Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q1 2019 Earnings Presentation
20 slides from Kkr Real Estate Finance Trust's earnings presentation, May 1, 2019
Slide 1: KKR Real Estate Finance Trust Inc. 1st Quarter 2019 Supplemental Information
KKR Real Estate Finance Trust Inc. 1st Quarter 2019 Supplemental Information May 1, 2019
Slide 2: Legal Disclosures
Legal Disclosures This presentation has been prepared for KKR Real Estate Finance Trust Inc. (NYSE: KREF) for the benefit of its stockholders. This presentation is solely for informational purposes in connection with evaluating the business, operations and financial results of KKR Real Estate Financ
Slide 3: 1Q'19 Key Highlights
1Q’19 Key Highlights • Net Income(1) of $24.7 million or $0.43 per share • Net Core Earnings(2) of $25.3 million or $0.44 per share Financials • Book value(3) of $1,128.7 million or $19.67 per share • Paid 1Q dividend of $0.43 per share, equating to an 8.5% annualized dividend yield(4) • Originated
Slide 4: 1Q'19 Financial Summary
1Q’19 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 1Q19 1Q19 Net Interest Income $29.9 Total Portfolio $3,745.4 Other Income 1.9 Secured Debt Outstanding Face Amount 936.4 Operating Expenses and Other (7.2) Convertible
Slide 5: Recent Operating Performance
Recent Operating Performance • 1Q'19 Net Income attributable to common stockholders of $24.7 million or $0.43 per share • 1Q'19 Net Core Earnings(1) of $25.3 million or $0.44 per share • Book value of $1,128.7 million or $19.67 per share in 1Q'19(3) compared to $1,132.3 million or $19.66 per share i
Slide 6: 1Q'19 Loan Activity
1Q’19 Loan Activity • March 31, 2019 total portfolio of $3.7 billion, up $1.3 billion or 51% since March 31, 2018 and down $388.1 million or 9% since December 31, 2018 • Higher level of repayments as portfolio seasons and our borrowers execute their business plans • Subsequent to quarter-end, origin
Slide 7: 1Q'19 Loan Originations – Case Studies
1Q’19 Loan Originations – Case Studies Investment Brooklyn Hospitality Boston Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $76 million $138 million Location Brooklyn, NY Boston, MA Collateral 196-key Full Service Hotel 390-unit Class-A Multifamily Loan Purpose
Slide 8: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $3.7 billion as of March 31, 2019 • 51% increase in portfolio size YoY, decreased 9% QoQ. Increased 196% since June 30, 2017 (first quarter-end post IPO). • Office and multifamily loans comprise 83% of the portfolio Total Portfolio Growt
Slide 9: 1Q'19 KREF Portfolio
1Q’19 KREF Portfolio • $3.7 billion portfolio comprised of 36 investments • Portfolio weighted average LTV of 68%(1) Geography(2) Investment Type(3) CMBS Mezz 1% <1% Senior Loans 99% Interest Rate Type Fixed 1% Floating 99% Property Type(2) Other (<5%) 16% Industrial Retail Condo 4% 4% NY 32% (Resid
Slide 10: Portfolio Credit Quality Remains Strong
Portfolio Credit Quality Remains Strong • KREF’s loan portfolio is 100% performing, with no defaulted or impaired loans • The securities portfolio is performing as expected Loan-to-Value(1,2) Risk Rating Distribution(2,4) (% of total portfolio) (% of portfolio) Weighted Average Weighted Average LTV(
Slide 11: Financing Overview
Financing Overview • Total financing capacity of $4.2 billion with $1.5 billion of undrawn capacity • Increased the borrowing capacity on the Corporate Revolving Credit Facility from $100.0 million to $140.0 million. Subsequent to quarter end, further increased the borrowing capacity in April 2019 t
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity • KREF benefits in a rising rate environment • 99% of the portfolio is indexed to one-month USD LIBOR • A 50 basis point increase in one-month USD LIBOR would increase net interest income by $3.9 million or $0.07 per share over the next 12 months(1) • 95% of the portfolio i
Slide 13: Appendix
Appendix 13
Slide 14: Portfolio Details
Portfolio Details ($ in millions) Investment Committed Current Net Future Max Remaining # Investment Location Property Type Coupon(4)(5) LTV(4)(7) Date Principal Amount Principal Amount Equity (2) Funding(3) Term (Yrs)(4)(6) Senior Loans(1) 1 Senior Loan Queens, NY Office 5/9/2018 $350.0 $277.1 $173
Slide 15: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio. (2) Net equity reflects
Slide 16: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 3.8 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,022.6 $2,000 $1,500 $1,000 $661.1 $500 $392.5 $331.3 $291.0 $0.0 $5.5 $0.0 $0 2019 2020 2021 2022 2023 2024 2025 2026 Fully extended maturity (1)
Slide 17: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) March 31, 2019 December 31, 2018 Assets Cash and cash equivalents (1) $ 228,440 $ 86,531 Commercial mortgage loans, held-for-investment, net 3,684,128 4,001,820 Equity method investments, at fair value 32,711 30,734 Accrued
Slide 18: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended March 31, 2019 December 31, 2018 March 31, 2018 Net Interest Income Interest income $ 64,751 $ 59,623 $ 31,694 Interest expense 34,842 32,192 10,690 Total net interest income 29,909 27,431 21,004 Ot
Slide 19: Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings
Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings 1Q19 4Q18 1Q18 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $24,705 $19,709 $23,280 Adjustments Non-cash equity compensation expense 991 387 1,018 Incentive compensation to af
Slide 20: Key Definitions
Key Definitions • "Core Earnings" and “Net Core Earnings”: Used by the Company to evaluate the Company's performance excluding the effects of certain transactions and GAAP adjustments the Company believes are not necessarily indicative of the current loan activity and operations. The Company also us
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