstrates the offensive posture of our investment platform. We continue to lend primarily on multifamily and industrial assets, which represent approximately 91% of the $1.1 billion of our closed and in-process investments. For loans closed in the third quarter, we averaged 65% loan-to-value ratio and a credit spread of 3.22%, which speaks to the attractive credit risk profile we can source in the current investment environment.

Our investment activity would not be possible without TRTX's stable credit profile and substantial liquidity, coupled with the investment insights of TPG's integrated debt and equity investment platform.

While we were very active on the investment side, we continue to enhance our liability structure as evidenced by last week's pricing of our latest series CLO, FL7. This $11-billion transaction represents our latest match term nonrecourse non-mark-to-market financing with 30 months of reinvestment capacity.

Since both FL6 and FL7 were issued in 2025 and have 30-month reinvestment periods. These 2 vehicles will provide for the next 30 months, approximately $1.9 billion of financing capacity at a blended cost of funds of SOFR plus 1.75. These stable, cost-effective, flexible financings will accelerate earnings growth and provide substantial ballast for years to come.

This quarter's operating results and investment activity demonstrate TRTX's continued ability to deliver on its strategic goals. Year-over-year, our loan portfolio has grown by $1.2 billion or 12% net. We intend to continue our growth in a prudent manner. TRTX shares currently trade at a 20% discount to book value, which we believe offers substantial value. This value continues to be realized as we pull the many levers for growth, including deploying excess liquidity and prudently increasing our debt-to-equity ratio to meet our full investment objectives.

Combining these growth levers with the differentiated sourcing and investment capabilities of TPG's integrated real estate platform fuels our ability to create value for TRTX shareholders. With that, I'll turn the call over to Brandon to discuss our results.

Thank you, Doug, and good morning. Before I review our third quarter operating results, I also want to recognize Bob and his impact on TRTX, TPG and my professional career. Through his tenacity and commitment, Bob's reach and influence is felt across TRTX and TPG. His mentorship over our 7 years together has been invaluable to me, and I wish him all the best. Thank you, Bob.

For the third quarter of 2025, TRTX reported GAAP net income of $18.4 million or $0.23 per common share and distributable earnings of $19.9 million or $0.25 per common share, covering our quarterly dividend of $0.24 per common share. Book value per common share increased quarter-over-quarter to $11.25 from $11.20 due to our share repurchase program and another solid quarter of operating results.

Our operating results reflect the continued execution of our investment strategy, which is supported by our nimble capital allocation approach and durable liability structure. During the third quarter, we originated 4 loans with total commitments of $279.2 million at a weighted average credit spread of 3.22%. We received loan repayments of $415.8 million, including 6 full loan repayments of $405.8 million across our loan portfolio. These repayments were primarily multifamily and hotel loans originated in 2021 and 2022. These par loan repayments continue to demonstrate the ability of our borrowers to execute their business plans and validate the credit performance of our loan portfolio.

We repurchased 1.1 million common shares for total consideration of $9.3 million or $8.29 per common share, generating $0.04 per common share of book value accretion. In total, the company repurchased 3.2 million shares of common stock at a weighted average price of $7.89 per share, resulting in $0.13 per share of book value accretion in the current year.

We remain a market leader in optimizing our capital structure. On Monday, we announced the pricing of TRTX 2025 FL7, a $1.1 billion managed CRE CLO, which will settle on or about November 17. The company marketed to institutional investors approximately $957 million of investment-grade securities that will provide TRTX non-mark-to-market, nonrecourse term financing. FL7 includes a 30-month reinvestment period, an advance rate of 87% and a weighted average interest rate at issuance of term SOFR plus 1.67% before transaction costs.

Simultaneously, with the issuance of FL7, we expect to redeem TRTX 2021 FL4. The FL7 issuance and FL4 redemption are expected to produce roughly $100 million of liquidity to fund new loan investments. We ended the quarter with near-term liquidity of $216.4 million, consisting of $77.2 million of cash-on-hand available for investment, net of $16.4 million held to satisfy liquidity covenants under the company's secured financing agreements; undrawn capacity under secured financing arrangements of $78.6 million and collateralized loan obligation reinvestment proceeds of $44.2 million.

