Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April~~July 30, 2021, there were ~~76,897,102~~77,046,183 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. By their nature, forward-looking statements speak only as of the date they are made, are not statements of historical fact or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will occur or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth under the heading “Risk Factors” in this Form 10-Q and in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2021, as such risk factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Such risks, uncertainties and other factors include, but are not limited to, the following:

There may be other risks, uncertainties or factors that may cause our actual results to differ materially from the forward-looking statements, including risks, uncertainties, and factors disclosed under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q. You should evaluate all forward-looking statements made in this Form 10-Q in the context of these risks, uncertainties and other factors.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements in this Form 10-Q apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this Form 10-Q and in other filings we make with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

~~Except~~In this quarterly report, except where the context requires otherwise, the terms “Company,” “we,” “us,” and “our” refer to TPG RE Finance Trust, Inc., a Maryland corporation, and its subsidiaries; the term “Manager” refers to our external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership; and the term “TPG” refers to TPG Global, LLC, a Delaware limited liability company, and its affiliates.otherwise:

TPG RE Finance Trust, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our” or the “Company”) is organized as a holding company and conducts its operations primarily through TPG RE Finance Trust Holdco, LLC (“Holdco”), a Delaware limited liability company that is wholly owned by the Company, and Holdco’s direct and indirect subsidiaries. The Company conducts its operations as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company is generally not subject to U.S. federal income taxes on its REIT taxable income to the extent that it annually distributes all of its REIT taxable income to stockholders and maintain its qualification as a REIT. The Company also operates its business in a manner that permits it to maintain an exclusion from registration under the Investment Company Act of 1940, as amended.

The Company’s principal business activity is to directly originate and acquire a diversified portfolio of commercial real estate related assets, consisting primarily of first mortgage loans and senior participation interests in first mortgage loans secured by institutional-quality properties in primary and select secondary markets in the United States. The Company has in the past invested in commercial real estate debt securities (“CRE debt securities”), primarily investment-grade commercial mortgage-backed securities (“CMBS”) and commercial real estate collateralized loan obligation securities (“CRE CLOs”).

Loans Held for Investment, Net (includes $1,354,085 and $2,259,467, respectively,

Collateralized Loan Obligations (net of deferred financing costs of $14,654 and $9,192,

Mortgage Loan Payable (net of deferred financing costs of $712 and $853, respectively)

Series B Cumulative Redeemable Preferred Stock ($0.001 par value per share; 0 and

13,000,000 shares authorized, respectively; 0 and 9,000,000 shares issued and outstanding,

Series A Preferred Stock ($0.001 par value per share; 100,000,000 shares authorized;

Series C Preferred Stock ($0.001 par value per share; 8,050,000 shares authorized;

8,050,000 and 0 shares issued and outstanding, respectively) ($201,250 aggregate liquidation

Common Stock ($0.001 par value per share; 302,500,000 and 302,500,000 shares authorized,

respectively; 77,089,125 and 76,787,006 shares issued and outstanding, respectively)

Loans ~~that the Company has the intent~~Held for Investment, Net (includes $1,354,085 and ~~ability~~$2,259,467, respectively,

Collateralized Loan Obligations (net of deferred financing costs of $14,654 and $9,192,

Mortgage Loan Payable (net of deferred financing costs of $712 and $853, respectively)

Payable to ~~hold for the foreseeable future, or until maturity or repayment, are reported at their~~Affiliates

Series B Cumulative Redeemable Preferred Stock ($0.001 par value per share; 0 and

13,000,000 shares authorized, respectively; 0 and 9,000,000 shares issued and outstanding, ~~principal balances net~~

Series A Preferred Stock ($0.001 par value per share; 100,000,000 shares authorized;

Series C Preferred Stock ($0.001 par value per share; 8,050,000 shares authorized;

8,050,000 and 0 shares issued and outstanding, respectively) ($201,250 aggregate liquidation

Common Stock ($0.001 par value per share; 302,500,000 and 302,500,000 shares authorized,

respectively; 77,089,125 and 76,787,006 shares issued and outstanding, respectively)

The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The interim consolidated financial statements include the Company’s accounts, consolidated variable interest entities for which the Company is the primary beneficiary, and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company believes it has made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing the consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim consolidated financial statements should be read in conjunction with the Company’s Form 10-K filed with the SEC on February 24, 2021.

Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the presentation of the Company’s current period consolidated financial statements. These reclassifications had no effect on the Company’s previously reported net income (loss) or total assets in the consolidated statements of income (loss) and comprehensive income (loss) and consolidated balance sheets, respectively. Prior period amounts related to preferred stock dividends and participating securities share in earnings (loss) were reclassified to conform with the current period presentation of net (loss) income attributable to common stockholders in the consolidated statements of income (loss) and comprehensive income (loss). Additionally, amounts related to collateralized loan obligation proceeds held at trustee were reclassified from accounts receivable from servicer/trustee in prior period consolidated balance sheets to conform with the current period presentation.

The preparation of the interim consolidated financial statements in conformity with GAAP requires estimates of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements. Actual results could differ from management’s estimates, and such differences could be material. Significant estimates made in the interim consolidated financial statements include, but are not limited to, the adequacy of our allowance for credit losses and the valuation inputs related thereto and the valuation of financial instruments. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process and the still-limited availability of observable pricing inputs due to market dislocation and continued reduced levels of investment sales and financing activity resulting from the coronavirus pandemic (“COVID-19”). Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date and the limited availability of observable prices.

COVID-19 resulted in broad challenges globally, contributed to significant volatility in financial markets and continues to adversely impact global commercial activity. COVID-19 has had a continued adverse impact on economic and market conditions and triggered a period of global economic slowdown which has and could continue to have a material adverse effect on the Company’s results and financial condition. As a result of the approval of multiple COVID-19 vaccines for use and the distribution of such vaccines among the general population, many jurisdictions have re-opened and loosened restrictions. However, wide disparities in vaccination rates and continued vaccine hesitancy, combined with the emergence of COVID-19 variants and surges in COVID-19 cases, could trigger the reinstatement of restrictions. Such restrictions could include mandatory business shut-downs, travel restrictions, reduced business operations and social distancing requirements, which could dampen or delay any economic recovery. Although the Company has observed signs of economic recovery, they are uneven, and the Company cannot predict the time required for a widespread sustainable economic recovery to take place. These factors could further materially and adversely affect the Company’s results and financial condition.

The full impact of COVID-19 on the real estate industry, the credit markets and consequently on the Company’s financial condition and results of operations is uncertain and cannot be predicted currently since it depends on several factors beyond the control of the Company including, but not limited to (i) the uncertainty surrounding the severity and duration of the outbreak, including possible recurrences and differing economic and social impacts of the outbreak in various regions of the United States, (ii) the effectiveness of the United States public health response, (iii) the pandemic’s impact on the United States and global economies, (iv) the timing, scope and effectiveness of additional governmental responses to the pandemic, (v) the timing and speed of economic recovery, including the availability of a treatment and effectiveness of vaccines approved for COVID-19 and the willingness of individuals to get vaccinated, (vi) changes in how certain types of commercial property are used while maintaining social distancing and other techniques intended to control the impact of COVID-19, (vii) the impact of phase out of economic stimulus measures, the inflationary pressure of economic stimulus, and the eventual halt and reversal by the U.S. Treasury of asset purchases and (viii) the uneven impact on the Company’s borrowers, real estate values and cost of capital.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a variable interest entity (“VIE”), for which control is achieved through means other than voting rights, and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which the Company is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

At each reporting date, the Company reconsiders its primary beneficiary conclusions for all its VIEs to determine if its obligation to absorb losses of, or its rights to receive benefits from, the VIE could potentially be more than insignificant, and will consolidate or not consolidate in accordance with GAAP. See Note 6 for details.

Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for expected or realized credit losses, if any. The objective of the interest method is to arrive at periodic interest income, including recognition of fees and costs, at a constant effective yield. Premiums, discounts, and origination fees are amortized or accreted into interest income over the lives of the loans using the interest method, or on a straight-line basis when it approximates the interest method. Extension and modification fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the related extension or modification period. Exit fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the lives of the loans to which they relate unless they can be waived by the Company or a co-lender in connection with a loan refinancing, or if timely collection of principal and interest is doubtful. Prepayment penalties from borrowers are recognized as interest income when received. Certain of the Company’s loan investments have in the past, and may in the future, provide for additional interest based on the borrower’s operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon certainty of collection. Certain of the Company’s loan investments have in the past, and may in the future, provide for the accrual of interest (in part, or in whole) instead of its current payment in cash, with the accrued interest (“PIK interest”) added to the unpaid principal balance of the loan. Such PIK interest is recognized currently as interest income unless the Company concludes eventual collection is unlikely, in which case the PIK interest is written off.

All interest accrued but not received for loans placed on non-accrual status is subtracted from interest income at the time the loan is placed on non-accrual status. Based on the Company’s judgment as to the collectability of principal, a loan on non-accrual status is either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for interest payments, or on a cost-recovery basis, where all cash receipts reduce the loan’s carrying value, and interest income is only recorded when such carrying value has been fully recovered.

Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their outstanding principal balances net of cumulative charge-offs, interest applied to principal (for loans accounted for using the cost recovery method), unamortized premiums, discounts, loan origination fees and costs. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight-line basis when it approximates the interest method, adjusted for actual prepayments. Accrued but not yet collected interest is separately reported as accrued interest and fees receivable on the Company’s consolidated balance sheets.

When loans are designated as held for investment, the Company’s intent is to hold the loans for the foreseeable future or until maturity or repayment. If subsequent changes in real estate or capital markets occur, the Company may change its intent or its assessment of its ability to hold these loans. Once a determination has been made to sell such loans, they are immediately transferred to loans held for sale and carried at the lower of cost or fair value in accordance with GAAP.

Loans are placed on non-accrual status when the full and timely collection of principal and interest is doubtful, generally when: management determines that the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; the loan becomes 90 days or more past due for principal and interest; or the loan experiences a maturity default. The Company considers an account past due when an obligor fails to pay substantially all (defined as 90%) of the scheduled contractual payments by the due date. In each case, the period of delinquency is based on the number of days payments are contractually past due. A loan may be returned to accrual status if all delinquent principal and interest payments are brought current, and collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured. Loans that in the judgment of the Company’s external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), are adequately secured and in the process of collection are maintained on accrual status, even if they are 90 days or more past due.

A loan is accounted for and reported as a troubled debt restructuring (“TDR”) when, for economic or legal reasons, the Company grants a concession to a borrower experiencing financial difficulty that the Company would not otherwise consider. The Company does not consider a restructuring that includes an insignificant delay in payment as a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal balance of the loan or collateral value, and the contractual amount due, or the delay in timing of the restructured payment period, is insignificant relative to the frequency of payments, the debt’s original contractual maturity or original expected duration.

TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are non-performing as of the date of modification usually remain on non-accrual status until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, which is generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period. TDRs with temporary below-market concessions remain designated as a TDR regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be de-designated as a TDR.

On January 1, 2020, the Company adopted Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses, and subsequent amendments, which replaced the incurred loss methodology with an expected loss model known as the Current Expected Credit Loss ("CECL") model. The initial CECL reserve recorded on January 1, 2020 is reflected as a direct charge to retained earnings on the Company’s consolidated statements of changes in equity. Subsequent changes to the CECL reserve are recognized through net income on the Company’s consolidated statements of income (loss) and comprehensive income (loss). The

allowance for credit losses measured under the CECL accounting framework represents an estimate of current expected losses for the Company’s existing portfolio of loans held for investment, and is presented as a valuation reserve on the Company’s consolidated balance sheets. Expected credit losses inherent in non-cancelable unfunded loan commitments are accounted for as separate liabilities included in accrued expenses and other liabilities on the consolidated balance sheets. The allowance for credit losses for loans held for investment, as reported in the Company’s consolidated balance sheets, is adjusted by a credit loss benefit (expense), which is reported in earnings in the consolidated statements of income (loss) and comprehensive income (loss) and reduced by the charge-off of loan amounts, net of recoveries and additions related to purchased credit-deteriorated (“PCD”) assets, if relevant. The allowance for credit losses includes a modeled component and an individually-assessed component. The Company has elected to not measure an allowance for credit losses on accrued interest receivables related to all of its loans held for investment because it writes off uncollectable accrued interest receivable in a timely manner pursuant to its non-accrual policy, described above.

The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including but not limited to: the capitalization of borrowers and sponsors; the expertise of the borrowers and sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan-to-value (“LTV”) ratio; loan amount and lien position; debt service and coverage ratio; the Company’s risk rating for the same and similar loans; and prior experience with the borrower and sponsor. This information is used to assess the financial and operating capability, experience and profitability of the sponsor/borrower. Ultimate repayment of the Company’s loans is sensitive to interest rate changes, general economic conditions, liquidity, LTV ratio, existence of a liquid investment sales market for commercial properties, and availability of replacement short-term or long-term financing. The loans in the Company’s commercial mortgage loan portfolio are secured by collateral in the following property types: office (including life science-related properties); multifamily; hotel; mixed-use; condominium; and retail.

The Company’s loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership interest or similar equity interest in an entity that owns real estate. The Company regularly evaluates on a loan-by-loan basis, typically no less frequently than quarterly, the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, and the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including, to the extent available (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data.

Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is LTV structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geography, property type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows:

The Company generally assigns a risk rating of “3” to all loan investments originated during the most recent quarter, except in the case of specific circumstances warranting an exception.

~~The Company generally assigns a risk rating of “3” to all loan investments originated during the most recent quarter, except in the case of specific circumstances warranting an exception.~~

The Company’s CECL reserve reflects its estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing the Company’s loans. These estimations include unemployment rates, interest rates, price indices for commercial property, and other macroeconomic factors that may influence the likelihood and magnitude of potential credit losses for the Company’s loans during their anticipated term. The Company licenses certain macroeconomic financial forecasts to inform its view of the potential future impact that broader economic conditions may have on its loan portfolio’s performance. The forecasts are embedded in the licensed model that the Company uses to estimate its CECL reserve as discussed below. Selection of these economic forecasts requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty, and the actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented.

The Company’s CECL reserve also reflects its estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing the Company’s loans. These estimations include unemployment rates, interest rates, price indices for commercial property, current and expected future availability of liquidity in the commercial property debt and equity capital markets, and other macroeconomic factors that may influence the likelihood and magnitude of potential credit losses for the Company’s loans during their anticipated term. The Company licenses certain macroeconomic financial forecasts to inform its view of the potential future impact that broader economic conditions may have on its loan portfolio’s performance. Selection of the economic forecast or forecasts used, in conjunction with loan level inputs, to determine the CECL reserve requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty, and the actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented.

Due to the COVID-19 pandemic and the dislocation it has caused to the national economy, the commercial real estate markets, and the capital markets, the Company’s ability to estimate key inputs for estimating the allowance for credit losses remains materially and adversely impacted. Key inputs to the estimate include, but are not limited to, LTV, debt service coverage ratio, current and future operating cash flow and performance of collateral properties, the financial strength and liquidity of borrowers and sponsors, capitalization rates and discount rates used to value commercial real estate properties, and market liquidity based on market indices or observable transactions involving the sale or financing of commercial properties. Estimates made by management are necessarily subject to change due to the ~~lack or sharply~~ limited number of observable inputs and uncertainty regarding the duration of the COVID-19 pandemic and its aftereffects.

The amount of allowance for credit losses is influenced by the size of the Company’s loan portfolio, loan asset quality, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The Company employs two methods to estimate credit losses in its loan portfolio: a loss-given-default (“LGD”) model-based approach utilized for substantially all of its loans; and an individually-assessed approach for loans that the Company concludes are ill-suited for use in the model-based approach, or are individually-assessed based on accounting guidance contained in the CECL framework.

Once the expected credit loss amount is determined, an allowance for credit losses equal to the calculated expected credit loss is established. Consistent with ASC Topic 326,Financial Instruments-Credit Losses (“ASC 326”), a loan will be ~~charged~~written off through Credit Loss Benefit (Expense) in the ~~allowance for credit losses~~consolidated statements of income (loss) and comprehensive income (loss) when it is deemed non-recoverable upon a realization event. This is generally at the time the loan receivable is settled, transferred or exchanged, but non-recoverability may also be concluded by the Company if, in its determination, it is nearly certain that all amounts due will not be collected. This loss shall equal the difference between the cash received, or expected to be received, and the book value of the asset. Factors considered by management in determining if the expected credit loss is permanent or not recoverable include whether management judges the loan to be uncollectible; that is, repayment is deemed to be delayed beyond reasonable time frames, or the loss becomes evident due to the borrower’s lack of assets and liquidity, or the borrower’s sponsor is unwilling or unable to support the loan. This policy is reflective of the investor’s economics as it relates to the ultimate realization of the loan.

Allowance for Credit Losses for Loans Held for Investment – Model-Based Approach

The model-based approach to measure the allowance for credit losses relates to loans which are not individually-assessed.

The Company licenses from Trepp, LLC historical loss information, incorporating loan performance data for over ~~100,000~~115,000 commercial real estate loans dating back to 1998, in an analytical model to compute statistical credit loss factors (i.e., probability-of-default and loss-given-default). These statistical credit loss factors are utilized together with individual loan information to estimate the allowance for credit losses. This methodology considers the unique characteristics of the Company’s commercial mortgage loan portfolio and individual assets within the portfolio by considering individual loan risk ratings, delinquency statuses and other credit trends and risk characteristics. Further, the Company incorporates its expectations about the impact of current conditions and reasonable and supportable forecasts on expected future credit losses in deriving its estimate. For the period beyond which the Company is able to make reasonable and supportable forecasts, the Company reverts to unadjusted historical loan loss information based on systematic methodology determined at the input level. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.

Allowance for Credit Losses for Loans Held for Investment – Individually-Assessed Approach

In instances where the unique attributes of a loan investment render it ill-suited for the model-based approach because it no longer shares risk characteristics with other loans, or because the Company concludes repayment of the loan is entirely collateral-dependent, or when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan, the Company separately evaluates the amount of expected credit loss using other real estate valuation techniques, considering substantially the same credit factors as utilized in the model-dependent method. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, if repayment is expected solely from the collateral, as determined by management using valuation techniques, frequently discounted cash flow. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than the operation) of the collateral.

The Company’s first mortgage loans often contain provisions for future funding conditioned upon the borrower’s execution of its business plan with respect to the underlying collateral property securing the loan. These deferred fundings are typically for base building work, tenant improvement costs and leasing commissions, and occasionally to fund forecasted operating deficits during lease-up, or for interest reserves. These deferred funding commitments may be for specific periods, often require satisfaction by the borrower of conditions precedent, and may contain termination clauses at the option of the borrower or, more rarely, at the Company’s option. The total amount of unfunded commitments does not necessarily represent actual amounts that may be funded in cash in the future, since commitments may expire without being drawn, may be cancelled if certain conditions are not satisfied by the borrower, or borrowers may elect not to borrow some or all of the unused commitment. The Company does not recognize these unfunded loan commitments in its consolidated financial statements.

The Company applies its expected credit loss estimates to all future funding commitments that cannot be contractually terminated at the Company’s option. The Company maintains a separate allowance for credit losses from unfunded loan commitments, which is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applies the loss factors used in the allowance for credit loss methodology described above to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan.

In the past, the Company acquired CRE debt securities for investment purposes. The Company designated CRE debt securities as available-for-sale (“AFS”) on the acquisition date. CRE debt securities that were classified as AFS were recorded at fair value through other comprehensive income or loss in the Company’s consolidated financial statements. The Company recognized interest income on its CRE debt securities using the interest method, or on a straight-line basis when it approximated the effective interest method, with any premium or discount amortized or accreted into interest income based on the respective outstanding principal balance and corresponding contractual term of the CRE debt security. Accrued but not yet collected interest was separately reported as accrued interest receivable on the Company’s consolidated balance sheets. The Company used a specific identification method when determining the cost of a CRE debt security sold and the amount of unrealized gain or loss reclassified from accumulated other comprehensive income or loss into earnings on the trade date.

AFS debt securities in unrealized loss positions were evaluated for impairment related to credit losses at least quarterly. For the purpose of identifying and measuring impairment, any applicable accrued interest was excluded from both the fair value and the amortized cost basis. The Company had elected to write off accrued interest by reversing interest income in the event the accrued interest is deemed uncollectible, generally when the security became 90 days or more past due for principal and interest.

The Company first assessed whether it intended to sell the debt security or more likely than not was required to sell the debt security before recovery of its amortized cost basis. If either criterion regarding intent or requirement to sell was met, the debt security’s amortized cost basis was written down to its fair value and the write down was charged against the allowance for credit losses, with any incremental impairment reported in earnings as a loss in the consolidated statements of income (loss) and comprehensive income (loss).

Any AFS debt security in an unrealized loss position which the Company did not intend to sell or was not more likely than not required to sell before recovery of the amortized cost basis was assessed for expected credit losses. The performance indicators considered for CRE debt securities related to the underlying assets and included default rates, delinquency rates, percentage of nonperforming assets, debt-to-collateral ratios, third-party guarantees, current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, the Company compared the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected was less than the amortized cost basis for the security, a credit loss existed and an allowance for credit losses was recorded, limited by the amount the fair value was less than amortized cost basis.

Declines in fair value of AFS debt securities in an unrealized loss position that were not due to credit losses, such as declines due to changes in market interest rates, were recorded through other comprehensive income. Any impairment that had not been recorded through an allowance for credit losses was recognized in other comprehensive income. Unrealized gains and losses on AFS debt securities presented in the consolidated statements of income (loss) and comprehensive income (loss) included the reversal of unrealized gains and losses at the time gains or losses were realized.

Real estate acquired asthrough a ~~result of~~ foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned ~~(REO)~~(“REO”) and held for investment on the Company’s consolidated balance sheet until a pending sales transaction meets the ~~Company makes a determination~~criteria of ASC 360-10-45-9 and is considered to ~~sell.~~be held for sale or is sold. The Company's cost basis in REO is equal to the estimated fair value of the collateral at the date of acquisition, less estimated ~~costs to sell.~~selling costs. The estimated fair value of ~~the~~ REO is determined using a discounted cash flow model ~~using~~and inputs that include the highest and best use for each asset, estimated future values based on extensive discussions with local brokers, investors and other market participants, the estimated holding period for the asset, and discount rates that reflect estimated investor return requirements for the risks associated with the expected use of each asset. If the estimated fair value of ~~the~~ REO is lower than the carrying value of the related loan upon acquisition, the difference, along with any previously recorded specific CECL reserve, is recorded ~~as a realized loss~~through Credit Loss Benefit (Expense) in the consolidated statements of income (loss) and comprehensive income (loss). ~~Thereafter,~~

REO is initially measured at fair value and is thereafter subject to an ongoing impairment analysis. Subsequent to a REO acquisition, events or circumstances may occur that result in a material and sustained decrease in the cash flows generated from the ~~assets, potentially leading to impairment.~~asset. REO is ~~not measured at~~evaluated for recoverability, on a fair value ~~on an ongoing~~ basis, ~~but subject to fair value adjustments only in certain circumstances, such as~~ when ~~there is evidence of impairment.~~impairment indicators are identified. Any impairment loss, revenue and expenses from operations of the properties and resulting gains or losses on sale are included within the consolidated statements of income (loss) and comprehensive income (loss) ~~in Other Income, net.~~.

The Company finances its portfolio of loans, or participation interests therein, and REO using secured credit agreements, including secured credit facilities, mortgage loans payable, and collateralized loan obligations. The related borrowings are recorded as separate liabilities on the Company’s consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the related borrowings are reported separately on the Company’s consolidated statements of income (loss) and comprehensive income (loss).

In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. For all such syndications the Company has completed through ~~March 31,~~June 30, 2021, the Company transferred, on a non-recourse basis, 100% of the senior mortgage loan that the Company originated to a third-party lender, and retained as a loan investment a separate mezzanine loan investment secured by a pledge of the equity in the mortgage borrower. With respect to the senior mortgage ~~loan so~~loans transferred, the Company retains: no control over the mortgage loan; no economic interest in the mortgage loan; and no recourse to the purchaser or the borrower. Consequently, based on these circumstances and because the Company does not have any continuing involvement with the transferred senior mortgage loan, these syndications are accounted for as sales under GAAP and are removed from the Company’s consolidated financial statements at the time of transfer. The Company’s consolidated balance sheets only include the separate mezzanine loan remaining after the transfer.

For more information regarding the Company’s portfolio financing arrangements, see Note 7.

The Company follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), for its holdings of financial instruments. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. The Company determines the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market-based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The financial instruments recorded at fair value on a recurring basis in the Company’s consolidated financial statements are cash and cash equivalents and restricted cash. The three levels of inputs that may be used to measure fair value are as follows:

Level I—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level II—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level III—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

For certain financial instruments, the various inputs that management uses to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for such financial instrument is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company may use valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The market approach uses third-party valuations and information obtained from market transactions involving identical or similar assets or liabilities. The income approach uses projections of the future economic benefits of an instrument to determine its fair value, such as in the discounted cash flow methodology. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these financial instruments. Transfers between levels of the fair value hierarchy are assumed to occur at the end of the reporting period.

The following methods and assumptions are used by our Manager to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

As discussed above, market-based or observable inputs are generally the preferred source of values for purposes of measuring the fair value of the Company’s assets under GAAP. The commercial property investment sales and commercial mortgage loan markets have and continue to experience ~~extreme volatility, sharply~~ reduced transaction ~~volume, reduced~~volumes, uneven liquidity, and disruption as a result of COVID-19, which has made it more difficult to rely on market-based inputs in connection with the valuation of the Company’s assets under GAAP. Key valuation inputs include, but are not limited to, future operating cash flow and performance of collateral properties, the financial strength and liquidity of borrowers and sponsors, capitalization rates and discount rates used to value commercial real estate properties, and observable transactions involving the sale or financing of commercial properties. In the

GAAP permits the use of management assumptions to measure fair value. However, the considerable market volatility and disruption caused by COVID-19 and the considerable uncertainty regarding the ultimate impact and duration of the pandemic have made it more difficult for the Company’s management to formulate assumptions to measure the fair value of the Company’s assets.

The Company qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended, commencing with its initial taxable year ended December 31, 2014. To the extent that it annually distributes at least 90% of its REIT taxable income to stockholders and complies with various other requirements as a REIT, the Company generally will not be subject to U.S. federal income taxes on its distributed REIT taxable income. In 2017, the Internal Revenue Service issued a revenue procedure permitting “publicly offered” REITs to make elective stock dividends (i.e., dividends paid in a mixture of stock and cash), with at least 20% of the total distribution being paid in cash, to satisfy their REIT distribution requirements. Pursuant to this revenue procedure, the Company may elect to make future distributions of its taxable income in a mixture of stock and cash. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even though the Company currently qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income.

In certain instances, the Company may generate excess inclusion income (“EII”) within its corporate entity structure, specifically in its sub-REIT and taxable partnership entities. Generally, EII results from an economic environment with sustained low interest rates, where the Company’s loan portfolio benefits from its high LIBOR floors, and the related CLO financing transactions cost of funds are largely based on unfloored LIBOR or Compounded Secured Overnight Financing Rate (“SOFR”). EII, which is treated as unrelated business taxable income, is an obligation of the Company and is allocated only to its taxable REIT subsidiaries and not to its common stockholders.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs. Under ASC Topic 740, Income Taxes (“ASC 740”), a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. The Company intends to continue to operate in a manner consistent with, and to continue to meet the requirements to be treated as, a REIT for tax purposes and to distribute all of its REIT taxable income. Accordingly, the Company does not expect to pay corporate level federal taxes.

The Company ~~utilizes~~calculates basic earnings per share using the two-class method ~~when assessing~~which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines earnings per share for each share of common stock and participating securities according to ~~calculate~~dividends declared and participation rights in undistributed earnings. Under this method, all earnings ~~per~~(distributed and undistributed) are allocated to common ~~share.~~shares and participating securities based on their respective rights to receive dividends. Basic earnings per common share is ~~computed~~calculated by dividing ~~net income attributable~~earnings allocated to common ~~stockholders (i.e., holders of common stock and, when it was outstanding, Class A common stock),~~shareholders by the weighted-average number of common shares ~~(both common stock and, when it was outstanding, Class A common stock)~~ outstanding during the period. The preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Class A common stock were identical to the common stock, except (1) the Class A common stock was not a “margin security” as defined in Regulation U of the Board of Governors of the U.S. Federal Reserve System (and rulings and interpretations thereunder) and could not be listed on a national securities exchange or a national market system and (2) each share of Class A common stock was convertible at any time or from time to time, at the option of the holder, for one fully paid and non-assessable share of common stock. See Note 13 for details regarding the conversion of Class A common stock.

Diluted earnings per share is computed under the more dilutive of the treasury stock method or the two-class method. The computation of diluted earnings per share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of warrants ~~(the~~(the “Warrants”, see Note 13) issued in connection with the Company’s ~~Series~~Series B Cumulative Redeemable Preferred Stock ~~(“Series~~(the “Series B ~~Preferred”~~Preferred Stock”), which are exercisable only on a net-share settlement basis. The number of incremental shares is calculated utilizing the treasury stock method. The Company accounts for unvested share-based payment awards that contain non-forfeitable dividend rights or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method. The Company excludes participating securities and warrants from the calculation of diluted weighted average shares outstanding in periods of net losses since their effect would be anti-dilutive.

Share-based compensation consists of awards issued by the Company to certain employees of affiliates of the Manager and certain members of the Company’s Board of Directors. These share-based awards generally vest in installments over a fixed ~~period of time.~~period. Deferred stock units granted to the Company’s Board of Directors fully vest on the grant date and accrue dividends that are ~~paid-~~

inpaid-in kind through additional deferred stock units on a quarterly basis. Compensation expense is recognized in net income on a straight-line basis over the applicable award’s vesting period. Forfeitures of share-based awards are recognized as they occur.

Deferred financing costs are reflected net of the collateralized loan obligations, secured credit arrangements, and mortgage loan payable on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method, or on a straight-line basis when it approximates the interest method, as follows: (a) for secured credit arrangements other than our CRE CLOs, the initial term of the financing arrangement, or in case of costs directly associated with the loan, over the life of the facility or the loan, whichever is shorter; (b) for deferred financing costs related to mortgage loan payable, the initial maturities of the underlying loan(s) pledged to support the specific borrowing; and (c) for our CRE CLOs, ~~issued by the Company’s subsidiaries,~~ over the estimated life of the liabilities issued based on the underlying loans’ initial maturity dates, ~~of the underlying loans currently held by each trust based upon~~considering the expected repayment behavior of the loans collateralizing the notes ~~after giving effect to~~and the impact of any reinvestment ~~period, all~~periods, as of the closing date.

Cash and cash equivalents include cash held in banks or invested in money market funds with original maturities of less than 90 days. The Company deposits its cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $250,000 per account as of ~~March 31,~~June 30, 2021 and December 31, ~~2019.~~2020. The balances in these accounts may exceed the insured limits.

Pursuant to financial covenants applicable to Holdco, which is the guarantor of the Company’s recourse indebtedness, the Company is required to maintain minimum cash equal to the greater of (i) ~~$10~~$15 million or (ii) the product of 5% and the aggregate recourse indebtedness of the Company. To comply with this covenant, the Company held as part of its total cash balances ~~$10.8~~$15.0 million and $19.1 million, respectively, ~~at March 31,~~as of June 30, 2021 and December 31, 2020.

Restricted cash primarily represents deposit proceeds from potential borrowers which may be returned to borrowers, after deducting transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction.

Collateralized Loan Obligation Proceeds Held at Trustee represent the TRTX 2021-FL4 Ramp-Up Account ~~in an amount of approximately $308.9 million~~ available to purchase eligible collateral interests from the Company during a ramp-up period of approximately six months following the FL4 Closing ~~Date.~~Date, and cash held by the Company’s CLOs pending reinvestment in eligible collateral. As of June 30, 2021, the Company has fully utilized the TRTX 2021-FL4 Ramp-Up Account. See Note 6 for details of the TRTX 2021-FL4 issuance. ~~Also included is cash held by the Company’s CRE CLOs pending reinvestment in eligible collateral.~~

Accounts receivable from Servicer/Trustee represents cash proceeds from loan activities that have not been remitted to the Company based on established servicing and borrowing procedures. Such amounts are generally held by the Servicer/Trustee for less than 30 days before being remitted to the Company.

Total Stockholders’ Equity includes preferred stock, common stock, and warrants classified as temporary equity or permanent equity. Common shares generally represent a basic ownership interest in an entity and a residual corporate interest in liquidation, bearing the ultimate risk of loss and receiving the benefit of success. Common shares are usually perpetual in nature with voting rights and dividend rights. Preferred shares are usually characterized by the life of the instrument (i.e., perpetual or redeemable) and the ability of a holder to convert the equity instrument into cash, common shares, or a combination thereof. The terms of preferred shares can vary significantly, including but not limited to, an equity instrument’s dividend rate, term (e.g., inclusion of a stated redemption date), conversion features, voting rights, and liquidation preferences.

Equity instruments that are redeemable for cash or other assets are classified as temporary equity if the instrument is redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer.

Redeemable equity instruments are initially carried at the relative fair value of the equity instrument at the issuance date, which is subsequently adjusted at each balance sheet date if the instrument is currently redeemable or probable of becoming redeemable. The Series B Preferred Stock issued in connection with the Investment Agreement described in Note 13 is classified as temporary equity in the accompanying financial statements. The Company elected the accreted redemption value method under which it accretes changes in the redemption value over the period from the date of issuance of the Series B Preferred Stock to the earliest costless redemption date (the fourth anniversary) using the effective interest ~~method, as described in Note 13.~~method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on the Company’s ~~Consolidated Statements~~consolidated statements of ~~Changes~~changes in ~~Equity~~equity and treated similarly to a dividend on preferred stock for GAAP purposes. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock and accelerated the accretion of the redemption value. As of June 30, 2021, the Company had 0 shares of Series B Preferred Stock outstanding.The Series B Preferred Stock issuance, including details related to the Warrants, and redemption are described in Note 13.

The Company has preferred stock, common stock, and warrants outstanding that are classified as permanent equity. The Company’s common stock is perpetual in nature with voting rights and dividend rights. On June 14, 2021, the Company issued 8,050,000 shares of Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) that is classified as permanent equity. The outstanding shares of Series C Preferred Stock have a 6.25% dividend rate and may be redeemed by the Company on and after June 14, 2026. The Series C Preferred Stock issuance is described in Note 13.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions to GAAP requirements for modifications to debt agreements, leases, derivatives, and other contracts, related to the expected market transition from LIBOR, and certain other floating rate benchmark indices, or collectively, IBORs, to alternative reference rates. ASU 2020-04 generally considers contract modifications related to reference rate reform to be an event that does not require contract remeasurement at the modification date nor a reassessment of a previous accounting determination. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, “Reference Rate Reform: Scope.” This ASU provides optional guidance for a limited period of time to ease the burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This would apply to companies meeting certain criteria that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This standard is effective for the Company immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company continues to evaluate the documentation and control processes associated with its assets and liabilities to manage the transition away from LIBOR to an alternative rate endorsed by the Alternative Reference Rates Committee of the Federal Reserve System, and continues to utilize required resources to revise its control and risk management systems to ensure there is no disruption to our day-to-day operations from the transition, when it does occur. The Company will continue to employ prudent risk management as it relates to the potential financial, operational and legal risks associated with the expected cessation of LIBOR, and to ensure that its assets and liabilities generally remain match-indexed following this event. The Company is currently evaluating the impact of ASU 2020-04 on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements.

In ~~October 2020,~~April 2021, the FASB issued ASU ~~2020-10, Codification Improvements,~~2021-04, which ~~updates various codification topics by clarifying~~included Topic 260 “Earnings Per Share”. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or ~~improving disclosure requirements~~exchanges of freestanding equity-classified written call options due to ~~align with~~a lack of explicit guidance in the ~~SEC’s regulations.~~FASB Codification. The ~~ASU’s amendments are~~ASU 2021-04 is effective for ~~annual periods~~all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU ~~2020-04~~2021-04 on its consolidated financial statements.

The Company originates and acquires first mortgage and mezzanine loans secured by commercial properties. The Company considers these loans to ~~belong to~~comprise a single portfolio of mortgage loans, and the Company has developed its systematic methodology to determine the allowance for credit losses based on a single portfolio. For purposes of certain disclosures herein, the Company disaggregates this portfolio segment into the following classes of finance receivables: Senior loans; and Subordinated and Mezzanine loans. These loans can potentially subject the Company to concentrations of credit risk as measured by various metrics, including, without limitation, property type collateralizing the loan, loan size, loans to a single sponsor and loans in a single geographic area. The Company’s loans held for investment are accounted for at amortized cost. Interest accrued but not yet collected is separately reported as accrued interest and fees receivable on the Company’s consolidated balance sheets. Amounts within that caption relating to loans held for investment were ~~$14.3~~$13.9 million and $14.0 million as of ~~March 31,~~June 30, 2021 and December 31, 2020.

During the three months ended ~~March 31,~~June 30, 2021, the Company originated 19 mortgage ~~loan,~~loans, with a total commitment of ~~$45.4~~$752.5 million, an initial unpaid principal balance of ~~$37.5~~$597.0 million, and unfunded ~~commitment~~commitments at closing of ~~$7.9~~$155.5 million. During the six months ended June 30, 2021, the Company originated 10 mortgage loans, with a total commitment of $797.8 million, an initial unpaid principal balance of $634.5 million, and unfunded commitments at closing of $163.3 million.

The following table details overall statistics for the Company’s loan portfolio as of ~~March~~June 30, 2021 and December 31, ~~2021~~2020 (dollars in thousands):

The following tables present an overview of the mortgage loan investment portfolio by loan seniority as of ~~March 31,~~June 30, 2021 and December 31, 2020 (dollars in thousands):

For the ~~three~~six months ended ~~March 31,~~June 30, 2021, loan portfolio activity was as follows (dollars in thousands):

During the three months ended June 30, 2021, the Company sold one hotel loan with an unpaid principal balance of $60.7 million for $59.5 million, resulting in a loss on sale of $1.6 million, including transaction costs of $0.4 million,before giving effect to the reduction of the general CECL reserve resulting from the related decline in loan commitments.

~~At March 31, 2021 and December 31, 2020, there were 0 unamortized loan purchase discounts or premiums included in loans held for investment at amortized cost on the consolidated balance sheets.~~

~~At March 31,~~As of June 30, 2021 and December 31, 2020, there was ~~$7.2~~$7.6 million and $8.3 million, respectively, of unamortized loan fees and discounts included in loans held for investment, net in the consolidated balance sheets. The Company did 0t recognize any accelerated fee component of prepayment fees during the three months ended ~~March 31,~~June 30, 2021 and 2020, and recognized $0 million and $0.3 million of such payments, respectively, during the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020.

As of June 30, 2021 and December 31, 2020, there were no unamortized loan purchase discounts or premiums included in loans held for investment at amortized cost on the consolidated balance sheets.

As discussed in Note 2, the Company evaluates all of its loans to assign risk ratings on a quarterly basis. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are described in Note 2. The Company generally assigns a risk rating of “3” to ~~all~~its loan investments ~~originated during~~in the ~~most recent~~origination quarter, except in ~~the case of~~ specific circumstances ~~warranting an exception.~~that warrant a different risk rating based on current circumstances.

The following tables present amortized cost basis by origination year, grouped by risk rating, as of ~~March~~June 30, 2021 and December 31, ~~2021~~2020 (dollars in thousands):

Loans acquired rather than originated are presented in the table above in the column corresponding to the year of origination, not acquisition.

The table below summarizes the amortized cost, and results of the Company’s internal risk rating review performed as of ~~March 31,~~June 30, 2021 and December 31, 2020 (dollars in thousands):

The weighted average risk ~~ratings~~rating of the Company’s loans ~~remain~~remained unchanged at 3.1 as of ~~March 31,~~June 30, 2021 and December 31, 2020.

During the three months ended June 30, 2021, the Company assigned to 1 of its loans originated in the current quarter a risk rating of “2” based on the continued outperformance of the underlying collateral. This loan refinanced a loan held in the Company’s loan portfolio that carried a “2” risk rating at the time it was repaid in full. Additionally, as of June 30, 2021, the Company: upgraded 2 hotel loans from risk category “4” to “3” due to positive economic trends in the local markets and continued improvements in property-level operating performance; upgraded 4 condominium loans, to the same Sponsor, from risk category “4” to “3” due to improved Sponsor financial condition, pace of conversion work, and improving market conditions; and downgraded 1 office loan from risk category “2” to “3” due to slowing leasing activity.

During the three months ended March 31, 2021, the Company upgraded 1 loan from risk category “3” to “2” because the collateral property achieved ~~lease~~stabilized occupancy at rents in excess of ~~underwriting.~~underwritten rents.

The Company’s reserve developed pursuant to ASC 326 reflects its current estimate of potential credit losses related to its loan portfolio as of ~~March 31,~~June 30, 2021. As part of its allowance for credit losses, the Company maintains a separate allowance for credit losses related to unfunded loan commitments, and this amount is included in accrued expenses and other liabilities on the consolidated balance sheets. For further information on the policies that govern the estimation of the allowances for credit loss, ~~levels,~~ see Note 2.

