Thank you, operator. Good afternoon, everyone, and thank you for joining us today.

With me on the call today are Scott Rowland, our Chief Investment Officer; Tracy Johnston, our Chief Financial Officer; and Geoff McTait, who leads the Canadian originations and global syndications business. The second quarter reflected steady execution against our key priorities.

We maintained stable distributable income, delivered strong origination activity, and continued to reduce our stage loan exposure. During the quarter, we advanced approximately $154 million, reflecting positive market conditions.

Net investment income for the quarter was solid at $24.9 million, and we generated distributable income of $14.6 million, or 18-- 18 cents per share, resulting in a payout ratio of 97.7%. We believe our current earnings profile continues to support the monthly dividend while providing opportunities for further improvement as capital tied up in staged positions continues to be redeployed into performing investments.

At the same time, we continue to execute on several important asset management initiatives and made meaningful progress in reducing our stage loan exposure through a combination of resolutions, sale processes, and other asset-specific strategies. Overall, we're very encouraged by the underlying activity levels in the business and the stability of distributable income and the progress we're making against our key priorities for 2026.

With that, I'll turn the call over to Scott to walk through the portfolio in more detail. Scott?

Thanks, Blair, and good afternoon, everyone. I'll spend a few minutes reviewing portfolio composition and performance, as well as asset management activity related to stage loans, and then hand things over to Geoff to discuss originations trends and the lending environment.

At a high level, the portfolio remains well-aligned with our longstanding investment strategy and risk framework. At quarter end, just over 81% of the portfolio was invested in cash flowing properties, and multi-residential assets represented approximately 60% of investments.

The emphasis on income-producing real estate has been a core element of our strategy through multiple market cycles and remains unchanged today. At quarter end, first mortgages represented approximately 94% of investments.

The weighted average loan-to-value was 68.3%. The weighted average interest rate for the quarter was 7.6%, compared with 7.7% in Q1 and 8.6% a year ago.

The decline primarily reflects lower benchmark rates and the repayment of certain higher-rate investments. Importantly, approximately 90% of the portfolio remains invested in floating-rate loans with contractual floors, and substantially all of those loans are currently operating at their floor rates.

This continues to provide meaningful support to portfolio yields despite the lower-rate environment. While lower benchmark rates have reduced portfolio yields over the past year, the earnings impact has been moderated by increased syndication activity, healthy fee generation, and lower borrowing costs.

Together, these factors continue to support the portfolio's overall earnings profile and distributable income generation. The portfolio remains well-diversified by geography and asset type.

97% of invested capital remains concentrated in Ontario, BC, Quebec, and Alberta, with a focus on major urban markets that benefit from stronger liquidity. As Blair mentioned, we continued to make meaningful progress on our remaining stage 2 and stage 3 positions during the quarter.

Since year end, stage 3 balances have declined by more than 51%, reflecting the successful execution of multiple asset-specific resolution strategies and completed exits. During the quarter, we resolved two Calgary stage 3 positions through receiver-led sales processes and continued advancing several of our larger remaining files.

In terms of expected credit losses during the quarter, a significant portion was related to the Vancouver retail portfolio and reflects the carrying costs associated with positioning the asset for sale and advancing the exit strategy. We also updated valuation assumptions on certain Victoria assets to reflect current transaction activity and evolving sale processes.

While these adjustments impacted earnings in the quarter, they are occurring alongside continued progress on the underlying exit strategies. Although additional work remains, we believe we are now in the later stages of resolving many of the larger staged positions that have weighed on the portfolio in recent years.

As these assets are resolved and capital is recycled into new mortgage investments, we expect an increasing proportion of the portfolio to contribute to earnings and distributable income generation. At this point, I'll turn things over to Geoff.

Thanks, Scott, and good afternoon, everyone. Commercial real estate activity continued to improve through the second quarter, supported by increasing transaction volumes, improving financing market stability, and healthy borrower demand across our target markets.