Our net earning assets have grown year-over-year by $377.3 million or 12%, driven by $1.2 billion of loan originations. At quarter end, our loan portfolio was again 100% performing with no negative credit migration. Our weighted average risk rating for the loan portfolio is 3.0, consistent with the prior 7 quarters.

Our CECL reserve decreased by $2.6 million quarter-over-quarter, primarily due to loan repayments, while the reserve rate of 176 basis points is flat from June 30. The company's liability structure is 87% non-mark-to-market, reflecting our long-held preference for liabilities that are stable, long-dated and low cost.

Total leverage was flat quarter-over-quarter at 2.6x. At quarter end, we had $1.6 billion of financing capacity available to support loan investment activity, and we're in compliance with all financial covenants. Our third quarter operating results again demonstrate that the company's disciplined approach to capital allocation, asset management and capital markets execution will continue to deliver quality earnings growth and enhanced shareholder value.

We remain focused on sustaining our momentum to further narrow the current share price to book value discount. With that, we welcome your questions. Operator?

[Operator Instructions] First question comes from Steve Delaney with Citizens JMP.

First, Bob, congratulations to you on a wonderful career and all the best in what I would call your semi retirement, given that you're going to remain an adviser, a trusted adviser. So, this is a special call for just that reason. Brandon, I'm just curious, when you look at the portfolio, which is performing exceptionally well, but at $3.7 billion, when you look at that and you look at your 2.6 debt-to-equity, do you feel that the company has some amount of organic portfolio growth available to it with the current capital base?

Thank you for your question. And I do believe that, that is the case. We have previously discussed the potential growth of the balance sheet as it's currently constructed. In June, we put out materials that show as you lever the company's balance sheet to 2.5, 3, 3.5x that there's incremental DE growth on a per share basis of $0.04 to $0.06 depending on the ROEs of the loans originated and timing of when that occurs during the quarter.

This afternoon, we'll hopefully get a cut from the Fed. As you -- and your partners there, as you talk to borrowers, do you feel that there are -- there is CRE equity money for transitional properties that is sort of waiting for a more attractive rate environment? And would you expect not just this one 25 basis point cuts, but if we get 3 to 4 over the next year, like a lot of people are expecting, do you see a significant increase in demand for your primary bridge loan product?

Yes. It's an important question. This is Doug, by the way. I think that from an investment activity perspective, we're already starting to see some of that acceleration. I mentioned that when you combine the loans that we closed this past quarter, what we have closed thus far in Q4 and what we have signed up, that totals about $1.1 billion just in Q1 and -- sorry, just in Q3 and Q4 of this year. So we're kind of starting to see some of that.

As I look forward to the next year, I think there's sort of a few things that I expect will increase the demand for our product. I think, one, SOFR actually going lower, I think, will be a big driver. That will probably on the margin push some of those acquisition dollars for transitional assets into our sector, one. And then two, simply put is there's more -- as there's a reduction in interest rate volatility is when you tend to see more appetite for real estate transactions, generally speaking. So I think when you think about our current pipeline and portfolio, I think as I've shared in prior quarters, it's been, I'd say, predominantly refinance focused, typically, give or take, about 80%.

And what we're expecting, at least for next year is to have perhaps a little bit more balance between acquisition activity and refinance activity, driven again by part of what the Fed's actions will be. But also, there's just kind of to my earlier comments about broader asset classes, there is -- there's been a pretty dramatic rally across all asset classes globally. I would say that real estate has not fully participated in that rally. And I think it does put our asset class at a particularly attractive spot in terms of risk appetite.

Next question, John Nickodemus with BTIG.

And before I start, I just want to congratulate you, Bob, on a fantastic career at TPG and elsewhere. Always was a pleasure working with you since we started picking up coverage. First off, similar question to what Steve led off with. Obviously, saw leverage stay flat quarter-over-quarter. Brandon, you just noted the sort of pickup in earnings power from raising that leverage.