The following tables present activity in the allowance for credit losses for the mortgage loan investment portfolio by class of finance receivable for the three and six months ended ~~March 31,~~June 30, 2021 and 2020 (dollars in thousands):

The amount of allowance for credit losses is influenced by the size of the Company’s loan portfolio, loan quality, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three months ended ~~March 31,~~June 30, 2021, the Company recorded a decrease of ~~$4.0~~$3.5 million to its allowance for credit losses. The decline in the Company’s allowance for credit losses was primarily due to an improving macroeconomic outlook based on recent observed economic data, improved property performance of underlying collateral for many of its loan investments that were adversely impacted by COVID-19, and normalizing commercial real estate capital markets activity. While the ultimate impact of these trends remains uncertain, the Company has selected its macroeconomic outlook based on this uncertainty, made specific forward-looking valuation adjustments to the inputs of its calculation of the allowance for credit losses ~~thus~~to reflect variability regarding the timing, strength, and distribution of a sustained economic recovery, and unknown post-COVID levels of economic activity that may result.

During the six months ended June 30, 2021, the Company recorded a decrease of $7.5 million to its allowance for credit losses, reducing ~~the total~~its CECL reserve to ~~$58.8~~$55.3 million as of ~~March 31,~~June 30, 2021. ~~This decline was primarilydue to expectations of improving macroeconomic conditions and actual improvements in operating results for many collateral properties adversely affected by COVID-19.~~ For the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Company’s estimate of expected credit losses was impacted by loan originations, sales, and repayments of $631.4 million, $60.7 million, and $339.3 million, respectively, recessionary and recovery macroeconomic assumptions employed in determining the model-based general CECL reserve, and an increase in the Company’s total loan commitments and unpaid principal balance as of June 30, 2021. For the six months ended June 30, 2020, the allowance for credit losses increased to ~~$83.0~~$58.7 million, comprised of $19.6 million in connection with the adoption of ASC 326 on January 1, 2020, and ~~$63.3~~$39.1 million ~~increase in provision~~ due to changes in economic outlook resulting from the initial impact of the COVID-19 pandemic. The average risk ~~ratings~~rating of the Company’s loans ~~remain~~remained unchanged at 3.1 as of ~~March 31,~~June 30, 2021, ~~and~~ December 31, ~~2020. The overall economic slowdown due to the COVID-19 pandemic has caused reduced investment sales~~2020, and financing activity in most sectors of the commercial real estate capital markets, which may moderate the pace of loan repayments and likely impact commercial property values and valuation inputs. While the ultimate impact of these trends remains uncertain, the Company has made certain forward-looking adjustments to the inputs of its calculation of the allowance for credit losses to reflect uncertainty regarding the timing, strength and distribution of the economic recovery, and the post-COVID levels of economic activity that may result. June 30, 2020.

NaN loan secured by a retail property was on non-accrual status as of ~~March 31,~~June 30, 2021 and December 31, 2020 due to a default caused by non-payment of interest in December 2020. The amortized cost of the loan was $31.2 million and $31.1 million as of ~~March 31,~~June 30, 2021 and December 31, 2020, respectively. In accordance with the Company’s revenue recognition policy on loans placed on non-accrual status, the Company suspended accrual of interest income on this first mortgage loan. ~~At March 31,~~As of June 30, 2021 and December 31, 2020, the Company determined that this first mortgage loan met the CECL framework’s criteria for individual assessment. Accordingly, the Company utilized the estimated fair value of the collateral on ~~March 31,~~June 30, 2021 and December 31, 2020 to estimate a loan loss reserve of $10.0 million, which is included in the CECL reserve. The Company’s estimate of the collateral’s fair market value was determined using a discounted cash flow model and Level 3 inputs, which include estimates of property-specific cash flows over a specific holding period, a discount rate of 12.5%, and a terminal capitalization rate of 7.5%. These inputs are based on the location, type and nature of the property, current and anticipated market conditions, and management’s knowledge, experience, and judgment. With the passage of time and continuation of the COVID-19 pandemic, certain borrowers may fail to pay interest which may result in additional loans being placed on non-accrual status during later periods.

During the three months ended ~~March 31,~~June 30, 2021, the Company executed 52 loan modifications with borrowers. As of ~~March 31,~~June 30, 2021, these loans had an aggregate commitment amount of ~~$397.7~~$186.9 million and an aggregate unpaid principal balance of ~~$393.5~~$174.0 million. None of ~~these~~the loan modifications ~~trigger~~triggered the accounting requirements ~~for accounting as TDRs. The Company’s~~of a troubled debt restructuring.

During the six months ended June 30, 2021, the Company executed 7 loan modifications. As of June 30, 2021, the aggregate number of loan modifications in effect was 12 with an unpaid principal balance of $1,032.9 million.All the modified loans are performing as of June 30, 2021.

Loan modifications implemented by the Company since January 1, 2021 typically ~~temporarily reduce~~involve the ~~amount~~adjustment or waiver of ~~cash interest collected, permit~~property level or business plan milestones or performance tests that are prerequisite to the ~~accrual~~extension of a ~~portion (typically not more than 50%)~~loan maturity in exchange for borrower concessions that may include any or all of the ~~interest due, to be repaid at~~following: a ~~later date~~partial repayment of principal; termination of all or a portion of the remaining unfunded loan commitment; a cash infusion by the sponsor or borrower ~~and/~~to replenish loan reserves (interest or ~~permit~~capital improvements); additional call protection; and an increase in the ~~use~~loan coupon. Loan modifications implemented by the Company in 2020 typically involved the repurposing of existing reserves to pay interest and other property-level expenses, ~~as well as~~and providing ~~accommodations on~~relief to conditions for extension, such as waiving debt yield tests ~~and/~~or modifying the conditions upon which the underlying borrower may extend the maturity date. In exchange, borrowers and sponsors ~~have~~ made partial principal repayments and/or provided additional cash for payment of interest, operating expenses, and replenishment of interest reserves or capital reserves in amounts and combinations acceptable to the Company. ~~All of~~

The following table presents the ~~modified loans are performing as of March 31, 2021. As of March 31,~~activity in the PIK balance during the six months ended June 30, 2021 (dollars in thousands):

For the ~~aggregate number of modified loans outstanding was 11 with an unpaid principal balance of $943.5 million. Total~~three months ended June 30, 2021, total PIK interest of ~~$0.8~~$0.4 million on two loans was deferred and added to the outstanding loan ~~principal~~principal. For the six months ended June 30, 2021, total PIK interest of $1.2 million on two loans was deferred and added to the outstanding loan principal. PIK interest on eight loans was outstanding as of June 30, 2021.

The following table presents collections of scheduled interest during the three and six months ended June 30, 2021 and 2020 and the three months ended March 31, 2021. During the three months ended March 31, 2021, the Company collected 99.4% of interest collections, including PIK interest of 1.2%, compared to 96.7% of interest collections, including PIK interest of 1.7% during the three months ended December 31, 2020. The Company collected 99.1% of interest collections during the three months ended March 31, 2020. The Company did 0t defer any PIK interest during the three months ended March 31, 2020. The following table presents the activity in the PIK balance during the three months ended March 31, 2021 (dollars in thousands): 2021:

The following table presents the aging analysis on an amortized cost basis of mortgage loans by class of loans as of ~~March 31,~~June 30, 2021 (dollars in thousands):

In December 2020, the Company acquired 2 undeveloped commercially-zoned land parcels on the Las Vegas Strip comprising 27 acres (the ~~“Property”~~“REO Property”) pursuant to a negotiated deed-in-lieu of foreclosure. At September 30, 2020, this property served as collateral for a first mortgage loan receivable held for investment with an unpaid principal balance of $112.0 million, an independently-assessed credit loss reserve of $12.8 million, and a net carrying value ofThe Company's cost basis in the REO Property was $99.2 million. On October 9, 2020, the first mortgage loan reached final maturity without repayment or satisfaction of extension conditions, which triggered a maturity default. On December 31, 2020, the Company took ownership of the Property, extinguished the first mortgage loan receivable, and realized a loss of $12.8 million, equal to the ~~previously recorded specific CECL reserve on the first mortgage loan. At March 31, 2021, the Company continued to hold the Property at its~~ estimated fair value of the collateral at the ~~time~~date of acquisition, net of estimated selling ~~costs, of $99.2 million.~~costs. The Company’s estimate of the REO Property’s fair value was determined using a discounted cash flow model and Level 3 inputs, which include estimates of parcel-specific cash flows over a specific holding period, at a discount rate that ranges between 8.0% - 17.5% based on the risk profile of estimated cash flows associated with each respective parcel, and an estimated capitalization rate of 6.25%, where applicable. These inputs are based on the highest and best use for each parcel, estimated future values for the parcels based on extensive discussions with local brokers, investors and other market participants, the estimated holding period for the parcels, and discount rates that reflect estimated investor return requirements for the risks associated with the expected use of each sub-parcel.

As of June 30, 2021, the Company continued to hold the REO Property at its estimated fair value at the time of acquisition, net of estimated selling costs, of $99.2 million. The Company obtained from a third party a $50.0 million non-recourse first mortgage loan secured by the REO Property, which is classified as Mortgage Loan Payable on the ~~Company’s~~ consolidated balance sheets. See Note 7 for details of the Mortgage Loan Payable.

For the ~~three~~six months ended ~~March 31,~~June 30, 2021, operating revenues from the REO ~~asset~~Property were sufficient to cover the operating expenses and were immaterial to the financial results of the Company.

As of ~~March 31,~~June 30, 2021, ~~and December 31, 2020,~~ the Company did 0t own any CRE debt securities. The Company did 0t acquire any CRE debt securities during the three and six months ended ~~March 31,~~June 30, 2021. During the six months ended June 30, 2020, all but one of the Company’s CRE debt securities was pledged as collateral under daily mark-to-market secured credit agreements.

During the three months ended March 31, 2020, the Company sold 11 of its CRE CLO investments for total net proceeds of $151.6 million, recognizing a loss on sale of $36.2 million included in Securities Impairments on the consolidated ~~statements~~statement of income (loss) and comprehensive income (loss).

~~During the quarter ended March 31, 2020, all but one of the Company’s CRE debt securities portfolio was pledged as collateral under daily mark-to-market secured credit facilities.~~ Fluctuations in the value of the Company’s CRE debt securities portfolio resulted in the

Company being required to post cash collateral with the Company’s lenders under these facilities. To mitigate the impact to the Company’s business from these developments, the Company decided in late March 2020 to sell ~~substantially all of the Company’s~~its entire CRE debt securities portfolio. Accordingly, atas of March 31, 2020, the Company ~~determined it no longer had the intent and ability to retain its investment portfolio of CRE debt securities,~~ wrote down the entire portfolio to its estimated fair value (on securities where amortized cost basis exceeded fair value), and recorded an impairment charge of $167.3 million, which iswas recognized as expense in Securities Impairments on the consolidated ~~statements~~statement of income (loss) and comprehensive income (loss). ~~During~~In April 2020, the Company sold the remainder of its CRE debt securities portfolio with an aggregate face value of $782.0 million generating gross sales proceeds of $614.8 million. After retiring $581.7 million of repurchase financing and generating net cash proceeds of $33.1 million, the Company recorded aggregate losses from these sales of $167.3 million approximately equal to the impairment charge recorded during the three months ended March 31, 2020. For the six months ended June 30, 2020, the Company recorded a total ~~loss~~impairment charges of ~~$203.5~~$203.4 million recognized as expense in Securities Impairments on the consolidated ~~statements~~statement of income (loss) and comprehensive income (loss), offset by a small realized gain.

Subsidiaries of the Company have outstanding ~~at March 31, 2020~~as of June 30, 2021 3 collateralized loan obligations to finance approximately ~~$3.2~~$3.4 billion or ~~69.0%~~70.2% of the Company’s loan investment portfolio, measured by unpaid principal balance.

On March 31, 2021 (the “FL4 Closing Date”), TPG RE Finance Trust CLO Sub-REIT (“Sub-REIT”), a subsidiary of the Company, entered into a collateralized loan obligation (“TRTX 2021-FL4” or “FL4”) through its wholly-owned subsidiaries TRTX 2021-FL4 Issuer, Ltd., an exempted company incorporated in the Cayman Islands with limited liability, as issuer (the “FL4 Issuer”), and TRTX 2021-FL4 Co-Issuer, LLC, a Delaware limited liability company, as co-issuer (the “FL4 Co-Issuer” and together with the FL4 Issuer, the “FL4 Issuers”). On the FL4 Closing Date, FL4 Issuer issued $1.25 billion principal amount of notes (the “FL4 Notes”). The FL4 Co-Issuer co-issued $1.04 billion principal amount of investment grade-rated notes which were purchased by third party investors. Concurrently with the issuance of the FL4 Notes, the FL4 Issuer also issued 112,500 preferred shares, par value $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “FL4 Preferred Shares” and, together with the FL4 Notes, the “FL4 Securities”), to TRTX Master Retention Holder, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of the Company (“FL4 Retention Holder”).

Proceeds from the issuance of the FL4 Securities were used to (i) purchase 1 commercial real estate whole loan (the “FL4 Closing Date Whole Loan”) and 17 pari passu participations in 17 separate commercial real estate whole loans (the “FL4 Closing Date Pari Passu Participations” and, together with the FL4 Closing Date Whole Loan, the “FL4 Closing Date Collateral Interests”), (ii) fund an account (the “FL4 Ramp-Up Account”) in an amount of approximately $308.9 million to be used to purchase eligible collateral interests during a ramp-up period of approximately six months following the Closing Date (the “FL4 Ramp-Up Collateral Interests,” and, together with the FL4 Whole Loans, the “FL4 Initial Collateral Interests”) and (iii) to distribute to the Company $104.8 million of cash for investment or other corporate uses. The FL4 Closing Date Collateral Interests were purchased by the FL4 Issuer from the FL4 Seller, a wholly-owned subsidiary of the Company and an affiliate of the FL4 Issuers.

The FL4 Ramp-Up Account represents cash held at the trustee and is included in Collateralized Loan Obligation Proceeds Held at Trustee on the Company’s consolidated balance sheets. The FL4 Ramp-Up Account is available to purchase eligible collateral interests from the Company ~~during the six-month ramp-up period. In the event~~fully invested the FL4 Ramp-Up Account ~~is not fully utilized within six~~of $308.9 million during the three months of the FL4 Closing Date, amounts up to and including $5.0 million shall be deposited into the FL4 reinvestment account. Any amounts in excess of $5.0 million shall be applied to retire FL4 bonds payable on the first payment date after the ramp-up period in accordance with the priority of payments.ended June 30, 2021.

TRTX 2021-FL4 permits the Company, during the 24 months after closing, to contribute eligible new loans or participation interests (the “FL4 Additional Interests”) in loans to TRTX 2021-FL4 in exchange for cash, which provides additional liquidity to the Company to originate new loan investments as underlying loans repay.

In addition to fully utilizing the FL4 ~~Closing Date Collateral Interests~~Ramp-Up Account, the Company utilized the reinvestment feature twice, contributing $77.2 million of new loans or participation interests, receiving net proceeds of $15.5 million after repaying $23.5 million of existing borrowings, including accrued interest.

As of June 30, 2021, FL4 Mortgage Assets represented ~~20.5%~~24.8% of the aggregate unpaid principal balance of the Company’s loan investment portfolio and had an aggregate principal balance of approximately ~~$0.9~~$1.2 billion as of ~~March 31,~~June 30, 2021.

As of June 30, 2021, ~~and $308.9~~TRTX 2019-FL4 had $52.6 million of cash available to acquire eligible assets which is included in Collateralized Loan Obligation Proceeds Held at Trustee on the ~~FL4 Ramp-Up Account to be used for purchase of certain other collateral interests during the ramp-up period.~~Company’s consolidated balance sheets.

In connection with TRTX 2021-FL4, the Company incurred $8.3 million of issuance costs which are amortized on an effective yield basis over the expected life of the investment-grade notes issued based upon the expected repayment behavior of the loans collateralizing the notes after giving effect to the reinvestment period, both as of the FL4 Closing Date. As of ~~March 31,~~June 30, 2021, the Company’s unamortized issuance costs related to TRTX 2021-FL4 were ~~$8.3~~$7.8 million.

Interest expense on the outstanding FL4 Notes is payable monthly. For the three and six months ended ~~March 31,~~June 30, 2021, interest expense on the outstanding FL4 Notes (excluding amortization of deferred financing costs) of ~~$0.04~~$4.6 million and $4.7 million, respectively, is included in the Company’s consolidated statements of income (loss) and comprehensive income (loss).

On October 25, 2019 (the “FL3 Closing Date”), Sub-REIT entered into a collateralized loan obligation (“TRTX 2019-FL3” or “FL3”). TRTX 2019-FL3 provides for reinvestment, during the 24 months after closing of FL3, whereby eligible new loans or participation interests (the “FL3 Additional Interests”) in loans may be contributed to TRTX 2019-FL3 in exchange for cash, which provides liquidity to the Company to originate new loan investments as underlying loans repay.

For the three and six months ended ~~March 31,~~June 30, 2021, the Company did not utilize the reinvestment feature. For the three months ended ~~March 31,~~June 30, 2020, the Company utilized the reinvestment feature ~~four~~two times, contributing ~~$157.3~~$5.8 million of new loans or participating interests in loans, and receiving ~~$47.3~~$2.0 million of cash, after the repayment of ~~$110.0~~$3.8 million of existing borrowings, including accrued interest. For the six months ended June 30, 2020, the Company utilized the reinvestment feature six times, contributing $163.1 million of new loans or participating interests in loans, and receiving $49.3 million of cash, after the repayment of $113.8 million of existing borrowings, including accrued interest.

As of ~~March 31,~~June 30, 2021 FL3 Mortgage Assets represented ~~26.8%~~25.4% of the aggregate unpaid principal balance of the Company’s loan investment portfolio and had an aggregate principal balance of approximately $1.2 billion.

~~At March 31,~~As of June 30, 2021, TRTX 2019-FL3 had $1.2 million of cash available to acquire eligible assets which is included in Collateralized Loan Obligation Proceeds Held at Trustee on the Company’s consolidated balance sheets.

In connection with TRTX 2019-FL3, the Company incurred $7.8 million of issuance costs which are amortized on an effective yield basis over the expected life of the investment-grade notes issued based upon the expected repayment behavior of the loans collateralizing the notes after giving effect to the reinvestment period, both as of the FL3 Closing Date. As of ~~March 31,~~June 30, 2021, the Company’s unamortized issuance costs related to TRTX 2019-FL3 were ~~$4.5~~$3.9 million.

Interest expense on the outstanding FL3 Notes is payable monthly. On March 5, 2021, the Financial Conduct Authority of the U.K. (the “FCA”) announced that all LIBOR tenors relevant to us will cease to be published or will no longer be representative after June 30, 2023. The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event, and on May 17, 2021, Wells Fargo Bank, National Association, solely in their capacity as designated transaction representative under the FL3 indenture, determined that a benchmark transition event had occurred with respect to FL3. Accordingly, on June 15, 2021, the benchmark index interest rate for bondholders under FL3 was converted from LIBOR to SOFR plus a benchmark replacement adjustment of 11.448 basis points, conforming with the FL3 Indenture and the recommendation of the ARRC. The designated transaction representative has further determined that SOFR for any interest accrual period shall be the “30-Day Average SOFR” published on the website of the Federal Reserve Bank of New York on each benchmark determination date. SOFR will be determined by the calculation agent in arrears using a lookback period equal to the number of calendar days in such interest accrual period plus two SOFR Business Days. As of June 30, 2021, the FL3 mortgage assets are indexed to LIBOR and the borrowings under FL3 are indexed to SOFR, creating an underlying benchmark index interest rate basis difference between FL3 assets and liabilities, which is meant to be mitigated by the benchmark replacement adjustment described above. The Company has the right to transition the FL3 mortgage assets to SOFR, eliminating the basis difference between FL3 assets and liabilities, and will make its determination taking into account the loan portfolio as a whole. The transition to SOFR is not expected to have a material impact to FL3’s assets and liabilities and related interest expense.

For the three and six months ended ~~March 31,~~June 30, 2021, interest expense on the outstanding FL3 Notes (excluding amortization of deferred financing costs) of $3.8 million and $7.6 million, respectively, is included in the Company’s consolidated statements of income (loss) and comprehensive income (loss).For the three and six months ended June 30, 2020, interest expense on the outstanding FL3 Notes (excluding amortization of deferred financing costs) of $4.8 million and $12.1 million, respectively, is included in the Company’s consolidated statements of income (loss) and comprehensive income (loss).

On November 29, 2018 (the “FL2 Closing Date”), Sub-REIT entered into a collateralized loan obligation (“TRTX 2018-FL2” or “FL2”). TRTX 2018-FL2 provides for reinvestment, during the 24 months after closing of FL2, whereby eligible new loans or

participation interests in loans may be contributed to TRTX 2018-FL2 in exchange for cash, which provided additional liquidity to the Company to originate new loan investments as underlying loans repay. The reinvestment period for TRTX 2018-FL2 ended on December 11, 2020. ~~At March 31,~~ For the three and six months ended June 30, 2021, the Company repaid $32.2 million and $36.4 million, respectively, of existing borrowings under TRTX ~~2018-FL2 had 0 cash available to acquire eligible assets.~~ 2018-FL2. For the three months ended ~~March 31,~~June 30, 2020, the Company utilized the reinvestment feature ~~three times,~~twice, contributing ~~$74.3~~$58.8 million of new loans or participation interests in loans, and receiving net cash proceeds of ~~$45.1~~$20.5 million, after the repayment of ~~$29.2~~$38.3 million of existing borrowings, including accrued interest. For the six months ended June 30, 2020, the Company utilized the reinvestment feature five times, contributing $133.0 million of new loans or participation interests in loans, and receiving net cash proceeds of $65.6 million, after the repayment of $67.4 million of existing borrowings, including accrued interest.

As of ~~March 31,~~June 30, 2021, FL2 Mortgage Assets represented ~~21.7%~~20.0% of the aggregate unpaid principal balance of the Company’s loan investment portfolio and had an aggregate principal balance of approximately ~~$1.0 billion~~ $964.5 million..

In connection with TRTX 2018-FL2, the Company incurred $8.7 million of issuance costs which are amortized on an effective yield basis over the expected life of the investment-grade notes (the “FL2 Notes”) issued based upon the expected repayment behavior of the loans collateralizing the notes and the reinvestment period, both as of the FL2 Closing Date. As of ~~March 31,~~June 30, 2021, the Company’s unamortized issuance costs related to TRTX 2018-FL2 were ~~$3.2~~$2.6 million.

Interest expense on the outstanding FL2 Notes is payable monthly. For the three and six months ended ~~March 31,~~June 30, 2021, interest expense on the outstanding FL2 Notes (excluding amortization of deferred financing costs) of $3.1 million and $6.2 million, respectively, is included in the Company’s consolidated statements of income (loss) and comprehensive income (loss). For the three and six months ended June 30, 2020, interest expense on the outstanding FL2 Notes (excluding amortization of deferred financing costs) of $4.0 million and $10.0 million, respectively, is included in the Company’s consolidated statements of income (loss) and comprehensive income (loss).

In accordance with ASC 810, the Company evaluated the key attributes of the issuers of the FL4 Notes (the “FL4 Issuers”), FL3 Notes (the “FL3 Issuers”) and the issuers of the FL2 Notes (the “FL2 Issuers”) to determine if they were VIEs and, if so, whether the Company was the primary beneficiary of their operating activities. This analysis caused the Company to conclude that the FL4 Issuers, FL3 Issuers and the FL2 Issuers were VIEs and that the Company was the primary beneficiary. The Company is the primary beneficiary because it has the ability to control the most significant activities of the FL4 Issuers, FL3 Issuers and the FL2 Issuers, the obligation to absorb losses to the extent of its equity investments, and the right to receive benefits, that could potentially be significant to these entities. Accordingly, the Company consolidates the FL4 Issuers, FL3 Issuers and the FL2 Issuers.

The Company’s total assets and total liabilities as of ~~March 31,~~June 30, 2021 and December 31, 2020 included the following VIE assets and liabilities of TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 (dollars in thousands):

The following tables outline TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 loan collateral and borrowings under the TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 collateralized loan obligations as of ~~March 31,~~June 30, 2021 and December 31, 2020 (dollars in thousands):

Assets held by the FL4 Issuers, FL3 Issuers and the FL2 Issuers are restricted and can only be used to settle obligations of the related VIE. The liabilities of the FL4 Issuers, FL3 Issuers and the FL2 Issuers are non-recourse to the Company and can only be satisfied from the then-current assets of the related VIE.

The following table outlines the weighted average spreads and maturities for TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 loan collateral and borrowings under the TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 collateralized loan obligations as of ~~March 31,~~June 30, 2021 and December 31, 2020 (dollars in thousands):

~~At March 31,~~As of June 30, 2021 and December 31, 2020, the Company had secured credit facilities ~~and a mortgage loan payable, all of which were~~ used to finance certain of the Company’s loan ~~investments.~~investments, and a mortgage loan payable used to finance the Company’s REO Property. These financing arrangements bear interest at rates equal to LIBOR plus a credit spread negotiated between the Company and each lender, often a separate credit spread for each pledge of collateral, which is primarily based on property type and advance rate against the unpaid principal balance of the pledged loan. Except for the mortgage loan payable, these borrowing arrangements contain defined mark-to-market provisions that permit our lenders to issue margin calls to the Company in the event that the collateral properties underlying the Company’s loans pledged to the Company’s lenders experience a non-temporary decline in value (“credit marks”) due to reasons other than capital markets events that result in changing credit spreads for similar borrowing obligations. In connection with one of these borrowing arrangements, the lender is also permitted to issue margin calls to the Company in the event the lender determines capital markets events have caused credit spreads to change for similar borrowing obligations (“spread marks”).

The following table presents certain information regarding the Company’s secured credit agreements as of ~~March 31,~~June 30, 2021 and December 31, 2020. Except as otherwise noted, all agreements are on a partial (25%) recourse basis (dollars in thousands):

The Company’s secured credit facilities contain defined mark-to-market provisions that permit the lenders to issue margin calls in the event ~~that the~~ collateral properties ~~underlying~~securing the Company’s ~~loans pledged to its lenders~~borrowings experience a non-temporary decline in value or net cash flow (“credit marks”) ~~due to reasons other than capital markets events that result in changing credit spreads for similar borrowing obligations.~~. In connection with one of these borrowing arrangements, the lender is also permitted to issue margin calls to the Company in the event the lender determines capital markets events have caused credit spreads to change for similar borrowing obligations (“spread marks”). Furthermore, in connection with one of these borrowing arrangements, the lender has the right to re-margin the secured credit facility based solely on appraised loan-to-values inafter the ~~third year~~second anniversary date of the facility. The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of ~~March 31,~~June 30, 2021:

The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of December 31, 2020:

~~At March 31,~~As of June 30, 2021 and December 31, 2020, the Company had 7 secured credit facilities to finance its loan investing activities. Credit spreads vary depending upon the collateral type, advance rate and other factors. Assets pledged ~~at March 31,~~as of June 30, 2021 and December 31, 2020 consisted of 3749 and 55 mortgage loans, or participation interests therein, respectively. Under ~~these~~six of the seven secured credit agreements, the Company transfers all of its rights, title and interest in the loans to the ~~repurchase~~secured credit facility counterparty in exchange for cash, and simultaneously agrees to reacquire the asset at a future date for an amount equal to the cash exchanged plus an interest factor. The ~~repurchase counterparty (lender)~~secured credit facility lender collects all principal and interest on related loans and remits to the Company the net amount after the lender collects its interest and other fees. For the seventh credit facility, which is a mortgage warehouse facility, the lender receives a security interest (pledge) in the loans financed under the arrangement. The secured credit facilities used to finance loan investments are 25% recourse to Holdco.

Under each of the Company’s secured credit facilities, including the mortgage warehouse facility, the Company is required to post margin for changes in conditions to specific loans that serve as collateral for those secured credit facilities. The lender’s margin amount is in all but one instance limited to collateral-specific credit marks based on other-than-temporary declines in the value of the properties securing the underlying loan collateral. Market value determinations and redeterminations may be made by the repurchase lender in its sole discretion subject to certain specified parameters. ~~In the case of assets that serve as collateral under the Company’s secured credit facilities secured by loans, these~~These considerations include credit-based factors (which are generally based on factors other than those related to the capital markets). In only one instance do the considerations include changes in observable credit spreads in the market for these assets. These factors are described in the immediately preceding table.

The following table summarizes certain characteristics of the Company’s secured credit ~~agreements~~facilities secured by commercial mortgage loans, including counterparty concentration risks, ~~at March 31,~~as of June 30, 2021 (dollars in thousands):

The ~~Company’s~~ financial covenants and guarantees for outstanding borrowings related to ~~our~~the Company’s secured credit ~~agreements and secured revolving credit agreements~~facilities require Holdco to maintain compliance with the following financial covenants (among others), which were revised on ~~May 28, 2020~~June 7, 2021 as follows:

The amendments as of ~~May 28, 2020~~June 7, 2021 revised the ~~definition of~~minimum tangible net worth test such that the ~~baseline~~ amount for testing was reset as of ~~April 1, 2020~~June 7, 2021 to ~~$1.1~~$1.0 billion plus 75% of net future equity issuances after ~~April 1, 2020. The definition~~June 7, 2021 minus 75% of redeemed equity or stock after June 7, 2021. Holdco’s equity for purposes of calculating the debt-to-equity ~~covenant~~test (which was revised as of June 7, 2021 at 4.25 to 1:00) was revised to include: ~~common equity; preferred equity;~~stockholders’ equity as determined by GAAP; any other equity instrument(s) issued by Holdco or its Subsidiary that is or are classified as temporary equity under GAAP; and an adjustment equal to the sum of the Current Expected Credit Loss reserve, write-downs, impairments or realized losses ~~recorded~~taken against the value of any assets of Holdco or its subsidiaries

from and after April 1, 2020; provided, however, that the equity adjustment may not exceed the amount of (a) Holdco’s total equity less (b) the product of Holdco’s total indebtedness multiplied by 25%. Additionally, the minimum liquidity test was increased as of June 7, 2021 to be no less than the greater of (x) 15.0 million and (y) 5% of Holdco’s recourse indebtedness, and the minimum interest coverage ratio test remained unchanged at 1.5 to 1.0.

For as long as the Series B Preferred Stock is outstanding, the Company is required to maintain a debt-to-equity ratio not greater than 3.0 to 1.0. For the purpose of determining this ratio, the aggregate liquidation preference of the outstanding shares of Series B Preferred Stock is excluded from the calculation of total indebtedness of the Company and its subsidiaries, and is included in the calculation of total stockholders’ equity. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock.

The Company was in compliance with all financial covenants to the extent that balances were outstanding as of ~~March 31,~~June 30, 2021 and December 31, 2020.

Negative impacts on the Company’s business caused by COVID-19 ~~have and~~ may ~~continue to~~ make it more difficult to meet or satisfy these covenants, and there can be no assurance that the Company will remain in compliance with these covenants in the future.

The Company through a special purpose entity subsidiary is a borrower under a $50.0 million mortgage loan secured by a first deed of trust against the REO Property. Refer to Note 4 for additional information. The first mortgage loan was provided by an institutional lender, has an initial maturity date of December 15, 2021, and includes an option to extend the maturity for 12 months subject to the satisfaction of customary extension conditions, including (i) the purchase of a new interest rate cap for the extension term, (ii) replenishment of the interest reserve with an amount equal to 12 months of debt service, (iii) payment of a 0.25% extension fee on the outstanding principal balance, and (iv) no event of default. The first mortgage loan permits partial releases of collateral in exchange for payment of a minimum release price equal to the greater of 100% of net sales proceeds (after reasonable transaction expenses) or 115% of the allocated loan amount. The loan bears interest at a rate of LIBOR plus 4.50% subject to a LIBOR interest rate floor of 0.50% and a rate cap of 0.50%. The Company has posted cash of $2.4 million to pre-fund interest payments due under the note during its initial term. ~~At March 31,~~As of June 30, 2021, the remaining reserve balance was ~~$2.0~~$1.4 million.

The future principal payments for the five years subsequent to ~~March 31,~~June 30, 2021 and thereafter are as follows (in thousands):

The Company’s consolidated balance sheet includes Level I fair value measurements related to cash equivalents, restricted cash, accounts receivable, and accrued liabilities. ~~At March 31,~~As of June 30, 2021, the Company had ~~$291.8~~$144.0 million invested in money market funds with original maturities of less than 90 days. The carrying values of these financial assets and liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. The consolidated balance sheet also includes loans held for investment, the assets and liabilities of TRTX 2018-FL2, TRTX 2019-FL3 and TRTX 2021-FL4, ~~(as of March 31, 2021),~~ and secured debt agreements that are considered Level III fair value measurements that are not measured at fair value on a recurring basis but are subject to fair value adjustments utilizing the fair value of the underlying collateral when there is evidence of impairment and when the loan is dependent solely on the collateral for payment of principal and interest.

The following tables provide information about the fair value of the Company’s financial assets and liabilities on the Company’s consolidated balance sheets as of ~~March 31,~~June 30, 2021 and December 31, 2020 (dollars in thousands):

~~At March 31,~~As of June 30, 2021 and December 31, 2020, the estimated fair value of Loans Held for Investment was ~~$4.6~~$4.8 billion and $4.5 billion, respectively, which approximated carrying value. The weighted average gross credit spread ~~at March 31,~~as of June 30, 2021 and December 31, 2020 was ~~3.19%~~3.23% and 3.18%, respectively. The weighted average years to maturity ~~at March 31,~~as of June 30, 2021 and December 31, 2020 was 2.9 years and 3.1 years, respectively, assuming full extension of all loans.

~~At March 31,~~As of June 30, 2021 and December 31, 2020, the estimated fair value of the secured credit agreements approximated fair value as current borrowing spreads reflect market terms. ~~At March 31,~~As of June 30, 2021 and December 31, 2020, the estimated fair value of the Collateralized Loan Obligation liabilities approximated carrying value as current borrowing spreads reflect market terms.

Changes in assets and liabilities with Level III fair values for the ~~three~~six months ended ~~March 31,~~June 30, 2021 are as ~~follows:~~follows (dollars in thousands):

There were 0 transfers of financial assets or liabilities within the levels of the fair value hierarchy during the ~~three~~six months ended ~~March 31,~~June 30, 2021.

The Company indirectly owns 100% of the equity of multiple taxable REIT subsidiaries (collectively “TRSs”). TRSs are subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRSs that are not conducted on an arm’s-length basis. The Company files income tax returns in the United States federal jurisdiction as well as various state and local jurisdictions. The filings are subject to normal reviews by tax authorities until the related statute of limitations expires. The years open to examination generally range from 2017 to present.

ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of ~~March 31,~~June 30, 2021 and December 31, 2020, based on the Company’s evaluation, the Company did 0t have any material uncertain income tax positions.

The Company’s policy is to classify interest and penalties associated with underpayment of U.S. federal and state income taxes, if any, as a component of general and administrative expense on its consolidated statements of income (loss) and comprehensive income (loss). For the three and six months ended ~~March 31,~~June 30, 2021, the Company did 0t have interest or penalties associated with the underpayment of any income taxes.

The Company owns, through a tax partnership (“Parent LLC”), 100% of the common equity in Sub-REIT, which qualifies as a REIT for U.S. federal income tax purposes and is a separate taxpayer from both the Company and Parent LLC. Parent LLC is owned by the Company both directly and through a TRS. The Company, through Sub-REIT, issues CRE CLO liabilities (“CLOs”) to finance on a non-recourse, non-mark-to-market basis a large proportion of its loan investment portfolio. Due to unusually low LIBOR rates beginning in March 2020 coupled with the benefit of LIBOR floors relating to the various loans and participation interests pledged to Sub-REIT’s CLOs, certain of Sub-REIT‘s CLOs currently generate excess inclusion income (“EII”), which is treated as unrelated business taxable income (“UBTI”). Published IRS guidance requires that Sub-REIT allocate its EII in accordance with its dividends paid. Accordingly, EII generated by Sub-REIT‘s CLOs is allocated to Parent LLC. Pursuant to the Parent LLC operating agreement, any EII allocated from Sub-REIT to Parent LLC is allocated further to the TRS. Consequently, no EII is allocated to the Company and, as a result, the Company’s shareholders will not be allocated any EII or UBTI by the Company. The tax liability borne by the TRS on the EII is at the highest U.S. federal corporate tax rate (currently 21%). This tax liability is included in the consolidated statements of income (loss) and comprehensive income (loss) and balance sheets of the Company.

For the three months ended ~~March 31, 2021 and 2020, the Company incurred 0 federal, state or local tax relating to its TRSs. For the three months ended March 31,~~June 30, 2021 and 2020, the Company recognized ~~$0.9~~$0.2 million and $0.1 million, respectively, of federal, state, and local tax expense. ~~At March 31,~~For the six months ended June 30, 2021 and 2020, the Company recognized $1.2 million and $0.2 million, respectively, of federal, state and local tax expense (benefit). As of June 30, 2021 and 2020, the Company’s effective tax rate was ~~2.8%~~1.8% and ~~0.5%~~0.2%, respectively.

As of December 31, 2020, 0 deferred income tax assets or liabilities were recorded for the operating activities of the Company’s TRSs.

From March 23, 2020 through April 2020, the Company sold all its CRE debt securities with an aggregate face value of $969.8 million, generating gross sales proceeds of $766.4 million. The Company recorded losses from these sales of $203.4 million recognized as expense in Securities Impairments on the consolidated statements of income (loss) and comprehensive income (loss), which are expected to be available to offset any capital gains of the Company in 2020 and, to the extent those capital losses exceed the Company’s capital gains for 2020, such losses would be available to be carried forward to offset capital gains in future years. The Company does not expect these losses to reduce the amount that the Company will be required to distribute under the requirement that the Company distribute to the Company’s stockholders at least 90% of the Company’s REIT taxable income (computed without regard to the deduction for dividends paid and excluding net capital gain) each year in order to continue to qualify as a REIT.

The Company is externally managed and advised by the Manager pursuant to the terms of a management agreement between the Company and the Manager (as amended, the “Management Agreement”). Pursuant to the Management Agreement, the Company pays the Manager a base management fee equal to the greater of $250,000 per annum ($62,500 per quarter) or 1.50% per annum (0.375% per quarter) of the Company’s “Equity” as defined in the Management Agreement. ~~Proceeds~~Net proceeds from the issuance of Series B and Series C Preferred Stock isare included in the Company’s Equity for purposes of determining the base management ~~fee.~~fee using the same daily weighted average method as is utilized for common equity. The base management fee is payable in cash, quarterly in arrears. The Manager is also entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter in arrears in an amount, not less than zero, equal to the difference between: (1) the product of (a) 20% and (b) the difference between (i) the Company’s Core Earnings for the most recent 12-month period, including the calendar quarter (or part thereof) for which the calculation of incentive compensation is being made (the “applicable period”), and (ii) the product of (A) the Company’s Equity in the most recent 12-month period, including the applicable period, and (B) 7% per annum; and (2) the sum of any incentive compensation paid to the Manager with respect to the first three calendar quarters of the most recent 12-month period. No incentive compensation is payable to the Manager with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. For purposes of calculating the Manager’s incentive compensation, the Management Agreement ~~as amended,~~ specifies that equity securities of the Company or any of the Company’s subsidiaries that are entitled to a specified periodic distribution or have other debt characteristics will not constitute equity securities and will not be included in “Equity” for the purpose of calculating incentive compensation. Instead, the aggregate distribution amount that accrues to such equity securities during the calendar quarter of such calculation will be subtracted from Core Earnings, before incentive compensation for purposes of calculating incentive compensation, unless such distribution is otherwise excluded from Core Earnings.

Core Earnings, as defined in the Management Agreement, means the net income (loss) attributable to the holders of the Company’s common stock and Class A common stock (in those periods in which such Class A shares were outstanding) and, without duplication, the holders of the Company’s subsidiaries’ equity securities (other than the Company or any of the Company’s subsidiaries), computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), and excluding (i) non-cash equity compensation expense, (ii) the incentive compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses, including an allowance for credit losses, or other similar non-cash items that are included in net income for the applicable period, regardless of whether such items are included in other comprehensive income or loss or in net income and (v) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the Company’s independent directors.

For so long as any shares of Series B Preferred Stock remain issued and outstanding, the Manager ~~has~~ agreed to reduce by 50% the base management fee attributable to the ~~inclusion of the~~ Series B Preferred Stock net proceeds included in the Company’s Equity, such that the base management fee rate ~~applicable to the Series B Preferred Stock included in the equity base~~ will equal 0.75% per annum, instead of 1.50% per annum as provided in the Management Agreement.On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock, incorporating the impact of the redemption into its Equity calculation. The reduced base management fee rate will apply until the Series B Preferred Stock issuance and redemption no longer impact the Company’s Equity used to calculate the base management fee payable to its Manager.

