Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q2 2019 Earnings Presentation
21 slides from Kkr Real Estate Finance Trust's earnings presentation, Aug 1, 2019
Slide 1: 2nd Quarter 2019 Supplemental Information
KKR Real Estate Finance Trust Inc. 2nd Quarter 2019 Supplemental Information August 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: 2Q'19 Key Highlights
2Q’19 Key Highlights • Net Income(1) of $17.4 million or $0.30 per share • Net Core Earnings(2) of $20.5 million or $0.36 per share Financials • Book value(3) of $1,122.0 million or $19.54 per share • Paid 2Q dividend of $0.43 per share, equating to an 8.6% annualized dividend yield(4) • Originated
Slide 4: 2Q'19 Financial Summary
2Q’19 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 2Q19 2Q19 Net Interest Income $25.9 Total Portfolio $4,951.9 Other Income (0.0) Secured Debt Outstanding Face Amount 1,059.2 Operating Expenses and Other (8.5) Term Lo
Slide 5: Recent Operating Performance
Recent Operating Performance • 2Q'19 Net Income attributable to common stockholders of $17.4 million or $0.30 per share • 2Q'19 Net Core Earnings(1) of $20.5 million or $0.36 per share, reflects the impact of lower net interest income due to the timing of deployment • Book value of $1,122.0 million
Slide 6: 2Q'19 Loan Activity
2Q’19 Loan Activity • June 30, 2019 total portfolio of $5.0 billion, up $2.0 billion or 67% since June 30, 2018 and $1.2 billion or 32% since March 31, 2019 • Reflects largest quarterly originations to date • Subsequent to quarter-end, originated one floating-rate senior loan totaling $170.0 million
Slide 7: 2Q'19 Loan Originations – Case Studies
2Q’19 Loan Originations – Case Studies Investment Philadelphia Office Brooklyn Multifamily Various Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $183 million $386 million $217 million Atlanta, GA Location Philadelphia, PA Brooklyn, NY B
Slide 8: 2Q'19 Loan Originations – Case Studies
2Q’19 Loan Originations – Case Studies Investment Chicago Multifamily Arlington Multifamily Chicago Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $186 million $339 million $340 million Location Chicago, IL Arlington, VA Chicago, IL Coll
Slide 9: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $5.0 billion as of June 30, 2019 • 67% increase in portfolio size YoY, increased 32% QoQ. Increased 292% since June 30, 2017 (first quarter-end post IPO). • Multifamily and office loans comprise 87% of the portfolio Total Portfolio Growt
Slide 10: 2Q'19 KREF Portfolio
2Q’19 KREF Portfolio • $5.0 billion portfolio comprised of 39 investments • Portfolio weighted average LTV of 66%(1) Geography(2) Investment Type(3) CMBS Mezz 1% <1% Senior Loans 99% Interest Rate Type Fixed 1% Floating 99% Other (<5%) Property Type(2) 12% Industrial MN NY Retail Condo 3% 5% 28% 3%
Slide 11: 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 12: Financing Overview: 73% Non-Mark-To-Market
Financing Overview: 73% Non-Mark-To-Market • Diversified financing sources totaling $5.4 billion(1) with $1.7 billion of undrawn capacity • Entered into a new $900.0 million non-mark-to-market Term Lending Agreement • Increased borrowing capacity on one of our Term Credit Facilities, Asset Specific
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity • 99% of the portfolio is indexed to one-month USD LIBOR • KREF benefits in a rising rate environment and rate floors provide protection in a declining rate environment • 92% of the loan portfolio is subject to a LIBOR floor of at least 0.50% Net Interest Income Sensitivity
Slide 14: Appendix
Appendix 14
Slide 15: Portfolio Details
Portfolio Details ($ in millions) Investment Committed Current Future Max Remaining # Investment Location Property Type Net Equity(2) Coupon(4)(5) LTV(4)(7) Date Principal Amount Principal Amount Funding(3) Term (Yrs)(4)(6) Senior Loans(1) 1 Senior Loan Brooklyn, NY Multifamily 5/22/2019 $386.0 $328
Slide 16: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes pari passu l
Slide 17: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 4.1 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,000 $1,914.5 $1,538.3 $1,500 $1,000 $612.1 $500 $283.1 $261.2 $291.2 $0.0 $5.5 $0 2019 2020 2021 2022 2023 2024 2025 2026 Fully extended maturity
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) June 30, 2019 December 31, 2018 Assets Cash and cash equivalents(1) $ 182,732 $ 86,531 Commercial mortgage loans, held-for-investment, net 4,800,213 4,001,820 Equity method investments, at fair value 37,070 30,734 Accrued i
Slide 19: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Six Months Ended June 30, 2019 March 31, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net Interest Income Interest income $ 62,944 $ 64,751 $ 40,363 $ 127,695 $ 72,057 Interest expense 37,089 34,8
Slide 20: Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings
Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings 2Q19 1Q19 2Q18 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $17,381 $24,705 $23,483 Adjustments Non-cash equity compensation expense 1,043 991 273 Incentive compensation to af
Slide 21: 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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