We advanced approximately $154 million during the quarter, including 11 new mortgage investments and additional advances on existing relationships. Originations remained concentrated within our core lending categories, particularly multi-residential opportunities with attractive risk-adjusted returns.

Year-to-date, we have advanced approximately $315 million through 24 new investments, representing a meaningful increase over the same period last year. Repayments totaled approximately $250 million during the quarter.

While elevated, this activity was consistent with our expectations and reflects the healthy turnover characteristics of a transitional lending portfolio. More importantly, these repayments provide meaningful capacity to recycle capital into new opportunities while generating fee income that supports distributable income.

Additionally, I would note that the quarter-end portfolio balance is a point-in-time measure that excludes an additional $100 million net that was subsequently deployed in early July. This further highlights the robust origination activity through the first half, with a resulting current portfolio balance of approximately $1.24 billion.

Syndication activity also remained strong during the quarter, continuing to support balance sheet capacity while contributing to earnings and distributable income. In summary, we continue to see an active flow of opportunities across our core markets and believe conditions remain supportive of robust origination activity through the balance of the year.

I'll now turn the call over to Tracy.

Thanks, Geoff, and good afternoon, everyone. Net investment income on financial assets measured at amortized cost totaled $24.9 million during Q2, essentially unchanged from both prior quarter and the comparative period.

Portfolio growth, increased fee generation, and lower funding costs largely offset the impact of lower benchmark interest rates. Distributable income totaled $14.6 million, or 18 cents per share, compared to $14.5 million in the first quarter.

The payout ratio remained within our targeted range of 97.7%. Net income and comprehensive income totaled $7.8 million for the quarter, compared to $12.4 million in the prior period.

As Scott discussed, the increase in expected credit losses reflects updated assumptions related to certain stage 2 and stage 3 positions and capital advanced as part of ongoing resolution strategies. Importantly, net income before expected credit losses remained stable at $14.5 million, or 18 cents per share, compared with the same, or 17 cents per share, in Q2 of last year.

We believe this provides a useful view of the underlying earning capacity of the portfolio as stage loan resolutions continue to progress. This slide highlights the stability of our distributable income over time despite fluctuations in IFRS earnings resulting from the timing of credit provisions and valuation adjustments.

As we've consistently said, distributable income remains the best measure of the recurring cash generating ability of the portfolio and its capacity to support the monthly dividend. Over the medium term, quarterly distributable income per share has generally ranged between 17 cents and 21 cents, averaging approximately 19 cents per share.

The consistency of our distributable income profile reflects both the underlying earning power of the portfolio and the benefits of active capital deployment across the business. Looking quickly at the balance sheet, net mortgage investments totaled approximately $1.14 billion at quarter end, an increase of approximately $30 million year-over-year.

Credit utilization increased during the quarter, reflecting the pace of origination activity. At the same time, the company continued to generate liquidity through repayments, syndication activity, and staged asset resolutions, supporting the ongoing recycling of capital into new lending opportunities.

With an active pipeline and several resolution initiatives continuing to progress, we believe we are well-positioned to redeploy capital into opportunities that meet our risk and return objectives. With that, I'll turn the call back to Scott for closing remarks.

Thanks, Tracy. As we enter the second half of 2026, our focus remains on executing against the same priorities that drove results in the first half of the year: disciplined originations, stage loan resolutions, and redeploying capital into investments that enhance earnings generation.

The progress achieved on stage loan resolutions over the past several quarters is creating an increasingly attractive opportunity set for capital redeployment. With more than $314 million of originations completed year-to-date and an active near-term pipeline, we continue to see opportunities to put recovered capital back to work across our core lending categories.

That concludes our prepared remarks. We'll now open the call to questions.

Hi there. Can you just talk about, obviously multi-unit is your kind of bread and butter, but can you just talk about the environment for some of the other segments?

The market, as you mentioned, was stabilized, but I'm just curious which ones are leading and which ones are trailing, if you don't mind. No,

listen, it's Geoff. Hi.