Management Fees Incurred and Paid for the three and six months ended ~~March 31,~~June 30, 2021 and 2020

For the three and six months ended ~~March 31,~~June 30, 2021 and 2020, the Company incurred and paid the following management fees and incentive management fees pursuant to the Management Agreement (dollars in thousands):

Management fees and incentive management fees included in payable to affiliates on the consolidated balance sheets ~~at March 31,~~as of June 30, 2021 and December 31, 2020 are ~~$5.1~~$5.3 million and $5.4 million, respectively. NaN incentive management fee was earned during the three and six months ended ~~March 31,~~June 30, 2021.

A termination fee would be due to the Manager upon termination of the Management Agreement by the Company absent a cause event. The termination fee would also be payable to the Manager upon termination of the Management Agreement by the Manager if the Company materially breaches the Management Agreement. The termination fee is equal to three times the sum of (x) the average annual base management fee and (y) the average annual incentive compensation earned by the Manager, in each case during the 24-month period immediately preceding the most recently completed calendar quarter prior to the date of termination.

The Manager or its affiliates is responsible for the expenses related to the personnel of the Manager and its affiliates who provide services to the Company. However, the Company does reimburse the Manager for agreed-upon amounts based upon the Company’s allocable share of the compensation (including, without limitation, annual base salary, bonus, any related withholding taxes and employee benefits) paid to (1) the Manager’s personnel serving as the Company’s chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (2) other corporate finance, tax, accounting, internal audit, legal risk management, operations, compliance and other non-investment personnel of the Manager or its affiliates who spend all or a portion of their time managing the Company’s affairs, based on the percentage of time devoted by such personnel to the Company’s and the Company’s subsidiaries’ affairs. For the three and six months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~ 2020, respectively the Manager incurred $0.3 million and ~~$0.3~~$0.5 million, respectively, of expenses that were subject to reimbursement by the Company for services rendered on its behalf by the Manager and its affiliates.

For as long as any shares of Series B Preferred Stock ~~(hereafter defined)~~ remain issued and outstanding, the Manager ~~has~~ agreed that it ~~will~~would not seek reimbursement for reimbursable expenses in excess of the greater of (x) $1.0 million per fiscal year and (y) twenty percent (20%) of the Company’s allocable share of such reimbursable expenses pursuant to the Management Agreement per fiscal year. ~~For the quarter ended March 31,~~On June 16, 2021, the Company ~~reimbursed to~~redeemed all 9,000,000 outstanding shares of the ~~Manager $250,000~~Series B Preferred Stock and 0 shares of ~~reimbursable expenses,~~Series B Preferred Stock are outstanding as of June 30, 2021. As a result of the Series B Preferred Stock redemption, this agreement was terminated and ~~the Manager elected not to seek reimbursement for reimbursable amounts in excess thereof. There~~there can be no assurance that the Manager will not seek reimbursement of such expenses in future quarters. ~~If the product~~As of ~~20% multiplied by eligible reimbursable expenses is expected to exceed $1.0 million annually,~~June 30, 2021, the Manager ~~is obligated to inform and review with the Company’s board of directors, the methodology and rationale~~has 0t requested reimbursement for ~~such an increase~~expenses incurred in ~~advance~~excess of the ~~delivery to the Company of a written request for reimbursement reflecting such increase. No such notice has been received by the Company as of March 31, 2021.~~annual cap.

The Company is required to pay the Manager or its affiliates for documented costs and expenses incurred with third parties by the Manager or its affiliates on behalf of the Company, subject to the Company’s review and approval of such costs and expenses. The Company’s obligation to pay for costs and expenses incurred on its behalf is not subject to a dollar limitation.

As of ~~March 31,~~June 30, 2021 and December 31, 2020, ~~$0.0~~$0.4 million and $0.2 million, respectively, remained outstanding and payable to the Manager or its affiliates for third party expenses that were incurred on behalf of the Company.

All expenses due and payable to the Manager are reflected in the respective expense category of the consolidated statements of income (loss) and comprehensive income (loss) or consolidated balance sheets based on the nature of the item.

In connection with the Series C Preferred Stock issuance as described in Note 13, the Company paid TPG Capital BD, LLC a $0.7 million underwriting discount and commission for its services as joint bookrunner during the three months ended June 30, 2021. The underwriting discount and commission was settled net of the preferred stock issuance proceeds and recorded as a reduction to additional paid-in-capital in the Company’s consolidated statement of changes in equity at closing.

The Company calculates its basic and diluted earnings (loss) per share using the two-class method for all periods presented, ~~since the~~which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. The unvested restricted shares of its common stock granted to certain current and former employees and affiliates of the Manager qualify as participating securities. These restricted shares have the same rights as the Company’s other shares of common stock and Class A common stock (which Class A shares were converted to common shares in February 2020), including participating in any dividends, and therefore are included in the Company’s basic and diluted earnings per share calculation. For the three months ended ~~March 31,~~June 30, 2021 and 2020, $0.1 million and $0.1 million, respectively, of common stock dividends declared and undistributed net income attributable to common stockholders were allocated to unvested shares of our common stock pursuant to stock grants made under the Company’s Incentive Plan. For the six months ended June 30, 2021 and 2020, $0.3 million and $0.4 million, respectively, of common stock dividends declared and undistributed net income attributable to common stockholders were allocated to unvested shares of our common stock pursuant to stock grants made under the Company’s Incentive Plan. See Note 14 for details.

In connection with the issuance of Series B Preferred Stock and the Warrants described in Note 13, the Company elected the accreted redemption value method whereby the discount created based on the relative fair value of the Warrants to the fair value of the Series B Preferred Stock and the related issuance costs will be accreted as a non-cash dividend on preferred stock over four years using the effective interest method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on ~~our Consolidated Statements~~the Company’s consolidated statements of ~~Changes~~changes in ~~Equity~~equity and treated ~~similarly to~~as a deemed dividend on preferred stock for GAAPand income tax purposes. For the three months ended ~~March 31,~~June 30, 2021 and 2020, this adjustment totaled ~~$1.5 million.~~$24.0 million and $0.4 million, respectively. For the six months ended June 30, 2021 and 2020, this adjustment totaled $25.4 million and $0.4 million, respectively.

On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of Series B Preferred Stock, made a make-whole payment of $22.5 million and wrote-off $22.5 million of unamortized discount, including the unamortized amounts related to the allocated Warrant fair value and transaction costs. The Series B Preferred Stock make-whole payment and write-off of unamortized discount are included in the Company’s consolidated statements of changes in equity and described in Note 13 and are not recognized as an expense for purposes of calculating either taxable income or the Company’s minimum distribution requirement for purposes of maintaining its REIT status.

The computation of diluted earnings per common share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of ~~warrants issued pursuant to~~ the ~~Company’s issuance of Series B Preferred Stock.~~Warrants. The number of incremental common shares is calculated utilizing the treasury stock method. For the three months ended ~~March 31,~~June 30, 2021, the Warrants are excluded from the calculation of diluted earnings per common share since their effect would be anti-dilutive. For the six months ended June 30, 2021, the Warrants are included in the calculation of diluted earnings per common share because the Company generated earnings on a per common share basis and the average market price of the Company’s common stock during the ~~three~~six months ended ~~March 31,~~June 30, 2021 was ~~$10.95,~~$11.90, which exceeds the strike price of $7.50 per common share for ~~warrants~~Warrants currently outstanding.

The following table sets forth the calculation of basic and diluted earnings per common share based on the weighted-average number of shares of common stock outstanding for the three and six months ended ~~March 31,~~June 30, 2021 and 2020 (in thousands, except share and per share data):

On June 14, 2021, the Company received net proceeds of $194.4 million from the sale of the 8,050,000 shares of Series C Preferred Stock after deducting the underwriting discount and commissions of $6.3 million and issuance costs of $0.6 million. The Company used the net proceeds from the offering to partially fund the redemption of all of the outstanding shares of the Company’s Series B Preferred Stock. The Series C Preferred Stock is currently listed on the NYSE under the symbol “TRTX PRC.”

The Company’s Series C Preferred Stock has a liquidation preference of $25.00 per share. When, as, and if authorized by the Company’s board of directors and declared by the Company, dividends on Series C Preferred Stock will be payable quarterly in arrears on or about March 30, June 30, September 30, and December 30 of each year at a rate per annum equal to 6.25% per annum of the $25.00 per share liquidation preference. Dividends on the Series C Preferred Stock are cumulative. The first dividend on the Series C Preferred Stock is payable on September 30, 2021, and will cover the period from, and including, June 14, 2021 to, but not including, September 30, 2021 and will be in the amount of $0.46 per share.

On and after June 14, 2026, the Company, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the Series C Preferred Stock, in whole, at any time, or in part, from time to time, for cash, at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) on such shares of Series C Preferred Stock to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which shall be paid on the payment date notwithstanding prior redemption of such shares.

Upon the occurrence of a Change of Control event, the holders of Series C Preferred Stock have the right to convert their shares solely into common stock at their request and do not have the right to request that their shares convert into cash or a combination of cash and common stock. The Company, upon the occurrence of a Change of Control event, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the shares of Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price equal to $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which will be paid on the payment date notwithstanding prior redemption of such shares).

Holders of Series C Preferred Stock will not have any voting rights except as set forth in the Articles Supplementary.

Series B Cumulative Redeemable Preferred Stock and Warrants to Purchase Shares of Common Stock

On May 28, 2020, the Company entered into an Investment Agreement (the “Investment Agreement”) with PE Holder L.L.C., a Delaware limited liability company (the “Purchaser”), an affiliate of Starwood Capital Group Global II, L.P., under which the Company agreed to issue and sell to the Purchaser up to 13,000,000 shares of 11.0% Series B Preferred Stock, par value $0.001 per share (plus any additional such shares paid as dividends pursuant to the Articles Supplementary, the “Series B Preferred Stock”), and Warrants to purchase, in the aggregate, up to 15,000,000 shares (subject to adjustment) of the Company’s Common Stock, for an aggregate cash purchase price of up to $325,000,000. Such purchases ~~may~~could occur in up to three ~~tranches.~~tranches prior to December 31, 2020. The Investment Agreement contains market standard provisions regarding board representation, voting agreements, rights to information, and a standstill agreement and registration rights agreement regarding common stock acquired via exercise of Warrants.

~~On May 28, 2020,~~ At closing, the Purchaser acquired the initial tranche consisting of 9,000,000 shares of Series B Preferred Stock and Warrants to purchase up to 12,000,000 shares of Common Stock, for an aggregate price of $225.0 million. The Company retained an option to sell to the Purchaser the second and third tranches on or prior to December 31, 2020, provided notice of intent to sell is delivered to the Purchaser not later than December 11, 2020. Each of the second and third tranches consisted of 2,000,000 shares of Series B Preferred Stock and Warrants to purchase up to 1,500,000 shares of Common Stock, for an aggregate purchase price of $50.0 million per tranche. The Company allowed ~~the~~its option to issue additional shares of Series B Preferred Stock to expire unused.

The Company’s Series B Preferred Stock has a liquidation preference of $25.00 per share over all other classes of the Company’s equity other than Series A Preferred Stock, which has liquidation preference over the Series B Preferred Stock.

Series B Preferred Stock bears a dividend at 11% per annum, accrued daily and compounded semi-annually, which is payable quarterly in cash; provided that up to 2.0% per annum of the liquidation preference may be paid, at the option of the Company, in the form of additional shares of Series B Preferred Stock.

On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock at an aggregate redemption price of approximately $247.5 million. Dividends on all shares of Series B Preferred Stock were paid in full as of the redemption date. As a result of the redemption, dividends will no longer accrue or be declared on any shares of Series B Preferred Stock, and 0 shares of Series B Preferred Stock remain outstanding. In connection with the redemption, the Company made a make-whole payment to the holder of the Series B Preferred Stock of $22.5 million equal to the present value of all remaining dividend payments due on such shares of Series B Preferred Stock from and after the redemption date (and not including any declared or paid

dividends or accrued dividends prior to such redemption date) through the second anniversary of the original issue date, computed in accordance with the terms of the Articles Supplementary. This make-whole payment is recorded as Series B Preferred Stock Redemption Make-Whole Payment on the Company’s consolidated statements of changes in equity. Additionally, the Company accelerated the accretion of $22.5 million related to the remaining unamortized discount, including the unamortized allocated Warrant fair value and transactions costs, which was included in Series B Preferred Stock Accretion of Discount, including Allocated Warrant Fair Value and Transaction Costs on the Company’s consolidated statements of changes in equity. Neither the make-whole payment nor the write-off of unamortized discount are recognized as expense for purposes of calculating either taxable income or the Company’s minimum distribution requirement for purposes of maintaining its qualification as a REIT.

The Warrants have an initial exercise price of $7.50 per share. The exercise price of the Warrants and shares of Common Stock issuable upon exercise of the Warrants are subject to customary adjustments. The Warrants are exercisable only on a net settlement basis and expire on May 28, 2025. The Warrants are classified as equity and were initially recorded at their estimated fair value of $14.4 million with no subsequent remeasurement. NaN of the Warrants have been exercised as of June 30, 2021.

On the issuance date, the Company retained third party valuation experts to assist with estimating the fair value of the Series B Preferred Stock and the Warrants using a binomial lattice model. Based on the Warrants’ relative fair value to the fair value of the Series B Preferred Stock, approximately $14.4 million of the $225.0 million proceeds was allocated to the Warrants, creating a corresponding preferred stock discount in the same amount. The Company elected the accreted redemption value method whereby this discount will be accreted over four years using the effective interest method, resulting in an increase in the carrying value of the Series B Preferred Stock. Additionally, $14.2 million of costs directly related to the issuance will be accreted using the effective interest method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on the Company’s consolidated statements of changes in equity and treated similarly to a dividend on preferred stock for GAAP purposes, but only the accretion of the Warrant allocated fair value is treated as a dividend for income tax purposes.

On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock and 0 shares of Series B Preferred Stock are outstanding as of June 30, 2021. As a result of the Series B Preferred Stock redemption, $11.2 million of unamortized transaction costs and $11.3 million of unaccreted discount related to the Warrants were written off.

Between January 22, 2020 and January 24, 2020, the Company received requests to convert all of the outstanding shares of the Company’s Class A common stock into shares of the Company’s common stock. Accordingly, all of the outstanding shares of the Company’s Class A common stock were retired and returned to the authorized but unissued shares of Class A common stock of the Company, and the holders of shares of the Class A common stock were issued an aggregate of 1,136,665 shares of the Company’s common stock. On February 14, 2020, the Company filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland to reclassify and designate all 2,500,000 authorized but unissued shares of the Company’s Class A common stock as additional shares of undesignated common stock of the Company. The Articles Supplementary became effective upon filing on February 14, 2020. As a result, as of June 30, 2021, there are 0 shares of the Company’s Class A common stock authorized or outstanding.

On March 7, 2019, the Company and the Manager entered into an equity distribution agreement with each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, JMP Securities LLC, Wells Fargo Securities, LLC and TPG Capital BD, LLC (each a “Sales Agent” and, collectively, the “Sales Agents”) relating to the issuance and sale by the Company of shares of its common stock pursuant to a continuous offering program. In accordance with the terms of the equity distribution agreement, the Company may, at its discretion and from time to time, offer and sell shares of its common stock having an aggregate gross sales price of up to $125.0 million through the Sales Agents, each acting as the Company’s agent. The offering of shares of the Company’s common stock pursuant to the equity distribution agreement will terminate upon the earlier of (1) the sale of shares of the Company’s common stock subject to the equity distribution agreement having an aggregate gross sales price of $125.0 million and (2) the termination of the equity distribution agreement by the Sales Agents or the Company at any time as set forth in the equity distribution agreement. As of June 30, 2021, cumulative gross proceeds issued under the equity distribution agreement totaled $50.9 million, leaving $74.1 million available for future issuance subject to the direction of management, and market conditions.

Each Sales Agent will be entitled to commissions in an amount not to exceed 1.75% of the gross sales prices of shares of the Company’s common stock sold through it, as the Company’s agent. For the three and six months ended June 30, 2021, the Company sold 0 shares of common stock under this arrangement. For the six months ended June 30, 2020, the Company sold 0.6 million shares

of common stock at a weighted average price per share of $20.53 and gross proceeds of $12.9 million, and paid commissions totaling $0.2 million.The Company used the proceeds from the offering to originate commercial real estate loans, acquire CRE debt securities and for general corporate purposes.

Upon the approval of the Company’s Board of Directors, the Company accrues dividends. Dividends are paid first to the holders of the Company’s Series A preferred stock at the rate of 12.5% of the total $0.001 million liquidation preference per annum plus all accumulated and unpaid dividends thereon, then to the holder of the Company’s Series B Preferred Stock at the rate of 11.0% per annum of the $25.00 per share liquidation preference and to the holders of the Company’s Series C Preferred Stock at the rate of 6.25% per annum of the $25.00 per share liquidation preference, and then to the holders of the Company’s common stock, in each case, to the extent outstanding. The Company intends to distribute each year substantially all of its taxable income to its stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended. The Board of Directors will determine whether to pay future dividends, entirely in cash, or in a combination of stock and cash based on facts and circumstances at the time such decisions are made.

On June 14, 2021, the Company’s Board of Directors declared and approved a cash dividend for the second quarter of 2021 in the amount of $0.20 per share of common stock, or $15.5 million in the aggregate, which was paid on July 23, 2021 to holders of record of the Company’s common stock as of June 28, 2021.

On June 14, 2021, the Company’s Board of Directors declared a cash dividend for the second quarter of 2021 in the amount of $0.69 per share of Series B Preferred Stock, or $6.2 million in the aggregate, which dividend was paid on June 16, 2021 to the holder of record of our Series B Preferred Stock as of June 15, 2021.

On June 16, 2020, the Company’s Board of Directors declared and approved a cash dividend for the second quarter of 2020 in the amount of $0.20 per share of common stock, or $15.4 million in the aggregate, which was paid on July 24, 2020 to holders of record of the Company’s common stock as of June 26, 2020. On March 23, 2020, the Company announced the deferral until July 14, 2020 of the payment of its declared first quarter cash dividend to stockholders of record as of June 15, 2020. This dividend was paid on July 14, 2020.

On June 16, 2020, the Company’s Board of Directors declared a cash dividend for the second quarter of 2020 in the amount of $0.25 per share of Series B Preferred Stock, or $2.3 million in the aggregate, which dividend was paid on June 30, 2020 to the holder of record of our Series B Preferred Stock as of June 15, 2020.

For the six months ended June 30, 2021 and 2020, common stock dividends in the amount of $31.0 million and $48.7 million, respectively, were declared and approved.

For the six months ended June 30, 2021 and 2020, Series B Preferred Stock dividends in the amount of $12.3 million and $2.3 million, respectively, were declared and approved.

As of June 30, 2021 and December 31, 2020,common stock dividends of $15.5 million and $29.5 million, respectively, were unpaid and are reflected in dividends payable on the Company’s consolidated balance sheets.

The Company does not have any employees. As of June 30, 2021, certain individuals employed by an affiliate of the Manager and certain members of the Company’s Board of Directors were compensated, in part, through the issuance of share-based instruments.

The Company’s Board of Directors has adopted, and the Company’s stockholders have approved, the TPG RE Finance Trust, Inc. 2017 Equity Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the grant of equity-based awards to the Company’s, and its affiliates’, directors, officers, employees (if any) and consultants, and the members, officers, directors, employees and consultants of our Manager or its affiliates, as well as to our Manager and other entities that provide services to us and our affiliates and the employees of such entities. The total number of shares of common stock or long-term incentive plan (“LTIP”) units that may be awarded under the Incentive Plan is 4,600,463. The Incentive Plan will automatically expire on the tenth anniversary of its effective date, unless terminated earlier by the Company’s Board of Directors.

Generally, the shares vest in installments over a four-year period, pursuant to the terms of the award and the Incentive Plan. The following table presents the number of shares associated with outstanding awards that will vest over the next four years. Shares presented for the current year, 2021, includes 309,841 shares which have vested during the period from January 1, 2021 to June 30, 2021.

As of June 30, 2021, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $6.8 million. This cost is expected to be recognized over a weighted average period of1.5 years from June 30, 2021. For the three months ended June 30, 2021 and 2020, the Company recognized $1.4 million and $1.7 million, respectively, of share-based compensation expense. For the six months ended June 30, 2021 and 2020, the Company recognized $2.8 million and $3.1 million, respectively, of share-based compensation expense.

Due to the current COVID-19 pandemic in the United States and globally, the Company’s borrowers and their tenants, the properties securing the Company’s investments, and the economy as a whole have been, and will continue to be, adversely impacted. The magnitude and duration of COVID-19 and its impact on the Company’s borrowers and their tenants, cash flows and future results of operations could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of mutated strains of COVID-19, the availability of a treatment or effectiveness of vaccines approved for COVID-19, the distribution of COVID-19 vaccines and wide disparity of global vaccination rates, and reactions by consumers, companies, governmental entities and capital markets. Certain of the adverse impacts from the COVID-19 pandemic to the commercial real estate industry will only be known once firms and employees return to the workplace. The prolonged duration and impact of COVID-19 has and could further materially disrupt the Company’s business operations and impact its financial performance.

As part of its lending activities, the Company commits to certain funding obligations which are not advanced at closing and that have not been recognized in the Company’s consolidated financial statements. These commitments to extend credit are made as part of the Company’s portfolio of loans held for investment. The aggregate amount of unrecognized unfunded loan commitments existing as of June 30, 2021 and December 31, 2020 was $488.9 million and $423.5 million, respectively.

The Company recorded an allowance for credit losses on loan commitments that are not unconditionally cancellable by the Company of $3.4 million and $2.9 million as of June 30, 2021 and December 31, 2020 which is included in accrued expenses and other liabilities on the Company’s consolidated balance sheets.

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. The Company establishes an accrued liability for loss contingencies when a settlement arising from a legal proceeding is both probable and reasonably estimable. If a legal matter is not probable and reasonably estimable, no such liability is recorded. Examples of this include (i) early stages of a legal proceeding, (ii) damages that are unspecified or cannot be determined, (iii) discovery has not started or is incomplete or (iv) there is uncertainty as to the outcome of pending appeals or motions. If these items exist, an estimated range of potential loss cannot be determined and as such the Company does not record an accrued liability.

As of June 30, 2021 and December 31, 2020, the Company was not involved in any material legal proceedings and has not recorded an accrued liability for loss contingencies.

A summary of the loan portfolio by property type as of June 30, 2021 and December 31, 2020 based on total loan commitment and current unpaid principal balance (“UPB”) is as follows (dollars in thousands):

Loan commitments represent principal commitments made by the Company, and do not include capitalized interest resulting from certain loan modifications of $4.2 million and $4.7 million as of June 30, 2021 and December 31, 2020, respectively.

All of the Company’s loans held for investment are secured by properties within the United States. The geographic composition of loans held for investment based on total loan commitment and current UPB as of June 30, 2021 and December 31, 2020 is as follows (dollars in thousands):

A summary of the loan portfolio by category as of June 30, 2021 and December 31, 2020 based on total loan commitment and current UPB is as follows (dollars in thousands):

The potential negative impacts on the Company’s business caused by COVID-19 may be heightened by the fact that the Company is not required to observe specific diversification criteria, which means that the Company’s investments may be concentrated in certain property types, geographical areas or loan categories that are more adversely affected by COVID-19 than other property types, geographical areas or loan categories. For example, certain of the loans in the Company’s loan portfolio are secured by office buildings, hotels and retail properties. Federal and state mandates implemented to control the spread of COVID-19, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders, have in the past and may in the future negatively impact the hotel and retail industries, which could adversely affect the Company’s investments in assets secured by properties that operate in these industries. Also, changes in how certain types of commercial properties are used while maintaining social distancing and other techniques intended to control the impact of COVID-19 (for example, office buildings may be adversely impacted by a possible reversal in the recent trend toward increased densification of office space, or a preference by office users for suburban properties less reliant on public transportation to safely deliver their employees to and from the workplace) have and are likely to impact our investments secured by these properties. Additional regional surges in infection rates due to COVID-19 variants, reversed re-openings, uncertainty regarding the effectiveness of vaccines approved for COVID-19, or high proportions of vaccine hesitancy in certain regions, could adversely affect the Company’s loan investments secured by properties in these regions so impacted.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited and audited consolidated financial statements and the accompanying notes included elsewhere in this Form 10-Q and in our Form 10-K filed with the SEC on February 24, 2021. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, and financial condition based on current expectations that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from any results expressed or implied by these forward-looking statements as a result of various factors, including but not limited to those discussed under the heading “Risk Factors” in this Form 10-Q and in our Form 10-K filed with the SEC on February 24, 2021.

We are a commercial real estate finance company externally managed by TPG RE Finance Trust Management, L.P. and sponsored by TPG. We directly originate, acquire and manage commercial mortgage loans and other commercial real estate-related debt instruments in North America for our balance sheet. Our objective is to provide attractive risk-adjusted returns to our stockholders over time through cash distributions and capital appreciation. To meet our objective, we focus primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning. The collateral underlying our loans is located in primary and select secondary markets in the U.S. that we believe have attractive economic conditions and commercial real estate fundamentals. We operate our business as one segment.

As of June 30, 2021, our loan investment portfolio consisted of 61 first mortgage loans (or interests therein) and one mezzanine loan with total loan commitments of $5.3 billion, an aggregate unpaid principal balance of $4.8 billion, a weighted average credit spread of 3.2%, a weighted average all-in yield of 5.0%, a weighted average term to extended maturity (assuming all extension options have been exercised by borrowers) of 2.9 years, and a weighted average LTV of 66.7%. As of June 30, 2021, 100% of the loan commitments in our portfolio consisted of floating rate loans, of which 99.3% were first mortgage loans or, in two instances a first mortgage loan and contiguous mezzanine loan both owned by us, and 0.7% was a mezzanine loan. As of June 30, 2021, we had $488.9 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

As of June 30, 2021, we had $99.2 million of real estate owned comprising 27 acres across two undeveloped commercially-zoned land parcels on the Las Vegas Strip (the “REO Property”) acquired pursuant to a negotiated deed-in-lieu of foreclosure. This Property is held for investment and reflected on our consolidated balance sheets at its estimated fair value at the time of acquisition, net of estimated selling costs.

We have made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. We believe we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and we believe that our organization and current and intended manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. We operate our business in a manner that permits us to maintain an exclusion or exemption from registration under the Investment Company Act.

During 2020, the COVID-19 pandemic caused significant disruptions to the U.S. and global economies. These disruptions contributed to significant and ongoing volatility, widening credit spreads and sharp declines in liquidity in the real estate securities and whole loan financing markets at points during 2020. The pace of recovery following this disruption remains uncertain, as do the longer-term economic effects and shifts in behavior. As a result of the impact of COVID-19, many commercial real estate finance and financial services industry participants, including us, reduced new investment activity until the capital markets became more stable, the macroeconomic outlook became clearer, market liquidity improved, and transaction volumes increased. For most of 2020, we focused on actively managing portfolio credit, generating and recycling liquidity from existing assets, extending the maturities and further reducing the mark-to-market exposure of our liabilities and controlling corporate overhead as a percentage of our total assets and total revenues. Although market conditions remain uncertain due to COVID-19 and evolving new variants of the virus, the credit performance of our portfolio, loan repayments that have allowed us to retire certain borrowings and increase our liquidity, extended maturity dates for many of our secured credit agreements, and the increase in non-mark-to-market liabilities to 82% of total borrowings positioned us to resume the origination of first mortgage transitional loans in the first quarter of 2021. For more information regarding the impact that COVID-19 has had and may have on our business, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG manages investments across multiple asset classes, including private equity, real estate, energy, infrastructure, and hedge funds. 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 equity group and TPG’s executive committee. For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 11 to our consolidated financial statements included in this Form 10-Q.

Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $69.7 million that are eligible to pledge under our existing financing arrangements.

Financing capacity for loan investments as of June 30, 2021 was $2.8 billion under our three CLOs, two of which currently allow reinvestment of eligible loan collateral, and $3.1 billion under secured credit agreements provided by seven lenders. At June 30, 2021, approximately 76.6% of our borrowings were via our CLO vehicles and 23.4% were pursuant to our secured credit agreements.

Our ability to draw on our secured credit agreements 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 stable financing with mark-to-market provisions generally limited to collateral-specific events and, in only one instance, to capital markets-specific events. As of June 30, 2021, borrowings under these secured credit agreements had a weighted average credit spread of 2.3% (1.7% for facilities with mark-to-market provisions and 4.5% for one facility 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 2.3 years. These financing arrangements are generally 25% recourse to Holdco.

For the three months ended June 30, 2021, we declared a cash dividend of $0.20 per common share, which was paid on July 23, 2021.

Our book value per common share as of June 30, 2021 was $16.03, a decrease of $0.58 from our book value per common share as of March 31, 2021, primarily due to the redemption of the Series B Preferred Stock on June 16, 2021, offset by net income in excess of our dividends declared per common share in the period. As further described below, Distributable Earnings is a measure that is not prepared in accordance with GAAP. We use Distributable Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan activity and operations.

The computation of diluted earnings per share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of the Warrants, which are exercisable only on a net-settlement basis. The number of incremental shares is calculated by applying the treasury stock method. We exclude participating securities and the Warrants from the calculation of basic earnings (loss) per share in periods of net losses since their effect would be anti-dilutive. For the three months ended June 30, 2021, we incurred a net (loss) attributable to common stockholders and therefore excluded participating securities and the Warrants from the calculation of diluted (loss) per share.

The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share (in thousands, except share and per share data):

We believe that Distributable Earnings provides meaningful information for our investors to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. Annually, we generally must distribute at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gains, for us to qualify as a REIT for U.S. federal income tax purposes. To the extent that we satisfy this distribution requirement but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. One of the primary reasons investors purchase our common stock is to receive our dividends. Over time, Distributable Earnings has been a useful indicator of our distribution policy and dividends per common share. Because of our investors’ focus on dividends, Distributable Earnings and net taxable income are important measures considered by us in determining dividends per common share.

In assessing the impact of our allowance for credit losses on our Distributable Earnings, we determined that, consistent with our accounting policy for the measurement of credit losses, the fact that credit losses only impact our taxable income when such credit losses are realized, and our stakeholders’ view of realized loan losses, the recognition of our credit loss provision or reversals of our credit loss provision should be included in unrealized gains, losses or other non-cash items as referenced above, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period. A loan will be written off as a realized loss when it is deemed non-recoverable upon a realization event and is generally recognized at the time the loan receivable is settled, transferred or exchanged, or in the case of foreclosure, when the underlying property is foreclosed upon or sold based on the facts and circumstances of the underlying transaction. Non-recoverability may also be concluded by us if, in our determination, it is nearly certain that all amounts due will not be collected. A realized loss may equal the difference between the cash or consideration

received or expected to be received, and the net book value of the loan, reflecting our economics as it relates to the ultimate realization of the asset. See Note 2 to our consolidated financial statements included in this Form 10-Q for details related to our accounting policy on credit loss measurement and our application of Accounting Standards Codification (“ASC”) 326 and ASU 2016-13, Financial Instruments – Credit Losses.

Distributable Earnings does not represent net income (loss) or cash generated from operating activities and should not be considered as an alternative to GAAP net income (loss), or an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.

The following table provides a reconciliation of GAAP net income attributable to common stockholders to Distributable Earnings (in thousands, except share and per share data):

The following table sets forth the calculation of our book value per share (in thousands, except share and per share data):

June 30, 2021

March 31, 2021

Total Stockholders’ Equity and Temporary Equity

1,437,191

1,478,231

Series C Preferred Stock ($201,250 aggregate liquidation preference)

(201,250

)

—

~~Series B Preferred Stock~~Unfunded Commitments

~~The~~As part of its lending activities, the Company commits to certain funding obligations which are not advanced at closing and that have not been recognized in the Company’s ~~Series B Preferred Stock has a liquidation preference over all other classes~~consolidated financial statements. These commitments to extend credit are made as part of the Company’s ~~equity other than Series A Preferred Stock, which has liquidation preference over the Series B Preferred Stock.~~

~~Series B Preferred Stock bears a dividend at 11% per annum, accrued daily~~portfolio of loans held for investment. The aggregate amount of unrecognized unfunded loan commitments existing as of June 30, 2021 and compounded semi-annually, which is payable quarterly in cash; provided that up to 2.0% per annum of the liquidation preference may be paid, at the option of the Company, in the form of additional shares of Series B Preferred Stock.

~~Warrants to Purchase Common Stock~~December 31, 2020 was $488.9 million and $423.5 million, respectively.

The ~~Warrants have~~Company recorded an ~~initial exercise price of $7.50 per share. The exercise price of the Warrants and shares of Common Stock issuable upon exercise of the Warrants~~allowance for credit losses on loan commitments that are subject to customary adjustments. The Warrants are exercisable on a net settlement basis and expire on May 28, 2025. The Warrants are classified as equity and were initially recorded at their estimated fair value of $14.4 million with no subsequent remeasurement. NaN of the Warrants have been exercised as of March 31, 2021.

On the issuance date, the Company retained third party valuation experts to assist with estimating the fair value of the Series B Preferred Stock and the Warrants using the binomial lattice model. Based on the Warrants’ relative fair value to the fair value of the Series B Preferred Stock, approximately $14.4 million of the $225.0 million proceeds was allocated to the Warrants, creating a corresponding preferred stock discount in the same amount. The Company elected the accreted redemption value method whereby this discount will be accreted over four years using the effective interest method, resulting in an increase in the carrying value of the Series B Preferred Stock. Additionally, $14.2 million of costs directly related to the issuance will be accreted using the effective interest method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on our Consolidated Statements of Changes in Equity and treated similarly to a dividend on preferred stock for GAAP purposes.

~~Conversion of Class A Shares~~

Between January 22, 2020 and January 24, 2020, the Company received requests to convert all of the outstanding shares of the Company’s Class A common stock into shares of the Company’s common stock. Accordingly, all of the outstanding shares of the Company’s Class A common stock were retired and returned to the authorized but unissued shares of Class A common stock of the Company, and the holders of shares of the Class A common stock were issued an aggregate of 1,136,665 shares of the Company’s common stock. On February 14, 2020, the Company filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland to reclassify and designate all 2,500,000 authorized but unissued shares of the Company’s Class A common stock as additional shares of undesignated common stock of the Company. The Articles Supplementary became effective upon filing on February 14, 2020. As a result, as of March 31, 2021, there are 0 shares of the Company’s Class A common stock authorized or outstanding.

~~Equity Distribution Agreement~~

Litigation

As of June 30, 2021 and December 31, 2020, the Company was not involved in any material legal proceedings and has not recorded an accrued liability for loss contingencies.

(16) Concentration of Credit Risk

Property Type

	June 30, 2021
Property Type	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
Office	$	2,811,920	$	401,705		52.9	%	$	2,410,216		49.9	%
Multifamily		1,188,632		51,201		22.3			1,137,731		23.5
Hotel		673,043		6,781		12.7			669,773		13.9
Mixed-Use		588,693		27,086		11.1			561,606		11.6
Retail		33,000		2,143		0.6			31,200		0.6
Condominium		23,009		—		0.4			23,009		0.5
Total	$	5,318,297	$	488,916		100.0	%	$	4,833,535		100.0	%

	December 31, 2020
Property Type	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
Office	$	2,756,338	$	356,034		55.7	%	$	2,400,304		53.0	%
Multifamily		804,838		24,001		16.3			781,137		17.3
Hotel		737,293		9,864		14.9			731,487		16.2
Mixed-Use		586,993		31,398		11.9			555,595		12.3
Condominium		25,049		—		0.5			25,049		0.6
Retail		33,000		2,190		0.7			31,153		0.7
Total	$	4,943,511	$	423,487		100.0	%	$	4,524,725		100.0	%

Geography

	June 30, 2021
Geographic Region	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
East	$	2,101,475	$	126,872		39.5	%	$	1,975,566		40.9	%
South		1,358,016		93,438		25.5			1,265,693		26.2
West		1,207,005		202,935		22.7			1,005,804		20.8
Midwest		563,701		64,628		10.6			499,374		10.3
Various		88,100		1,043		1.7			87,098		1.8
Total	$	5,318,297	$	488,916		100.0	%	$	4,833,535		100.0	%

	December 31, 2020
Geographic Region	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
East	$	2,009,022	$	152,487		40.6	%	$	1,856,535		41.0	%
South		1,289,141		97,405		26.1			1,192,852		26.4
West		1,128,897		121,738		22.8			1,009,589		22.3
Midwest		428,351		49,478		8.7			379,173		8.4
Various		88,100		2,379		1.8			86,576		1.9
Total	$	4,943,511	$	423,487		100.0	%	$	4,524,725		100.0	%

Category

A summary of the loan portfolio by category as of ~~March 31,~~June 30, 2021 and December 31, 2020 based on total loan commitment and current UPB is as follows (dollars in thousands):

	March 31, 2021												June 30, 2021
Loan Category	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB			Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
Moderate Transitional													$	1,987,642	$	308,682		37.4	%	$	1,680,654		34.8	%
Light Transitional	$	1,932,437	$	160,166		38.8	%	$	1,772,271		38.7	%		1,924,901		155,159		36.2			1,769,742		36.6
Moderate Transitional		1,678,660		218,112		33.7			1,462,737		31.9
Bridge		1,337,648		21,980		26.8			1,318,818		28.7			1,370,754		24,337		25.7			1,348,877		27.9
Construction		35,000		1,468		0.7			33,532		0.7			35,000		738		0.7			34,262		0.7
Total	$	4,983,745	$	401,726		100.0	%	$	4,587,358		100.0	%	$	5,318,297	$	488,916		100.0	%	$	4,833,535		100.0	%

	December 31, 2020												December 31, 2020
Loan Category	Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB			Loan Commitment		Unfunded Commitment		% of Loan Commitment			Loan UPB		% of Loan UPB
Light Transitional	$	1,937,644	$	173,518		39.2	%	$	1,764,126		39.0	%	$	1,937,644	$	173,518		39.2	%	$	1,764,126		39.0	%
Moderate Transitional		1,633,131		224,532		33.0			1,410,145		31.2			1,633,131		224,532		33.0			1,410,145		31.2
Bridge		1,337,736		22,953		27.1			1,317,938		29.1			1,337,736		22,953		27.1			1,317,938		29.1
Construction		35,000		2,484		0.7			32,516		0.7			35,000		2,484		0.7			32,516		0.7
Total	$	4,943,511	$	423,487		100.0	%	$	4,524,725		100.0	%	$	4,943,511	$	423,487		100.0	%	$	4,524,725		100.0	%

Impact of COVID-19 on Concentration of Credit Risk

The potential negative impacts on the Company’s business caused by COVID-19 may be heightened by the fact that the Company is not required to observe specific diversification criteria, which means that the Company’s investments may be concentrated in certain property types, geographical areas or loan categories that are more adversely affected by COVID-19 than other property types, geographical areas or loan categories. For example, certain of the loans in the Company’s loan portfolio are secured by office buildings, hotels and retail properties. Federal and state mandates implemented to control the spread of COVID-19, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders, have in the past and ~~are likely to continue to~~may in the future negatively impact the hotel and retail industries, which could adversely affect the Company’s investments in assets secured by properties that operate in these industries. Also, changes in how certain types of commercial properties are used while maintaining social distancing and other techniques intended to control the impact of COVID-19 (for example, office buildings may be adversely impacted by a possible reversal in the recent trend toward increased densification of office space, or a preference by office users for suburban properties less reliant on public transportation to safely deliver their employees to and from the workplace) have and are likely to impact our investments secured by these properties. Additional regional surges in infection rates due to COVID-19 variants, reversed re-openings, uncertainty regarding the effectiveness of vaccines approved for COVID-19, or high proportions of vaccine hesitancy in certain regions, could adversely affect the Company’s loan investments secured by properties in these regions so impacted.

(17) Subsequent Events

The following events occurred subsequent to ~~March 31,~~June 30, 2021:

•

The Company has closed, 1or is in the process of closing, 5 first mortgage ~~loan~~loans with a total loan commitment amount of ~~$47.0~~$372.5 million and initial ~~funding~~fundings of ~~$45.9~~$363.1 million. ~~This loan was financed in TRTX 2021-FL4, and together with the contribution in April 2021 of a $37.5 million loan, the Company has utilized $83.4 million of the FL4 Ramp-Up Account.~~

•

~~The~~From July 1, 2021 through August 2, 2021, the Company ~~is in the process~~received full loan repayments related to 2 of ~~closing 7~~its first mortgage loans with a total loan commitment ~~amount~~and unpaid principal balance of ~~$588.7~~$218.6 million and ~~initial fundings~~$212.8 million, respectively. As of ~~$464.5 million. The majority~~June 30, 2021, the two full loan repayments had a weighted average risk rating of ~~these loans, measured by commitment amount, are expected to be financed~~2.8 and were included in ~~TRTX 2021-FL4.~~the Company’s office and multifamily property categories.

•

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited and audited consolidated financial statements and the accompanying notes included elsewhere in this Form 10-Q and in our Form 10-K filed with the SEC on February 24, 2021. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, and financial condition based on current expectations that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from ~~those in this discussion~~any results expressed or implied by these forward-looking statements as a result of various factors, including but not limited to those discussed under the heading “Risk Factors” in this Form 10-Q and in our Form 10-K filed with the SEC on February 24, 2021.

