Summary of CMTG Q4 2025 Earnings Call

1Key Financial Results and Metrics

GAAP Net Loss: $1.56 per share

Distributable Loss: $0.71 per share; distributable earnings (excluding realized gains/losses) were $0.02 per share.

Loan Portfolio: Decreased to $3.7 billion from $4.3 billion in Q3 2025 and $6.1 billion at year-end 2024.

Credit Loss Reserves: Total CECL reserve increased to $443 million (10.9% of UPB) from $308 million (6.8% of UPB) at the end of Q3 2025.

Liquidity: Ended the year with $153 million in liquidity, a $51 million increase year-over-year.

2Strategic Updates and Business Highlights

Resolutions: Exceeded the $2 billion resolution target for 2025, achieving $2.5 billion, including 11 watchlist loans with an aggregate UPB of $1.3 billion.

Deleveraging: Reduced leverage by $1.7 billion in 2025, with an additional $300 million reduction in early 2026.

Financing: Replaced the maturing Term Loan B with a new $500 million senior secured loan from HPS, extending maturity to 2030 and providing more flexibility.

Portfolio Transition: Continued to resolve watchlist loans and reposition the portfolio, with a focus on asset management and preparing for new lending opportunities by late 2026.

3Forward Guidance and Outlook

Market Conditions: Anticipates gradual improvement in the real estate market, with expectations of increased transaction volume and investor confidence if bond market conditions remain favorable.

2026 Focus: Emphasis on asset management, resolving remaining watchlist loans, and preparing for potential new lending opportunities.

NII Outlook: Expectation of lower net interest income in the near term due to ongoing portfolio transitions and resolutions.

4Bad News, Challenges, or Points of Concern

Net Losses: The company reported significant losses, indicating ongoing challenges in the portfolio.

Portfolio Decline: Continued decline in the held-for-investment loan portfolio as part of the strategy to resolve underperforming assets.

Credit Quality: Downgrades of several loans, including a $220 million luxury hotel loan and others to 5 risk ratings, reflecting ongoing risks in the commercial real estate sector.

Market Recovery: While there are signs of improvement, the market is not fully recovered, and transaction volumes remain lower than anticipated.

5Notable Q&A Insights

Shareholder Value: Discussion on the potential for creating shareholder value beyond resolving the current portfolio, with a focus on cleaning up the balance sheet first.

Liquidity Management: Liquidity levels are expected to remain strong, with a focus on further deleveraging and evaluating capital allocation options.

Resolution Timing: Management expressed confidence in accelerating the pace of loan resolutions and asset sales, but acknowledged the dynamic nature of the market could influence timing.

CapEx Expectations: Anticipated capital expenditures for REO properties will be minimal, contingent on the hold periods for assets. Overall, CMTG is navigating a challenging environment with a focus on resolving underperforming loans, enhancing liquidity, and preparing for future growth opportunities while acknowledging the ongoing risks and uncertainties in the commercial real estate market.