Happy to answer that question. Obviously, the multi-res space continues to kind of be a primary focus of ours as a mix, obviously, and given the historical stability in this market, irrespective of some softness in the broader residential markets over the last period of time.

We do continue to see that as a primary focus for sure. Additionally, we are starting to see some broader activity.

Again, somewhat of a broader indication of improving transactional and market activity outside of multi-res, and industrial would kind of be the second primary class that I think we've been speaking about over the last number of quarters as kind of the other primary food group for us at this point in time. Listen, of late, retail continues to be an opportunity that's out there.

We're looking at opportunities. They get bid pretty competitively, so, again, it's one-offs on those, and we don't expect to do a ton of that business, but we are seeing some increased trading activity in the retail space.

Then we are also starting to see more office opportunities. Again, I think we're looking at those cautiously out of the gate, for sure.

The frequency of office transactions and the opportunities to consider financing them has been more prevalent certainly over the last quarter than we've seen in the months or years prior to that point. That's again, I think a broader indication of where transaction activity is occurring.

We're seeing activity in the student residence space, in the retirement home space, some lesser activity, but a product we like in the self-storage space and the manufactured housing space. Again, these are smaller one-off opportunities, but again, pretty historically stable.

Manufactured housing, in particular, much more aligned with residential generally. Again, it is a broadening scope of asset classes that we're starting to see more so than has been the case in prior quarters or the last year or two.

Just my second question would be, in terms of repayments, I know there's seasonality. Just for modeling purposes, is this tend to be the high-water mark, Q2?

I think it's in line with what we would typically expect, and I don't know if it's necessarily a high-water mark in Q2 per se. I think it is generally fairly consistent throughout the year.

Again, it'll ebb and flow a little bit in and around that range. I don't think it's an overly seasonal thing.

I think originations activity tends to be more seasonal than repayment activity. Frankly, the first half, we've been very, very pleased with the levels of activities.

I'd say it's been higher than would seasonally be the case for the first half. The second half, generally for us is where we do the majority of our business, and we continue to expect that to be the case.

Repayments, I think, is a little bit more consistent throughout the year.

I'll add to that, it's Scott. Often actually we see Q4 as a major repayment.

This was a little high for Q2, but exactly to Jeff's point, for us, right, repayments sort of create the capacity for loans. Sometimes it is a little random, some projects get completed sooner, or there's a moment in the market that borrowers feel they can refinance.

We normally get sort of 60 days heads-up of that's happening, right, and that helps us create the runway for future loans. As an example, Q2, there were significant repayments, but I can tell you in July we had significant fundings, right?

Sometimes it's just sort of one falls after the other.

That's all I had. Thanks.

Hey, this is Gabriel from Bullpen. Great to see that syndication pick up.

Obviously, it's a higher return for Timber. I'm just wondering, can you just talk about how the team's thinking about this part of the book a bit?

Sorry, who's speaking? We couldn't quite hear you there.

Sorry, can you hear me now?

Oh, hey, Gabriel. Sorry, couldn't hear you quite there.

Hi, would you mind just repeating that question?

Sorry about that. Hopefully, this is better.

That is better. Thanks.

Perfect. I was thinking about the syndication.

It's picked up in the quarter. Obviously, higher return.

I'm just wondering how you're thinking about this part of the book.

Listen, I think syndications for us, we utilize it for a handful of reasons, right? I think it's a combination of managing exposure on a given deal.

Secondarily, we utilize it to create incremental originations capacity, right? Obviously, as we syndicate an A-note and hold a B-note, that capital can be deployed into another opportunity.

Then obviously, it's a yield enhancement strategy as well, right? Our ability to manage yield and drive optimal yield through syndication, it's another valuable tool from that standpoint.

Generally, syndication, we tend to syndicate larger transactions, and at the same time, I think of late, and certainly as we think about ways to drive incremental yield into the book, we are looking at opportunities to syndicate smaller loans than we might typically syndicate in order to drive incremental yield, and again, incremental originations capacity. Third-party institutional syndication partners, the demand is substantial.