Overview

As of ~~March 31,~~June 30, 2021, our loan investment portfolio consisted of 5761 first mortgage loans (or interests therein) and one mezzanine loan with total loan commitments of ~~$5.0~~$5.3 billion, an aggregate unpaid principal balance of ~~$4.6~~$4.8 billion, a weighted average credit spread of 3.2%, a weighted average all-in yield of ~~5.2%~~5.0%, a weighted average term to extended maturity (assuming all extension options have been exercised by borrowers) of 2.9 years, and a weighted average LTV of ~~65.9%~~66.7%. As of ~~March 31,~~June 30, 2021, 100% of the loan commitments in our portfolio consisted of floating rate loans, of which 99.3% were first mortgage loans or, in ~~one instance~~two instances a first mortgage loan and contiguous mezzanine loan both owned by us, and 0.7% was a mezzanine loan. As of ~~March 31,~~June 30, 2021, we had ~~$401.7~~$488.9 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

As of ~~March 31,~~June 30, 2021, we had $99.2 million of real estate owned comprising 27 acres across two undeveloped commercially-zoned land parcels on the Las Vegas Strip (the ~~“Property”~~“REO Property”) acquired pursuant to a negotiated deed-in-lieu of foreclosure. This Property is held for investment and reflected on our consolidated balance sheets at its ~~estimate of~~estimated fair value at the time of ~~acquisition.~~acquisition, net of estimated selling costs.

During 2020, the COVID-19 pandemic caused significant disruptions to the U.S. and global economies. These disruptions contributed to significant and ongoing volatility, widening credit spreads and sharp declines in liquidity in the real estate securities and whole loan financing markets at points during 2020. The pace of recovery following this disruption remains uncertain, as do the longer-term economic effects and shifts in behavior. As a result of the impact of COVID-19, many commercial real estate finance and financial services industry participants, including us, reduced new investment activity until the capital markets became more stable, the macroeconomic outlook became clearer, market liquidity improved, and transaction volumes increased. For most of 2020, we focused on actively managing portfolio credit, generating and recycling liquidity from existing assets, extending the maturities and further reducing the mark-to-market exposure of our liabilities and controlling corporate overhead as a percentage of our total assets and total revenues. Although market conditions remain uncertain due to COVID-19 and evolving new variants of the virus, the credit performance of our portfolio, loan repayments that have allowed us to retire certain borrowings and increase our liquidity, extended maturity dates for many of our secured credit agreements, ~~the introduction of a new secured credit agreement limiting mark-to-market risk relating to hotel loans in our portfolio,~~ and the increase in non-mark-to-market liabilities to ~~84%~~82% of total borrowings ~~have~~ positioned us to resume the origination of first mortgage transitional loans in the first quarter of 2021. For more information regarding the impact that COVID-19 has had and may have on our business, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

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 equity group and TPG’s executive committee. For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 11 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q.

~~First~~Second Quarter 2021 Activity

Operating Results:

•

~~Generated~~Recognized GAAP net income of ~~$32.0~~$32.4 million, ~~or $0.30 per weighted average diluted common share,~~ an increase of ~~$17.4~~$0.4 million compared to the three months ended ~~December~~March 31, ~~2020.~~2021.

•

Generated Distributable Earnings of $21.9 million, or an increase of $0.2 million compared to the three months ended March 31, 2021.

•

Produced ~~Distributable Earnings of $21.7 million, or $0.27 per weighted average diluted common share, an increase of $10.0 million, compared to the three months ended December 31, 2020.~~

•

~~Generated interest income of $58.1 million and incurred interest expense of $20.2 million, resulting in~~ net interest income of ~~$37.9 million.~~$39.9 million, resulting from Interest Income of $61.9 million and interest expense of $22.0 million in the second quarter of 2021. All net interest income was generated by our transitional first mortgage lending activity.

•

Recorded a decrease in our allowance for credit loss of ~~$4.0~~$3.5 million for a total allowance for credit losses of ~~$58.8~~$55.3 million.

•

Declared dividends on our common stock of $15.5 million, or $0.20 per common share.

Investment Portfolio Activity:

•

Originated ~~one~~nine first mortgage loans with total loan ~~with a commitment~~commitments of ~~$45.4~~$752.5 million, an aggregate initial unpaid principal balance of ~~$37.5~~$597.0 million, an unfunded ~~commitment~~loan commitments of ~~$7.9~~$155.5 million, and ana weighted average interest rate of LIBOR plus ~~3.3%~~3.48%.

•

Funded ~~$30.4~~$43.9 million in future funding obligations associated with existing loans.

•

Received ~~partial~~loan repayments in-full of $330.7 million across four loans, and principal amortization payments of $3.3 million across seven loans, for total loan repayments of ~~$5.3 million on four loans, and no repayments in full.~~$334.0 million.

Corporate and Investment Portfolio Financing Activity:

•

~~Closed TRTX 2021-FL4, a $1.25 billion collateralized loan obligation to finance 18 first mortgage loan investments comprised~~Issued 8,050,000 shares of ~~17 pari passu participation interests and purchase~~6.25% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”), generating net proceeds of ~~one commercial real estate loan, and providing $308.9~~$194.4 million after issuance costs of ~~cash capacity to finance new eligible loans, with a weighted average spread of 1.60% and an advance rate of 83.0%.~~$6.9 million.

•

~~Increased non-mark-to-market, non-recourse financing to 83.6%~~Redeemed 9,000,000 shares of ~~our total loan financing outstanding balances.~~11.0% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”)at an aggregate redemption price of approximately $247.5 million.

•

~~Repaid $615.0~~Invested the entire $308.9 million FL4 Ramp-Up Account, and reinvested $77.2 million in ~~secured financing in association with the closing of~~ TRTX ~~2021-FL4.~~2021-FL4, involving seven loans or participation interests therein.

~~Liquidity:~~Liquidity Position:

Available liquidity ~~at March 31,~~as of June 30, 2021 of ~~$632.9~~$393.0 million was comprised of:

•

Cash-on-hand of ~~$301.6~~$239.7 million, of which ~~$290.8~~$224.7 million was available for investment, net of ~~$10.8~~$15.0 million held to satisfy a cash liquidity covenant under our secured credit agreements.

•

$~~308.9 million of cash in the TRTX 2021-FL4 Ramp-Up Account, and $1.2~~53.8 million of cash in TRTX 2021-FL4 and TRTX 2019-FL3 ~~all~~ available for investment ~~dependent~~depending upon our ability to contribute eligible collateral.

•

Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of ~~$21.2~~$99.5 million under secured agreements with seven lenders.

Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $69.7 million that are eligible to pledge under our existing financing arrangements.

Financing capacity for ~~our secured credit agreements at March 31,~~loan investments as of June 30, 2021 was ~~comprised~~$2.8 billion under our three CLOs, two of ~~$3.2~~which currently allow reinvestment of eligible loan collateral, and $3.1 billion ~~of loan financing capacity~~ under secured credit agreements provided by seven lenders. At June 30, 2021, approximately 76.6% of our borrowings were via our CLO vehicles and 23.4% were pursuant to our secured credit agreements.

Our ability to draw on ~~this capacity~~our secured credit agreements 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 stable financing with mark-to-market provisions generally limited to collateral-specific events and, in only one instance, to capital markets-specific events. As of ~~March 31,~~June 30, 2021, borrowings under these ~~financing arrangements~~secured credit agreements had a weighted average credit spread of ~~2.4%~~2.3% (1.7% for facilities with mark-to-market provisions and 4.5% for one facility with no mark-to-market provisions), and a weighted average term to extended maturity ~~(assuming we have exercised~~assuming exercise of all extension options and term-out ~~provisions)~~provisions of ~~2.8~~2.3 years. These financing arrangements are generally 25% recourse to Holdco.

Key Financial Measures and Indicators

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared per common share, Distributable Earnings, and book value per share. For the three months ended ~~March 31,~~June 30, 2021, we recorded ~~earnings~~a loss per diluted common share of ~~$0.30, an increase~~$0.27, a decrease of ~~$0.21~~$0.57 per diluted common share from the three months ended ~~December~~March 31, ~~2020,~~2021, primarily due to the redemption of the Series B Preferred Stock. In connection with the redemption of the Series B Preferred Stock, we made a ~~reduction in credit loss expense~~make-whole payment to the holder of ~~$4.0~~the Series B Preferred Stock of $22.5 million ~~during~~and recorded a $22.5 million write-off associated with the ~~three months ended March 31, 2021, compared to a $16.3 million credit loss expense during the preceding quarter.~~unamortized discount upon redemption. Distributable Earnings per diluted common share was $0.27 for both of the three ~~months~~month periods ended June 30, 2021 and March 31, ~~2021, an increase of $0.12 from the three months ended December 31, 2020, mainly due to an increase in our net income.~~2021.

For the three months ended ~~March 31,~~June 30, 2021, we declared a cash dividend of $0.20 per common share, which was paid on ~~April~~July 23, 2021.

Our book value per common share as of ~~March 31,~~June 30, 2021 was ~~$16.61,~~$16.03, a ~~$0.11 increase~~decrease of $0.58 from our book value per common share as of ~~December~~March 31, ~~2020,~~2021, primarily due to ~~retained earnings~~the redemption of the Series B Preferred Stock on June 16, 2021, offset by net income in excess of ~~the~~our dividends declared ~~on our Series A and Series B preferred stock and our~~per common ~~stock.~~share in the period. As further described below, Distributable Earnings is a measure that is not prepared in accordance with GAAP. We use Distributable Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan activity and operations.

Earnings Per Common Share and Dividends Declared Per Common Share

The computation of diluted earnings per share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of ~~warrants,~~the Warrants, which are exercisable only on a net-settlement basis. The number of incremental shares is calculated by applying the treasury stock method. We exclude participating securities and ~~warrants~~the Warrants from the calculation of basic earnings (loss) per share in periods of net losses since their effect would be anti-dilutive. For the three months ended ~~March 31,~~June 30, 2021, we ~~present~~incurred a net (loss) attributable to common stockholders and therefore excluded participating securities and the Warrants from the calculation of diluted ~~earnings~~(loss) per share because the average market price of the Company’s common stock during the three months ended March 31, 2021 was $10.95, which exceeds the strike price of $7.50 per common share for warrants currently outstanding.share.

The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share (in thousands, except share and per share data):

Three Months Ended

March 31, 2021

December 31, 2020

Net Income (Loss) Attributable to TPG RE Finance Trust, Inc.⁽¹⁾

$
25,831

$
8,375

Participating Securities' Share in Earnings

(146
)

(338
)
Deemed Dividends on Series B Preferred Shares

(1,452
)

(1,399
)
Net Income (Loss) Attributable to Common Stockholders

$
24,233

$
6,638

Weighted Average Number of Common Shares Outstanding, Basic⁽²⁾

76,895,615

76,759,033

Weighted Average Number of Common Shares Outstanding, Diluted⁽²⁾

80,673,236

79,257,062

Earnings (Loss) per Common Share, Basic⁽²⁾

$
0.32

$
0.09

Earnings (Loss) per Common Share, Diluted⁽²⁾

$
0.30

$
0.09

Dividends Declared per Common Share⁽²⁾

$
0.20

$
0.38

	Three Months Ended
	June 30, 2021			March 31, 2021
Net Income (Loss)	$	32,391		$	31,955
Preferred Stock Dividends ⁽¹⁾		(6,799	)		(6,124	)
Participating Securities' Share in Earnings (loss)		(148	)		(146	)
Series B Preferred Stock Redemption Make-Whole Payment⁽²⁾		(22,485	)		—
Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs⁽³⁾		(23,997	)		(1,452	)
Net (Loss) Income Attributable to Common Stockholders ^– See Note 12	$	(21,038	)	$	24,233
Weighted Average Number of Common Shares Outstanding, Basic		76,899,270			76,895,615
Weighted Average Number of Common Shares Outstanding, Diluted		76,899,270			80,673,236
(Loss) Earnings per Common Share, Basic	$	(0.27	)	$	0.32
(Loss) Earnings per Common Share, Diluted	$	(0.27	)	$	0.30
Dividends Declared per Common Share	$	0.20		$	0.20

(1)

~~Represents net income (loss) attributable to holders of our common~~Includes preferred stock ~~after deducting~~dividends declared and paid for Series A preferred stock and Series B Preferred Stock ~~dividends.~~shares outstanding for the three months ended June 30, 2021 and March 31, 2021 and undeclared dividends for Series C Preferred Stock shares outstanding of $0.6 million for the three months ended June 30, 2021.

(2)

~~Weighted average number~~Represents the make-whole payment to the holder of ~~common~~the Series B Preferred Stock for an amount equal to the present value of all remaining dividend payments due on such shares ~~outstanding, earnings per common share~~of Series B Preferred Stock from and after the redemption date (and not including any declared or paid dividends ~~declared per common share includes common stock.~~or accrued dividends prior to such redemption date) through the second anniversary of the original issue date, computed in accordance with the terms of the Articles Supplementary.See Note 13 to our consolidated financial statements included in this Form 10-Q.

(3)

Distributable Earnings

We use Distributable Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments we believe are not necessarily indicative of our current loan ~~activity~~investment and ~~operations.~~operating activities. Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses, ~~not otherwise~~regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization expense, (iii) unrealized gains (losses), and (iv) certain non-cash ~~items. Distributable Earnings may also be adjusted from time to time to exclude one-time events pursuant to changes~~or income and expense items included in GAAP ~~and certain other non-cash charges as determined by our Manager, subject to approval by a majority of our independent directors.~~net income (loss) during the applicable reporting period. The exclusion of depreciation and amortization expense from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments. ~~Distributable Earnings is substantially the same as Core Earnings, as defined in our Management Agreement, for the three months ended March 31, 2021.~~

We believe that Distributable Earnings provides meaningful information for our investors to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. WeAnnually, we generally must distribute ~~annually~~ at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital ~~gain, in order~~gains, for us to qualify as a REIT for U.S. federal income tax purposes. To the extent that we satisfy this distribution requirement but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. ~~Dividends are one~~One of the ~~principal~~primary reasons investors ~~invest in~~purchase our common stock ~~and over~~is to receive our dividends. Over time, Distributable Earnings has been a useful indicator of our distribution policy and dividends per common share. ~~As such,~~Because of our investors’ focus on dividends, Distributable Earnings ~~is a measure~~and net taxable income are important measures considered by us in determining ~~dividends.~~dividends per common share.

In assessing the impact of ~~the new~~our allowance for credit ~~loss accounting guidance~~losses on our Distributable Earnings, we determined that, consistent with our accounting policy onfor the measurement of credit ~~loss measurement~~losses, the fact that credit losses only impact our taxable income when such credit losses are realized, and our stakeholders’ view of realized loan losses, the recognition of our credit loss provision or ~~reversal as computed under Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses,~~reversals of our credit loss provision should be included ~~within~~in unrealized gains, losses or other non-cash items as referenced above, but only to the extent that itour credit loss provision exceeds any realized credit losses during the applicable reporting period. See Note 2 to our Consolidated Financial Statements included in this Form 10-Q for details related to our accounting policy on credit loss measurement. Consistent with Accounting Standards Codification (“ASC”) 326, aA loan will be ~~charged~~written off as a realized loss when it is deemed non-recoverable upon a realization ~~event. This~~event and is generally recognized at the time the loan receivable is settled, transferred or exchanged, or in the case of foreclosure, when the underlying property is foreclosed upon or sold ~~but non-recoverability~~based on the facts and circumstances of the underlying transaction. Non-recoverability may also be concluded by us if, in our determination, it is nearly certain that all amounts due will not be collected. ~~The~~A realized loss ~~shall~~may equal the difference between the cash or consideration

received or expected to be received, and the net book value of the ~~asset. This policy is reflective of~~loan, reflecting our economics as it relates to the ultimate realization of the ~~loan.~~asset. See Note 2 to our consolidated financial statements included in this Form 10-Q for details related to our accounting policy on credit loss measurement and our application of Accounting Standards Codification (“ASC”) 326 and ASU 2016-13, Financial Instruments – Credit Losses.

The following ~~tables provide~~table provides a reconciliation of GAAP net income attributable to common stockholders to Distributable Earnings (in thousands, except share and per share data):

	Three Months Ended						Three Months Ended
	March 31, 2021			December 31, 2020			June 30, 2021			March 31, 2021
Net Income (Loss) Attributable to TPG RE Finance Trust, Inc	$	25,831		$	8,375
Participating Securities' Share in Earnings		(146	)		(338	)
Deemed Dividends on Series B Preferred Shares		(1,452	)		(1,399	)
Net Income (Loss) Attributable to Common Stockholders⁽¹⁾	$	24,233		$	6,638
Net Income (Loss)							$	32,391		$	31,955
Preferred Stock Dividends ⁽¹⁾								(6,799	)		(6,124	)
Participating Securities' Share in Earnings (Loss)								(148	)		(146	)
Series B Preferred Stock Redemption Make-Whole Payment⁽²⁾								(22,485	)		—
Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs⁽³⁾								(23,997	)		(1,452	)
Net (Loss) Income Attributable to Common Stockholders							$	(21,038	)	$	24,233
Series B Preferred Stock Redemption Make-Whole Payment								22,485			—
Series B Preferred Stock Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs								22,489			—
Non-Cash Stock Compensation Expense		1,456			1,534			1,393			1,456
Credit Loss (Benefit) Expense ⁽²⁾		(4,038	)		3,498
Credit Loss (Benefit) Expense ⁽⁴⁾								(3,478	)		(4,038	)
Distributable Earnings	$	21,651		$	11,670		$	21,851		$	21,651
Weighted-Average Common Shares Outstanding, Basic		76,895,615			76,759,033			76,899,270			76,895,615
Weighted-Average Common Shares Outstanding, Diluted		80,673,236			79,257,062			81,875,946			80,673,236
Distributable Earnings per Common Share, Basic	$	0.28		$	0.15		$	0.28		$	0.28
Distributable Earnings per Common Share, Diluted	$	0.27		$	0.15		$	0.27		$	0.27

(1)

~~Represents GAAP net income (loss) attributable to our common stockholders after deducting~~Includes preferred stock dividends ~~attributable to participating securities. For more information regarding~~declared and paid for Series A preferred stock and Series B Preferred Stock shares outstanding for the ~~calculation~~three months ended June 30, 2021 and March 31, 2021 and undeclared dividends for Series C Preferred Stock shares outstanding of ~~earnings per share using~~$0.6 million for the ~~two-class method, see Note 12 to our Consolidated Financial Statements included in this Form 10-Q.~~three months ended June 30, 2021.

(2)

(3)

(4)

Credit Loss (Benefit) Expense for the three months ended ~~December 31, 2020~~June 30, 2021 excludes the impact of a ~~realized~~$1.6 million loss ~~$12.8 million~~ on ~~an extinguishment~~sale of a first mortgage ~~loan that experienced a maturity default. See Notes 3 and 4 to our Consolidated Financial Statements included in this Form 10-Q for details.~~loan.

Book Value Per Common Share

The following table sets forth the calculation of our book value per share (in thousands, except share and per share data):

	March 31, 2021			December 31, 2020			June 30, 2021			March 31, 2021
Total Stockholders’ Equity and Temporary Equity	$	1,478,231		$	1,466,451		$	1,437,191		$	1,478,231
Series C Preferred Stock ($201,250 aggregate liquidation preference)							$	(201,250	)		—
Series B Preferred Stock		(201,003	)		(199,551	)		—			(201,003	)
Series A Preferred Stock		(125	)		(125	)		(125	)		(125	)
Stockholders’ Equity, Net of Preferred Stock	$	1,277,103		$	1,266,775		$	1,235,816		$	1,277,103
Number of Common Shares Outstanding at Period End		76,897,102			76,787,006			77,089,125			76,897,102
Book Value per Common Share	$	16.61		$	16.50		$	16.03		$	16.61

Investment Portfolio Overview

~~The Company’s~~Our interest-earning assets ~~include its~~are primarily comprised of a portfolio of floating rate, first mortgage loans, or in limited instances, mezzanine loans. ~~At March 31,~~As of June 30, 2021, our loan portfolio ~~was comprised~~consisted of 5862 loans totaling ~~$5.0~~$5.3 billion of commitments with an unpaid principal balance of ~~$4.6~~$4.8 billion, as compared to 5758 loans with ~~$4.9~~$5.0 billion of commitments and an unpaid principal balance of ~~$4.5~~$4.6 billion ~~at December~~as of March 31, ~~2020.~~2021.

~~At March 31,~~As of June 30, 2021, we owned real estate with a carrying value of $99.2 million comprising 27 acres across two undeveloped commercially-zoned land parcels on the Las Vegas Strip acquired pursuant to a negotiated deed-in-lieu of foreclosure. This Property is held for investment and reflected on our consolidated balance sheets at its ~~estimate of~~estimated fair value at the time of ~~acquisition.~~acquisition, net of estimated selling costs.

Loan Portfolio

During the three months ended ~~March 31,~~June 30, 2021, we originated ~~one loan~~,nine mortgage loans, with a total ~~loan~~ commitment ~~amount~~ of ~~$45.4~~$752.5 million, an initial unpaid principal balance of ~~which $37.5~~$597.0 million, ~~was funded~~and unfunded commitment at ~~origination.~~closing of $155.5 million. Loan fundings included ~~$30.4~~$43.9 million of deferred fundings related to previously originated loan commitments. ~~Proceeds~~We received proceeds from loan repayments ~~totaled $5.3~~in-full of $330.7 million ~~representing partial~~across four loans, and principal amortization payments of $3.3 million across seven loans, for total loan repayments ~~from four loans.~~of $334.0 million during the period. We generated interest income of ~~$58.1~~$61.9 million and incurred interest expense of ~~$20.2~~$22.0 million, which resulted in net interest income of ~~$37.9~~$39.9 million.Additionally, we sold one performing first mortgage hotel loan with an unpaid principal balance of $60.7 million for $59.5 million, resulting in a loss on sale of $1.6 million, including transaction costs of $0.4 million, before giving effect to the reduction of the general CECL reserve resulting from the related decline in loan commitments.

The following table details our loan activity by unpaid principal balance for the three months ended June 30, 2021 and March 31, 2021 ~~and December 31, 2020~~ (dollars in thousands):

	Three Months Ended						Three Months Ended
	March 31, 2021			December 31, 2020			June 30, 2021			March 31, 2021
Loan originations and acquisitions — initial funding	$	37,545		$	—		$	596,958		$	37,545
Other loan fundings⁽¹⁾		30,382			62,451			43,930			30,382
Loan repayments		(5,294	)		(365,096	)		(334,021	)		(5,294	)
Loan extinguishment on conversion to REO⁽²⁾		—			(112,000	)
Loan sale								(60,690	)		—
Total loan activity, net	$	62,633		$	(414,645	)	$	246,177		$	62,633

(1)	Additional fundings made under existing loan commitments.

~~(2)~~

Includes extinguishment of a first mortgage loan with an unpaid principal balance of $112.0 million as of December 31, 2020. On December 31, 2020, we took title to the Property pursuant to a negotiated deed-in-lieu of foreclosure. Fair value of the Property at the time of acquisition was $99.2 million resulting in a realized loss of $12.8 million, equal to the previously recorded CECL reserve included in our results of operations for the three months ended December 31, 2020. See Notes 3 and 4 to our Consolidated Financial Statements included in this Form 10-Q for details.

The following table details overall statistics for our loan portfolio as of ~~March 31,~~June 30, 2021 (dollars in thousands):

	Balance Sheet Portfolio			Total Loan Portfolio			Balance Sheet Portfolio			Total Loan Portfolio
Number of loans		58			59			62			63
Floating rate loans (by unpaid principal balance)		100.0	%		100.0	%		100.0	%		100.0	%
Total loan commitments⁽¹⁾	$	4,983,745		$	5,115,745		$	5,318,297		$	5,450,297
Unpaid principal balance⁽²⁾	$	4,587,358		$	4,587,358		$	4,833,535		$	4,833,535
Unfunded loan commitments⁽³⁾	$	401,726		$	401,726		$	488,916		$	488,916
Amortized cost	$	4,580,179		$	4,580,179		$	4,825,890		$	4,825,890
Weighted average credit spread⁽⁴⁾		3.2	%		3.2	%		3.2	%		3.2	%
Weighted average all-in yield⁽⁴⁾		5.2	%		5.2	%		5.0	%		5.0	%
Weighted average term to extended maturity (in years)⁽⁵⁾		2.9			2.9			2.9			2.9
Weighted average LTV⁽⁶⁾		65.9	%		65.9	%		66.7	%		66.7	%

(1)

In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan commitment encompasses the entire loan portfolio we originated, acquired and financed. ~~At March~~As of June 30, 2021 and December 31, ~~2021,~~2020, we had one non-consolidated senior interest outstanding of $132.0 million.

(2)	Unpaid principal balance includes PIK interest of ~~$5.5~~$4.2 million and $4.7 million as of ~~March~~June 30, 2021 and December 31, ~~2021.~~2020, respectively.

(3)

Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by our borrowers, to finance operating deficits during renovation and lease-up, and in limited instances to finance construction.

(4)

As of ~~March 31,~~June 30, 2021, our floating rate loans were indexed to LIBOR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, loan origination costs and accrual of both extension and exit fees. Credit spread and all-in yield for the total portfolio assumes the applicable floating benchmark rate as of ~~March 31,~~June 30, 2021 for weighted average calculations.

(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,~~June 30, 2021, based on the unpaid principal balance of our total loan exposure, ~~23.0%~~20.6% of our loans were subject to yield maintenance or other prepayment restrictions and ~~77.0%~~79.4% were open to repayment by the borrower without penalty.

(6)

Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) as of ~~March 31,~~June 30, 2021, divided by the as-is appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

For information regarding the financing of our loan portfolio, see the section entitled “Investment Portfolio Financing.”

Real Estate Owned

In December 2020, we acquired the REO Property pursuant to a negotiated deed-in-lieu of foreclosure. At September 30, 2020, this property served as collateral for a first mortgage loan receivable held for investment with an unpaid principal balance of $112.0 million, an independently-assessed credit loss reserve of $12.8 million, and a net carrying value ofOur cost basis in the REO Property upon acquisition was $99.2 million. On October 9, 2020, the first mortgage loan reached final maturity without repayment or satisfaction of extension conditions, which triggered a maturity default. On December 31, 2020, we took ownership of the Property, extinguished the first mortgage loan receivable, and realized a loss of $12.8 million, equal to the ~~previously recorded specific CECL reserve on the first mortgage loan. At March 31, 2021, we continued to hold the Property at its~~ estimated fair value of the collateral at the ~~time~~date of acquisition, net of estimated selling ~~costs, of $99.2 million.~~costs. Our estimate of the REO Property’s fair value was determined using a discounted cash flow model and Level 3 inputs, which include estimates of parcel-specific cash flows over a specific holding period, at a discount rate that ranges between 8.0% - 17.5% based on the risk profile of estimated cash flows associated with each respective parcel, and an estimated capitalization rate of 6.25%, where applicable. These inputs are based on the highest and best use for each parcel, estimated future values for the parcels based on extensive discussions with local brokers, investors and other market participants, the estimated holding period for the parcels, and discount rates that reflect estimated investor return requirements for the risks associated with the expected use of each sub-parcel.

As of June 30, 2021, we continued to hold the REO Property at its estimated fair value at the time of acquisition, net of estimated selling costs, of $99.2 million. We obtained from a third party a $50.0 million non-recourse first mortgage loan secured by the REO Property, which is classified as Mortgage Loan Payable on our consolidated balance sheets. See Note 7 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for details of the Mortgage Loan Payable.

Asset Management

We actively manage the assets in our portfolio from closing to final repayment. We are party to an agreement with Situs Asset Management, LLC (“SitusAMC”), one of the largest commercial mortgage loan servicers, pursuant to which SitusAMC provides us with dedicated asset management employees for performing asset management services pursuant to our proprietary guidelines. Following the closing of an investment, this dedicated asset management team rigorously monitors the investment under our Manager’s oversight, with an emphasis on ongoing financial, legal and quantitative analyses. Through the final repayment of an investment, the asset management team maintains regular contact with borrowers, servicers and local market experts monitoring performance of the collateral, anticipating borrower, property and market issues, and enforcing our rights and remedies when appropriate.

Loan Portfolio Review

Our Manager reviews our entire loan portfolio quarterly, undertakes an assessment of the performance of each loan, and assigns it a risk rating between “1” and “5,” from least risk to greatest risk, respectively. See Note 2 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for a discussion regarding the risk rating system that we use in connection with our portfolio. The following table allocates among risk categories the amortized cost of our loan portfolio as of ~~March 31,~~June 30, 2021 and December 31, 2020 based on our internal risk ratings (dollars in thousands):

	March 31, 2021				December 31, 2020				June 30, 2021				December 31, 2020
Risk Rating	Amortized Cost		Number of Loans		Amortized Cost		Number of Loans		Amortized Cost		Number of Loans		Amortized Cost		Number of Loans
1	$	—		—	$	—		—	$	—		—	$	—		—
2		369,245		5		337,738		4		341,749		4		337,738		4
3		3,376,123		37		3,340,663		37		3,872,528		49		3,340,663		37
4		803,632		15		806,893		15		580,413		8		806,893		15
5		31,179		1		31,106		1		31,200		1		31,106		1
Unpaid principal balance	$	4,580,179		58	$	4,516,400		57	$	4,825,890		62	$	4,516,400		57

The weighted average risk rating of our total loan exposure based on amortized cost ~~remains~~remained unchanged at 3.1 ~~for the periods ended March 31,~~as of June 30, 2021 and December 31, 2020.

During the three months ended June 30, 2021, we assigned to one of our loans originated in the current quarter a risk rating of “2” based on the continued outperformance of the underlying collateral. This loan refinanced a loan held in our loan portfolio that carried a “2” risk rating at the time it was repaid in full. Additionally, as of June 30, 2021, we: upgraded two hotel loans from risk category “4” to “3” due to positive economic trends in the local markets and continued improvements to the property-level operating performance; upgraded four condominium loans, to the same Sponsor, from risk category “4” to “3” due to improved Sponsor financial condition, pace of conversion work, and improving market conditions; and downgraded one office loan from risk category “2” to “3” due to slowing leasing activity.

During the three months ended March 31, 2021, we upgraded one loan from risk category “3” to “2” because the collateral property achieved ~~lease~~stabilized occupancy at rents in excess of ~~underwriting.~~underwritten rents.

~~Allowance for Credit Losses~~

During the three months ended March 31, 2021, we recorded a decrease of $4.0 million in the allowance for credit losses thus reducing the CECL reserve to $58.8 million as of March 31, 2021. This decline was due primarily to expectations of improving macroeconomic conditions, and actual improvements in operating results for many collateral properties adversely affected by COVID-19. The average risk ratings of our loans remain unchanged at 3.1 for the periods ended March 31, 2021 and December 31, 2020. The ongoing economic slowdown due to the COVID-19 pandemic has caused reduced investment sales and financing activity in most sectors of the commercial real estate capital markets, which may moderate the pace of loan repayments and will likely impact commercial property values and valuation inputs. While the ultimate impact of these trends remains uncertain, we have made certain forward-looking adjustments to the inputs of our calculation of the allowance for credit losses to reflect uncertainty regarding the timing, strength, and distribution of the economic recovery, and the post-COVID levels of economic activity that may result.Loan Modification Activity

The economic and market disruptions caused by COVID-19 have adversely impacted the financial condition of many of our borrowers. These impacts have and may differ in timing, duration and magnitude depending on factors such as property type and geography. We have experienced a small number of delinquencies and defaults, but we cannot be certain delinquencies and defaults will not increase in the future. ~~Since March 31, 2020, we have entered into approximately 24 loan modification agreements~~

Loan modifications implemented by us since January 1, 2021 typically involve the adjustment or waiver of property level or business plan milestones or performance tests that ~~typically temporarily reduce~~are prerequisite to the ~~amount of cash interest collected, permit the accrual~~extension of a ~~portion (typically not more than 50%)~~loan maturity in exchange for borrower concessions that may include any or all of the ~~interest due to be repaid at~~following: a ~~later date~~partial repayment of principal; termination of all or a portion of the remaining unfunded loan commitment; a cash infusion by the sponsor or borrower ~~permit~~to replenish loan reserves (interest or capital improvements); additional call protection; and/or an increase in the ~~use~~loan coupon. Loan modifications implemented by us in 2020 typically involved the repurposing of existing reserves to pay interest and other property-level expenses, ~~as well as~~and providing ~~accommodations on~~relief to conditions for extension, such as waiving debt yield tests ~~and/~~or modifying the conditions upon which the underlying borrower may extend the maturity date. In exchange, borrowers and sponsors ~~have~~ made partial principal repayments and/or provided ~~to us~~ additional cash for payment of interest, operating expenses, and replenishment of interest reserves or capital reserves in amounts and combinations acceptable to us. ~~At March 31,~~As of June 30, 2021, we had 1112 loan modifications outstanding related to loans with an unpaid principal balance of ~~$943.5~~$1,032.9 million.

During the three months ended March 31, 2021, we executed five loan modifications with borrowers. As of March 31, 2021, these loans had an aggregate commitment amount of $397.7 million and an aggregate unpaid principal balance of $393.5 million. None of these loan modifications trigger the requirements for accounting as TDRs. In connection with these modifications, borrowers made aggregate principal reduction payments of approximately $4.3 million and infused approximately $5.9 million to replenish reserves. All of the modified loans are performing as of March 31, 2021. Total PIK interest of $0.8 million on two loans was deferred and added to

~~the outstanding loan principal during the three months ended March 31, 2021. At March 31, 2021, the total amount of PIK interest in the portfolio was $5.5 million with respect to nine loans.~~

Loan modification activity from April 1, 2020 through ~~March 31,~~June 30, 2021 is summarized in the following table (dollars in thousands):

	At March 31, 2021			As of June 30, 2021
Executed loan modifications		24			26
Expired loan modifications⁽¹⁾		(13	)		(14	)
Outstanding loan modifications		11			12

Unpaid principal balance of outstanding loan modifications	$	943,544
Unpaid principal balance of loans related to outstanding loan modifications				$	1,032,905

Total PIK accrued	$	5,644		$	6,004
PIK Repaid		(127	)
PIK Outstanding	$	5,517
PIK repayments and write-off					(1,851	)
PIK outstanding				$	4,153

(1)

~~Includes: (a)~~Includes an amendment and simultaneous assignment of an existing first mortgage loan by a third-party purchaser of the property securing the loan. This transaction was treated as an extinguishment of the existing loan and origination of a new loan under ~~GAAP; and (b)~~GAAP. Also includes the sale, at no gain or loss, of a mezzanine loan related to a contiguous first mortgage loan held by ~~the Company.~~us.

During the three months ended June 30, 2021, we executed two loan modifications with borrowers. As of June 30, 2021, the loans to which these modifications relate had an aggregate commitment amount of $186.9 million and an aggregate unpaid principal balance of $174.0 million. None of the loan modifications triggered the accounting requirements of a troubled debt restructuring. In connection with these modifications, borrowers infused approximately $1.4 million to replenish reserves. All of the modified loans are performing as of June 30, 2021. Total PIK interest of $0.4 million on two loans was deferred and added to the outstanding loan principal during the three months ended June 30, 2021. As of June 30, 2021, the total amount of PIK interest in the portfolio was $4.2 million with respect to eight loans.

We continue to work with our borrowers to address the circumstances caused by COVID-19 while seeking to protect the credit attributes of our loans. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures, or losses.

Allowance for Credit Losses

The amount of allowance for credit losses is influenced by the size of our loan portfolio, loan quality, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three months ended June 30, 2021, the Company recorded a decrease of $3.5 million to its allowance for credit losses. The decline in the Company’s allowance for credit losses was primarily due to an improving macroeconomic outlook based on recent observed economic data, improved property performance of underlying collateral for many of its loan investments that were adversely impacted by COVID-19, and normalizing commercial real estate capital markets activity. While the ultimate impact of these trends remains uncertain, we selected our macroeconomic outlook based on this uncertainty, made specific forward-looking valuation adjustments to the inputs of our calculation of the allowance for credit losses to reflect variability regarding the timing, strength, and distribution of a sustained economic recovery, and unknown post-COVID levels of economic activity that may result.

Investment Portfolio Financing

We finance our investment portfolio using secured credit agreements, including secured credit facilities, mortgage loans payable, asset-specific financing arrangements, and collateralized loan obligations. In certain instances, we may create structural leverage and obtain matched-term financing through the co-origination or non-recourse syndication of a senior loan interest to a third party (a “non-consolidated senior interest”). We generally seek to match-fund and match-index our investments by minimizing the differences between the durations and indices of our investments and those of our liabilities, while minimizing our exposure to mark-to-market risk.

Investment Portfolio Financing Arrangements

Our portfolio financing arrangements during the period ended ~~March 31,~~June 30, 2021 and December 31, 2020 included collateralized loan obligations, secured credit agreements, ~~and~~ a mortgage loan ~~payable. We had one outstanding~~payable, and a non-consolidated senior ~~interest outstanding~~interest. The increase in total indebtedness as of June 30, 2021 is primarily due to the close of TRTX 2021-FL4, a $1.25 billion CLO, on March 31, 2021. TRTX 2021-FL4 has a weighted average advance rate of 83% and increased our total indebtedness and our non-mark-to-market financing, which at ~~both March~~June 30, 2021 represented 81.9% of our total borrowings. In connection with TRTX 2021-FL4, we placed $1.04 billion (principal amount) of investment grade-rated notes with institutional investors. See Note 6 to our consolidated financial statements included in this Form 10-Q for details.

The following table details our loan portfolio borrowings as of June 30, 2021 and December 31, 2020 (dollars in thousands):

	Portfolio Financing Outstanding Principal Balance
	June 30, 2021		December 31, 2020
CLO financing	$	2,835,887	$	1,834,760
Secured credit facilities		863,211		1,522,859
Mortgage loan payable		50,000		50,000
Total indebtedness⁽¹⁾⁽²⁾	$	3,749,098	$	3,407,619

(1)

Excludes a non-consolidated senior interest outstanding as of June 30, 2021 and December 31, 2020 with a total loan commitment of $132.0 million.

~~The following table details our portfolio financing arrangements at March 31, 2021 and December 31, 2020 (dollars in thousands):~~

Portfolio Financing
Outstanding Principal Balance

March 31, 2021

December 31, 2020

CLO financing⁽¹⁾

$
2,868,047

$
1,834,760

Secured credit facilities - loans

860,867

1,522,859

Mortgage loan payable

50,000

50,000

Total indebtedness⁽²⁾

$
3,778,914

$
3,407,619

~~(1)~~

~~Increase in the balance as of March 31, 2021 is due to the issuance of $1.04 billion~~ ~~principal amount of investment grade-rated notes in connection with TRTX 2021-FL4. See Note 6 to our Consolidated Financial Statements included in this Form 10-Q for details.~~

(2)	Excludes deferred financing costs of ~~$23.0~~$19.9 million and $18.9 million as of ~~March 31,~~June 30, 2021 and December 31, 2020, respectively.

Non-mark-to-market financing sources accounted for ~~83.6%~~81.9% of our total loan portfolio ~~financing arrangements at March 31,~~borrowings as of June 30, 2021. The remaining ~~16.4%~~18.1% of our loan portfolio ~~financing arrangements,~~borrowings, which are comprised primarily of our seven secured credit facilities, are subject to credit marks, and in only one instance to credit and spread marks. The following table summarizes our loan portfolio ~~financing~~borrowings as of ~~March 31,~~June 30, 2021 (dollars in thousands):

Loan Portfolio Financing Arrangements

Initial
Maturity
Date

Extended
Maturity
Date
Recourse
Percentage

Basis of
Margin Calls

Non-Mark-to-Market

Mark-to-Market

Secured Credit Facilities

Goldman Sachs

08/19/21

08/19/22

25
%

Credit

$
—

$
1,667

Wells Fargo

04/18/22

04/18/22

25
%

Credit

—

2,091

Barclays

08/13/22

08/13/22

25
%

Credit

—

247,282

Morgan Stanley

05/04/22

05/04/22

25
%

Credit

—

156,175

JP Morgan

10/30/23

10/30/25

25
%

Credit and Spread

—

124,458

US Bank

07/09/22

07/09/24

25
%

Credit

—

69,584

Bank of America

09/29/21

09/29/22

25
%

Credit

—

31,664

Institutional Financing

10/30/23

10/30/25

25
%

Credit

227,946

—

227,946

632,921

Collateralized Loan Agreements:

TRTX 2018-FL2

10/01/34

10/01/34

0
%

None

1,039,627

—

TRTX 2019-FL3

11/29/37

11/29/37

0
%

None

790,920

—

TRTX 2021-FL4

03/31/38

03/31/38

0
%

None

1,037,000

—

Non-Consolidated Senior Interests

None

132,000

—

Total

$
3,227,493

$
632,921

Percentage of Total

83.6
%

16.4
%

~~Secured Credit Facilities~~

As of March 31, 2021, aggregate borrowings outstanding under our secured credit facilities totaled $0.9 billion, which was entirely related to our mortgage loan investments. As of March 31, 2021, the weighted average interest rate was LIBOR plus 2.4% per annum, and the weighted average advance rate was 67.9%. As of March 31, 2021, outstanding borrowings under these facilities had a weighted average term to extended maturity of 2.8 years (assuming we have exercised all extension options and term out provisions). These secured credit agreements are 25% recourse to Holdco.

