Business Wire | Dec 13, 2021 05:00PM EST

Claros Mortgage Trust, Inc. Reports Third Quarter 2021 Results

Dec. 13, 2021

NEW YORK--(BUSINESS WIRE)--Dec. 13, 2021--Claros Mortgage Trust, Inc. (NYSE: CMTG) (the "Company" or "CMTG") today reported its financial results for the quarter ended September 30, 2021. The Company's third quarter 2021 GAAP net income was $52.9 million, or $0.40 per diluted share of common stock, and Net Distributable Earnings (a non-GAAP financial measure defined below) was $45.3 million, or $0.34 per diluted share of common stock.

Third Quarter 2021 Highlights

* Significant increase in origination activity, closing seven investments totaling $905.2 million of total commitments of which $745.0 million was funded at closing * Current loan portfolio: $6.4 billion portfolio with a weighted average all-in yield of 6.4% Residential investments (multifamily and for sale condo) represented 28.3% of the portfolio based on unpaid principal balance 98.3% floating-rate with a weighted average LTV of 66.1% * Declared a dividend of $0.37 per common share for the third quarter 2021

Post-Quarter End Update

* Executed initial public offering of 5.5 million shares for gross proceeds of approximately $103.0 million * Refinanced Secured Term Loan, reducing the interest rate to the greater of (i) 1-month SOFR plus a 0.10% credit spread adjustment and (ii) 0.50% plus a credit spread of 4.50% * Declared a dividend of $0.37 per common share for the fourth quarter 2021

"Our recent initial public offering was an important milestone in the evolution and growth of CMTG," said Richard Mack, Chief Executive Officer and Chairman of CMTG. "We continue to see healthy demand for both new transitional CRE loans as well as the recapitalization of existing transitional CRE loans, which aligns well with our investment strategy. This, coupled with our team's deep expertise in all phases of transitional CRE asset management, will enable us to deliver attractive risk-adjusted returns to our shareholders over the long term."

"In the third quarter, our team delivered a solid performance with regard to loan originations, committing more than $900 million of floating rate transitional loans across major U.S. markets. Consistent with our track record of disciplined underwriting, these loans were backed by institutional quality collateral."

Teleconference DetailsA conference call to discuss CMTG's financial results will be held on Tuesday, December 14, 2021, at 9:00 a.m. ET. The conference call may be accessed by dialing 1-844-200-6205 and referencing the Claros Mortgage Trust, Inc. teleconference call; access code 199727.

The conference call will also be broadcast live over the internet and may be accessed through the Investor Relations section of CMTG's website at www.clarosmortgage.com. The earnings presentation accompanying this release and containing supplemental information about the Company's financial results may also be accessed through this website in advance of the call.

For those unable to listen to the live broadcast, a webcast replay will be available on CMTG's website or by dialing 1-866-813-9403, access code 230645, beginning approximately two hours after the event.

About Claros Mortgage Trust, Inc.CMTG is a real estate investment trust that is focused primarily on originating senior and subordinate loans on transitional commercial real estate assets located in major markets across the U.S. CMTG is externally managed and advised by Claros REIT Management LP, an affiliate of Mack Real Estate Credit Strategies, L.P. Additional information can be found on the Company's website at www.clarosmortgage.com.

Forward-Looking StatementsCertain statements contained in this press release may be considered 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. CMTG intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements can generally be identified by CMTG's use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," "seek," "objective," "goal," "strategy," "plan," "focus," "priority," "should," "could," "potential," "possible," "look forward," "optimistic," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of CMTG's performance in future periods. Except as required by law, CMTG does not undertake any obligation to update or revise any forward-looking statements contained in this release.

Definitions Distributable Earnings and Net Distributable Earnings:Distributable Earnings and Net Distributable Earnings are non-GAAP measures used to evaluate the Company's performance excluding the effects of certain transactions, non-cash items and GAAP adjustments, as determined by our Manager, which the Company believes are not necessarily indicative of the Company's current performance and operations. Distributable Earnings is a non-GAAP measure, which the Company defines as net income as determined in accordance with GAAP, excluding (i) non-cash equity compensation expense (income), (ii) incentive fees, (iii) real estate depreciation and amortization, (iv) any unrealized gains or losses from mark-to-market valuation changes (other than permanent impairments) that are included in net income for the applicable period, (v) one-time events pursuant to changes in GAAP and (vi) certain non-cash items, which in the judgment of the Company's Manager, should not be included in Distributable Earnings. Net Distributable Earnings is Distributable Earnings less incentive fees due to the Company's Manager. Distributable Earnings is substantially the same as Core Earnings, as defined in the Management Agreement, for the periods presented.