I'd say it's probably since Q3, Q4 of last year where demand really started to increase, and it's remained at elevated levels. We have lots of interest from our existing partners.

We have new partners reaching out looking to work with us and partner with us on transactions. It does give us meaningful incremental capacity to continue to drive originations where the flow supports it, which has been the case for the last couple quarters.

Gabriel, it's Blair. I'll just maybe clarify one point.

From a yield enhancement perspective, one of the ways it's helpful is I think you're getting at is that the attachment point for the A-note can be higher, the B-note, the return on that B-note, the equity yield on that is higher than it might be if we use the credit facility. We're only going to do that when the credit facility is effectively fully utilized, when you see a larger syndication position on our balance sheet, it's certainly a leading indicator of things going well.

All

right. Then your originations are strong.

We can see that. I'm just wondering how you're thinking about this back half and then also, I guess the credit quality as well, right?

These recently originated loans, how they're comparing versus the historical averages.

The back half we're expecting is going to play out as generally speaking it does, being outweighted relative to the first half. Pipeline activity has remained strong.

Again, since the end of the quarter, we've continued to close on significant transactions and have a really strong pipeline through August and September at this point. Again, we continue to originate, you're a month, two months, three months out, depending on the specific transaction.

We're feeling very optimistic about the balance of the year and have a current pipeline to support that. In general, we feel very good about you call it the vintage of loans that we've been originating over the past handful of years, and it continues to be, again, in a market where transaction activity is increasing, that's partly driven by the buyers and the sellers being able to sort of meet on pricing.

Obviously pricing has softened such that we're lending into positions at lower bases. We're feeling good about whatever strategic plan might relate to that particular asset and the probability for us to successfully exit and participate in the value creation that occurs.

It's a good question, Gabriel. Understandably, people are interested to hear how we're progressing with the stage loans.

If you take that whatever, $200 million-ish and put that aside and talk about the other billion-one, that part of the portfolio is in very good shape. On an absolute basis and relative to some of those that we compete with.

It's important to kind of point that out as well. All right.

It just seems like the business is going well and things are on track. Maybe I'll just touch on one more, just on continuing on this origination line, and then I'll just wrap it up with that, which is, are you seeing any indirect origination benefits now that you've had the CMHC activity at TMSI for a while now?

I wonder if you could touch on that. No,

listen, absolutely. I think the CMHC business has introduced us to absolutely a new subset of borrowers that we didn't necessarily have prior relationships with.

Borrowers who are primarily CMHC borrowers, they tend to obviously deal with CMHC lenders, and when they have other needs, they tend to go back to that primary lender for those other products that they need. Now that we do have the CMHC product, it is again initiating conversations and resulting in new deal flow from those groups, obviously from a CMHC standpoint.

To your question, for the interim facilities that fundamentally they also do need, again, whether it's the project isn't quite ready to go to CMHC, or any combination of interim potential needs, we've had conversations with them about CMHC product, and now they're having conversations with us about the other products that we offer. There have been indirect benefits from that program for the benefit of TF, as was part of what was intended here in launching that program.

Perfect. Appreciate.

Thank you very much.

Hi. Can you hear me now?

Hey, Graham.

Yeah.

Great. Maybe could just start with the GTA improved land mortgage that was moved to fair value profit loss.

Can you just explain I guess why that one moves to fair value through profit and loss and doesn't sit in your mortgage receivable portfolio?

Sure, it's Tracy. That one does have a bit of an equity component at the end in terms of structuring that deal and ultimate sales.

Because of that, it moves into fair value through profit and loss. Only deals that are solely payments of principal and interest remain within our amortized cost book, and anytime there's any sort of equity characteristic to the deals, they move to fair value through profit and loss.

That makes sense. You made some good progress on stage 3 mortgages this quarter.