~~The following table details our secured credit agreements as of March 31, 2021 (dollars in thousands):~~

Lender

Commitment
Amount⁽¹⁾

UPB of
Collateral

Advance
Rate

Approved
Borrowings

Outstanding
Balance

Undrawn
Capacity⁽³⁾

Available
Capacity⁽²⁾

Interest
Rate

Extended
Maturity⁽⁴⁾

Goldman Sachs

$
250,000

$
37,940

66.0
%

$
3,751

$
1,667

$
2,084

$
246,249

L+ 2.35
%

08/19/22

Wells Fargo

750,000

3,776

77.0
%

2,798

2,091

707

747,202

L+ 1.87
%
04/18/22

Barclays

750,000

350,488

70.5
%

247,733

247,282

451

502,267

L+ 1.54
%

08/13/22

Morgan Stanley

500,000

212,883

78.2
%

166,229

156,175

10,054

333,771

L+ 1.82
%
05/04/22

JP Morgan

400,000

207,618

62.5
%

130,238

124,458

5,780

269,762

L+ 1.69
%

10/30/25

US Bank

139,960

101,759

70.0
%

71,231

69,584

1,647

68,729

L+ 1.53
%

07/09/24

Bank of America

200,000

42,813

75.0
%

32,110

31,664

446

167,890

L+ 1.75
%

09/29/22

Institutional Financing

249,546

392,148

58.7
%

227,946

227,946

—

21,600

L+ 4.50
%

10/30/25

Subtotal/Weighted
Average—Loans

$
3,239,506

$
1,349,425

67.9
%

$
882,036

$
860,867

$
21,169

$
2,357,470

L+ 2.41
%

~~(1)~~

~~Commitment amount represents the largest amount of borrowings available under a given agreement once sufficient collateral assets have been approved by the lender and pledged by us.~~

~~(2)~~

~~Represents the commitment amount less the approved borrowings, which amount is available to be borrowed provided we pledge, and the lender approves, additional collateral assets.~~

~~(3)~~

Undrawn capacity represents the positive difference between the borrowing amount approved by the lender against collateral assets pledged by us and the amount actually drawn against those collateral assets. The funding of such amounts is generally subject to the sole and absolute discretion of each lender.

~~(4)~~

Our ability to extend our secured credit facilities to the dates shown above is subject to satisfaction of certain conditions. Even if extended, our lenders retain sole discretion to determine whether to accept pledged collateral, and the advance rate and credit spread applicable to each borrowing thereunder.

Once we identify an asset and the asset is approved by the secured credit facility lender to serve as collateral (which lender’s approval is in its sole discretion), we and the lender may enter into a transaction whereby the lender advances to us a percentage of the value of the asset, which is referred to as the “advance rate.” In the case of borrowings under our repurchase facilities, this advance serves as the purchase price at which the lender acquires the loan asset from us with an obligation of ours to repurchase the asset from the lender for an amount equal to the purchase price for the transaction plus a price differential, which is calculated based on an interest rate. Advance rates are subject to negotiation between us and our secured credit facility lenders.

For each transaction, we and the lender agree to a trade confirmation which sets forth, among other things, the purchase price if a repurchase facility, the maximum advance rate, the interest rate and the market value of the asset. For transactions under our secured credit agreements secured by our loan assets, the trade confirmation may also set forth any future funding obligations which are contemplated with respect to the specific transaction and/or the underlying loan asset. For loan assets which involve future funding obligations of ours, the transaction may provide for the lender to fund portions (for example, pro rata per the maximum advance rate of the related transaction) of such future funding obligations. The trade confirmation can also set forth loan-specific margin maintenance provisions, described below.

Generally, our secured credit facilities allow for revolving balances, which allow us to voluntarily repay balances and draw again on existing available credit. The primary obligor on each secured credit facility is a separate special purpose subsidiary of ours which is restricted from conducting activity other than activity related to the utilization of its secured credit facility and the loans or loan interests that are originated or acquired by such subsidiary. As additional credit support, our holding company subsidiary, Holdco, provides certain guarantees of the obligations of its subsidiaries. Holdco’s liability is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the related agreement. However, this liability cap does not apply in the event of certain “bad boy” defaults which can trigger recourse to Holdco for losses or the entire outstanding obligations of the borrower depending on the nature of the “bad boy” default in question. Examples of such “bad boy” defaults include, without limitation, fraud, intentional misrepresentation, willful misconduct, incurrence of additional debt in violation of financing documents, and the filing of a voluntary or collusive involuntary bankruptcy or insolvency proceeding of the special purpose entity subsidiary or the guarantor entity.

Each of the secured credit facilities has “margin maintenance” provisions, which are designed to allow the lender to maintain a certain margin of credit enhancement and/or against the assets which serve as collateral. The lender’s margin amount is typically based on a percentage of the market value of the asset and/or mortgaged property collateral; however, certain secured credit agreements may also involve margin maintenance based on maintenance of a minimum debt yield with respect to the cash flow from the underlying real estate collateral. In certain cases, margin maintenance provisions can relate to minimum debt yields for pledged collateral considered as a whole, or limits on concentration of loan exposure measured by property type or loan type.

Our secured credit facilities contain defined mark-to-market provisions that permit the lenders to issue margin calls to us in the event that the collateral properties underlying our loans pledged to our lenders experience a non-temporary decline in value or net cash flow (“credit marks”) due to reasons other than capital markets events that result in changing credit spreads for similar borrowing obligations. In connection with one of these borrowing arrangements, the lender is also permitted to issue margin calls to us in the event the lender determines capital markets events have caused credit spreads to change for similar borrowing obligations (“spread marks”). Furthermore, in connection with one of these borrowing arrangements, the lender has the right to re-margin the secured credit facility based solely on appraised loan-to-values in the third year of the facility. On May 28, 2020, we made voluntary deleveraging payments totaling $157.7 million to our seven secured credit facility lenders in exchange for their agreement to suspend margin calls for defined periods, subject to certain conditions. When these payments were made, no margin deficits existed, and no margin calls have been issued to us since. The margin holiday agreements expired in December 2020. If market turbulence returns, we may be exposed to margin calls in connection with our secured credit agreements secured by our mortgage loan investments.

The maturity dates for each of our secured credit agreements are set forth in tables that appear earlier in this section. Our secured credit agreements generally have terms of between one and three years, but may be extended if we satisfy certain performance-based conditions. In the normal course of business, we maintain discussions with our lenders to extend or amend any financing facilities related to our loans.

At March 31, 2021, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit facilities taken as a whole) was 32.1% as compared to 30.7% at December 31, 2020 and 19.5% at March 31, 2020. The year-over-year increase in our weighted average haircut was due to the repayment in full and subsequent termination by the Company of all of its secured credit agreements for CRE debt securities, which generally had lower haircuts than our secured credit agreements for whole loans.

The secured credit facilities also include cash management features which generally require that income from collateral loan assets be deposited in a lender-controlled account for distribution in accordance with a specified waterfall of payments designed to keep facility-related obligations current before such income is disbursed for our own account. The cash management features generally require the trapping of cash in such controlled account if an uncured default under our borrowing arrangement remains outstanding. Furthermore, some secured credit agreements may require an accelerated principal amortization schedule if the secured credit agreement is in its final extended term.

Notwithstanding that a loan asset may be subject to a financing arrangement and serve as collateral under a secured credit facility, we retain the right to administer and service the loan and interact directly with the underlying obligors and sponsors of our loan assets so long as there is no default under the secured credit agreement, and so long as we do not engage in certain material modifications (including amendments, waivers, exercises of remedies, or releases of obligors and collateral, among other things) of the loan assets without the lender’s prior consent.

~~Collateralized Loan Obligations~~

At March 31, 2021, we had three collateralized loan obligations, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2, totaling $2.9 billion, financing 39 existing first mortgage loan investments totaling $3.2 billion, and holding $310.1 million of cash for investment in eligible loan collateral. Our CLOs provide low cost, non-mark-to-market, non-recourse financing for 74.3% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of LIBOR plus 1.5%, have a weighted average advance rate of 82.6%, and include a reinvestment feature that allows us to contribute existing or newly originated loan investments in exchange for proceeds from loan repayments held in the collateralized loan obligations. At March 31, 2021, we had approximately $308.9 million in the FL4 Ramp-Up Account available to purchase eligible collateral interests during a ramp-up period of approximately six months following the FL4 Closing Date. See Note 6 to our Consolidated Financial Statements included in this Form 10-Q for details. The reinvestment period for TRTX 2018-FL2 ended on December 11, 2020. During the three months ended March 31, 2021, we did not utilize the reinvestment feature in TRTX 2019-FL3.

~~Mortgage Loan Payable~~

We are, through a special purpose entity subsidiary, a borrower under a $50.0 million mortgage loan secured by the Property. Refer to Note 4 to our Consolidated Financial Statements included in this Form 10-Q for additional information. The first mortgage loan was provided by an institutional lender, has an initial maturity date of December 15, 2021, and an option to extend the maturity for 12 months subject to the satisfaction of customary extension conditions, including (i) the purchase of a new interest rate cap for the extension term, (ii) replenishment of the interest reserve with an amount equal to 12 months of debt service, (iii) payment of a 0.25% extension fee on the outstanding principal balance, and (iv) no event of default. The first mortgage loan permits partial releases of collateral in exchange for payment of a minimum release price equal to the greater of 100% of net sales proceeds (after reasonable transaction expenses) or 115% of the allocated loan amount. The loan bears interest at a rate of LIBOR plus 4.50% subject to a LIBOR interest rate floor and cap of 0.50%. We posted cash of $2.4 million to pre-fund interest payments due under the note during its initial term. The remaining reserve balance at March 31,2021 was $2.0 million.

Loan Portfolio Financing Arrangements

Initial

Maturity

Date

Extended

Maturity

Date

Recourse

Percentage

Basis of

Margin Calls

Non-Mark-to-Market

Mark-to-Market

Secured Credit Facilities

Goldman Sachs⁽¹⁾

08/19/21

08/19/22

Credit

—

97,989

Wells Fargo

04/18/22

Credit

—

63,069

Barclays

08/13/22

Credit

—

150,380

Morgan Stanley

05/04/22

Credit

—

169,083

JP Morgan

10/30/23

10/30/25

Credit and Spread

—

142,685

US Bank

07/09/22

07/09/24

Credit

—

39,245

Bank of America

09/29/21

09/29/22

Credit

—

31,664

Institutional Financing

10/30/23

10/30/25

Credit

169,096

—

169,096

694,115

Collateralized Loan Agreements:

TRTX 2018-FL2

11/29/37

None

758,759

—

TRTX 2019-FL3

10/01/34

None

1,039,628

—

TRTX 2021-FL4

03/31/38

None

1,037,500

—

Non-Consolidated Senior Interests

In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party, we retain on our balance sheet a mezzanine loan. As of March 31, 2021, the Company retained a mezzanine loan investment with a total commitment of $35.0 million, an unpaid principal balance of $33.5 million and an interest rate of LIBOR plus 10.3%.

~~The following table presents our non-consolidated senior interests outstanding as of March 31, 2021 (dollars in thousands):~~

Non-Consolidated Senior Interests

Count

Loan
Commitment

Principal
Balance

Amortized
Cost

Weighted
Average
Credit
Spread⁽¹⁾

Guarantee

Weighted
Average
Term to
Extended
Maturity
Senior loan sold or co-originated

1

$
132,000

$
132,000

N/A

L+ 4.3
%

N/A

6/28/2025
Retained mezzanine loan

1

35,000

33,532

33,399

L+ 10.3
%

N/A

6/28/2025
Total loan

2

$
167,000

$
165,532

L+ 5.5
%

6/28/2025

~~(1)~~

~~Loan commitment used as a basis for computation of weighted average credit spread.~~

~~Financial Covenants for Outstanding Borrowings~~

Our financial covenants and guarantees for outstanding borrowings related to our secured credit agreements require Holdco to maintain compliance with the following financial covenants (among others), which were revised on May 28, 2020 as follows:

~~Financial Covenant~~	~~Current~~	None			132,000				—
Total		$	3,136,983			$	694,115
Percentage of Total			81.9	%			18.1	%

(1)	In August 2021, we extended the initial maturity date from August 19, 2021 to August 19, 2022, with two additional one-year extensions at our option, provided the secured credit facility is not in default.

Secured Credit Facilities

As of June 30, 2021, aggregate borrowings outstanding under our secured credit facilities totaled $0.9 billion, relating solely to our mortgage loan investments. As of June 30, 2021, the overall weighted average interest rate was LIBOR plus 2.3% per annum, the weighted average interest rate for borrowings with mark-to-market provisions was 1.7%, the weighted average interest rate for borrowings with no current mark-to-market provisions was 4.5%, and the overall weighted average advance rate was 70.3%. As of June 30, 2021, outstanding borrowings under these facilities had a weighted average term to extended maturity of 2.3 years assuming exercise of all extension options and term out provisions. These secured credit facilities are 25% recourse to Holdco.

The following table details our secured credit facilities as of June 30, 2021 (dollars in thousands):

Lender	Commitment Amount⁽¹⁾		UPB of Collateral		Advance Rate			Approved Borrowings		Outstanding Balance		Undrawn Capacity⁽³⁾		Available Capacity⁽²⁾		Interest Rate			Extended Maturity⁽⁴⁾
Goldman Sachs⁽⁵⁾	$	250,000	$	160,959		78.9	%	$	102,501	$	97,989	$	4,512	$	147,499		L+ 2.01	%	08/19/22
Wells Fargo		750,000		169,396		79.8	%		135,099		63,069		72,030		614,901		L+ 1.75	%	04/18/22
Barclays		750,000		229,722		64.9	%		150,425		150,380		45		599,575		L+ 1.54	%	08/13/22
Morgan Stanley		500,000		223,976		78.1	%		176,942		169,083		7,859		323,058		L+ 1.81	%	05/04/22
JP Morgan		400,000		223,856		64.1	%		155,605		142,685		12,920		244,395		L+ 1.68	%	10/30/25
US Bank		44,730		58,519		70.0	%		40,963		39,245		1,718		3,767		L+ 1.40	%	07/09/24
Bank of America		200,000		42,813		75.0	%		32,110		31,664		446		167,890		L+ 1.75	%	09/29/22
Institutional Financing		249,546		293,120		58.7	%		169,096		169,096		—		80,450		L+ 4.50	%	10/30/25
Subtotal/Weighted Average—Loans	$	3,144,276	$	1,402,361		70.3	%	$	962,741	$	863,211	$	99,530	$	2,181,535		L+ 2.27	%

(1)	Commitment amount represents the largest amount of borrowings available under a given agreement once sufficient collateral assets have been approved by the lender and pledged by us.

(2)	Represents the commitment amount less the approved borrowings, which amount is available to be borrowed provided we pledge, and the lender approves, additional collateral assets.

(3)

(4)

(5)	In August 2021, we extended the initial maturity date from August 19, 2021 to August 19, 2022, with two additional one-year extensions at our option, provided the secured credit facility is not in default.

Once we identify an asset and the asset is approved by the secured credit facility lender to serve as collateral (which lender’s approval is in its sole discretion), we and the lender may enter into a transaction whereby the lender advances to us a percentage of the value of the loan asset, which is referred to as the “advance rate.” In the case of borrowings under our secured credit facilities that are repurchase arrangements, this advance serves as the purchase price at which the lender acquires the loan asset from us with an obligation of ours to repurchase the asset from the lender for an amount equal to the purchase price for the transaction plus a price differential, which is calculated based on an interest rate. Advance rates are subject to negotiation between us and our secured credit facility lenders.

For each transaction, we and the lender agree to a trade confirmation which sets forth, among other things, the asset purchase price, the maximum advance rate, the interest rate and the market value of the asset. For transactions under our secured credit facilities, the trade confirmation may also set forth any future funding obligations which are contemplated with respect to the specific transaction the underlying loan asset. For loan assets which involve future funding obligations of ours, the transaction may provide for the lender to fund portions (for example, pro rata per the maximum advance rate of the related transaction) of such future funding obligations. The trade confirmation can also set forth loan-specific margin maintenance provisions, described below.

Each of the secured credit facilities has “margin maintenance” provisions, which are designed to allow the lender to maintain a certain margin of credit enhancement against the assets which serve as collateral. The lender’s margin amount is typically based on a percentage of the market value of the asset and/or mortgaged property collateral; however, certain secured credit facilities may also involve margin maintenance based on maintenance of a minimum debt yield with respect to the cash flow from the underlying real estate collateral. In certain cases, margin maintenance provisions can relate to minimum debt yields for pledged collateral considered as a whole, or limits on concentration of loan exposure measured by property type or loan type.

The maturity dates for each of our secured credit facilities are set forth in tables that appear earlier in this section. Our secured credit facilities generally have terms of between one and three years, but may be extended if we satisfy certain performance-based conditions. In the normal course of business, we maintain discussions with our lenders to extend or amend any financing facilities related to our loans.

As of June 30, 2021, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit facilities taken as a whole) was 29.7% compared to 30.7% as of December 31, 2020 and 30.8% as of June 30, 2020.

The secured credit facilities also include cash management features which generally require that income from collateral loan assets be deposited in a lender-controlled account for distribution in accordance with a specified waterfall of payments designed to keep facility-related obligations current before such income is disbursed for our own account. The cash management features generally require the trapping of cash in such controlled account if an uncured default under our borrowing arrangement remains outstanding. Furthermore, some secured credit facilities may require an accelerated principal amortization schedule if the secured credit facility is in its final extended term.

Notwithstanding that a loan asset may be subject to a financing arrangement and serve as collateral under a secured credit facility, we retain the right to administer and service the loan and interact directly with the underlying obligors and sponsors of our loan assets so long as there is no default under the secured credit facility, and so long as we do not engage in certain material modifications (including amendments, waivers, exercises of remedies, or releases of obligors and collateral, among other things) of the loan assets without the lender’s prior consent.

Collateralized Loan Obligations

As of June 30, 2021, we had three collateralized loan obligations, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2, totaling $2.8 billion, financing 43 existing first mortgage loan investments totaling $3.4 billion and holding $53.8 million of cash for investment in eligible loan collateral. Our CLOs provide low cost, non-mark-to-market, non-recourse financing for 76.7% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of LIBOR plus 1.5%, have a weighted average advance rate of 82.3%, and include a reinvestment feature that allows us to contribute existing or newly originated loan investments in exchange for proceeds from loan repayments held in the collateralized loan obligations.

On March 5, 2021, the Financial Conduct Authority of the U.K. (the “FCA”) announced that all LIBOR tenors relevant to us will cease to be published or will no longer be representative after June 30, 2023. The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event, and on May 17, 2021, Wells Fargo Bank, National Association, solely in their capacity as designated transaction representative under the FL3 indenture, determined that a benchmark transition event had occurred with respect to FL3. Accordingly, on June 15, 2021, the benchmark index interest rate for bondholders under FL3 was converted from LIBOR to the Compounded Secured Overnight Financing Rate (“SOFR”) plus a benchmark replacement adjustment of 11.448 basis points, conforming with the FL3 Indenture and the recommendation of the ARRC. The designated transaction representative has further determined that SOFR for any interest accrual period shall be the “30-Day Average SOFR” published on the website of the Federal Reserve Bank of New York on each benchmark determination date. SOFR will be determined by the calculation agent in arrears using a lookback period equal to the number of calendar days in such interest accrual period plus two SOFR Business Days. As of June 30, 2021, the FL3 mortgage assets are indexed to LIBOR and the borrowings under FL3 are indexed to SOFR, creating an underlying benchmark index interest rate basis difference between FL3 assets and liabilities, which is meant to be mitigated by the benchmark replacement adjustment described above. We have the right to transition the FL3 mortgage assets to SOFR, eliminating the basis difference between FL3 assets and liabilities, and will make this determination taking into account our loan portfolio as a whole. The transition to SOFR is not expected to have a material impact to FL3’s assets and liabilities and related interest expense.

During the three months ended June 30, 2021, we fully invested $308.9 million in the FL4 Ramp-Up Account available to purchase eligible collateral interests. See Note 6 to our consolidated financial statements included in this Form 10-Q for details. During the three months ended June 30, 2021, we utilized the reinvestment feature in TRTX 2021-FL4 twice and we did not utilize the reinvestment feature in TRTX 2019-FL3.The reinvestment period for TRTX 2018-FL2 ended on December 11, 2020.

Mortgage Loan Payable

We are, through a special purpose entity subsidiary, a borrower under a $50.0 million mortgage loan secured by the REO Property. Refer to Note 4 to our consolidated financial statements included in this Form 10-Q for additional information. This mortgage loan was provided by an institutional lender, has an initial maturity date of December 15, 2021, and an option to extend the maturity for 12 months subject to the satisfaction of customary extension conditions, including (i) the purchase of a new interest rate cap for the extension term, (ii) replenishment of the interest reserve with an amount equal to 12 months of debt service, (iii) payment of a 0.25% extension fee on the outstanding principal balance, and (iv) no event of default. This mortgage loan permits partial releases of collateral in exchange for payment of a minimum release price equal to the greater of 100% of net sales proceeds (after reasonable transaction expenses) or 115% of the allocated loan amountfor the respective parcel. This loan bears interest at a rate of LIBOR plus 4.50% subject to a LIBOR interest rate floor and cap of 0.50%. We posted cash of $2.4 million to pre-fund interest payments due under the note during its initial term. The remaining reserve balance as of June 30, 2021 was $1.4 million.

Non-Consolidated Senior Interests and Retained Mezzanine Loans

In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party, we retain on our balance sheet a mezzanine loan. As of June 30, 2021, we retained a mezzanine loan investment with a total commitment of $35.0 million, an unpaid principal balance of $34.3 million and an interest rate of LIBOR plus 10.3%.

The following table presents our non-consolidated senior interest and retained mezzanine loan outstanding as of June 30, 2021 (dollars in thousands):

Non-Consolidated Senior Interests and Retained Mezzanine Loans	Count		Loan Commitment		Principal Balance		Amortized Cost		Weighted Average Credit Spread⁽¹⁾			Guarantee		Weighted Average Term to Extended Maturity
Senior loan sold or co-originated		1	$	132,000	$	132,000		N/A		L+ 4.3	%		N/A	6/28/2025
Retained mezzanine loan		1		35,000		34,262		34,160		L+ 10.3	%		N/A	6/28/2025
Total loan		2	$	167,000	$	166,262				L+ 5.5	%			6/28/2025

(1)	Loan commitment used as a basis for computation of weighted average credit spread.

Financial Covenants for Outstanding Borrowings

Our financial covenants and guarantees for outstanding borrowings related to our secured credit facilities require Holdco to maintain compliance with the following financial covenants (among others), which were revised on June 7, 2021 as follows:

Financial Covenant	Current	Prior to June 7, 2021
Cash Liquidity	Minimum cash liquidity of no less than the greater of: $15.0 million; and 5.0% of Holdco’s recourse indebtedness	Minimum cash liquidity of no less than the greater of: $10.0 million; and 5.0% of Holdco’s recourse indebtedness
Tangible Net Worth	$1.0 billion, plus 75% of all subsequent equity issuances (net of discounts, commissions, expense), minus 75% of the redeemed or repurchased preferred or redeemable equity or stock	$1.1 billion as of April 1, 2020, ~~plus 75% of future equity issuances thereafter~~
~~Debt-to-Equity~~	~~Debt-to-Equity ratio not to exceed 3.5 to 1.0 with "equity" and "equity adjustment" as defined below~~
~~Interest Coverage~~	~~Minimum interest coverage ratio of no less than 1.5 to 1.0~~

~~The amendments as of May 28, 2020 revised the definition of tangible net worth such that the baseline amount for testing was reset as of April 1, 2020 to $1.1 billion~~ plus 75% of future equity issuances ~~after April 1, 2020. The definition~~thereafter (net of equity for purposes of calculating the debt-to-equity covenant was revised to include: common equity; preferred equity; and an adjustment equal to the sum of the Current Expected Credit Loss reserve, write-downs, impairments or realized losses recorded against the value of any assets of Holdco or its subsidiaries from and after April 1, 2020; provided, however, that the equity adjustment may not exceed the amount of (a) Holdco’s total equity less (b) the product of Holdco’s total indebtedness multiplied by 25%.discounts, commissions, expense)

~~For so long as the Series B Preferred Stock is outstanding, we are required to maintain a debt-to-equity~~Debt-to-Equity

Debt-to-Equity ratio not ~~greater~~to exceed 4.25 to 1.0 with "equity" and "equity adjustment" as defined below

Debt-to-Equity ratio not to exceed 3.5 to 1.0 with "equity" and "equity adjustment" as defined below

Interest Coverage

Minimum interest coverage ratio of no less than ~~3.0~~1.5 to ~~1.0. For the purpose~~1.0

Minimum interest coverage ratio of determining this ratio, the aggregate liquidation preference of the outstanding shares of Series B Preferred Stock is excluded from the calculation of total indebtedness of the Company and its subsidiaries, and is included in the calculation of total equity.

~~We were in compliance with all financial covenants for our secured credit agreements and mortgage loan payable~~no less than 1.5 to ~~the extent of outstanding balances as of March 31,~~1.0

The amendments as of June 7, 2021 revised the minimum tangible net worth test such that the amount for testing was reset as of June 7, 2021 to $1.0 billion plus 75% of net future equity issuances after June 7, 2021 minus 75% of redeemed equity or stock after June 7, 2021. Holdco’s equity for purposes of calculating the debt-to-equity test (which was revised as of June 7, 2021 at 4.25 to 1:00) was revised to include: stockholders’ equity as determined by GAAP; any other equity instrument(s) issued by Holdco or its Subsidiary that is or are classified as temporary equity under GAAP; and an adjustment equal to the sum of the Current Expected Credit Loss reserve, write-downs, impairments or realized losses taken against the value of any assets of Holdco or its subsidiaries from and after April 1, 2020; provided, however, that the equity adjustment may not exceed the amount of (a) Holdco’s total equity less (b) the product of Holdco’s total indebtedness multiplied by 25%. Additionally, the minimum liquidity test was increased as of June 7, 2021 to be no less than the greater of (x) 15.0 million and (y) 5% of Holdco’s recourse indebtedness, and the minimum interest coverage ratio test remained unchanged at 1.5 to 1.0.

Financial Covenant relating to the Series B Preferred Stock

For as long as the Series B Preferred Stock is outstanding, we are required to maintain a debt-to-equity ratio not greater than 3.0 to 1.0. For the purpose of determining this ratio, the aggregate liquidation preference of the outstanding shares of Series B Preferred Stock is excluded from the calculation of total indebtedness of the Company and its subsidiaries, and is included in the calculation of total stockholders’ equity. On June 16, 2021, we redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock. As of June 30, 2021, we did not have any shares of Series B Preferred Stock outstanding.

We were in compliance with all financial covenants for our secured credit facilities and mortgage loan payable to the extent of outstanding balances as of June 30, 2021 and December 31, 2020, respectively, and were in compliance with the financial covenant relating to the Series B Preferred Stock as of ~~March 31, 2021 and~~ December 31, 2020.

If we fail to meet or satisfy any of the covenants in our financing arrangements and are unable to obtain a waiver or other suitable relief from the lenders, we would be in default under these agreements, which could result in a cross-default or cross-acceleration under other financing arrangements, and our lenders could elect to declare outstanding amounts due and payable (or such amounts may automatically become due and payable), terminate their commitments, require the posting of additional collateral and enforce their respective interests against existing collateral. A default also could significantly limit our financing alternatives, which could cause us to curtail our investment activities or dispose of assets when we otherwise would not choose to do so. Further, this could make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes. There can be no assurance that we will remain in compliance with these covenants in the future. For more information regarding the impact that COVID-19 may have on our ability to comply with these covenants, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents ~~the Company’s~~our Debt-to-Equity ratio and Total Leverage ratio as of ~~March 31,~~June 30, 2021 and December 31, 2020:

	~~March 31,~~June 30, 2021	December 31, 2020
Debt-to-equity ratio⁽¹⁾	~~2.72x~~2.44x	2.44x
Total leverage ratio⁽²⁾	~~2.83x~~2.53x	2.54x

(1)	Represents (i) total outstanding borrowings under financing arrangements, net, including collateralized loan obligations, secured credit ~~agreements,~~facilities, and mortgage loan payable, less cash, to (ii) total stockholders’ equity, at period end.

(2)

Represents (i) total outstanding borrowings under financing arrangements, net, including collateralized loan obligations, secured credit ~~agreements,~~facilities, and mortgage loan payable, plus non-consolidated senior interests sold or co-originated (if any), less cash, to (ii) total stockholders’ equity, at period end.

Floating Rate Portfolio

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices, typically LIBOR. 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 beneficial impact of LIBOR floors in our mortgage loan investment portfolio. As of ~~March 31,~~June 30, 2021, 100.0% of our loans 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 approximately ~~$0.9~~$1.1 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans and ~~8.0%~~5.7% of our liabilities. We had no fixed rate loans outstanding as of ~~March 31,~~June 30, 2021.

Our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in benchmark rates that vary based on the relative proportion of floating rate assets and liabilities. The following table details our loan portfolio’s net floating rate exposure as of ~~March 31,~~June 30, 2021 (dollars in thousands):

	Net Exposure			Net Exposure
Floating rate assets⁽¹⁾	$	4,587,358		$	4,833,535
Floating rate debt⁽¹⁾⁽²⁾		(3,728,914	)		(3,699,097	)
Net floating rate exposure	$	858,444		$	1,134,438

(1)	Floating rate mortgage loan assets and liabilities (with the sole exception of TRTX-2019 FL3 liabilities which are indexed to SOFR) are indexed to LIBOR. The net exposure to the underlying benchmark interest rate is directly correlated to our assets indexed to the same rate.

(2)	Floating rate liabilities include secured credit facilities and collateralized loan obligations.

With the cessation of LIBOR expected to occur effective January 1, 2022, we continue to evaluate the documentation and control processes associated with our assets and liabilities to manage the transition away from LIBOR to an alternative rate endorsed by the Alternative Reference Rates Committee of the Federal Reserve System. Although recent statements from regulators indicate the possibility of a longer period of transition, perhaps through June 2023, we continue to utilize ~~required~~ resources to revise our control and risk management systems to ensure there is no disruption to our day-to-day operations from the transition, when it does occur. We will continue to employ prudent risk management as it relates to the potential financial, operational and legal risks associated with the expected cessation of LIBOR, and to ensure that our assets and liabilities generally remain match-indexed following this event. While we generally seek to match index our assets and liabilities, there is likely to be a transition period as different underlying assets and sources of financing may transition from LIBOR to an alternative index at different times.

Interest-Earning Assets and Interest-Bearing Liabilities

The following table presents the average balance of interest-earning assets and related interest-bearing liabilities, associated interest income and interest expense, and financing costs and the corresponding weighted average yields for the three months ended June 30, 2021 and March 31, 2021 ~~and December 31, 2020~~ (dollars in thousands):

	Three months ended,														Three Months Ended,
	March 31, 2021							December 31, 2020							June 30, 2021							March 31, 2021
	Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾
Core Interest-earning assets:
First mortgage loans	$	4,509,896	$	57,067		5.1	%	$	4,556,855	$	60,643		5.3	%	$	4,729,443	$	60,793		5.1	%	$	4,509,896	$	57,067		5.1	%
Retained mezzanine loans		33,070		1,081		13.1	%		32,011		1,074		13.4	%		34,025		1,122		13.2	%		33,070		1,081		13.1	%
CRE debt securities		—		—		0.0	%		—		301		0.0	%
Core interest-earning assets	$	4,542,966	$	58,148		5.1	%	$	4,588,866	$	62,018		5.4	%	$	4,763,468	$	61,915		5.2	%	$	4,542,966	$	58,148		5.1	%

Interest-bearing liabilities:
Collateralized loan obligations	$	1,833,303	$	8,382		1.8	%	$	1,834,760	$	8,684		1.9	%	$	2,857,273	$	13,528		1.9	%	$	1,833,303	$	8,382		1.8	%
Secured credit agreements		1,286,517		11,454		3.6	%		1,587,709		11,548		2.9	%
Secured credit facilities																899,637		7,786		3.5	%		1,286,517		11,454		3.6	%
Mortgage loan payable		50,000		454		0.0	%		16,667		—		0.0	%		50,000		703		0.0	%		50,000		454		0.0	%
Asset-specific financings		—		—		0.0	%		51,039		1,233		9.7	%
Total interest-bearing liabilities	$	3,169,820	$	20,290		2.6	%	$	3,490,175	$	21,465		2.5	%	$	3,806,910	$	22,017		2.3	%	$	3,169,820	$	20,290		2.6	%
Net interest income⁽³⁾			$	37,858						$	40,553						$	39,898						$	37,858

Other Interest-earning assets:
Cash equivalents	$	281,831	$	7		0.0	%	$	307,638	$	10		0.0	%	$	228,815	$	6		0.0	%	$	281,831	$	7		0.0	%
Accounts receivable from servicer/trustee		105,479		—		0.0	%		95,080		—		0.0	%		149,048		1		0.0	%		105,479		—		0.0	%
Total interest-earning assets	$	4,930,276	$	58,155		4.7	%	$	4,991,584	$	62,028		5.0	%	$	5,141,331	$	61,922		4.8	%	$	4,930,276	$	58,155		4.7	%

(1)	Based on carrying value for loans ~~amortized cost for CRE debt securities~~ and carrying value for interest-bearing liabilities. Calculated balances as the month-end averages.

(2)	Weighted average yield or financing cost calculated based on annualized interest income or expense divided by calculated month-end average outstanding balance.

(3)	Represents interest income on core interest-earning assets less interest expense on total interest-bearing liabilities. Interest income on Other Interest-earning assets is included in Other Income, net on the consolidated statements of income (loss) and comprehensive income (loss).

The following table presents the average balance of interest-earning assets and related interest-bearing liabilities, associated interest income and interest expense, and financing costs and the corresponding weighted average yields for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020 (dollars in thousands):

	Three Months Ended														Six Months Ended
	March 31, 2021							March 31, 2020							June 30, 2021							June 30, 2020
	Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Amortized Cost / Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾			Average Carrying Value⁽¹⁾		Interest Income/ Expense		Wtd. Avg. Yield/ Financing Cost⁽²⁾
Core Interest-earning assets:
First mortgage loans	$	4,509,896	$	57,067		5.1	%	$	5,077,118	$	73,417		5.8	%	$	4,619,670	$	117,861		5.1	%	$	5,075,469	$	142,770		5.6	%
Retained mezzanine loans		33,070		1,081		13.1	%		19,734		682		13.8	%		33,548		2,203		13.1	%		19,749		1,358		13.8	%
CRE debt securities⁽³⁾		—		—		0.0	%		788,988		7,650		3.9	%		—		—		0.0	%		394,494		7,672		0.0	%
Core interest-earning assets	$	4,542,966	$	58,148		5.1	%	$	5,885,840	$	81,749		5.6	%	$	4,653,218	$	120,064		5.2	%	$	5,489,712	$	151,800		5.5	%

Interest-bearing liabilities:
Collateralized loan obligations	$	1,833,303	$	8,382		1.8	%	$	1,820,061	$	14,922		3.3	%	$	2,518,206	$	21,849		1.7	%	$	1,827,411	$	25,114		2.7	%
Secured credit agreements		1,286,517		11,454		3.6	%		2,531,367		20,561		3.2	%
Secured credit facilities																1,093,077		19,016		3.5	%		2,161,755		33,712		3.1	%
Mortgage loan payable		50,000		454		0.0	%		—		—		0.0	%		50,000		1,442		5.8	%		—		—		0.0	%
Asset-specific financings		—		—		0.0	%		77,000		1,436		7.5	%		—		—		—			77,000		2,825		7.3	%
Secured revolving credit agreement		—		—		0.0	%		145,637		1,538		4.2	%		—		—		—			145,637		2,671		3.7	%
Total interest-bearing liabilities	$	3,169,820	$	20,290		2.6	%	$	4,574,065	$	38,457		3.4	%	$	3,661,283	$	42,307		2.3	%	$	4,211,803	$	64,322		3.1	%
Net interest income⁽⁴⁾			$	37,858						$	43,292						$	77,757						$	87,478

Other Interest-earning assets:
Cash equivalents	$	281,831	$	7		0.0	%	$	105,263	$	304		1.2	%	$	255,323	$	13		0.0	%	$	155,486	$	411		0.5	%
Accounts receivable from servicer/trustee		105,479		—		0.0	%		13,066		24		0.7	%		127,264		1		0.0	%		20,134		36		0.4	%
Total interest-earning assets	$	4,930,276	$	58,155		4.7	%	$	6,004,169	$	82,077		5.5	%	$	5,035,805	$	120,078		4.8	%	$	5,665,332	$	152,247		5.4	%

(1)	Based on carrying value for loans, amortized cost for CRE debt securities and carrying value for interest-bearing liabilities. Calculated balances as the month-end averages.

(2)	Weighted average yield or financing cost calculated based on annualized interest income or expense divided by calculated month-end average outstanding balance.

(3)	Reflects the sale of the entire existing CRE Debt securities portfolio during March and April of 2020.

(4)	Represents interest income on core interest-earning assets less interest expense on total interest-bearing liabilities. Interest income on Other Interest-earning assets is included in Other Income, net on the consolidated statements of income (loss) and comprehensive income (loss).

Our Results of Operations

Operating Results

The following table sets forth information regarding our consolidated results of operations (dollars in thousands, except per share data):

	Three Months Ended March 31,						Variance			Three Months Ended June 30,						Variance			Six Months Ended June 30,						Variance
	2021			2020			2021 vs 2020			2021			2020			2021 vs 2020			2021			2020			2021 vs 2020
INTEREST INCOME
Interest Income	$	58,148		$	81,749		$	(23,601	)	$	61,915		$	70,051		$	(8,136	)	$	120,064		$	151,800		$	(31,736	)
Interest Expense		(20,290	)		(38,457	)		18,167			(22,017	)		(25,865	)		3,848			(42,307	)		(64,322	)		22,015
Net Interest Income		37,858			43,292			(5,434	)		39,898			44,186			(4,288	)		77,757			87,478			(9,721	)
OTHER REVENUE
Other Income, net		96			328			(232	)		157			119			38			253			447			(194	)
Total Other Revenue		96			328			(232	)		157			119			38			253			447			(194	)
OTHER EXPENSES
Professional Fees		1,198			1,819			(621	)		1,137			4,036			(2,899	)		2,336			5,855			(3,519	)
General and Administrative		1,030			980			50			1,081			860			221			2,112			1,840			272
Stock Compensation Expense		1,456			1,401			55			1,393			1,686			(293	)		2,849			3,087			(238	)
Servicing and Asset Management Fees		328			276			52			328			261			67			655			537			118
Management Fee		5,094			5,000			94			5,344			5,115			229			10,437			10,115			322
Total Other Expenses		9,106			9,476			(370	)		9,283			11,958			(2,675	)		18,389			21,434			(3,045	)
Securities Impairments		—			(203,493	)		203,493			—			96			(96	)		—			(203,397	)		203,397
Credit Loss Benefit (Expense)		4,038			(63,348	)		67,386			1,852			10,546			(8,694	)		5,890			(52,802	)		58,692
Income (Loss) Before Income Taxes		32,886			(232,697	)		265,583			32,624			42,989			(10,365	)		65,511			(189,708	)		255,219
Income Tax Expense, net		(931	)		(93	)		(838	)		(233	)		(61	)		(172	)		(1,164	)		(154	)		(1,010	)
Net Income (Loss)		31,955			(232,790	)		264,745			32,391			42,928			(10,537	)		64,347			(189,862	)		254,209
Series A Preferred Stock Dividends		(4	)		(3	)		(1	)
Series B Cumulative Redeemable Preferred Stock Dividends		(6,120	)		—			(6,120	)
Net Income (Loss) Attributable to TPG RE Finance Trust, Inc.	$	25,831		$	(232,793	)		258,624
Earnings (Loss) per Common Share, Basic	$	0.32		$	(3.05	)		3.37
Earnings (Loss) per Common Share, Diluted	$	0.30		$	(3.05	)		3.35
Preferred Stock Dividends and Participating Securities Share in Earnings (Loss)											(6,947	)		(2,380	)		(4,567	)		(13,217	)		(2,651	)		(10,566	)
Series B Preferred Stock Redemption Make-Whole Payment											(22,485	)		—			(22,485	)		(22,485	)		—			(22,485	)
Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs											(23,997	)		(443	)		(23,554	)		(25,449	)		(443	)		(25,006	)
Net (Loss) Income Attributable to Common Stockholders - See Note 12										$	(21,038	)	$	40,105			(61,143	)	$	3,196		$	(192,956	)	$	196,152
(Loss) Earnings per Common Share, Basic⁽¹⁾										$	(0.27	)	$	0.52			(0.79	)	$	0.04		$	(2.53	)		2.57
(Loss) Earnings per Common Share, Diluted⁽¹⁾										$	(0.27	)	$	0.52			(0.79	)	$	0.04		$	(2.53	)		2.57
Dividends Declared per Common Share	$	0.20		$	0.43			(0.23	)	$	0.20		$	0.20			—		$	0.40		$	0.63			(0.23	)
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized Gain (Loss) on CRE Debt Securities	$	—		$	(974	)	$	974		$	—		$	(77	)	$	77		$	—		$	(1,051	)	$	1,051
Comprehensive Net Income (Loss)	$	31,955		$	(233,764	)	$	265,719		$	32,391		$	42,851		$	(10,460	)	$	64,347		$	(190,913	)	$	255,260

(1)

Basic and diluted (loss) earnings per common share are computed independently based on the weighted-average shares of common stock outstanding. Diluted (loss) earnings per common share also includes the impact of participating securities outstanding plus any incremental shares that would be outstanding assuming the exercise of the Warrants. Accordingly, the sum of the quarterly (loss) earnings per common share amounts may not agree to the total for the six months ended June 30, 2021.