The Company believes that Distributable Earnings and Net Distributable Earnings provide meaningful information to consider in addition to the Company's net income and cash flows from operating activities determined in accordance with GAAP. The Company believes the Distributable Earnings and Net Distributable Earnings measures help it to evaluate the Company's performance excluding the effects of certain transactions, non-cash items and GAAP adjustments, as determined by the Company's Manager, that it believes are not necessarily indicative of the Company's current performance and operations. Distributable Earnings and Net Distributable Earnings do not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of the Company's cash flows from operating activities, a measure of the Company's liquidity or an indication of funds available for the Company's cash needs. In addition, the Company's methodology for calculating Distributable Earnings and Net Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures and, accordingly, the Company's reported Distributable Earnings and Net Distributable Earnings may not be comparable to the Distributable Earnings and Net Distributable Earnings reported by other companies.

In order to maintain the Company's status as a REIT, the Company is required to distribute at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, as dividends. Net Distributable Earnings, and other similar measures, have historically been a useful indicator of mortgage REITs' ability to cover their dividends, and to mortgage REITs themselves in determining the amount of any dividends. Net Distributable Earnings is a key factor considered by the board of directors in setting the dividend and as such the Company believes Net Distributable Earnings is useful to investors. Accordingly, the Company believes providing Net Distributable Earnings on a supplemental basis to the Company's net income as determined in accordance with GAAP is helpful to its stockholders in assessing the overall performance of its business.

While Distributable Earnings excludes the impact of the Company's unrealized current provision for credit losses, loan losses are charged off and recognized through Distributable Earnings when deemed non-recoverable. Non-recoverability is determined (i) upon the resolution of a loan (i.e. when the loan is repaid, fully or partially, or in the case of foreclosure, when the underlying asset is sold), or (ii) with respect to any amount due under any loan, when such amount is determined to be non-collectible.

Claros Mortgage Trust, Inc.Consolidated Balance Sheets (Unaudited)(Amounts in thousands, except share and per share data)

September 30, December 31, 2021 2020

Assets

Cash and cash equivalents $ 235,596 $ 427,512

Restricted cash 24,236 3,462

Loans receivable held-for-investment 5,983,559 6,131,825

Less: allowance for loan losses (59,213) (6,000)

Loans receivable held-for-investment, net 5,924,346 6,125,825

Interests in loans receivable held-for-investment, 436,721 338,270net

Real estate owned, net 408,827 -

Accrued interest receivable, net 30,259 35,668

Deferred financing costs 18,398 8,030

Loan principal payments held by servicer 252,946 12,980

Other assets 20,944 796

Total assets $ 7,352,273 $ 6,952,543

Liabilities and Stockholders' Equity

Repurchase agreements $ 3,094,832 $ 2,685,203

Loan participations sold, net 524,518 516,484

Notes payable, net 47,921 303,515

Secured term loan, net 742,778 746,095

Debt related to real estate owned, net 289,784 -

Accounts payable and accrued expenses 32,740 2,481

Interest payable 8,673 10,180

Other liabilities 2,626 1,967

Dividends payable - common stock, redeemablecommon stock and 50,000 50,000

vested restricted stock units

Dividends payable - unvested restricted stock 3,192 3,480units

Dividends payable - preferred stock 4 -

Deposits held 2,105 716

Management fee payable - affiliate 9,789 9,849

Incentive fee payable - affiliate - 187

Total liabilities 4,808,962 4,330,157

Commitments and contingencies - Note 13

Redeemable common stock, $0.01 par value,7,306,984 shares issued 137,234 141,356and outstanding at September 30, 2021 and December31, 2020

Stockholders' Equity

Preferred stock, par value $0.01 per share andliquidation preference

$1,000 per share, 10,000,000 shares authorized and125 shares issued 125 125

and outstanding, at September 30, 2021 andDecember 31, 2020,

respectively

Common stock, $0.01 par value, 500,000,000 sharesauthorized,

126,126,503 and 125,541,736 shares issued and 1,261 1,255outstanding at

September 30, 2021 and December 31, 2020,respectively

Additional paid-in capital 2,485,534 2,491,836

Dividends declared (715,317) (573,677)

Retained earnings 597,331 526,205

Total Claros Mortgage Trust, Inc. equity 2,368,934 2,445,744

Non-controlling interests 37,143 35,286

Total stockholders' equity 2,406,077 2,481,030

Total liabilities, redeemable common stock and $ 7,352,273 $ 6,952,543stockholders' equity

Claros Mortgage Trust, Inc. Consolidated Statements of Operations (Unaudited)(Amounts in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Revenue

Interest and related income

$ 103,876

$ 105,984

$ 314,326

$ 340,786

Less: interest and related expense

48,070

39,740

151,188

129,081

Net interest income

55,806

66,244

163,138

211,705

Revenue from real estate owned

8,550

-

15,620

-

Total revenue

64,356

66,244

178,758

211,705

Expenses

Management fees - affiliate

9,789

9,844

29,152

29,111

Incentive fees - affiliate

-

1,141

-

7,579

Equity compensation

(186)

2,451

(376)

7,354

General and administrative expenses

1,330

1,169

5,393

4,162

Expenses from real estate owned

9,888

-

21,912

-

Total expenses

20,821

14,605

56,081

48,206

Realized loss on sale of investments

-

(202)

-

(202)