There's still about 20% of your portfolio in stage 2 and 3. Should we expect PCLs to remain elevated over the near term as you sort of work to bring that stage 2, stage 3 mix down back towards that sort of historical 7% to 10% range?

It's Blair, Graham. Hi.

As we talked about yesterday, we have visibility into the resolution of, frankly, all of them that are remaining. There will always be a few that cycle through, as we've talked about before, and that should be kind of the baseline at that 7% and 9%, or whatever the number may be in that neighborhood.

For the other, call it 12%, yeah, we certainly expect those to continue to be resolved, and stand kind of behind our guidance that the expectation is most, if not all, will have much better visibility to resolution by the end of the year or be resolved. We're looking at this being measured in quarters, obviously not years, to kind of be back in a position to be talking about kind of growth rather than stage loans.

Okay. Your message that you feel comfortable with evaluations where they're currently marked.

There's no

Absolutely. Today, of course.

If we're not comfortable, then we wouldn't be carrying them there. As we've talked about before, they're all a little bit different.

Sometimes it's a sponsor issue, sometimes it's an asset issue. Sometimes it's a market issue kind of at a higher level.

We continue to focus on full recoveries. In some circumstances, as we've talked about in the past with specific examples, the math kind of tells you that a bird in hand is sometimes better than two in the bush if you're going to be able to turn around and redeploy whatever that is quickly.

In yield, generate a 12% equity yield on that. We continue to focus on full recoveries.

Will we get full recoveries? We'll see, but they're going to be resolved one way or the other soon.

Fair. I thought that was an encouraging data point.

You said the portfolio is back up to $1.24 billion as of July. It looked like your leverage was 48% as of the end of Q2.

What's the implied leverage in the business that's sort of sitting behind that $1.24 sort of net portfolio today?

It's similar. It carries again just as the book has grown and, on a pro rata basis, the leverage increases.

We're still hovering around that mark. Then obviously that 1.24 is a net number, but we have the syndication ability as well, right, to continue making that turn and growing the portfolio that way.

We're not going to move off that leverage point.

Okay. Then my last question.

Just the rental income was $1.8 million in the quarter. It was, I think $1 million last quarter.

What's a reasonable run rate for that line?

That would be more of one-time items that are going through there. We had an investment in condos that are closing, and it's been a great investment.

There'll be a little bit more, but not the same run rate.

Okay.

Will be replaced, obviously, when that capital is redeployed

into

mortgages, of course.

Right. Okay.

That's it for me. Thank you.

Thanks, Graham.

Can you hear me?

Yes.

Okay. Sorry, had some mic difficulties.

Just one quick one, actually, around the lender fees on new and renewed mortgages. It seems to be lower than what we've seen in years past.

Consistent with recent quarters, but just lower than years past, I just wonder if you can give us a little more guidance or color into that result and what it looks like going forward on lender fees.

I think you should continue to expect it to continue in the range that we've been reporting this year.

Obviously, it ties in with originations, right? The fees as a percentage of principal advanced are pretty consistent, so, as Geoff said, if we're going to do whatever the number is, are we going to originate more than last year?

Same as last year? About the same, right?

Was there any No,

I might be a little closer to it. Hey, it's Scott.

Actually, I agree with you, it was a little lower in Q2, but that comes back to that timing of the repayments and the new loans.

We had some loans in June that slipped to early July, Jaeme, Q3 would be a little higher than normal, I would say. I would say overall for the full year, I'm expecting fees to be higher than last year's.

I see what you're looking at, though, that Q2 did come in a little low, and that we did have about I want to say it's about $80 million worth of deals that flipped into July, where normally Q3 is a little lower for us, Q3 is going to be a little higher and Q2 was a little lower. That's a fair observation.

Thank you.

Great. Thank you.

Thanks, everyone, for joining us today. As usual, look forward to speaking to you again in about 90 days.

Of course, if you have any questions in the interim, please do reach out. We're always happy to chat.

Have a good afternoon.