Comparison of the Three Months Ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020

Net Interest Income

Net interest income decreased to ~~$37.9~~$39.9 million, during the three months ended ~~March 31,~~June 30, 2021 compared to ~~$43.3~~$44.2 million for the three months ended ~~March 31,~~June 30, 2020. The decrease was primarily due to higher repayment and sales volume, which reduced the ~~decrease in~~average interest earning ~~assets~~asset base of ~~$1.1 billion driven~~our loan portfolio by $373.9 million, compared to the ~~sale~~three months ended June 30, 2020. Our loan portfolio weighted average spread also decreased from 3.4% to 3.2%, and our weighted average LIBOR floors decreased from 1.67% to 1.44%, resulting in lower interest margins.

Other Expenses

Other expenses decreased $2.7 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, mainly due to a decrease of $2.9 million in professional fees (legal, accounting and advisory fees) incurred in connection with our response to COVID-19 during the three months ended June 30, 2020.

Credit Loss

Credit loss benefit increased by $8.7 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the improving expectation of macroeconomic conditions and the improved operating performance of underlying collateral for many of our loan investments in 2021 that were adversely impacted by COVID-19 during 2020.

Dividends Declared Per Common Share

During the three months ended June 30, 2021, we declared cash dividends of $0.20 per common share, or $15.5 million. During the three months ended June 30, 2020, we declared cash dividends of $0.20 per common share, or $15.4 million.

Series B Preferred Stock Redemption Make-Whole Payment

During the three months ended June 30, 2021, we made a make-whole payment of $22.5 million to the holder of the ~~entire CRE debt securities portfolio in~~Series B Preferred Stock for an amount equal to the present value of all remaining dividend payments due on such shares of Series B Preferred Stock from and after the redemption date (and not including any declared or paid dividends or accrued dividends prior to such redemption date) through the second ~~quarter~~anniversary of the original issue date, computed in accordance with the terms of the Articles Supplementary. See Note 13 to our consolidated financial statements included in this Form 10-Q for additional details.

Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs

During the three months ended June 30, 2021, in connection with the redemption of the Series B Preferred Stock, we accelerated the accretion and wrote-off the unamortized discount related to the allocated Warrant fair value and transaction costs.See Note 13 to our consolidated financial statements included in this Form 10-Q for additional details.

Comparison of the Six Months Ended June 30, 2021 and June 30, 2020

Net Interest Income

Net interest income decreased to $77.8 million, during the six months ended June 30, 2021 compared to $87.5 million for the six months ended June 30, 2020. The decrease inwas primarily due to higher repayment and sales volume, which reduced the average interest earning asset base of our loan portfolio by $347.9 million, compared to the six months ended June 30, 2020. Our loan portfolio weighted average spread also decreased from 3.4% to 3.2%, and our weighted average LIBOR floors decreased from ~~1.4%~~1.67% to 1.44%, resulting in ~~the first quarter of 2020 to 0.11% in the first quarter of 2021, offset by the benefit of LIBOR floors with a weighted average strike price of 1.64%.~~lower interest margins.

Other Revenue

Other revenue is comprised of interest income earned on certain cash collection accounts, net operating income from REO held for investment and miscellaneous fee income. Other revenue decreased by $0.2 million during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020, primarily due to lower overnight interest earned for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020.

Other Expenses

Other expenses decreased ~~$0.4~~$3.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020, mainly due to a decrease of ~~$0.6~~$3.5 million in professional fees (legal, accounting and advisory fees) incurred in connection with our response to COVID-19 during the ~~three~~six months ended ~~March 31,~~June 30, 2020.

Credit Loss

Credit loss expense decreased by ~~$67.4~~$58.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020, primarily due to ~~a net increase~~the improving expectation of macroeconomic conditions and the improved operating performance of underlying collateral for many of our loan investments in ~~credit loss expense of $63.3 million due to changes in economic outlook resulting from the impact of the~~2021 that were adversely impacted by COVID-19 ~~pandemic.~~during 2020.

Securities Impairments

We had no securities impairment expense for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to ~~$203.5~~$203.4 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. Securities impairment expense for the ~~three~~six months ended ~~March 31,~~June 30, 2020 ~~was due to~~include losses on sales of CRE debt securities of $36.2 million and an impairment charge of $167.3 million, offset by a realized gain on sale of $0.1 million related to one position in connection with CRE debt securities owned at March 31, ~~2020 (which combined aggregate $203.5 million).~~2020.

Dividends Declared Per Common Share

During the ~~three~~six months ended ~~March 31,~~June 30, 2021, we declared cash dividends of ~~$0.20~~$0.40 per common share, or ~~$15.5~~$31.0 million. During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we declared cash dividends of ~~$0.43~~$0.63 per common share, or ~~$33.2~~$48.7 million.

Unrealized Gain (Loss) on CRE Debt Securities

Other comprehensive income (loss) decreased $1.0 million during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020. The decrease is primarily related to the reversal of unrealized gains upon the sale of certain CRE debt securities.

Income Tax Expense

Income tax expense increased ~~$0.8~~$1.0 million during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020 primarily due to the excess inclusion income (“EII”) generated by certain of Sub-REIT‘s CLOs due to unusually low LIBOR rates beginning in March 2020 coupled with the benefit of LIBOR floors relating to the various loans and participation interests pledged to Sub-REIT’s CLOs. Pursuant to ~~the~~ our tax partnership (“Parent ~~LLC~~LLC”) operating agreement, any EII allocated from Sub-REIT to Parent LLC is allocated further to ~~the~~our TRSs. Consequently, no EII is allocated to us and, as a result, our shareholders will not be allocated any EII or unrelated business taxable income by us. See Note 10 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for additional details.

Series B Preferred Stock Redemption Make-Whole Payment

During the six months ended June 30, 2021, we made a make-whole payment of $22.5 million to the holder of the Series B Preferred Stock for an amount equal to the present value of all remaining dividend payments due on such shares of Series B Preferred Stock from and after the redemption date (and not including any declared or paid dividends or accrued dividends prior to such redemption date) through the second anniversary of the original issue date, computed in accordance with the terms of the Articles Supplementary. See Note 13 to our consolidated financial statements included in this Form 10-Q for additional details.

Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs

During the six months ended June 30, 2021, in connection with the redemption of the Series B Preferred Stock, we accelerated the accretion and wrote-off the unamortized discount related to the allocated Warrant fair value and transaction costs.See Note 13 to our consolidated financial statements included in this Form 10-Q for additional details.

Liquidity and Capital Resources

Capitalization

We have capitalized our business to date through, among other things, the issuance and sale of shares of our common stock, issuance of ~~preferred stock~~Series C Preferred Stock classified as permanent equity, issuance of Series B Preferred Stock treated as temporary equity, ~~issuance of common stock warrants,~~ borrowings under secured credit ~~agreements,~~facilities, collateralized loan obligations, mortgage loan payable, asset-specific financings, and non-consolidated senior interests. As of ~~March 31,~~June 30, 2021, we had outstanding ~~76.9~~77.1 million shares of our common stock representing ~~$1.3~~$1.2 billion of stockholders’ equity, ~~$225.0~~$194.4 million of ~~temporary equity~~Series C Preferred Stock, and ~~$3.8~~$3.7 billion of outstanding borrowings used to finance our operations.

See Notes 6 and 7 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for additional details regarding our borrowings under secured credit ~~agreements,~~facilities, collateralized loan obligations, and mortgage loan payable.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under secured credit ~~agreements~~facilities and capacity in our collateralized loan obligations available for reinvestment, which are set forth in the following table (dollars in thousands):

March 31, 2021

December 31, 2020

Cash and cash equivalents

$
301,607

$
319,669

Secured credit facilities

21,169

22,766

Collateralized Loan Obligation Proceeds Held at Trustee⁽¹⁾

310,070

121

Total

$
632,846

$
342,556

~~(1)~~

~~Comprised mainly of FL4 Ramp-Up Account as described in Note 6 to our Consolidated Financial Statements included in this Form 10-Q.~~

	June 30, 2021		December 31, 2020
Cash and cash equivalents	$	239,743	$	319,669
Secured credit facilities		99,529		22,766
Collateralized Loan Obligation Proceeds Held at Trustee		53,982		121
Total	$	393,254	$	342,556

Our existing loan portfolio provides us with liquidity as loans are repaid or sold, in whole or in part, of which some proceeds may be included in accounts receivable from our servicers until released and the proceeds from such repayments become available for us to reinvest. ~~Due to severe dislocation in the capital markets caused by the COVID-19 pandemic, the volume of loan repayments declined in comparison to prior years.~~ For the ~~three~~six months ended ~~March 31,~~June 30, 2021, loan repayments ~~representing partial repayments on four loans, measured by~~totaled $339.3 million, and one loan with an unpaid principal ~~amount repaid, totaled $5.3 million. Loan repayments, measured by principal amount repaid, were $300.6~~balance of $60.7 million was sold for $59.5 million. For the ~~three~~six months ended ~~March 31, 2020.~~

~~At March 31, 2021, we had approximately $308.9~~June 30, 2020, loan repayments totaled $320.7 million, ~~in the FL4 Ramp-Up Account available to purchase eligible collateral interests during a ramp-up period~~and one loan with an unpaid principal balance of ~~approximately six months following the FL4 Closing Date. See Note 6 to our Consolidated Financial Statements included in this Form 10-Q~~$99.3 million was sold for ~~details.~~$85.5 million.

We continue to monitor the COVID-19 pandemic and its impact on our borrowers, their tenants, our lenders, and the economy as a whole. The magnitude and duration of the COVID-19 pandemic, and its impact on our operations and liquidity, are uncertain and continue to evolve in the United States and globally. Additional regional surges in infection rates due to COVID-19 variants, reversed re-openings, uncertainty regarding the effectiveness of vaccines approved for COVID-19, or high proportions of vaccine hesitancy in certain regions, may have a material impact on our operations and liquidity.

Uses of Liquidity

In addition to our ongoing loan activity, our primary liquidity needs include interest and principal payments under our ~~$3.8~~$3.7 billion of outstanding borrowings under secured credit ~~agreements,~~facilities, collateralized loan obligations and mortgage loan payable, ~~$401.7~~$488.9 million of unfunded loan commitments, dividend distributions to our preferred and common stockholders, and operating expenses.

Consolidated Cash Flows

Our primary cash flow activities involve actively managing our investment portfolio, originating floating rate, first mortgage loan investments, and raising capital through public offerings of our equity and debt securities. The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash balances for the six months ended June 30, 2021 and 2020 (dollars in thousands):

	Six Months Ended June 30,
	2021			2020
Cash flows provided by operating activities	$	61,060		$	70,677
Cash flows (used in) provided by investing activities		(363,587	)		461,217
Cash flows provided by (used in) financing activities		223,429			(415,143	)
Net change in cash, cash equivalents, and restricted cash	$	(79,098	)	$	116,751

Operating Activities

During the six months ended June 30, 2021, cash flows provided by operating activities totaled $61.1 million primarily related to net interest income, offset by operating expenses. During the six months ended June 30, 2020, cash flows provided by operating activities totaled $70.7 million primarily related to net interest income, offset by operating expenses.

Investing Activities

During the six months ended June 30, 2021, cash flows used in investing activities totaled $363.6 million primarily due to new loan originations of $631.4 million, advances on loans of $73.1 million and proceeds from sales of loans of $58.4 million, offset by loan repayments of $282.6 million. Cash flows from investing activities during the six months ended June 30, 2020 totaled $461.2

million primarily due to repayments on loans held for investment of $333.5 million, and sale of CRE debt securities totaling $766.4 million offset by new loan originations and purchases of CRE debt securities of $520.5 million.

Financing Activities

During the six months ended June 30, 2021, cash flows provided by financing activities totaled $223.4 million primarily due to proceeds from the issuance of TRTX 2021-FL4 of $1.04 billion (described in Note 6 to our consolidated financial statements included in this Form 10-Q), issuance of Series C Preferred Stock of $201.3 million, offset by payments on secured financing agreements of $868.1 million, payments related to the redemption of Series B Preferred Stock of $247.5 million, payment of dividends on our common stock and Series B Preferred Stock of $57.3 million and payments of deferred financing costs of $8.2 million. During the six months ended June 30, 2020, cash flows used in financing activities totaled $415.1 million primarily due to payments on secured financing agreements of $1.4 billion offset by additional proceeds from secured financing agreements of $827.4 million, and the issuance of Series B Preferred Stock and Warrants of $225.0 million.

During the period from March 1, 2020 to March 31, 2020, we received margin call notices with respect to borrowings against our CRE CLO investment portfolio aggregating $170.9 million, which were satisfied with a combination of $89.8 million of cash, cash proceeds from bond sales, and increases in market values prior to quarter-end. As of March 31, 2020, unpaid margin calls totaled $19.0 million, which were satisfied in April 2020 through cash proceeds from bond sales and increases in market value. During the quarter ended June 30, 2020, prior to making our voluntary deleveraging payments, we satisfied one margin call aggregating $20.0 million in connection with our secured credit agreements financing our loan investments by pledging a previously unencumbered loan investment.

On May 28, 2020, we made voluntary deleveraging payments totaling $157.7 million to all six of our secured credit agreement lenders and our one secured credit facility lender that provide financing for certain of our first mortgage loan investments in exchange for their agreement to suspend margin calls for defined periods, subject to certain conditions. When these payments were made, no margin deficits existed, and no margin calls have been issued to us since. If market turbulence persists or resurges, we may be required to post cash collateral in connection with our secured credit agreements secured by our mortgage loan investments upon or after the expiry of these agreements. We maintain frequent dialogue with the lenders under our secured credit agreements, and senior secured and secured credit agreements regarding our management of their collateral assets in light of the impacts of the COVID-19 pandemic. For more information regarding the impact that COVID-19 has had and may have on our business, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of ~~March 31,~~June 30, 2021 were as follows (dollars in thousands):

			Payment Timing										Payment Timing
	Total Obligation		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total Obligation		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years
Unfunded loan commitments⁽¹⁾	$	401,726	$	157,683	$	236,238	$	7,805	$	—	$	488,916	$	117,703	$	240,322	$	130,891	$	—
Collateralized loan obligations—principal⁽²⁾		2,868,047		48,566		1,454,545		1,364,936		—		2,835,887		—		1,627,464		1,137,883		70,540
Secured debt agreements—principal⁽³⁾		860,867		1,667		859,200		—		—		863,211		232,152		591,814		39,245		—
Collateralized loan obligations—interest⁽⁴⁾		131,223		46,596		73,927		10,700		—		136,118		46,283		70,722		19,083		30
Secured debt agreements—interest⁽⁴⁾		45,801		22,374		23,427		—		—		36,634		20,273		16,345		16		—
Dividends on Series B Preferred Stock⁽⁵⁾		85,140		24,930		49,860		10,350		—
Mortgage loan payable - principal		50,000		—		50,000		—		—		50,000		—		50,000		—		—
Mortgage loan payable - interest		4,333		2,534		1,799		—		—		3,406		2,333		1,073		—		—
Total	$	4,447,137	$	304,350	$	2,748,996	$	1,393,791	$	—	$	4,414,172	$	418,744	$	2,597,740	$	1,327,118	$	70,570

(1)	The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date and the loan maturity date.

(2)	Collateralized loan obligation liabilities are based on the fully extended maturity of mortgage loan collateral, considering the reinvestment window of our collateralized loan obligation.

(3)	The allocation of secured debt agreements is based on the extended maturity date for those credit facilities where extensions are at our option, subject to no default, or the current maturity date of those facilities where extension options are subject to counterparty approval.

(4)

Amounts include the related future interest payment obligations, which are estimated by assuming the amounts outstanding under our secured debt agreements and collateralized loan obligations and the interest rates in effect as of ~~March 31,~~June 30, 2021 will remain constant into the future. This is only an estimate, as actual amounts borrowed and rates will vary over time. Our floating rate loans and related liabilities are indexed to ~~LIBOR.~~LIBOR (with the sole exception of TRTX-2019 FL3 liabilities which are indexed to SOFR).

~~(5)~~

~~Series B Preferred Stock dividends are computed at 11% per annum, with up to two percentage points payable in additional preferred stock at the discretion of the issuer.~~

With respect to our debt obligations that are contractually due within the next five years, we plan to employ several strategies to meet these obligations, including: (i) exercising maturity date extension options that exist in our current financing arrangements; (ii) negotiating extensions of terms with our providers of credit; (iii) periodically accessing the public and private equity and debt capital markets to raise cash to fund new investments or the repayment of indebtedness; (iv) the issuance of additional structured finance vehicles, such as a collateralized loan obligations similar to TRTX 2021-FL4, TRTX 2019-FL3 or TRTX 2018-FL2, as a method of financing; (v) term loans with private lenders; (vi) selling loans to generate cash to repay our debt obligations; and/or (vii) applying repayments from underlying loans to satisfy the debt obligations which they secure. Although these avenues have been available to us in the past, we cannot offer any assurance that we will be able to access any or all of these alternatives as a result of the continuing market disruption caused by the COVID-19 pandemic.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our Management Agreement as they are not fixed and determinable. No incentive fee was earned by our Manager during the three months ended ~~March 31,~~June 30, 2021. See Note 11 to our consolidated financial statements included in this Form 10-Q for additional terms and details of the fees payable under our Management Agreement.

As a REIT, we generally must distribute substantially all of our net taxable income to stockholders in the form of dividends to comply with the REIT provisions of the Internal Revenue Code. In 2017, the Internal Revenue Service issued a revenue procedure permitting “publicly offered” REITs to make elective stock dividends (i.e. dividends paid in a mixture of stock and cash), with at least 20% of the total distribution being paid in cash, to satisfy their REIT distribution requirements. Pursuant to this revenue procedure, we may elect to make future distributions of our taxable income in a mixture of stock and cash.

Our REIT taxable income does not necessarily equal our net income as calculated in accordance with GAAP or our Distributable Earnings as described above. See Note 10 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for additional details.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

~~Cash Flows~~Corporate Activities

~~The following table provides a breakdown~~Issuance of Series C Preferred Stock

On June 14, 2021, we received net proceeds of $194.4 million from the sale of the ~~net change in our cash, cash equivalents,~~8,050,000 shares of Series C Preferred Stock after deducting the underwriting discount and ~~restricted cash balances for the three months ended March 31, 2021 and 2020 (dollars in thousands):~~

Three Months Ended March 31,

2021

2020

Cash flows provided by operating activities

$
26,340

$
37,526

Cash flows used in investing activities

(62,343
)

(183,132
)
Cash flows provided by financing activities

18,754

170,472

Net change in cash, cash equivalents, and restricted cash

$
(17,249
)

$
24,866

~~Cash Flows from Operating Activities~~

~~During the three months ended March 31, 2021, cash flows provided by operating activities totaled $26.3 million primarily related to net interest income, offset by operating expenses.~~ ~~During the three months ended March 31, 2020, cash flows provided by operating activities totaled $37.5 million primarily related to net interest income, offset by operating expenses.~~

~~Cash Flows from Investing Activities~~

~~During the three months ended March 31, 2021 cash flows used in investing activities totaled $62.3 million primarily due to a new loan origination~~commissions of ~~$37.1~~$6.3 million and ~~advances on loans~~issuance costs of ~~$29.6~~$0.6 million. ~~Cash flows~~We used ~~in investing activities during~~ the ~~three months ended March 31, 2020 totaled $183.1 million due primarily to loan originations and CRE debt securities purchases.~~

~~Cash Flows from Financing Activities~~

~~During the three months ended March 31, 2021, cash flows provided by financing activities totaled $18.8 million primarily due to~~net proceeds from the ~~issuance~~offering to partially fund the redemption of ~~TRTX 2021-FL4~~ ~~of $1.04 billion~~ ~~net~~all of the ~~FL4 Ramp-Up Account~~outstanding shares of ~~$308.9 million (described~~the Series B Preferred Stock. The Series C Preferred Stock is currently listed on the NYSE under the symbol “TRTX PRC.”

The Series C Preferred Stock has a liquidation preference of $25.00 per share. When, as, and if authorized by the board of directors and declared by us, dividends on the Series C Preferred Stock will be payable quarterly in arrears on or about March 30, June 30, September 30, and December 30 of each year at a rate per annum equal to 6.25% per annum of the $25.00 per share liquidation preference. Dividends on the Series C Preferred Stock are cumulative. The first dividend on the Series C Preferred Stock is payable on September 30, 2021, and will cover the period from, and including, June 14, 2021 to, but not including, September 30, 2021 and will be in the amount of $0.46 per share.

For additional details regarding the offering of Series C Preferred Stock, see Note 613 to our ~~Consolidated Financial Statements~~ consolidated financial statements included in this Form ~~10-Q),~~ offset by payments on secured financing agreements of $662.0 million, payment of dividends on our common stock and Series B Preferred Stock of $35.6 million and payments of deferred financing costs of $7.9 million. Cash flows provided by financing activities during the three months ended March 31, 2020 totaled $170.5 million due primarily to net secured financing proceeds relating to our lending activities of $191.0 million, and proceeds of $12.9 million from equity issuance via our at-the-market program.

The FL4 Ramp-Up Account represents cash held at the trustee and is included in Collateralized Loan Obligation Proceeds Held at Trustee on our consolidated balance sheets. The FL4 Ramp-Up Account is available to purchase eligible collateral interests during the six-month ramp-up period. The utilization of the FL4 Ramp-Up Account is expected to be a cash inflow in subsequent periods and is excluded from current period cash inflows.

During the three months ended March 31, 2020, we received margin call notices with respect to borrowings against our CRE CLO investment portfolio aggregating $170.9 million, which were satisfied with a combination of $89.8 million of cash, cash proceeds from bond sales, and increases in market values of pledged collateral prior to quarter-end. At March 31, 2020, unpaid margin calls totaled $19.0 million, which were satisfied in April 2020 through cash proceeds from bond sales and increases in market value.

~~Corporate Activities~~10-Q.

Issuance of Series B Preferred Stock and Warrants to Purchase Common Stock

On May 28, 2020, we entered into an Investment Agreement with the Purchaser, an affiliate of Starwood Capital Group Global II, L.P., under which we agreed to issue and sell to the Purchaser up to 13 million shares of ~~the our 11.0%~~ Series B Preferred Stock ~~par value $0.001 per share (plus any additional such shares paid as dividends pursuant to the Articles Supplementary, the “Series B Preferred Stock”),~~ and Warrants to purchase, in the aggregate, up to 15 million shares (subject to adjustment) of our Common Stock, for an aggregate cash purchase price of up to $325.0 million. Such purchases were permitted to occur in up to three ~~tranches.~~tranches prior to December 31, 2020. The Investment Agreement ~~contains~~contained market standard provisions regarding board representation, voting agreements, rights to information, and a standstill agreement and registration rights agreement regarding common stock acquired via exercise of Warrants.

~~On May 28, 2020, the~~ The Purchaser acquired the first tranche of the Investment Agreement, consisting of 9.0 million shares of Series B Preferred Stock and Warrants to purchase up to 12.0 million shares of Common Stock, for an aggregate price of $225.0 million. We retained an option to sell to the Purchaser the second and third tranches on or prior to December 31, 2020, provided notice of intent to sell is delivered to the Purchaser not later than December 11, 2020. Each of the second and third tranches consisted of 2,000,000 shares of Series B Preferred Stock and Warrants to purchase up to 1,500,000 shares of Common Stock, for an aggregate purchase price of $50.0 million per tranche. We allowed the option to issue additional shares of Series B Preferred Stock to expire unused.

On June 16, 2021, we redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock at an aggregate redemption price of $247.5 million. Dividends on all shares of Series B Preferred Stock were paid in full as of the redemption date. As a result of the redemption, dividends will no longer accrue or be declared on any shares of Series B Preferred Stock, and no shares of Series B Preferred Stock remain outstanding. In connection with the redemption, we made a make-whole payment to the holder of the Series B Preferred Stock of $22.5 million, the amount equal to the present value of all remaining dividend payments due on such shares of Series B Preferred Stock from and after the redemption date (and not including any declared or paid dividends or accrued dividends prior to such redemption date) through the second anniversary of the original issue date, computed in accordance with the terms of the Articles Supplementary. This make-whole payment is recorded as Series B Preferred Stock Redemption Make-Whole Payment on our consolidated statements of changes in equity and treated similarly to a dividend on preferred stock for GAAP purposes. Additionally, we accelerated the accretion of approximately $22.5 million related to the remaining unamortized discount, which was included in Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs on our consolidated statements of changes in equity and treated similarly to a dividend on preferred stock for GAAP purposes.

None of the Warrants ~~were~~had been exercised as of ~~March 31,~~June 30, 2021.

Offering of Common Stock

On March 7, 2019, we and our Manager entered into an equity distribution agreement with each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, JMP Securities LLC, Wells Fargo Securities, LLC and TPG Capital BD, LLC (each a “Sales Agent” and, collectively, the “Sales Agents”) relating to the issuance and sale of shares of our common stock pursuant to a continuous offering program. In accordance with the terms of the equity distribution agreement, we may, at our discretion and from time to time, offer and sell shares of our common stock having an aggregate gross sales price of up to $125.0 million through the Sales Agents, each acting as our agent. The offering of shares of our common stock pursuant to the equity distribution agreement will terminate upon the earlier of (1) the sale of shares of our common stock subject to the equity distribution agreement having an aggregate gross sales price of $125.0 million and (2) the termination of the equity distribution agreement by the Sales Agents or us at any time as set forth in the equity distribution agreement. AtAs of March 31, 2021, cumulative gross proceeds issued under the equity distribution agreement totaled $50.9 million, leaving $74.1 million available for future issuance subject to the direction of management, and market conditions.

Each Sales Agent will be entitled to commissions in an amount not to exceed 1.75% of the gross sales prices of shares of our common stock sold through it, as our agent. No shares of common stock were sold during the three months ended ~~March 31,~~June 30, 2021. For the ~~three~~six months ended ~~March 31,~~June 30, 2020, we sold 0.6 million shares of common stock pursuant to the equity distribution agreement at a weighted average price per share of $20.53, generating gross proceeds of $12.9 million. We paid commissions totaling $0.2 million.

Dividends

Upon the approval of our Board of Directors, we accrue dividends. Dividends are paid first to the holders of our Series A preferred stock at the rate of 12.5% of the total $0.001 million liquidation preference per annum plus all accumulated and unpaid dividends thereon, then to ~~holders~~the holder of our Series B Preferred Stock at the rate of 11.0% per annum of the $25.00 per share liquidation preference and to the holders of our Series C Preferred Stock at the rate of 6.25% per annum of the $25.00 per share liquidation preference, and then to the holders of our common ~~stock.~~stock, in each case, to the extent outstanding. We intend to distribute each year substantially all our taxable income to our stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended. The Board of Directors will determine whether to pay future dividends, entirely in cash, or in a combination of stock and cash based on facts and circumstances at the time such decisions are made.

On ~~March 15,~~June 14, 2021, our Board of Directors declared and approved a cash dividend for the ~~first~~second quarter of 2021 in the amount of $0.20 per share of common stock, or $15.5 million in the aggregate, which was paid on ~~April~~July 23, 2021 to holders of record of ~~the Company’s~~our common stock as of ~~March 26,~~June 28, 2021.

On ~~March 15,~~June 14, 2021, our Board of Directors declared a cash dividend for the ~~first~~second quarter of 2021 in the amount of ~~$0.68~~$0.69 per share of Series B Preferred Stock, or ~~$6.1~~$6.2 million in the aggregate, which dividend was paid on ~~March 31,~~June 16, 2021 to the holder of record of ~~our~~the Series B Preferred Stock as of ~~March~~June 15, 2021.

On ~~March 17,~~June 16, 2020, our Board of Directors declared and approved a cash dividend for the ~~first~~second quarter of 2020 in the amount of ~~$0.43~~$0.20 per share of common stock, or ~~$33.2~~$15.4 million in the aggregate, which was ~~payable~~paid on ~~April~~July 24, 2020 to holders of record of our common stock as of ~~March 27,~~June 26, 2020. On March 23, 2020, ~~the Company~~we announced the deferral until July 14, 2020 of the payment of ~~its~~our declared first quarter cash dividend to stockholders of record as of June 15, ~~2020. This dividend~~2020, which was paid on July 14, 2020.

On June 16, 2020, our Board of Directors declared a cash dividend for the second quarter of 2020 in the amount of $0.25 per share of Series B Preferred Stock, or $2.3 million in the aggregate, which dividend was paid on June 30, 2020 to the holder of record of the Series B Preferred Stock as of June 15, 2020.

For the six months ended June 30, 2021 and 2020, common stock in the amount of $31.0 million and $48.7 million, respectively, were declared and approved.

As of ~~March 31,~~June 30, 2021 and December 31, 2020,common stock dividends of $15.5 million and $29.5 million, respectively, ~~remain~~were unpaid and are reflected in dividends payable on our consolidated balance sheets.

Critical Accounting Policies

The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, interest income and other revenue recognition, allowance for loan losses, expense recognition, tax liability, future impairment of our investments, valuation of our investment portfolio and disclosure of contingent assets and liabilities, among other items. Our management bases these estimates and judgments about current, and for some estimates, future economic and market conditions and their effects on available information, historical experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates, judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or changes in our analyses.

If conditions change from those expected, it is possible that our judgments, estimates and assumptions could change, which may result in a change in our interest income and other revenue recognition, allowance for loan losses, expense recognition, tax liability, future impairment of our investments, and valuation of our investment portfolio, among other effects. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are included in the consolidated financial statements in the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying estimates, judgments or assumptions.

For a discussion of our critical accounting policies, see Note 2 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q.

Recent Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see Note 2 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q.

Subsequent Events

The following events occurred subsequent to ~~March 31,~~June 30, 2021:

•

We have closed, ~~one~~or are in the process of closing, five first mortgage ~~loan~~loans with a total loan commitment amount of ~~$47.0~~$372.5 million and initial ~~funding~~fundings of ~~$45.9~~$363.1 million. ~~This loan was financed in TRTX 2021-FL4, and together with the contribution in April 2021 of a $37.5 million loan, we have utilized $83.4 million of the FL4 Ramp-Up Account.~~

•

~~We are in the process~~From July 1, 2021 through August 2, 2021, we received full loan repayments related to two of ~~closing seven~~our first mortgage loans with a total loan commitment ~~amount~~and unpaid principal balance of ~~$588.7~~$218.6 million and ~~initial fundings~~$212.8 million, respectively. As of ~~$464.5 million. The majority~~June 30, 2021, the two full loan repayments had a weighted average risk rating of ~~these loans, measured by commitment amount, are expected to be financed~~2.8 and were include in ~~TRTX 2021-FL4.~~the Company’s office and multifamily property categories.

•

In August 2021, we extended the initial maturity date of our $250.0 million secured credit facility with Goldman Sachs from August 19, 2021 to August 19, 2022, with two additional one-year extensions at our option, provided the secured credit facility is not in default.

Loan Portfolio Details

The following table provides details with respect to our loan investment portfolio on a loan-by-loan basis as of ~~March 31,~~June 30, 2021 (dollars in millions, except loan per square foot/unit):