So I was curious, both headed into the end of this year as well as next year, given the new CLO, given what appears to be a ramp in origination volumes, sort of how you see the cadence of that leverage as we assume going up both at the end of 2025 and into 2026, just how you're thinking about the timing there?

Sure. Yes. I think what Brandon alluded to back to that kind of path to growth chart, does map out, again, a bit of as we lever up and frankly, how that can flow into DE. I think that what you're seeing within, let's call it, this quarter, and I think thus far, what we've seen so far in Q4 is the -- you're not really seeing that kind of full earn-in of our new investment activity because even in Q4, exactly what we're seeing is that the repayments for Q4 have largely happened within the sort of first half of the quarter. And the bulk of the new investments, we expect will close towards the end of the quarter. So as we're -- I think one of those players in the market who is pretty meaningfully growing our balance sheet. We will have that lag that can be 45 to 60 days in between when loans pay off and when we make new investments.

And we continue to want to kind of keep that day count as short as possible. But that's a little bit of what you're seeing, I'd say, Q3 earnings, and I think that will be a dynamic over the kind of coming quarter or 2 as we continue to kind of scale and grow our balance sheet.

Great. That's really helpful for us. And then my other question, a little more minute here, but noticed that your largest new loan of the quarter was actually on the Nashville hotel. This has been in recent quarters, an area that you've been reducing exposure. Obviously, you have been more focused on multifamily and industrial. So just curious what went into this loan, if it was just sort of a unique opportunity, just kind of something that caught our eye when we were looking through the new loans for the quarter.

Sure. This is Ryan. As you know, as you said, we have been reducing some exposure to hospitality over time as we've seen repayments accelerate in that sector for us. And this was just an unique opportunity to lend on a very high-quality asset to a high-quality borrower where the business plan has largely been completed at that point in time. So a good ROE for the company and an interesting investment per se.

[Operator Instructions] Next question comes from Rick Shane with JPMorgan.

Bob, I'm sure we'll catch up afterwards. But I think we've followed your companies for approaching 20 years, and it has truly been a pleasure. Really appreciate all of the wisdom and consideration over the years in terms of thoughtfulness, so thank you. As we think about the levers that are available, you've had questions today about whether or not you can take operating leverage up. You've done a great job managing down nonaccruals. So the portfolio is accruing. Is the opportunity at this point to enhance ROE a function of taking down that REO portfolio, having more leverageable capital there and obviously having a portfolio that no longer drags earnings. Is that the next leg as we move forward in terms of enhancing ROE?

Yes. No, I think that's really not the path specifically. I think that it really is just net balance sheet growth is the single most important driver. I think unlike many of our competitors, our REO portfolio is really not a material drag in terms of our DE. I think more of what really will frankly drive our growth is just the growth in our net balance sheet over time. Our liquidity position continues to get further buttressed even by this recent series CLO. So I think for us, the next kind of coming quarters will be focusing on just frankly growing our balance sheet and really moving our debt-to-equity ratio up from -- we've kind of been in the mid-2s recently. And I think getting closer to 3, 3.5 over time is really -- that's the important driver, frankly, less so in terms of REO dispositions.

Got it. Okay. And that's helpful. I appreciate the specificity. I wasn't -- perhaps I misunderstood the earlier answers, but I wasn't as confident about increasing that leverage until the specificity of answers. That seems to me to be where the opportunity is. And is part of this a function of the CLO market is going to, given the efficiency there, give you incremental leverage based on sort of recent transactions?

Yes. No, that definitely does give us more leverage, one, and also that it both gives us more leverage, but also it lowers the cost of capital of the company. And the deal has priced but has not closed yet. So these are all things that you'll start to see flowing through in coming quarters.

And Bob, like I said, we'll catch up later, but thank you for everything over the years.

Thank you.

I would like to turn the floor over to management for closing remarks.

Thank you, everyone, for taking the time this morning, and we look forward to updating you on further progress in the future. Thank you very much.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.