Gain on foreclosure of real estate owned

-

-

1,430

-

Other income

-

-

5,855

-

Reversal of current expected credit loss

reserve

9,306

-

17,413

-

Income before income taxes

52,841

51,437

147,375

163,297

Income tax benefit

-

-

6,025

-

Net income

$ 52,841

$ 51,437

$ 153,400

$ 163,297

Net (loss) income attributable to

non-controlling interests

$ (40)

$ 1,414

$ (118)

$ 4,113

Net income attributable to preferred stock

$ 4

$ 8

$ 12

$ 24

Net income attributable to common stock and

redeemable common stock

$ 52,877

$ 50,015

$ 153,506

$ 159,160

Net income per share of common stock and

redeemable common stock

Basic

$ 0.40

$ 0.37

$ 1.15

$ 1.20

Diluted

$ 0.40

$ 0.37

$ 1.15

$ 1.20

Weighted-average shares of common stock

and redeemable common stock outstanding

Basic

133,433,487

133,726,218

133,491,390

132,729,868

Diluted

133,433,487

133,726,218

133,491,390

132,729,868

Claros Mortgage Trust, Inc.Consolidated Statements of Operations (Unaudited)(Amounts in thousands, except share and per share data)

Three Months Ended Nine Months Ended

September September September September 30, 2021 30, 2020 30, 2021 30, 2020

Revenue

Interest and related income $ 103,876 $ 105,984 $ 314,326 $ 340,786

Less: interest and related 48,070 39,740 151,188 129,081expense

Net interest income 55,806 66,244 163,138 211,705

Revenue from real estate 8,550 - 15,620 -owned

Total revenue 64,356 66,244 178,758 211,705

Expenses

Management fees - affiliate 9,789 9,844 29,152 29,111

Incentive fees - affiliate - 1,141 - 7,579

Equity compensation (186) 2,451 (376) 7,354

General and administrative 1,330 1,169 5,393 4,162expenses

Expenses from real estate 9,888 - 21,912 -owned

Total expenses 20,821 14,605 56,081 48,206

Realized loss on sale of - (202) - (202)investments

Gain on foreclosure of real - - 1,430 -estate owned

Other income - - 5,855 -

Reversal of currentexpected credit loss 9,306 - 17,413 -

reserve

Income before income taxes 52,841 51,437 147,375 163,297

Income tax benefit - - 6,025 -

Net income $ 52,841 $ 51,437 $ 153,400 $ 163,297

Net (loss) incomeattributable to $ (40) $ 1,414 $ (118) $ 4,113

non-controlling interests

Net income attributable to $ 4 $ 8 $ 12 $ 24preferred stock

Net income attributable tocommon stock and $ 52,877 $ 50,015 $ 153,506 $ 159,160

redeemable common stock

Net income per share ofcommon stock and

redeemable common stock

Basic $ 0.40 $ 0.37 $ 1.15 $ 1.20

Diluted $ 0.40 $ 0.37 $ 1.15 $ 1.20

Weighted-average shares ofcommon stock

and redeemable common stockoutstanding

Basic 133,433,487 133,726,218 133,491,390 132,729,868

Diluted 133,433,487 133,726,218 133,491,390 132,729,868

Claros Mortgage Trust, Inc. Reconciliation of Distributable Earnings to Net Income Attributable to Common Stockholders(Amounts in thousands, except share and per share data)

Three Months Ended

September 30, 2021

June 30, 2021

Net income attributable to common stock:

$ 52,877

$ 42,021

Adjustments:

Noncash equity compensation expense

(186)

1,452

Current expected credit loss reserve

(9,306)

(7,922)

Income tax benefit relating to deferred tax asset

-

(1,846)

Depreciation expense

1,940

1,940

Distributable Earnings(1)

$ 45,325

$ 35,645

Less: incentive fee adjustments

$ -

$ -

Net Distributable Earnings(1)

$ 43,325

$ 35,645

Weighted average shares of common stock outstanding, basic and diluted(2)

133,433,487

133,433,487

Basic and diluted earnings per share(2)

$ 0.40

$ 0.31

Distributable Earnings per share, basic and diluted

$ 0.34

$ 0.27

Net Distributable Earnings per share, basic and diluted

$ 0.34

$ 0.27

* Distributable Earnings and Net Distributable Earnings are non-GAAP measures used to evaluate our performance excluding the effects of certain transactions, non-cash items and GAAP adjustments, as determined by our Manager, that we believe are not necessarily indicative of our current performance and operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Key Financial Measures and Indicators-Distributable Earnings and Net Distributable Earnings" in our prospectus comprising a part of our Registration Statement on Form S-11 (File No. 333-260140), which is accessible on the SEC's website at www.sec.gov, for definitions and a discussion of Distributable Earnings and Net Distributable Earnings and a reconciliation to the nearest GAAP equivalent for certain historical periods. * Excludes 1,097,293 shares of common stock underlying unvested RSUs that vested in full in November 2021 in connection with our initial public offering. View source version on businesswire.com: https://www.businesswire.com/news/home/20211213005857/en/

CONTACT: Investor Relations: Claros Mortgage Trust, Inc. Anh Huynh 212-484-0090 cmtgIR@mackregroup.com