Loan #	Form of Investment		Origination / Acquisition Date⁽²⁾	Total Loan		Principal Balance		Amortized Cost⁽³⁾		Credit Spread⁽⁴⁾			All-in Yield⁽⁵⁾	Fixed / Floating	Extended Maturity⁽⁶⁾	City, State	Property Type	Loan Type	Loan Per SQFT / Unit	LTV⁽⁷⁾				Risk Rating⁽⁸⁾	Form of Investment		Origination / Acquisition Date⁽²⁾	Total Loan		Principal Balance		Amortized Cost⁽³⁾		Credit Spread⁽⁴⁾			All-in Yield⁽⁵⁾	Fixed / Floating	Extended Maturity⁽⁶⁾	City, State	Property Type	Loan Type	Loan Per SQFT / Unit	LTV⁽⁷⁾				Risk Rating⁽⁸⁾
First Mortgage Loans⁽¹⁾
1	Senior Loan		8/21/2019		300.8		287.5		287.0		L+ 1.6	%	L +1.8%	Floating	9/9/2024	New York, NY	Office	Light Transitional	$594 Sq ft		65.2	%	⁽¹²⁾	3	Senior Loan		8/21/2019	$	300.8	$	290.2	$	289.8		L+ 1.6	%	L +1.8%	Floating	9/9/2024	New York, NY	Office	Light Transitional	$594 Sq ft		65.2	%	⁽¹²⁾	3
2	Senior Loan		8/7/2018		223.0		172.4		171.6		L+ 3.4	%	L +3.6%	Floating	8/9/2024	Atlanta, GA	Office	Light Transitional	$214 Sq ft		61.4	%		3	Senior Loan		8/7/2018		223.0		173.0		172.4		L+ 3.4	%	L +3.6%	Floating	8/9/2024	Atlanta, GA	Office	Light Transitional	$214 Sq ft		61.4	%		3
3	Senior Loan		12/19/2018		210.0		185.3		185.3		L+ 3.6	%	L +4.0%	Floating	1/9/2024	Detroit, MI	Office	Moderate Transitional	$217 Sq ft		59.8	%		3	Senior Loan		5/5/2021		215.0		120.7		120.0		L+ 3.9	%	L +4.1%	Floating	5/9/2026	Daly City, CA	Office	Moderate Transitional	$545 Sq ft		63.1	%		3
4	Senior Loan		12/21/2018		206.5		204.4		204.4		L+ 2.9	%	L +3.2%	Floating	1/9/2024	Various, FL	Multifamily	Light Transitional	$181,299 Unit		76.6	%		2	Senior Loan		12/19/2018		210.0		185.3		185.3		L+ 3.6	%	L +4.0%	Floating	1/9/2024	Detroit, MI	Office	Moderate Transitional	$217 Sq ft		59.8	%		3
5	Senior Loan	⁽¹¹⁾	9/18/2019		200.0		181.5		181.0		L+ 2.9	%	L +3.2%	Floating	9/9/2024	New York, NY	Office	Moderate Transitional	$904 Sq ft		65.2	%		3	Senior Loan		12/21/2018		206.5		205.0		205.0		L+ 2.9	%	L +3.2%	Floating	1/9/2024	Various, FL	Multifamily	Light Transitional	$181,299 Unit		76.6	%		2
6	Senior Loan		11/26/2019		190.1		174.5		174.2		L+ 3.0	%	L +3.2%	Floating	12/9/2024	San Diego, CA	Office	Light Transitional	$248 Sq ft		51.9	%		3	Senior Loan	⁽¹¹⁾	9/18/2019		200.0		197.0		196.8		L+ 2.9	%	L +3.2%	Floating	9/9/2024	New York, NY	Office	Moderate Transitional	$904 Sq ft		65.2	%		3
7	Senior Loan		6/28/2018		190.0		185.8		185.8		L+ 2.7	%	L +3.0%	Floating	7/9/2023	Philadelphia, PA	Office	Bridge	$177 Sq ft		73.6	%		3	Senior Loan		6/28/2018		190.0		185.8		185.8		L+ 2.7	%	L +3.0%	Floating	7/9/2023	Philadelphia, PA	Office	Bridge	$177 Sq ft		73.6	%		3
8	Senior Loan		9/29/2017		173.3		167.2		167.2		L+ 4.3	%	L +4.7%	Floating	10/9/2022	Philadelphia, PA	Office	Moderate Transitional	$213 Sq ft		72.2	%		3	Senior Loan		9/29/2017		173.3		167.2		167.2		L+ 4.3	%	L +4.7%	Floating	10/9/2022	Philadelphia, PA	Office	Moderate Transitional	$213 Sq ft		72.2	%		3
9	Senior Loan		10/12/2017		165.0		165.0		165.0		L+ 3.8	%	L +4.0%	Floating	11/9/2022	Charlotte, NC	Hotel	Bridge	$235,714 Unit		65.5	%		4	Senior Loan		10/12/2017		165.0		165.0		165.0		L+ 3.8	%	L +4.0%	Floating	11/9/2022	Charlotte, NC	Hotel	Bridge	$235,714 Unit		65.5	%		4
10	Senior Loan		2/14/2018		165.0		161.5		161.5		L+ 3.8	%	L +4.0%	Floating	3/9/2023	Various, NJ	Multifamily	Bridge	$132,850 Unit		78.4	%		3	Senior Loan		2/14/2018		165.0		161.9		161.9		L+ 3.8	%	L +4.0%	Floating	3/9/2023	Various, NJ	Multifamily	Bridge	$132,850 Unit		78.4	%		3
11	Senior Loan		9/28/2018		160.0		156.0		156.0		L+ 2.8	%	L +3.0%	Floating	10/9/2023	Houston, TX	Mixed-Use	Light Transitional	$299 Sq ft		61.9	%		3	Senior Loan		9/28/2018		160.0		156.0		156.0		L+ 2.8	%	L +3.0%	Floating	10/9/2023	Houston, TX	Mixed-Use	Light Transitional	$299 Sq ft		61.9	%		3
12	Senior Loan		5/15/2019		143.0		131.1		131.1		L+ 2.6	%	L +2.9%	Floating	5/9/2024	New York, NY	Mixed-Use	Moderate Transitional	$1,741 Sq ft		61.0	%		3	Senior Loan		5/15/2019		143.0		132.1		132.1		L+ 2.6	%	L +2.9%	Floating	5/9/2024	New York, NY	Mixed-Use	Moderate Transitional	$1,741 Sq ft		61.0	%		3
13	Senior Loan		11/26/2019		113.0		113.7		113.7		L+ 3.0	%	L +3.3%	Floating	12/9/2024	Burbank, CA	Hotel	Bridge	$231,557 Unit		70.4	%		4	Senior Loan		5/7/2021		122.5		118.0		118.0		L+ 2.9	%	L +3.1%	Floating	5/9/2026	Towson, MD	Multifamily	Bridge	$147,947 Unit		70.2	%		3
14	Senior Loan		12/20/2018		105.9		98.4		98.4		L+ 3.3	%	L +3.4%	Floating	1/9/2024	Torrance, CA	Mixed-Use	Moderate Transitional	$254 Sq ft		61.1	%		3	Senior Loan		6/14/2021		114.0		86.0		86.0		L+ 3.1	%	L +3.4%	Floating	7/9/2026	Hayward, CA	Office	Moderate Transitional	$308 Sq ft		49.7	%		3
15	Senior Loan		12/18/2019		101.0		81.9		81.8		L+ 2.6	%	L +2.8%	Floating	1/9/2025	Arlington, VA	Office	Light Transitional	$319 Sq ft		71.1	%		3	Senior Loan		11/26/2019		113.0		113.7		113.7		L+ 3.0	%	L +3.3%	Floating	12/9/2024	Burbank, CA	Hotel	Bridge	$231,557 Unit		70.4	%		4
16	Senior Loan		1/27/2020		94.0		43.1		42.6		L+ 3.3	%	L +3.6%	Floating	2/9/2025	Washington, DC	Office	Moderate Transitional	$339 Sq ft		61.6	%		3	Senior Loan		12/20/2018		105.9		98.5		98.5		L+ 3.3	%	L +3.4%	Floating	1/9/2024	Torrance, CA	Mixed-Use	Moderate Transitional	$254 Sq ft		61.1	%		3
17	Senior Loan		8/28/2019		90.0		68.5		68.0		L+ 3.1	%	L +3.3%	Floating	9/9/2024	San Diego, CA	Office	Moderate Transitional	$382 Sq ft		67.7	%		3	Senior Loan		12/18/2019		101.0		82.2		82.2		L+ 2.6	%	L +2.8%	Floating	1/9/2025	Arlington, VA	Office	Light Transitional	$319 Sq ft		71.1	%		3
18	Senior Loan		9/29/2017		89.5		88.2		88.2		L+ 3.9	%	L +4.2%	Floating	10/9/2022	Dallas, TX	Office	Moderate Transitional	$106 Sq ft		50.7	%		3	Senior Loan		1/27/2020		94.0		44.4		44.0		L+ 3.3	%	L +3.6%	Floating	2/9/2025	Washington, DC	Office	Moderate Transitional	$339 Sq ft		61.6	%		3
19	Senior Loan		9/25/2020		88.9		78.5		78.5		L+ 3.0	%	L +3.1%	Floating	4/9/2025	Brooklyn, NY	Office	Light Transitional	$200 Sq ft		78.4	%		3	Senior Loan		8/28/2019		90.0		77.2		76.7		L+ 3.1	%	L +3.3%	Floating	9/9/2024	San Diego, CA	Office	Moderate Transitional	$382 Sq ft		67.7	%		3
20	Senior Loan		3/27/2019		88.2		88.5		88.2		L+ 3.5	%	L +4.6%	Floating	4/9/2024	Aurora, IL	Multifamily	Bridge	$211,394 Unit		74.8	%		3	Senior Loan		6/29/2021		90.0		81.4		81.4		L+ 3.0	%	L +3.2%	Floating	7/9/2026	Columbus, OH	Multifamily	Light Transitional	$109,756 Unit		79.0	%		3
21	Senior Loan		3/28/2019		88.1		87.0		86.9		L+ 3.7	%	L +5.9%	Floating	4/9/2024	Various, Various	Hotel	Moderate Transitional	$100,228 Unit		69.6	%		4	Senior Loan		9/29/2017		89.5		89.2		89.2		L+ 3.9	%	L +4.2%	Floating	10/9/2022	Dallas, TX	Office	Moderate Transitional	$106 Sq ft		50.7	%		3
22	Senior Loan		3/7/2019		81.3		81.3		81.3		L+ 3.1	%	L +3.4%	Floating	3/9/2024	Rockville, MD	Mixed-Use	Bridge	$256 Sq ft		67.2	%		3	Senior Loan		9/25/2020		88.9		78.8		78.8		L+ 3.0	%	L +3.1%	Floating	4/9/2025	Brooklyn, NY	Office	Light Transitional	$200 Sq ft		78.4	%		3
23	Senior Loan		2/1/2017		80.7		80.7		80.7		L+ 4.7	%	L +5.0%	Floating	2/9/2023	St. Pete Beach, FL	Hotel	Light Transitional	$211,257 Unit		60.7	%		4	Senior Loan		3/27/2019		88.2		88.5		88.2		L+ 3.5	%	L +3.8%	Floating	4/9/2024	Aurora, IL	Multifamily	Bridge	$211,394 Unit		74.8	%		3
24	Senior Loan		6/17/2019		79.4		78.8		78.5		L+ 2.8	%	L +3.0%	Floating	7/9/2025	Boston, MA	Office	Bridge	$187 Sq ft		70.7	%		3	Senior Loan		3/28/2019		88.1		87.1		87.0		L+ 3.7	%	L +4.0%	Floating	4/9/2024	Various, Various	Hotel	Moderate Transitional	$100,228 Unit		69.6	%		4
25	Senior Loan		8/8/2019		76.5		61.7		61.6		L+ 3.0	%	L +3.2%	Floating	8/9/2024	Orange, CA	Office	Moderate Transitional	$225 Sq ft		64.2	%		3	Senior Loan		3/7/2019		81.3		81.3		81.3		L+ 3.1	%	L +3.4%	Floating	3/9/2024	Rockville, MD	Mixed-Use	Bridge	$256 Sq ft		67.2	%		3
26	Senior Loan		12/10/2019		75.8		56.4		56.4		L+ 2.6	%	L +2.8%	Floating	12/9/2024	San Mateo, CA	Office	Moderate Transitional	$368 Sq ft		65.8	%		3	Senior Loan		2/1/2017		80.7		80.7		80.7		L+ 4.7	%	L +5.0%	Floating	2/9/2023	St. Pete Beach, FL	Hotel	Light Transitional	$211,257 Unit		60.7	%		3
27	Senior Loan		4/29/2019		70.0		70.0		69.7		L+ 3.3	%	L +3.5%	Floating	5/9/2024	Clayton, MO	Multifamily	Bridge	$280,000 Unit		74.9	%		3	Senior Loan		8/8/2019		76.5		61.7		61.6		L+ 3.0	%	L +3.2%	Floating	8/9/2024	Orange, CA	Office	Moderate Transitional	$225 Sq ft		64.2	%		3
28	Senior Loan		6/28/2019		63.9		57.4		57.4		L+ 2.5	%	L +2.7%	Floating	7/9/2024	Burlington, CA	Office	Light Transitional	$327 Sq ft		70.9	%		3	Senior Loan		12/10/2019		75.8		57.2		57.2		L+ 2.6	%	L +2.8%	Floating	12/9/2024	San Mateo, CA	Office	Moderate Transitional	$368 Sq ft		65.8	%		3
29	Senior Loan		11/8/2019		62.1		58.9		58.8		L+ 3.9	%	L +4.3%	Floating	11/9/2021	Boston, MA	Mixed-Use	Light Transitional	$597 Sq ft		38.4	%		3	Senior Loan		4/29/2019		70.0		70.0		69.8		L+ 3.3	%	L +3.5%	Floating	5/9/2024	Clayton, MO	Multifamily	Bridge	$280,000 Unit		74.9	%		3
30	Senior Loan		6/25/2019		62.0		57.7		57.6		L+ 3.1	%	L +4.9%	Floating	7/9/2024	Calistoga, CA	Hotel	Moderate Transitional	$696,629 Unit		48.6	%		4	Senior Loan		6/28/2019		63.9		58.5		58.5		L+ 2.5	%	L +2.7%	Floating	7/9/2024	Burlington, CA	Office	Light Transitional	$327 Sq ft		70.9	%		3
31	Senior Loan		6/20/2018		61.0		57.6		57.6		L+ 3.0	%	L +3.3%	Floating	7/9/2023	Houston, TX	Office	Light Transitional	$162 Sq ft		74.9	%		3	Senior Loan		11/8/2019		62.1		60.1		60.0		L+ 3.9	%	L +4.0%	Floating	11/9/2021	Boston, MA	Mixed-Use	Light Transitional	$597 Sq ft		38.4	%		3
32	Senior Loan		1/8/2019		60.2		36.7		36.5		L+ 3.8	%	L +4.1%	Floating	2/9/2024	Kansas City, MO	Office	Moderate Transitional	$92 Sq ft		74.3	%		4	Senior Loan		6/25/2019		62.0		57.7		57.6		L+ 3.1	%	L +3.3%	Floating	7/9/2024	Calistoga, CA	Hotel	Moderate Transitional	$696,629 Unit		48.6	%		3
33	Senior Loan		1/9/2019		60.0		60.7		60.7		L+ 3.4	%	L +3.8%	Floating	1/9/2024	Mountain View, CA	Hotel	Bridge	$375,000 Unit		64.2	%		4	Senior Loan		6/20/2018		61.0		57.7		57.7		L+ 3.0	%	L +3.3%	Floating	7/9/2023	Houston, TX	Office	Light Transitional	$162 Sq ft		74.9	%		3
34	Senior Loan		12/18/2019		58.8		55.8		55.4		L+ 2.7	%	L +3.0%	Floating	1/9/2025	Houston, TX	Multifamily	Light Transitional	$80,109 Unit		73.6	%		3	Senior Loan		1/8/2019		60.2		36.7		36.6		L+ 3.8	%	L +4.1%	Floating	2/9/2024	Kansas City, MO	Office	Moderate Transitional	$92 Sq ft		74.3	%		4
35	Senior Loan		3/12/2020		55.0		49.3		49.0		L+ 2.7	%	L +2.9%	Floating	3/9/2025	Round Rock, TX	Multifamily	Light Transitional	$133,820 Unit		75.4	%		3	Senior Loan		12/18/2019		58.8		56.0		55.7		L+ 2.7	%	L +3.0%	Floating	1/9/2025	Houston, TX	Multifamily	Light Transitional	$80,109 Unit		73.6	%		3
36	Senior Loan		1/22/2019		54.0		52.5		52.5		L+ 3.9	%	L +4.1%	Floating	2/9/2023	Manhattan, NY	Office	Light Transitional	$441 Sq ft		61.1	%		3	Senior Loan		3/12/2020		55.0		49.5		49.2		L+ 2.7	%	L +2.9%	Floating	3/9/2025	Round Rock, TX	Multifamily	Light Transitional	$133,820 Unit		75.4	%		3
37	Senior Loan		1/23/2018		53.8		52.3		52.3		L+ 3.4	%	L +3.6%	Floating	2/9/2023	Walnut Creek, CA	Office	Bridge	$120 Sq ft		66.9	%		2	Senior Loan		1/22/2019		54.0		54.0		54.0		L+ 3.9	%	L +4.1%	Floating	2/9/2023	Manhattan, NY	Office	Light Transitional	$441 Sq ft		61.1	%		3
38	Senior Loan		6/15/2018		53.6		50.9		50.8		L+ 3.1	%	L +3.3%	Floating	6/9/2023	Brisbane, CA	Office	Moderate Transitional	$514 Sq ft		72.4	%		2	Senior Loan		1/23/2018		53.7		52.6		52.6		L+ 3.4	%	L +3.6%	Floating	2/9/2023	Walnut Creek, CA	Office	Bridge	$120 Sq ft		66.9	%		2
39	Senior Loan		10/10/2019		52.9		47.7		47.4		L+ 2.8	%	L +3.1%	Floating	11/9/2024	Miami, FL	Office	Light Transitional	$214 Sq ft		69.5	%		3	Senior Loan		6/15/2018		53.6		50.9		50.8		L+ 3.1	%	L +3.3%	Floating	6/9/2023	Brisbane, CA	Office	Moderate Transitional	$514 Sq ft		72.4	%		2
40	Senior Loan		12/20/2017		51.0		51.7		51.7		L+ 4.0	%	L +6.3%	Floating	1/9/2023	New Orleans, LA	Hotel	Bridge	$217,949 Unit		59.9	%		4	Senior Loan		10/10/2019		52.9		49.1		48.9		L+ 2.8	%	L +3.1%	Floating	11/9/2024	Miami, FL	Office	Light Transitional	$214 Sq ft		69.5	%		3
41	Senior Loan		3/12/2020		50.2		44.9		44.6		L+ 2.7	%	L +2.9%	Floating	3/9/2025	Round Rock, TX	Multifamily	Light Transitional	$137,049 Unit		75.6	%		3	Senior Loan	⁽¹³⁾	6/3/2021		51.4		47.5		47.0		L+ 4.7	%	L +4.8%	Floating	6/9/2026	Durham, NC	Multifamily	Bridge	$102,787 Unit		86.3	%		3
42	Senior Loan		6/15/2018		50.0		44.3		44.3		L+ 3.7	%	L +3.9%	Floating	7/9/2023	Atlanta, GA	Office	Bridge	$119 Sq ft		57.2	%		3	Senior Loan		12/20/2017		51.0		51.7		51.7		L+ 4.0	%	L +4.3%	Floating	1/9/2023	New Orleans, LA	Hotel	Bridge	$217,949 Unit		59.9	%		4
43	Senior Loan		11/29/2018		47.0		47.0		46.9		L+ 3.3	%	L +3.5%	Floating	12/9/2023	Brooklyn, NY	Multifamily	Moderate Transitional	$166,619 Unit		58.0	%		4	Senior Loan		3/12/2020		50.2		45.0		44.8		L+ 2.7	%	L +2.9%	Floating	3/9/2025	Round Rock, TX	Multifamily	Light Transitional	$137,049 Unit		75.6	%		3
44	Senior Loan		3/17/2021		45.4		37.5		37.1		L+ 3.3	%	L +3.6%	Floating	4/9/2026	Indianapolis, IN	Multifamily	Moderate Transitional	$62,209 Unit		63.7	%		3	Senior Loan		6/2/2021		48.5		42.5		42.1		L+ 3.8	%	L +4.0%	Floating	6/9/2026	Fort Lauderdale, FL	Office	Light Transitional	$187 Sq ft		71.0	%		3
45	Senior Loan		3/30/2018		45.2		42.1		42.1		L+ 3.7	%	L +3.9%	Floating	4/9/2023	Honolulu, HI	Office	Light Transitional	$157 Sq ft		57.9	%		3	Senior Loan		4/6/2021		47.0		45.9		45.7		L+ 3.7	%	L +4.0%	Floating	4/9/2026	St. Petersburg, FL	Multifamily	Bridge	$222,749 Unit		74.8	%		3
46																									Senior Loan		11/29/2018		47.0		47.0		46.9		L+ 3.3	%	L +3.5%	Floating	12/9/2023	Brooklyn, NY	Multifamily	Moderate Transitional	$166,619 Unit		58.0	%		4
47																									Senior Loan		3/17/2021		45.4		37.5		37.1		L+ 3.3	%	L +3.6%	Floating	4/9/2026	Indianapolis, IN	Multifamily	Light Transitional	$62,209 Unit		63.7	%		3

46	Senior Loan	1/28/2019		43.1			40.3		40.1		L+ 3.0	%		L +3.2%	Floating	2/9/2024	Dallas, TX	Office	Light Transitional	$222 Sq ft	64.3	%	3
47	Senior Loan	3/7/2019		39.4			39.6		39.5		L+ 3.8	%		L +4.2%	Floating	3/9/2024	Lexington, KY	Hotel	Moderate Transitional	$107,709 Unit	61.6	%	4
Loan #																								Form of Investment	Origination / Acquisition Date⁽²⁾	Total Loan			Principal Balance		Amortized Cost⁽³⁾		Credit Spread⁽⁴⁾				All-in Yield⁽⁵⁾	Fixed / Floating	Extended Maturity⁽⁶⁾	City, State	Property Type	Loan Type	Loan Per SQFT / Unit	LTV⁽⁷⁾			Risk Rating⁽⁸⁾
48	Senior Loan	3/11/2019		39.0			39.4		39.4		L+ 3.4	%		L +5.3%	Floating	4/9/2024	Miami Beach, FL	Hotel	Bridge	$295,455 Unit	59.3	%	4	Senior Loan	3/30/2018		43.8			41.9		41.9		L+ 3.7	%		L +3.9%	Floating	4/9/2023	Honolulu, HI	Office	Light Transitional	$152 Sq ft		57.9	%	3
49	Senior Loan	3/10/2020		37.5			36.3		36.3		L+ 2.7	%		L +3.0%	Floating	3/9/2025	Austin, TX	Multifamily	Bridge	$94,458 Unit	73.5	%	3	Senior Loan	1/28/2019		43.1			40.3		40.2		L+ 3.0	%		L +3.2%	Floating	2/9/2024	Dallas, TX	Office	Light Transitional	$222 Sq ft		64.3	%	3
50	Senior Loan	1/4/2018		35.2			29.9		29.9		L+ 3.4	%		L +3.7%	Floating	1/9/2023	Santa Ana, CA	Office	Light Transitional	$178 Sq ft	71.8	%	2	Senior Loan	3/7/2019		39.2			40.2		40.1		L+ 3.8	%		L +8.0%	Floating	3/9/2024	Lexington, KY	Hotel	Moderate Transitional	$107,221 Unit		61.6	%	4
51	Senior Loan	6/4/2019		34.7			32.0		31.9		L+ 3.5	%		L +3.8%	Floating	6/9/2024	Riverside, CA	Mixed-Use	Bridge	$99 Sq ft	68.0	%	2	Senior Loan	3/11/2019		39.0			39.4		39.4		L+ 3.4	%		L +3.6%	Floating	4/9/2024	Miami Beach, FL	Hotel	Bridge	$295,455 Unit		59.3	%	4
52	Senior Loan	5/27/2018		33.0			31.2		31.2		L+ 3.7	%		L +5.0%	Floating	6/9/2023	Woodland Hills, CA	Retail	Bridge	$498 Sq ft	63.6	%	5	Senior Loan	3/10/2020		37.5			36.5		36.5		L+ 2.7	%		L +3.0%	Floating	3/9/2025	Austin, TX	Multifamily	Bridge	$94,458 Unit		73.5	%	3
53	Senior Loan	9/13/2019		26.7			26.3		26.2		L+ 2.8	%		L +3.0%	Floating	10/9/2024	Austin, TX	Multifamily	Bridge	$135,051 Unit	77.5	%	3	Senior Loan	6/3/2021		36.4			33.7		33.3		L+ 3.6	%		L +3.8%	Floating	6/9/2026	Riverside, CA	Mixed-Use	Bridge	$103 Sq ft		62.2	%	2
54	Senior Loan	10/19/2016		10.4			10.4		10.4		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$641 Sq ft	49.8	%	4	Senior Loan	1/4/2018		35.2			30.0		30.0		L+ 3.4	%		L +3.7%	Floating	1/9/2023	Santa Ana, CA	Office	Light Transitional	$178 Sq ft		71.8	%	3
55	Senior Loan	10/19/2016		7.9			7.9		7.9		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$725 Sq ft	43.3	%	4	Senior Loan	5/27/2018		33.0			31.2		31.2		L+ 3.7	%		L +3.9%	Floating	6/9/2023	Woodland Hills, CA	Retail	Bridge	$498 Sq ft		63.6	%	5
56	Senior Loan	10/19/2016		4.8			4.8		4.8		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$715 Sq ft	40.7	%	4	Senior Loan	5/14/2021		27.6			21.6		21.3		L+ 3.2	%		L +3.5%	Floating	6/9/2026	Pensacola, FL	Multifamily	Moderate Transitional	$137,752 Unit		72.8	%	3
57	Senior Loan	10/19/2016		1.9			1.9		1.9		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$478 Sq ft	46.6	%	4	Senior Loan	9/13/2019		26.7			26.3		26.2		L+ 2.8	%		L +3.0%	Floating	10/9/2024	Austin, TX	Multifamily	Bridge	$135,051 Unit		77.5	%	3
58																								Senior Loan	10/19/2016		9.6			9.6		9.6		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$641 Sq ft		49.8	%	3
59																								Senior Loan	10/19/2016		7.3			7.3		7.3		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$725 Sq ft		43.3	%	3
60																								Senior Loan	10/19/2016		4.4			4.4		4.4		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$715 Sq ft		40.7	%	3
61																								Senior Loan	10/19/2016		1.8			1.8		1.8		L+ 5.1	%		L +5.4%	Floating	5/9/2022	Manhattan, NY	Condominium	Moderate Transitional	$478 Sq ft		46.6	%	3
Subtotal / Weighted Average			4948.7			4553.9		4546.8		L +3.1%			⁽⁹⁾	L +3.6%		2.9 yrs					66.1	%	3.1			$	5,283.3		$	4,799.2	$	4,791.7	L +3.2%			⁽⁹⁾	L +3.5%		2.9 yrs						66.9	%	3.1
Mezzanine Loans:
1	Mezzanine Loan	6/28/2019		35.0	⁽¹⁰⁾	33.5		33.4			L+ 10.3	%		L +10.8%	4.2	6/28/2025	Napa, CA	Hotel	Construction	$818,195 Unit	41.0	%	3
62																								Mezzanine Loan	6/28/2019		35.0	⁽¹⁰⁾	34.3		34.2			L+ 10.3	%		L +10.8%	Floating	6/28/2025	Napa, CA	Hotel	Construction	$818,195 Unit		41.0	%	3
Subtotal / Weighted Average				35.0		33.5		33.4		L +10.3%				L +10.8%		4.2 yrs					41.0	%	3			$	35.0		$	34.3	$	34.2	L +10.3%				L +10.8%		4.0 yrs						41.0	%	3
Total / Weighted Average				4,983.7			4,587.4		4,580.2	L +3.2%				L +3.6%		2.9 yrs					65.9	%	3.1			$	5,318.3		$	4,833.5	$	4,825.9	L +3.2%				L +3.5%		2.9 yrs						66.7	%	3.1

(1)	First mortgage loans are whole mortgage loans unless otherwise noted. Loans numbered ~~53, 54, 55~~58, 59, 60 and 5661 represent 24% pari passu participation interests in whole mortgage loans.

(2)	Date loan was originated or acquired by us, which date has not been updated for subsequent loan modifications.

(3)	Represents unpaid principal balance net of unamortized costs.

(4)	Represents the formula pursuant to which our right to receive a cash coupon on a loan is determined.

(5)

In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, loan origination costs and accrual of both extension and exit fees. All-in yield for the total portfolio assumes the applicable floating benchmark rate as of ~~March 31,~~June 30, 2021 for weighted average calculations.

(6)

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,~~June 30, 2021, based on unpaid principal balance, ~~23.0%~~20.6% of our loans were subject to yield maintenance or other prepayment restrictions and ~~77.0%~~79.4% were open to repayment by the borrower without penalty.

(7)

Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) divided by the as-is ~~real estate~~appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

(8)	For a discussion of risk ratings, please see Notes 2 and 3 to our ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q.

(9)	Represents the weighted average of the credit spread as of ~~March 31,~~June 30, 2021 for the loans, all of which are floating rate.

(10)	Reflects the total loan amount, including non-consolidated senior interest, allocable to the property’s 135 hotel rooms. Excludes other improvements planned for the remainder of the project site.

(11)	This loan is comprised of a first mortgage loan of $106.3 million and a contiguous mezzanine loan of $93.7 million, of which we own both. Each loan carries the same interest rate.

(12)	Calculated as the ratio of unpaid principal balance as of ~~March 31,~~June 30, 2021 to the as-is appraised value at origination, to reflect the sale by us in August 2020 of the contiguous mezzanine loan with an unpaid principal balance of $46.4 million and a commitment amount of $50.0 million.

(13)

On June 3, 2021, we originated a loan with a total loan commitment of $51.4 million (Loan # 41). This loan is comprised of a first mortgage loan of $46.3 million and a contiguous mezzanine loan of $5.1 million, of which we own both. The interest rate on the first mortgage loan is 3.9% and the interest rate on the contiguous mezzanine loan is 12.0%. The weighted average interest rate is 4.7%.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Investment Portfolio Risks

Interest Rate Risk

Our business model seeks to minimize our exposure to changing interest rates by matching duration of our assets and liabilities and match-indexing our assets using the same, or similar, benchmark indices, typically LIBOR. 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 embedded in substantially all of our loans. ~~At March 31,~~As of June 30, 2021, the weighted average LIBOR floor for our loan portfolio was ~~1.64%~~1.44%. As of ~~March 31,~~June 30, 2021, 100% of our loans by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates. Approximately ~~90.8%~~94.3% of our liabilities do not contain LIBOR floors greater than zero.

The following table illustrates the impact on our interest income and interest expense, for the twelve-month period following ~~March 31,~~June 30, 2021, of an immediate increase or decrease in the underlying benchmark interest rate of 25, 50 and 75 basis points on our existing floating rate mortgage loan portfolio and related liabilities (dollars in thousands):

Assets (Liabilities) Subject to Interest Rate Sensitivity⁽¹⁾	Assets (Liabilities) Subject to Interest Rate Sensitivity⁽¹⁾				25 Basis Point Increase			25 Basis Point Decrease		50 Basis Point Increase			50 Basis Point Decrease		75 Basis Point Increase			75 Basis Point Decrease		Assets (Liabilities) Subject to Interest Rate Sensitivity⁽¹⁾				25 Basis Point Increase			25 Basis Point Decrease		50 Basis Point Increase			50 Basis Point Decrease		75 Basis Point Increase			75 Basis Point Decrease
$	4,587,358			Interest income	$	73		$	—	$	369		$	—	$	1,126		$	—	4,833,535			Interest income	$	836		$	—	$	2,568		$	—	$	4,732		$	—
	(3,678,914	)	⁽²⁾	Interest expense		(9,322	)		4,934		(18,643	)		4,934		(27,967	)		4,934	(3,699,097	)	⁽²⁾	Interest expense		(9,249	)		3,191		(18,496	)		3,191		(27,743	)		3,191
$	908,444			Total change in net interest income	$	(9,249	)	$	4,934	$	(18,274	)	$	4,934	$	(26,841	)	$	4,934	1,134,438			Total change in net interest income	$	(8,413	)	$	3,191	$	(15,928	)	$	3,191	$	(23,011	)	$	3,191

(1)	Floating rate mortgage loan assets and liabilities are indexed to ~~LIBOR.~~LIBOR (with the sole exception of TRTX-2019 FL3 liabilities which are indexed to SOFR).

(2)	Floating rate liabilities include secured credit facilities and collateralized loan obligations.

Credit Risk

Our loans are also subject to credit risk. The performance and value of our loans and other investments depend upon the sponsors’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us. To monitor this risk, the asset management team reviews our portfolio and maintains regular contact with borrowers, co-lenders and local market experts to monitor the performance of the underlying collateral, anticipate borrower, property and market issues and, to the extent necessary or appropriate, enforce our rights as the lender.

In addition, we are exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates and other macroeconomic factors beyond our control. We seek to manage these risks through our underwriting and asset management processes.

~~Liquidity Risk~~

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings including margin calls, fund and maintain investments, pay dividends to our stockholders and other general business needs. Our liquidity risk is principally associated with our financing of longer-maturity investments with shorter-term borrowings in the form of secured credit agreements. We are subject to “margin call” risk under our secured credit agreements. In the event that the value of our assets pledged as collateral suddenly decreases as a result of changes in credit spreads or interest rates, margin calls relating to our secured credit agreements could increase, causing an adverse change in our liquidity position. See “Management's Discussion and Analysis of Financial Condition and Results of Operations—Our Results of Operations—Liquidity and Capital Resources—Liquidity Needs” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on February 24, 2021 for information regarding margin calls that we funded during the quarter ended March 31, 2020 in connection with secured credit agreements used to finance our former investments in CRE debt securities. Additionally, if one or more of our secured credit agreement counterparties chooses not to provide ongoing funding, we may be unable to replace the financing through other lenders on favorable terms or at all. As such, we provide no assurance that we will be able to roll over or replace our secured credit agreements as they mature from time to time in the future. Prior to making our voluntary deleveraging payment during the second quarter of 2020, we satisfied one margin call aggregating $20.0 million in connection with our secured credit agreements financing our loan investments by pledging a previously unencumbered loan investment. On May 28, 2020, we made voluntary deleveraging payments totaling $157.7 million to our six secured credit facility lenders and one secured credit facility lender in exchange for their agreement to suspend margin calls for defined periods, subject to certain conditions. At the time these payments were made, no margin deficits existed, and no margin calls have been issued to us since. If market turbulence returns, we may be required to post cash collateral in

connection with our secured credit agreements secured by our mortgage loan investments upon or after the expiry of these agreements. We maintain frequent dialogue with the lenders under our secured credit agreements regarding our management of their collateral assets in light of the impacts of the COVID-19 pandemic. For more information regarding the impact that COVID-19 has had on our liquidity and may have on our future liquidity, see risk factors ~~set forth in our Form 10-K filed with the SEC on February 24, 2021.~~

In some situations, we have in the past, and may in the future, be forced to sell assets to maintain adequate liquidity. Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which we invest and may at the same time lead to a significant contraction in short-term and long-term debt and equity funding sources. A decline in market liquidity of real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell assets or determine their fair values. As a result, we may be unable to sell investments, or only be able to sell investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that our borrowing arrangements or other arrangements for obtaining leverage will continue to be available or, if available, will be available on terms and conditions acceptable to us.

Prepayment Risk

Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on certain investments to be less than expected. As we receive prepayments of principal on our assets, any premiums paid on such assets are amortized against interest income. In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets.

Extension Risk

Our Manager computes the projected weighted average life of our assets based on assumptions regarding the rate at which the borrowers will prepay the mortgages or extend. If prepayment rates decrease in a rising interest rate environment or extension options are exercised, the life of our loan investments could extend beyond the term of the secured debt agreements. We expect that the economic and market disruptions caused by COVID-19 will lead to a decrease in prepayment rates and an increase in the number of our borrowers who exercise extension options. This could have a negative impact on our results of operations. In some situations, we may be forced to sell assets to maintain adequate liquidity, which could cause us to incur losses. For more information regarding the impact of COVID-19 on the financial condition of our borrowers, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

~~Capital Market Risk~~

We are exposed to risks related to the equity capital markets and our related ability to raise capital through the issuance of our stock or other equity instruments. We are also exposed to risks related to the debt capital markets and our related ability to finance our business through borrowings under secured credit agreements, collateralized loan obligations, mortgage loan payable, term loans, or other debt instruments or arrangements. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise.

During 2020, the COVID-19 pandemic caused significant disruptions to the U.S. and global economies. These disruptions have contributed to significant and ongoing volatility, widening credit spreads and sharp declines in liquidity in the real estate securities markets. This capital markets environment has led to increased cost of funds and reduced availability of efficient debt capital, factors which have caused us to reduce our investment activity. We also anticipate that these conditions will adversely impact the ability of commercial property owners to service their debt and refinance their loans as they mature. For more information, see risk factors ~~set forth in our Form 10-K filed with the SEC on February 24, 2021.~~

~~Counterparty Risk~~

The nature of our business requires us to hold our cash and cash equivalents with, and obtain financing from, various financial institutions. This exposes us to the risk that these financial institutions may not fulfill their obligations to us under these various contractual arrangements. We mitigate this exposure by depositing our cash and cash equivalents and entering into financing agreements with high credit-quality institutions.

The nature of our loans and other investments also exposes us to the risk that our counterparties do not make required interest and principal payments on scheduled due dates. We seek to manage this risk through a comprehensive credit analysis prior to making an investment and rigorous monitoring of the underlying collateral during the term of our investments.

Non-Performance Risk

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the collateral real estate assets and, potentially, contribute to non-performance or, in severe cases, default. This risk is partially mitigated by various factors we consider during our underwriting and loan structuring process, including but not limited to, requiring substantially all of our borrowers to purchase an interest rate cap contract for the term of our loan.

Loan Portfolio Value

We may in the future originate loans that earn a fixed rate of interest on unpaid principal balance. The value of fixed rate loans is sensitive to changes in interest rates. We generally hold all of our loans to maturity, and do not expect to realize gains or losses on any fixed rate loan we may hold in the future, as a result of movements in market interest rates during future periods.

Real Estate Risk

The market values of commercial mortgage assets are subject to volatility and may be adversely affected by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses. For more information regarding the impact that COVID-19 has had on these risks, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

Operating and Capital Market Risks

Liquidity Risk

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings including margin calls, fund and maintain investments, pay dividends to our stockholders and other general business needs. Our liquidity risk is principally associated with our financing of longer-maturity investments with shorter-term borrowings in the form of secured credit facilities. We are subject to “margin call” risk under our secured credit facilities. In the event that the value of our assets pledged as collateral suddenly decreases as a result of changes in credit spreads or interest rates, margin calls relating to our secured credit facilities could increase, causing an adverse change in our liquidity position. See “Management's Discussion and Analysis of Financial Condition and Results of Operations—Our Results of Operations—Consolidated Cash Flows—Financing Activities” in this Quarterly Report on Form 10-Q for information regarding margin calls that we funded during the quarter ended March 31, 2020 in connection with secured credit agreements used to finance our former investments in CRE debt securities. Additionally, if one or more of our secured credit facility counterparties chooses not to provide ongoing funding, we may be unable to replace the financing through other lenders on favorable terms or at all. As such, we provide no assurance that we will be able to roll over or replace our secured credit facilities as they mature from time to time in the future. Prior to making our voluntary deleveraging payment during the second quarter of 2020, we satisfied one margin call aggregating $20.0 million in connection with our secured credit facilities financing our loan investments by pledging a previously unencumbered loan investment. On May 28, 2020, we made voluntary deleveraging payments totaling $157.7 million to our six secured credit facility lenders and one secured credit facility lender in exchange for their agreement to suspend margin calls for defined periods, subject to certain conditions. At the time these payments were made, no margin deficits existed, and no margin calls have been issued to us since. If market turbulence returns, we may be required to post cash collateral in connection with our secured credit facilities secured by our mortgage loan investments upon or after the expiry of these agreements. We maintain frequent dialogue with the lenders under our secured credit facilities regarding our management of their collateral assets in light of the impacts of the COVID-19 pandemic. For more information regarding the impact that COVID-19 has had on our liquidity and may have on our future liquidity, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

Capital Market Risk

We are exposed to risks related to the equity capital markets and our related ability to raise capital through the issuance of our stock or other equity instruments. We are also exposed to risks related to the debt capital markets and our related ability to finance our business through borrowings under secured credit facilities, collateralized loan obligations, mortgage loans, term loans, or other debt instruments or arrangements. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise.

During 2020, the COVID-19 pandemic caused significant disruptions to the U.S. and global economies. These disruptions have contributed to significant and ongoing volatility, widening credit spreads and sharp declines in liquidity in the real estate securities markets. This capital markets environment has led to increased cost of funds and reduced availability of efficient debt capital, factors which have caused us to reduce our investment activity. We also anticipate that these conditions will adversely impact the ability of commercial property owners to service their debt and refinance their loans as they mature. For more information, see risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

Counterparty Risk

Currency Risk

We may in the future hold assets denominated in foreign currencies, which would expose us to foreign currency risk. As a result, a change in foreign currency exchange rates may have an adverse impact on the valuation of our assets, as well as our income and distributions. Any such changes in foreign currency exchange rates may impact the measurement of such assets or income for the purposes of our REIT tests and may affect the amounts available for payment of dividends on our common stock.

We intend to hedge any currency exposures in a prudent manner. However, our currency hedging strategies may not eliminate all of our currency risk due to, among other things, uncertainties in the timing and/or amount of payments received on the related investments and/or unequal, inaccurate or unavailability of hedges to perfectly offset changes in future exchange rates. Additionally, we may be required under certain circumstances to collateralize our currency hedges for the benefit of the hedge counterparty, which could adversely affect our liquidity.

We may hedge foreign currency exposure on certain investments in the future by entering into a series of forwards to fix the U.S. dollar amount of foreign currency denominated cash flows (interest income, rental income and principal payments) we expect to receive from any foreign currency denominated investments. Accordingly, the notional values and expiration dates of our foreign currency hedges would approximate the amounts and timing of future payments we expect to receive on the related investments.

Item 4. Controls and Procedures

Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our President (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our President (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March 31,~~June 30, 2021. Based upon that evaluation, our President (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~March 31,~~June 30, 2021.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting (as such term as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of ~~March 31,~~June 30, 2021, we were not involved in any material legal proceedings. See the “Litigation” section of Note 15 to the ~~Consolidated Financial Statements~~consolidated financial statements included in this Form 10-Q for information regarding legal proceedings, which information is incorporated by reference in this Item 1.

Item 1A. Risk Factors

The following risk factors should be read in conjunction with the risk factors set forth in our Form 10-K filed with the SEC on February 24, 2021.

We may enter into hedging transactions that could expose us to contingent liabilities in the future and adversely impact our financial condition.

Subject to maintaining our qualification as a REIT, we may enter into hedging transactions that could require us to fund cash payments in certain circumstances (e.g., the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument). The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges. Any such economic losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition.

In addition, certain of the hedging instruments that we may enter into could involve risks since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. We cannot assure that a liquid secondary market will exist for hedging instruments that we may purchase or sell in the future, and we may be required to maintain a position until exercise or expiration, which could result in significant losses.

In addition, subject to maintaining our qualification as a REIT, we may pursue various hedging strategies to seek to reduce our exposure to adverse changes in interest rates. We may fail to recalculate, readjust and execute hedges in an efficient manner.

While we may enter into such transactions seeking to reduce interest rate risks, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio positions or liabilities being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.

Furthermore, we intend to record any derivative and hedging transactions we enter into in accordance with GAAP. However, we may choose not to pursue, or fail to qualify for, hedge accounting treatment relating to such derivative instruments. As a result, our operating results may suffer because any losses on these derivative instruments may not be offset by a change in the fair value of the related hedged transaction or item.

Changes to, or the elimination of, LIBOR may adversely affect our interest income, interest expense, or both.

On March 5, 2021, the Financial Conduct Authority of the U.K. (the “FCA”), which regulates LIBOR, announced (the “FCA Announcement”) that all LIBOR tenors relevant to us will cease to be published or will no longer be representative after June 30, 2023. The FCA Announcement coincides with the March 5, 2021 announcement of LIBOR’s administrator, the ICE Benchmark Administration Limited (the “IBA”), indicating that, as a result of not having access to input data necessary to calculate LIBOR tenors relevant to us on a representative basis after June 30, 2023, the IBA would have to cease publication of such LIBOR tenors immediately after the last publication on June 30, 2023. These announcements mean that any of our assets or liabilities with interest rates tied to LIBOR that extend beyond June 30, 2023 will need to be converted to a replacement rate. In the United States, the Alternative Reference Rates Committee (the “ARRC”), a committee of private sector entities with ex-officio official sector members convened by the Federal Reserve Board and the Federal Reserve Bank of New York, has confirmed that, in its opinion, the March 5, 2021 announcements by the IBA and the FCA on future cessation and loss of representativeness of the LIBOR benchmarks constituted a “Benchmark Transition Event” with respect to all U.S. Dollar LIBOR settings and has recommended the Secured Overnight Financing Rate (“SOFR”) plus a recommended spread adjustment as LIBOR’s replacement.

There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured lending rate, and SOFR is an overnight rate while LIBOR reflects term rates at different maturities. If our LIBOR-based borrowings are converted to SOFR, the differences between LIBOR and SOFR, plus the recommended spread adjustment, could result in higher interest costs for us, which could have a material adverse effect on our operating results. Although SOFR is the ARRC’s recommended replacement rate, it is also possible that lenders may instead choose alternative replacement rates that may differ from LIBOR in ways similar to SOFR or in other ways that would result in higher interest costs for us. In addition, the elimination of LIBOR and/or changes to another index could result in mismatches with the interest rate of investments that we are financing, and the overall financial markets may be disrupted as a result of the phase-out or replacement of LIBOR; however, we cannot reasonably estimate the impact of the transition at this time. The transition from LIBOR to SOFR or other alternative reference rates may also introduce operational risks in our accounting, financial reporting, loan servicing, liability management and other aspects of our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number		Description

3.1		Articles of Amendment and Restatement of TPG RE Finance Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (001-38156) filed on July 25, 2017)

3.2		Second Amended and Restated Bylaws of TPG RE Finance Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s ~~Current~~Annual Report on Form ~~8-K~~10-K for the fiscal year ended December 31, 2019 (001-38156) filed on ~~July 25, 2017)~~February 19, 2020)

3.3		Articles Supplementary of 11.0% Series B Cumulative Redeemable Preferred Stock of TPG RE Finance Trust Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (001-38156) filed on May 29, 2020)

3.4		Articles Supplementary of 6.25% Series C Cumulative Redeemable Preferred Stock of TPG RE Finance Trust Inc. (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form 8-A (001-38156) filed on June 10, 2021)

3.5		Articles Supplementary reclassifying and designating 7,000,000 authorized but unissued shares of the Company’s 11% Series B Cumulative Redeemable Preferred Stock, $0.001 par value per share, as additional shares of undesignated preferred stock, $0.001 par value per share, of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (001-38156) filed on June 24, 2021)

4.1		Specimen Common Stock Certificate of TPG RE Finance Trust, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11/A (333-217446) filed on June 21, 2017)

10.1		Second Amendment to Amended and Restated Guarantee Agreement, dated as of June 7, 2021, made by and between TPG RE Finance Trust Holdco, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.2		Second Amendment to Amended and Restated Guaranty, dated as of June 7, 2021, made by and between TPG RE Finance Trust Holdco, LLC in favor of Morgan Stanley Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.3		Second Amendment to Amended and Restated Guarantee Agreement, dated as of June 7, 2021, made by and between TPG RE Finance Trust Holdco, LLC and JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.4		Second Amendment to Amended and Restated Guarantee Agreement, dated as of June 7, 2021, made by and between TPG RE Finance Trust Holdco, LLC and Goldman Sachs Bank USA (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.5		Second Amendment to Amended and Restated Limited Guaranty, dated as of June 7, 2021, made and entered into by and between TPG RE Finance Trust Holdco, LLC and U.S. Bank National Association (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.6		Second Amendment to Guaranty, dated as of June 7, 2021, made by TPG RE Finance Trust Holdco, LLC for the benefit of Barclays Bank PLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.7		Second Amendment to Amended and Restated Guaranty, dated as of June 7, 2021, made by TPG RE Finance Trust Holdco, LLC in favor of Bank of America, N.A. (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K (001-38156) filed on June 7, 2021)

10.8		Eighth Amendment to Master Repurchase and Securities Contract Agreement, dated as of May 3, 2021 made by and between TPG RE Finance 12, LTD. and Morgan Stanley Bank, N.A

31.1		Certificate of Matthew Coleman, Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certificate of Robert Foley, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certificate of Matthew Coleman, Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2		Certificate of Robert Foley, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~May 04,~~August 3, 2021	TPG RE Finance Trust, Inc.

	(Registrant)

	/s/ Matthew Coleman
	Matthew Coleman
	President
	(Principal Executive Officer)

	/s/ Robert Foley
	Robert Foley
	Chief Financial Officer
	(Principal Financial Officer)

7178

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TRTX	New York Stock Exchange

6.25% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share	TRTX PRC	New York Stock Exchange

	March 31, 2021			December 31, 2020			June 30, 2021			December 31, 2020
ASSETS⁽¹⁾
Cash and Cash Equivalents	$	301,607		$	319,669		$	239,743		$	319,669
Restricted Cash		813			—			828			—
Accounts Receivable		755			785			755			785
Collateralized Loan Obligation Proceeds Held at Trustee		310,070			174			53,832			174
Accounts Receivable from Servicer/Trustee		177			418			2,439			418
Accrued Interest and Fees Receivable		29,229			27,391			29,461			27,391
Loans Held for Investment		4,580,179			4,516,400			4,825,890			4,516,400
Allowance for Credit Losses		(56,641	)		(59,940	)		(51,941	)		(59,940	)
Loans Held for Investment, Net (includes $1,305,947 and $2,259,467, respectively, pledged as collateral under secured credit facilities)		4,523,538			4,456,460
Loans Held for Investment, Net (includes $1,354,085 and $2,259,467, respectively, pledged as collateral under secured credit facilities)								4,773,949			4,456,460
Real Estate Owned		99,200			99,200			99,200			99,200
Other Assets		3,871			4,646			2,789			4,646
Total Assets		5,269,260		$	4,908,743			5,202,996		$	4,908,743
LIABILITIES AND EQUITY⁽¹⁾
Liabilities
Accrued Interest Payable	$	2,379		$	2,630		$	2,774		$	2,630
Accrued Expenses and Other Liabilities		10,440			14,450			11,311			14,450
Secured Credit Agreements (net of deferred financing costs of $5,869 and $8,831, respectively)		854,998			1,514,028
Collateralized Loan Obligations (net of deferred financing costs of $16,338 and $9,192, respectively)		2,851,709			1,825,568
Mortgage Loan Payable (net of deferred financing costs of $783 and $853)		49,217			49,147
Secured Credit Agreements (net of deferred financing costs of $4,571 and $8,831, respectively)								858,640			1,514,028
Collateralized Loan Obligations (net of deferred financing costs of $14,654 and $9,192, respectively)								2,821,233			1,825,568
Mortgage Loan Payable (net of deferred financing costs of $712 and $853, respectively)								49,288			49,147
Payable to Affiliates		5,094			5,570			5,738			5,570
Deferred Revenue		1,682			1,418			1,321			1,418
Dividends Payable		15,510			29,481			15,500			29,481
Total Liabilities		3,791,029			3,442,292			3,765,805			3,442,292
Commitments and Contingencies—See Note 15
Temporary Equity
Series B Cumulative Redeemable Preferred Stock ($0.001 par value per share; 13,000,000 and 13,000,000 shares authorized, respectively; 9,000,000 and 9,000,000 shares issued and outstanding, respectively)		201,003			199,551
Series B Cumulative Redeemable Preferred Stock ($0.001 par value per share; 0 and 13,000,000 shares authorized, respectively; 0 and 9,000,000 shares issued and outstanding, respectively)								—			199,551
Permanent Equity
Series A Preferred Stock ($0.001 par value per share; 100,000,000 shares authorized; 125 and 125 shares issued and outstanding, respectively)		—			—			—			—
Common Stock ($0.001 par value per share; 302,500,000 and 302,500,000 shares authorized, respectively; 76,897,102 and 76,787,006 shares issued and outstanding, respectively)		77			77
Series C Preferred Stock ($0.001 par value per share; 8,050,000 shares authorized; 8,050,000 and 0 shares issued and outstanding, respectively) ($201,250 aggregate liquidation preference)								8			—
Common Stock ($0.001 par value per share; 302,500,000 and 302,500,000 shares authorized, respectively; 77,089,125 and 76,787,006 shares issued and outstanding, respectively)								77			77
Additional Paid-in-Capital		1,559,685			1,559,681			1,708,972			1,559,681
Accumulated Deficit		(282,534	)		(292,858	)		(271,866	)		(292,858	)
Total Stockholders' Equity	$	1,277,228		$	1,266,900		$	1,437,191		$	1,266,900
Total Permanent Equity	$	1,277,228		$	1,266,900		$	1,437,191		$	1,266,900
Total Liabilities and Equity	$	5,269,260		$	4,908,743		$	5,202,996		$	4,908,743

	Three Months Ended March 31,						Six Months Ended June 30,
	2021			2020			2021			2020
Cash Flows from Operating Activities:
Net Income (Loss)	$	31,955		$	(232,790	)	$	64,347		$	(189,862	)
Adjustment to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
Adjustment to Reconcile Net Income (Loss) to Net Cash Flows from Operating Activities:
Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, Net		(1,600	)		(3,194	)		(3,775	)		(5,627	)
Amortization of Deferred Financing Costs		3,818			3,340			7,644			6,539
Increase in Capitalized Accrued Interest		(816	)		—
Loss on Sales of Loans Held for Investment and CRE Debt Securities, Net		—			203,493
Decrease (Increase) in Capitalized Accrued Interest								548			(550	)
Loss on Sales of Loans Held for Investment, net								1,626			13,773
Loss on Sales of CRE Debt Securities, net								—			203,397
Stock Compensation Expense		1,456			1,401			2,849			3,087
(Benefit) Allowance for Credit Loss Expense		(4,038	)		63,348			(7,515	)		39,029
Cash Flows Due to Changes in Operating Assets and Liabilities:
Accounts Receivable		30			2,338			30			2,308
Accrued Interest Receivable		(1,447	)		102			(2,051	)		(1,078	)
Accrued Expenses and Other Liabilities		(3,329	)		2,748			(4,716	)		1,414
Accrued Interest Payable		(250	)		(1,533	)		146			(3,212	)
Payable to Affiliates		(478	)		(1,550	)		167			1,505
Deferred Fee Income		264			125			(97	)		(15	)
Other Assets		775			(302	)		1,857			(31	)
Net Cash Provided by Operating Activities		26,340			37,526			61,060			70,677
Cash Flows from Investing Activities:
Origination of Loans Held for Investment		(37,091	)		(351,650	)		(631,408	)		(351,650	)
Advances on Loans Held for Investment		(29,566	)		(61,720	)		(73,136	)		(123,692	)
Principal Repayments of Loans Held for Investment		4,314			312,687			282,583			333,715
Sales of Loans Held for Investment								58,374			5,295
Purchase of Available-for-Sale CRE Debt Securities		—			(168,888	)		—			(168,888	)
Sales and Principal Repayments of Available-for-Sale CRE Debt Securities		—			86,439			—			766,437
Net Cash Used in Investing Activities		(62,343	)		(183,132	)
Net Cash (Used in) Provided by Investing Activities								(363,587	)		461,217
Cash Flows from Financing Activities:
Payments on Collateralized Loan Obligations		(4,212	)		—			(36,373	)		—
Proceeds from Collateralized Loan Obligation		728,434			—			1,037,500			—
Proceeds from Issuance of Series C Cumulative Redeemable Preferred Stock								201,250			—
Payments on Secured Credit Agreements - Loan Investments		(661,991	)		(337,306	)		(868,083	)		(606,265	)
Proceeds from Secured Credit Agreements - Loan Investments		—			612,861			208,435			695,250
Payments on Secured Credit Agreements - CRE Debt Securities		—			(216,638	)		—			(824,920	)
Proceeds from Secured Credit Agreements - CRE Debt Securities		—			132,122			—			132,122
Payment of Deferred Financing Costs		(7,875	)		(421	)		(8,119	)		(1,769	)
Series B Preferred Stock Redemption Make-Whole payment								(22,485	)		—
Series B Preferred Stock Redemption at Par Value								(225,000	)		—
Proceeds from Issuance of Series B Preferred Stock								—			210,598
Proceeds from Issuance of Warrants to Purchase Common Stock								—			14,402
Proceeds from Issuance of Common Stock		—			12,895			—			12,895
Dividends Paid on Common Stock		(29,482	)		(32,551	)		(44,998	)		(32,551	)
Dividends Paid on Class A Common Stock		—			(284	)		—			(284	)
Dividends Paid on Series B Cumulative Redeemable Preferred Stock		(6,120	)		—
Dividends Paid on Preferred Stock								(12,338	)		(2,256	)
Payment of Equity Issuance and Equity Distribution Agreement Transaction Costs		—			(206	)		(6,360	)		(12,365	)
Net Cash Provided by Financing Activities		18,754			170,472
Net Cash Provided by (Used in) Financing Activities								223,429			(415,143	)
Net Change in Cash, Cash Equivalents, and Restricted Cash		(17,249	)		24,866			(79,098	)		116,751
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		319,669			79,666			319,669			79,666
Cash, Cash Equivalents and Restricted Cash at End of Period	$	302,420		$	104,532		$	240,571		$	196,417
Supplemental Disclosure of Cash Flow Information:
Interest Paid	$	16,723		$	36,090		$	34,526		$	60,995
Taxes Paid	$	852		$	4		$	973		$	5
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Collateralized Loan Obligation Proceeds Held at Trustee	$	308,916		$	—
Dividends Declared, not paid	$	15,510		$	33,222		$	15,500		$	48,669
Principal Repayments of Loans Held for Investment Held by Servicer/Trustee, Net	$	1,154		$	881		$	55,872		$	80,205
Accrued Equity Issuance and Transaction Costs							$	506		$	3,035
Change in Accrued Deferred Financing Costs	$	58		$	484		$	587		$	937
Sales and Principal Repayments of Available-for-Sale CRE Debt Securities Held by Servicer/Trustee, Net	$	—		$	33,983
Unrealized Loss on Available-for-Sale CRE Debt Securities	$	—		$	(974	)	$	—		$	(1,051	)

	Six Months Ended June 30,
	2021			2020
Cash Flows from Operating Activities:
Net Income (Loss)	$	64,347		$	(189,862	)
Adjustment to Reconcile Net Income (Loss) to Net Cash Flows from Operating Activities:
Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, Net		(3,775	)		(5,627	)
Amortization of Deferred Financing Costs		7,644			6,539
Decrease (Increase) in Capitalized Accrued Interest		548			(550	)
Loss on Sales of Loans Held for Investment, net		1,626			13,773
Loss on Sales of CRE Debt Securities, net		—			203,397
Stock Compensation Expense		2,849			3,087
(Benefit) Allowance for Credit Loss Expense		(7,515	)		39,029
Cash Flows Due to Changes in Operating Assets and Liabilities:
Accounts Receivable		30			2,308
Accrued Interest Receivable		(2,051	)		(1,078	)
Accrued Expenses and Other Liabilities		(4,716	)		1,414
Accrued Interest Payable		146			(3,212	)
Payable to Affiliates		167			1,505
Deferred Fee Income		(97	)		(15	)
Other Assets		1,857			(31	)
Net Cash Provided by Operating Activities		61,060			70,677
Cash Flows from Investing Activities:
Origination of Loans Held for Investment		(631,408	)		(351,650	)
Advances on Loans Held for Investment		(73,136	)		(123,692	)
Principal Repayments of Loans Held for Investment		282,583			333,715
Sales of Loans Held for Investment		58,374			5,295
Purchase of Available-for-Sale CRE Debt Securities		—			(168,888	)
Sales and Principal Repayments of Available-for-Sale CRE Debt Securities		—			766,437
Net Cash (Used in) Provided by Investing Activities		(363,587	)		461,217
Cash Flows from Financing Activities:
Payments on Collateralized Loan Obligations		(36,373	)		—
Proceeds from Collateralized Loan Obligation		1,037,500			—
Proceeds from Issuance of Series C Cumulative Redeemable Preferred Stock		201,250			—
Payments on Secured Credit Agreements - Loan Investments		(868,083	)		(606,265	)
Proceeds from Secured Credit Agreements - Loan Investments		208,435			695,250
Payments on Secured Credit Agreements - CRE Debt Securities		—			(824,920	)
Proceeds from Secured Credit Agreements - CRE Debt Securities		—			132,122
Payment of Deferred Financing Costs		(8,119	)		(1,769	)
Series B Preferred Stock Redemption Make-Whole payment		(22,485	)		—
Series B Preferred Stock Redemption at Par Value		(225,000	)		—
Proceeds from Issuance of Series B Preferred Stock		—			210,598
Proceeds from Issuance of Warrants to Purchase Common Stock		—			14,402
Proceeds from Issuance of Common Stock		—			12,895
Dividends Paid on Common Stock		(44,998	)		(32,551	)
Dividends Paid on Class A Common Stock		—			(284	)
Dividends Paid on Preferred Stock		(12,338	)		(2,256	)
Payment of Equity Issuance and Equity Distribution Agreement Transaction Costs		(6,360	)		(12,365	)
Net Cash Provided by (Used in) Financing Activities		223,429			(415,143	)
Net Change in Cash, Cash Equivalents, and Restricted Cash		(79,098	)		116,751
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		319,669			79,666
Cash, Cash Equivalents and Restricted Cash at End of Period	$	240,571		$	196,417
Supplemental Disclosure of Cash Flow Information:
Interest Paid	$	34,526		$	60,995
Taxes Paid	$	973		$	5
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Dividends Declared, not paid	$	15,500		$	48,669
Principal Repayments of Loans Held for Investment Held by Servicer/Trustee, Net	$	55,872		$	80,205
Accrued Equity Issuance and Transaction Costs	$	506		$	3,035
Change in Accrued Deferred Financing Costs	$	587		$	937
Unrealized Loss on Available-for-Sale CRE Debt Securities	$	—		$	(1,051	)

	Six Months Ended June 30,
	2021			2020
Cash Flows from Operating Activities:
Net Income (Loss)	$	64,347		$	(189,862	)
Adjustment to Reconcile Net Income (Loss) to Net Cash Flows from Operating Activities:
Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, Net		(3,775	)		(5,627	)
Amortization of Deferred Financing Costs		7,644			6,539
Decrease (Increase) in Capitalized Accrued Interest		548			(550	)
Loss on Sales of Loans Held for Investment, net		1,626			13,773
Loss on Sales of CRE Debt Securities, net		—			203,397
Stock Compensation Expense		2,849			3,087
(Benefit) Allowance for Credit Loss Expense		(7,515	)		39,029
Cash Flows Due to Changes in Operating Assets and Liabilities:
Accounts Receivable		30			2,308
Accrued Interest Receivable		(2,051	)		(1,078	)
Accrued Expenses and Other Liabilities		(4,716	)		1,414
Accrued Interest Payable		146			(3,212	)
Payable to Affiliates		167			1,505
Deferred Fee Income		(97	)		(15	)
Other Assets		1,857			(31	)
Net Cash Provided by Operating Activities		61,060			70,677
Cash Flows from Investing Activities:
Origination of Loans Held for Investment		(631,408	)		(351,650	)
Advances on Loans Held for Investment		(73,136	)		(123,692	)
Principal Repayments of Loans Held for Investment		282,583			333,715
Sales of Loans Held for Investment		58,374			5,295
Purchase of Available-for-Sale CRE Debt Securities		—			(168,888	)
Sales and Principal Repayments of Available-for-Sale CRE Debt Securities		—			766,437
Net Cash (Used in) Provided by Investing Activities		(363,587	)		461,217
Cash Flows from Financing Activities:
Payments on Collateralized Loan Obligations		(36,373	)		—
Proceeds from Collateralized Loan Obligation		1,037,500			—
Proceeds from Issuance of Series C Cumulative Redeemable Preferred Stock		201,250			—
Payments on Secured Credit Agreements - Loan Investments		(868,083	)		(606,265	)
Proceeds from Secured Credit Agreements - Loan Investments		208,435			695,250
Payments on Secured Credit Agreements - CRE Debt Securities		—			(824,920	)
Proceeds from Secured Credit Agreements - CRE Debt Securities		—			132,122
Payment of Deferred Financing Costs		(8,119	)		(1,769	)
Series B Preferred Stock Redemption Make-Whole payment		(22,485	)		—
Series B Preferred Stock Redemption at Par Value		(225,000	)		—
Proceeds from Issuance of Series B Preferred Stock		—			210,598
Proceeds from Issuance of Warrants to Purchase Common Stock		—			14,402
Proceeds from Issuance of Common Stock		—			12,895
Dividends Paid on Common Stock		(44,998	)		(32,551	)
Dividends Paid on Class A Common Stock		—			(284	)
Dividends Paid on Preferred Stock		(12,338	)		(2,256	)
Payment of Equity Issuance and Equity Distribution Agreement Transaction Costs		(6,360	)		(12,365	)
Net Cash Provided by (Used in) Financing Activities		223,429			(415,143	)
Net Change in Cash, Cash Equivalents, and Restricted Cash		(79,098	)		116,751
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		319,669			79,666
Cash, Cash Equivalents and Restricted Cash at End of Period	$	240,571		$	196,417
Supplemental Disclosure of Cash Flow Information:
Interest Paid	$	34,526		$	60,995
Taxes Paid	$	973		$	5
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Dividends Declared, not paid	$	15,500		$	48,669
Principal Repayments of Loans Held for Investment Held by Servicer/Trustee, Net	$	55,872		$	80,205
Accrued Equity Issuance and Transaction Costs	$	506		$	3,035
Change in Accrued Deferred Financing Costs	$	587		$	937
Unrealized Loss on Available-for-Sale CRE Debt Securities	$	—		$	(1,051	)

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

Part I. Financial Information		1

Item 1.	Financial Statements	1

	Consolidated Balance Sheets as of ~~March 31,~~June 30, 2021 (unaudited) and December 31, 2020	1

	Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (unaudited) for the Three and Six Months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020	2

	Consolidated Statements of Changes in Equity (unaudited) for the Three and Six Months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020	3

	Consolidated Statements of Cash Flows (unaudited) for the ~~Three~~Six Months ended ~~March 31,~~June 30, 2021 and ~~March 31,~~June 30, 2020	45

	Notes to the Consolidated Financial Statements (unaudited)	56

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4044

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6470

Item 4.	Controls and Procedures	6773

Part II. Other Information		6874

Item 1.	Legal Proceedings	6874

Item 1A.	Risk Factors	6874

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6975

Item 3.	Defaults Upon Senior Securities	6975

Item 4.	Mine Safety Disclosures	6975

Item 5.	Other Information	6975

Item 6.	Exhibits	7076

Signatures		7178

	Three Months Ended March 31,						Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020			2021			2020
INTEREST INCOME
Interest Income	$	58,148		$	81,749		$	61,915		$	70,051		$	120,064		$	151,800
Interest Expense		(20,290	)		(38,457	)		(22,017	)		(25,865	)		(42,307	)		(64,322	)
Net Interest Income		37,858			43,292			39,898			44,186			77,757			87,478
OTHER REVENUE
Other Income, net		96			328			157			119			253			447
Total Other Revenue		96			328			157			119			253			447
OTHER EXPENSES
Professional Fees		1,198			1,819			1,137			4,036			2,336			5,855
General and Administrative		1,030			980			1,081			860			2,112			1,840
Stock Compensation Expense		1,456			1,401			1,393			1,686			2,849			3,087
Servicing and Asset Management Fees		328			276			328			261			655			537
Management Fee		5,094			5,000			5,344			5,115			10,437			10,115
Total Other Expenses		9,106			9,476			9,283			11,958			18,389			21,434
Securities Impairments		—			(203,493	)		—			96			—			(203,397	)
Credit Loss Benefit (Expense)		4,038			(63,348	)		1,852			10,546			5,890			(52,802	)
Income (Loss) Before Income Taxes		32,886			(232,697	)		32,624			42,989			65,511			(189,708	)
Income Tax Expense, net		(931	)		(93	)		(233	)		(61	)		(1,164	)		(154	)
Net Income (Loss)	$	31,955		$	(232,790	)	$	32,391		$	42,928		$	64,347		$	(189,862	)
Series A Preferred Stock Dividends		(4	)		(3	)
Series B Cumulative Redeemable Preferred Stock Dividends		(6,120	)		—
Net Income (Loss) Attributable to TPG RE Finance Trust, Inc.	$	25,831		$	(232,793	)
Earnings (Loss) per Common Share, Basic	$	0.32		$	(3.05	)
Earnings (Loss) per Common Share, Diluted	$	0.30		$	(3.05	)
Preferred Stock Dividends and Participating Securities Share in Earnings (Loss)								(6,947	)		(2,380	)		(13,217	)		(2,651	)
Series B Preferred Stock Redemption Make-Whole Payment								(22,485	)		—			(22,485	)		—
Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs								(23,997	)		(443	)		(25,449	)		(443	)
Net (Loss) Income Attributable to Common Stockholders - See Note 12							$	(21,038	)	$	40,105		$	3,196		$	(192,956	)
(Loss) Earnings per Common Share, Basic							$	(0.27	)	$	0.52		$	0.04		$	(2.53	)
(Loss) Earnings per Common Share, Diluted							$	(0.27	)	$	0.52		$	0.04		$	(2.53	)
Weighted Average Number of Common Shares Outstanding
Basic:		76,895,615			76,465,322			76,899,270			76,644,038			76,897,453			76,554,680
Diluted:		80,673,236			76,465,322			76,899,270			76,644,038			81,331,351			76,554,680
OTHER COMPREHENSIVE INCOME (LOSS)
Net Income (Loss)	$	31,955		$	(232,790	)	$	32,391		$	42,928		$	64,347		$	(189,862	)
Unrealized Loss on Available-for-Sale Debt Securities		—			(974	)		—			(77	)		—			(1,051	)
Comprehensive Net Income (Loss)	$	31,955		$	(233,764	)	$	32,391		$	42,851		$	64,347		$	(190,913	)

	Permanent Equity																										Temporary Equity		Permanent Equity																							Temporary Equity
	Series A Preferred Stock				Common Stock				Class A Common Stock																				Series A Preferred Stock				Series C Preferred Stock				Common Stock
	Shares		Par Value		Shares		Par Value		Shares			Par Value			Additional Paid- in-Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity			Series B Preferred Stock		Shares		Par Value		Shares		Par Value		Shares		Par Value		Additional Paid- in-Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity			Series B Preferred Stock
January 1, 2021		125	$	—		76,787,006	$	77		—		$	—		$	1,559,681		$	(292,858	)	$	—		$	1,266,900		$	199,551		125	$	—		—	$	—		76,787,006	$	77	$	1,559,681		$	(292,858	)	$	—	$	1,266,900		$	199,551
Issuance of Common Stock		—		—		110,096		—		—			—			—			—			—			—			—		—		—		—		—		110,096		—		—			—			—		—			—
Amortization of Share-Based Compensation		—		—		—		—		—			—			1,456			—			—			1,456			—		—		—		—		—		—		—		1,456			—			—		1,456			—
Net Income		—		—		—		—		—			—			—			31,955			—			31,955			—		—		—		—		—		—		—		—			31,955			—		31,955			—
Dividends on Preferred Stock		—		—		—		—		—			—			—			(6,124	)		—			(6,124	)		—		—		—		—		—		—		—		—			(6,124	)		—		(6,124	)		—
Accretion of Discount on Series B Cumulative Redeemable Preferred Stock		—		—		—		—		—			—			(1,452	)		—			—			(1,452	)		1,452
Series B Preferred Stock Accretion of Discount, including Allocated Warrant Fair Value and Transaction Costs																														—		—		—		—		—		—		(1,452	)		—			—		(1,452	)		1,452
Dividends on Common Stock (Dividends Declared per Share of $0.20)		—		—				—		—			—			—			(15,507	)		—			(15,507	)		—		—		—		—		—				—		—			(15,507	)		—		(15,507	)		—
March 31, 2021		125	$	—		76,897,102	$	77		—		$	—		$	1,559,685		$	(282,534	)	$	—		$	1,277,228		$	201,003		125	$	—		—	$	—		76,897,102	$	77	$	1,559,685		$	(282,534	)	$	—	$	1,277,228		$	201,003

	Permanent Equity																										Temporary Equity
	Series A Preferred Stock				Common Stock				Class A Common Stock
	Shares		Par Value		Shares		Par Value		Shares			Par Value			Additional Paid- in-Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity			Series B Preferred Stock
January 1, 2020		125	$	—		74,886,113	$	75		1,136,665		$	1		$	1,530,935		$	(28,108	)	$	1,051		$	1,503,954		$	—
Issuance of Common Stock		—		—		628,218		1		—			—			12,894			—			—			12,895			—		—		—		—		—		192,023		—		—			—			—		—			—
Conversions of Class A Common Stock to Common Stock		—		—		1,136,665		1		(1,136,665	)		(1	)		—			—			—			—			—
Issuance of Series C Preferred Stock																														—		—		8,050,000	$	8		—		—		201,242			—			—		201,250			—
Equity Issuance, Shelf Registration, and Equity Distribution Agreement Transaction Costs		—		—		—		—		—			—			(206	)		—			—			(206	)		—		—		—		—		—		—		—		(6,866	)		—			—		(6,866	)		—
Amortization of Share-Based Compensation		—		—		—		—		—			—			1,401			—			—			1,401			—		—		—		—		—		—		—		1,393			—			—		1,393			—
Cumulative Effect of Adoption of ASU 2016-13 (See Note 2)		—		—		—		—		—			—			—			(19,645	)		—			(19,645	)		—
Net Loss		—		—		—		—		—			—			—			(232,790	)		—			(232,790	)		—
Other Comprehensive Loss		—		—		—		—		—			—			—			—			(974	)		(974	)		—
Net Income																														—		—		—		—		—		—		—			32,391			—		32,391			—
Dividends on Preferred Stock		—		—		—		—		—			—			—			(3	)		—			(3	)		—		—		—		—		—		—		—		—			(6,214	)		—		(6,214	)		—
Dividends on Common Stock (Dividends Declared per Share of $0.43)		—		—		—		—		—			—			—			(33,219	)		—			(33,219	)		—
March 31, 2020		125	$	—		76,650,996	$	77		—		$	—		$	1,545,024		$	(313,765	)	$	77		$	1,231,413		$	—
Series B Preferred Stock Redemption at Par Value																														—		—		—		—		—		—		—			—			—		—			(225,000	)
Series B Preferred Stock Redemption Make-Whole Payment																														—		—		—		—		—		—		(22,485	)		—			—		(22,485	)		—
Series B Preferred Stock Accretion and Write-off of Discount, including Allocated Warrant Fair Value and Transaction Costs																														—		—		—		—		—		—		(23,997	)		—			—		(23,997	)		23,997
Dividends on Common Stock (Dividends Declared per Share of $0.20)																														—		—		—		—		—		—		—			(15,509	)		—		(15,509	)		—
June 30, 2021																														125	$	—		8,050,000	$	8		77,089,125	$	77	$	1,708,972		$	(271,866	)	$	—	$	1,437,191		$	—

	March 31, 2021								June 30, 2021
Loans Held for Investment, Net	Outstanding Principal		Unamortized Premium (Discount), Loan Origination Fees, net			Amortized Cost			Outstanding Principal		Unamortized Premium (Discount), Loan Origination Fees, net			Amortized Cost
Senior loans	$	4,553,826	$	(7,046	)	$	4,546,780		$	4,799,273	$	(7,543	)	$	4,791,730
Subordinated and mezzanine loans		33,532		(133	)		33,399
Subordinated and Mezzanine loans										34,262		(102	)		34,160
Total	$	4,587,358	$	(7,179	)	$	4,580,179		$	4,833,535	$	(7,645	)	$	4,825,890
Allowance for credit losses							(56,641	)							(51,941	)
Loans Held for Investment, Net						$	4,523,538							$	4,773,949

	Carrying Value			Carrying Value
Balance at December 31, 2020	$	4,456,460
Balance as of December 31, 2020				$	4,456,460
Additions during the period:
Loans originated and acquired		37,091			631,408
Additional fundings		30,382			74,312
Amortization of origination fees		1,600			3,775
Deductions during the period:
Collection of principal		(5,294	)		(339,315	)
Loan sale					(60,690	)
Change in allowance for credit losses		3,299			7,999
Balance at March 31, 2021	$	4,523,538
Balance as of June 30, 2021				$	4,773,949

	March 31, 2021
	Amortized Cost by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
Senior loans by internal risk ratings:
1	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2		—		—		31,863		337,382		—		—		369,245
3		37,098		251,019		1,696,788		1,102,412		255,407		—		3,342,724
4		—		—		434,291		46,910		297,382		25,049		803,632
5		—		—		—		31,179		—		—		31,179
Total mortgage loans	$	37,098	$	251,019	$	2,162,942	$	1,517,883	$	552,789	$	25,049	$	4,546,780
Subordinated and mezzanine loans by internal risk ratings:
1	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2		—		—		—		—		—		—		—
3		—		—		33,399		—		—		—		33,399
4		—		—		—		—		—		—		—
5		—		—		—		—		—		—		—
Total subordinated and mezzanine loans		—		—		33,399		—		—		—		33,399
Total	$	37,098	$	251,019	$	2,196,341	$	1,517,883	$	552,789	$	25,049	$	4,580,179

Rating	March 31, 2021			December 31, 2020			June 30, 2021			December 31, 2020
1	$	—		$	—		$	—		$	—
2		369,245			337,738			341,749			337,738
3		3,376,123			3,340,663			3,872,528			3,340,663
4		803,632			806,893			580,413			806,893
5		31,179			31,106			31,200			31,106
Total	$	4,580,179		$	4,516,400		$	4,825,890		$	4,516,400
Allowance for Credit Losses		(56,641	)		(59,940	)		(51,941	)		(59,940	)
Carrying Value	$	4,523,538		$	4,456,460		$	4,773,949		$	4,456,460
Weighted Average Risk Rating⁽¹⁾		3.1			3.1			3.1			3.1

	For the Three Months Ended March 31, 2021									For the Three Months Ended June 30, 2021
	Senior Loans			Subordinated and Mezzanine Loans			Total			Senior Loans			Subordinated and Mezzanine Loans			Total
Allowance for credit losses for loans held for investment:
CECL reserve as of December 31, 2020	$	58,210		$	1,730		$	59,940
Decrease in CECL reserve		(3,055	)		(244	)		(3,299	)
CECL reserve as of April 1, 2021										$	55,155		$	1,486		$	56,641
Credit Loss Expense (Benefit)											(3,724	)		(976	)		(4,700	)
Subtotal		55,155			1,486			56,641			51,431			510			51,941

Allowance for credit losses on unfunded loan commitments:
CECL reserve as of December 31, 2020		2,756			132			2,888
Decrease in CECL reserve		(672	)		(67	)		(739	)
CECL reserve as of April 1, 2021											2,084			65			2,149
Credit Loss Expense (Benefit)											1,276			(54	)		1,222
Subtotal		2,084			65			2,149			3,360			11			3,371

Total allowance for credit losses	$	57,239		$	1,551		$	58,790		$	54,791		$	521		$	55,312

	For the Three Months Ended June 30, 2020
	Senior Loans			Subordinated and Mezzanine Loans			Total
Allowance for credit losses for loans held for investment:
CECL reserve as of April 1, 2020	$	73,620		$	2,038		$	75,658
Credit Loss Expense (Benefit)		(22,063	)		(38	)		(22,101	)
Subtotal		51,557			2,000			53,557

Allowance for credit losses on unfunded loan commitments:
CECL reserve as of April 1, 2020		5,807			1,528			7,335
Credit Loss Expense (Benefit)		(2,189	)		(28	)		(2,217	)
Subtotal		3,618			1,500			5,118

Total allowance for credit losses	$	55,175		$	3,500		$	58,675

	For the Six Months Ended June 30, 2021
	Senior Loans			Subordinated and Mezzanine Loans			Total
Allowance for credit losses for loans held for investment:
CECL reserve as of December 31, 2020	$	58,210		$	1,730		$	59,940
Credit Loss Expense (Benefit)		(6,779	)		(1,220	)		(7,999	)
Subtotal		51,431			510			51,941

Allowance for credit losses on unfunded loan commitments:
CECL reserve as of December 31, 2020		2,756			132			2,888
Credit Loss Expense (Benefit)		604			(121	)		483
Subtotal		3,360			11			3,371

Total allowance for credit losses	$	54,791		$	521		$	55,312

	For the Six Months Ended June 30, 2020
	Senior Loans		Subordinated and Mezzanine Loans		Total
Allowance for credit losses for loans held for investment:
CECL reserve as of December 31, 2019	$	—	$	—	$	—
Cumulative-effect adjustment upon adoption of ASU 2016-13		16,903		880		17,783
Credit Loss Expense (Benefit)		34,654		1,120		35,774
Subtotal		51,557		2,000		53,557

Allowance for credit losses on unfunded loan commitments:
CECL reserve as of December 31, 2019		—		—		—
Cumulative-effect adjustment upon adoption of ASU 2016-13		1,862		—		1,862
Credit Loss Expense (Benefit)		1,756		1,500		3,256
Subtotal		3,618		1,500		5,118

Total allowance for credit losses	$	55,175	$	3,500	$	58,675


Balance as of December 31, 2020	$	4,701
PIK accrued		816
PIK repayments and write-off		—
Balance as of March 31, 2021		5,517
PIK accrued		360
PIK repayments		(1,034	)
PIK write-off		(690	)
Balance as of June 30, 2021	$	4,153

	Days Outstanding														Days Outstanding
	30-59 Days		60-89 Days		90 Days or More		Total Loans Past Due		Current		Total Loans		90 Days or More Past Due and Accruing		30-59 Days		60-89 Days		90 Days or More		Total Loans Past Due		Current		Total Loans		90 Days or More Past Due and Accruing
Loans Receivable:
Senior loans	$	—	$	—	$	31,179	$	31,179	$	4,515,601	$	4,546,780	$	—	$	—	$	—	$	31,200	$	31,200	$	4,760,530	$	4,791,730	$	—
Subordinated and mezzanine loans		—		—		—		—		33,399		33,399		—		—		—		—		—		34,160		34,160		—
Total	$	—	$	—	$	31,179	$	31,179	$	4,549,000	$	4,580,179	$	—	$	—	$	—	$	31,200	$	31,200	$	4,794,690	$	4,825,890	$	—

March 31, 2021
Collateral (loan investments)				Debt (notes issued)
Outstanding Principal		Carrying Value		Face Value		Carrying Value
$	3,141,155	$	3,141,155	$	2,868,047	$	2,851,709

December 31, 2020
Collateral (loan investments)				Debt (notes issued)
Outstanding Principal		Carrying Value		Face Value		Carrying Value
$	2,230,276	$	2,230,276	$	1,834,760	$	1,825,568

	March 31, 2021																				June 30, 2021
Secured Credit Agreements and Mortgage Loan Payable:	Initial Maturity Date	Extended Maturity Date	Index Rate	Weighted Average Credit Spread			Interest Rate			Commitment Amount		Maximum Current Availability		Balance Outstanding		Principal Balance of Collateral			Amortized Cost of Collateral		Initial Maturity Date	Extended Maturity Date	Index Rate	Weighted Average Credit Spread			Interest Rate			Commitment Amount		Maximum Current Availability		Balance Outstanding		Principal Balance of Collateral			Amortized Cost of Collateral
Secured Credit Facilities
Goldman Sachs⁽¹⁾⁽³⁾	08/19/21	08/19/22	1 Month LIBOR		2.3	%		2.6	%	$	250,000	$	248,333	$	1,667	$	37,940		$	37,826	08/19/21	08/19/22	1 Month LIBOR		2.0	%		2.1	%	$	250,000	$	152,011	$	97,989	$	160,959		$	160,206
Wells Fargo⁽¹⁾	04/18/22	04/18/22	1 Month LIBOR		1.9	%		2.0	%		750,000		747,909		2,091		3,776			2,466	04/18/22	04/18/22	1 Month LIBOR		1.8	%		1.9	%		750,000		686,931		63,069		169,396			167,834
Barclays⁽¹⁾	08/13/22	08/13/22	1 Month LIBOR		1.5	%		1.7	%		750,000		502,718		247,282		350,488			349,635	08/13/22	08/13/22	1 Month LIBOR		1.5	%		1.6	%		750,000		599,620		150,380		229,722			229,292
Morgan Stanley⁽¹⁾	05/04/22	05/04/22	1 Month LIBOR		1.8	%		1.9	%		500,000		343,825		156,175		212,883			211,525	05/04/22	05/04/22	1 Month LIBOR		1.8	%		1.9	%		500,000		330,917		169,083		223,976			222,838
JP Morgan⁽¹⁾	10/30/23	10/30/25	1 Month LIBOR		1.7	%		1.8	%		400,000		275,542		124,458		207,618			205,047	10/30/23	10/30/25	1 Month LIBOR		1.7	%		1.8	%		400,000		257,315		142,685		223,856			221,806
US Bank⁽¹⁾	07/09/22	07/09/24	1 Month LIBOR		1.5	%		1.8	%		139,960		70,376		69,584		101,759			101,714	07/09/22	07/09/24	1 Month LIBOR		1.4	%		1.7	%		44,730		5,485		39,245		58,519			58,519
Bank of America⁽¹⁾	09/29/21	09/29/22	1 Month LIBOR		1.8	%		1.9	%		200,000		168,336		31,664		42,813			42,813	09/29/21	09/29/22	1 Month LIBOR		1.8	%		1.9	%		200,000		168,336		31,664		42,813			42,813
Institutional Financing⁽¹⁾	10/30/23	10/30/25	1 Month LIBOR		4.5	%		4.8	%		249,546		21,600		227,946		392,148			391,877	10/30/23	10/30/25	1 Month LIBOR		4.5	%		4.8	%		249,546		80,450		169,096		293,120			292,918
Subtotal										$	3,239,506	$	2,378,639	$	860,867	$	1,349,425		$	1,342,903										$	3,144,276	$	2,281,065	$	863,211	$	1,402,361		$	1,396,226

Mortgage Loan Payable
Institutional Lender	12/15/21	12/15/22	1 Month LIBOR		4.5	%		5.0	%		50,000		—		50,000		99,200	⁽²⁾		—	12/15/21	12/15/22	1 Month LIBOR		4.5	%		5.0	%		50,000		—		50,000		99,200	⁽²⁾		—
Subtotal										$	50,000	$	—	$	50,000	$	99,200		$	—										$	50,000	$	—	$	50,000	$	99,200		$	—

Total										$	3,289,506	$	2,378,639	$	910,867	$	1,448,625		$	1,342,903										$	3,194,276	$	2,281,065	$	913,211	$	1,501,561		$	1,396,226

Financial Covenant	Current	Prior to ~~May 28, 2020~~June 7, 2021
Cash Liquidity	Minimum cash liquidity of no less than the greater of: ~~$10.0~~$15.0 million; and 5.0% of Holdco’s recourse indebtedness	Minimum cash liquidity of no less than the greater of: $10.0 million; and 5.0% of Holdco’s recourse indebtedness
Tangible Net Worth	$1.0 billion, plus 75% of all subsequent equity issuances (net of discounts, commissions, expense), minus 75% of the redeemed or repurchased preferred or redeemable equity or stock	$1.1 billion as of April 1, 2020, plus 75% of future equity issuances thereafter	~~Minimum tangible net worth~~ (net of ~~at least 75% of the net cash proceeds of all prior equity issuances made by Holdco or the Company, plus 75% of the net cash proceeds of all subsequent equity issuances made by Holdco or the Company~~discounts, commissions, expense)
Debt-to-Equity	Debt-to-Equity ratio not to exceed ~~3.5~~4.25 to 1.0 with "equity" and "equity adjustment" as defined below	Debt-to-Equity ratio not to exceed 3.5 to 1.0 with "equity" and "equity adjustment" as defined below
Interest Coverage	Minimum interest coverage ratio of no less than 1.5 to 1.0	Minimum interest coverage ratio of no less than 1.5 to 1.0

	Collateralized loan obligations⁽¹⁾		Secured credit facilities⁽²⁾		Mortgage Loan Payable⁽³⁾		Collateralized Loan Obligations⁽¹⁾		Secured Credit Facilities⁽²⁾		Mortgage Loan Payable⁽³⁾
2021	$	48,566	$	1,667	$	—	$	—	$	—	$	—
2022		344,814		506,796		50,000		260,628		512,185		50,000
2023		657,140		352,404		—		632,841		311,781		—
2024		1,470,523		—		—		1,190,431		39,245		—
2025		347,004		—		—		286,411		—		—
Thereafter		—		—		—		465,576		—		—
Total	$	2,868,047	$	860,867	$	50,000	$	2,835,887	$	863,211	$	50,000

	March 31, 2021								June 30, 2021
			Fair Value								Fair Value
	Carrying Value		Level I		Level II		Level III		Carrying Value		Level I		Level II		Level III
Financial Assets
Loans Held for Investment	$	4,523,538	$	—	$	—	$	4,571,875	$	4,773,949	$	—	$	—	$	4,779,484
Financial Liabilities
Collateralized Loan Obligations		2,851,709		—		—		2,855,190		2,821,233		—		—		2,819,640
Secured Financing Agreements		854,998		—		—		848,765		858,640		—		—		850,558
Mortgage Loan Payable		49,217		—		—		49,217		49,288		—		—		49,288

	Loans Held for Investment		Collateralized Loan Obligations		Secured Financing Arrangements			Mortgage Loan Payable		Total		Loans Held for Investment		Collateralized Loan Obligations		Secured Financing Arrangements			Mortgage Loan Payable		Total
Balance at December 31, 2020	$	4,472,984	$	1,834,760	$	1,532,910		$	49,147	$	7,889,801
Balance as of December 31, 2020												$	4,472,984	$	1,834,760	$	1,532,910		$	49,147	$	7,889,801
Additions		—		—		—			—		—		—		—		—			—		—
Change in fair value		98,891		1,020,430		(684,145	)		70		435,246		306,500		984,880		(682,352	)		141		609,169
Transfers into Level III		—		—		—			—		—		—		—		—			—		—
Transfers out of Level III		—		—		—			—		—		—		—		—			—		—
Disposals		—		—		—			—		—		—		—		—			—		—
Balance at March 31, 2021	$	4,571,875	$	2,855,190	$	848,765		$	49,217	$	8,325,047
Balance as of June 30, 2021												$	4,779,484	$	2,819,640	$	850,558		$	49,288	$	8,498,970

Vesting Year	Shares of Common Stock
2021		418,345
2022		183,030
2023		145,873
2024		89,548
Total		836,796