Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q3 2018 Earnings Presentation
21 slides from Kkr Real Estate Finance Trust's earnings presentation, Nov 5, 2018
Slide 1: 3rd Quarter 2018 Supplemental Information
KKR Real Estate Finance Trust Inc. 3rd Quarter 2018 Supplemental Information November 5, 2018
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: 3Q'18 Key Highlights
3Q’18 Key Highlights • Net Income(1) of $20.8 million or $0.37 per share • Net Core Earnings(2) of $21.4 million or $0.38 per share Financials • Book value of $1,146.3 million or $19.76 per share in 3Q compared to $1,051.1 million or $19.82 per share in 2Q • Paid 3Q dividend of $0.43 per share, equa
Slide 4: 3Q'18 Financial Summary
3Q’18 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 3Q18 3Q18 Net Interest Income $28.6 Total Portfolio $3,382.6 Secured Debt Outstanding Face Other Income 1.6 1,543.6 Amount Operating Expenses and Other (9.4) Convertib
Slide 5: Recent Operating Performance
Recent Operating Performance • 3Q 2018 Net Income attributable to common stockholders of $20.8 million or $0.37 per share • Net Core Earnings(1) of $21.4 million or $0.38 per share up 18% QoQ when compared to 2Q Net Core Earnings excluding gain on sale of CMBS B-Piece investments • Book value of $1,
Slide 6: 3Q'18 Loan Originations
3Q’18 Loan Originations Summary of 3Q’18 Originations Outstanding Portfolio ($ in Millions) 4 • New loans originated $3,769 ($281) Future $386 Funding Obligations(2) $681mm • Committed to new loans $704 100% • Senior loans 100% • Floating-rate loans +14% $3,383 $2,960 73% • Weighted average LTV • We
Slide 7: YTD Loan Originations
YTD Loan Originations • YTD September 30, 2018, originations of $1.8 billion of floating-rate senior loans • Subsequent to quarter-end, originated two floating-rate senior loans totaling $122.0 million, bringing YTD originations to $1.9 billion • Current total portfolio of $3.5 billion(1), up $1.4 b
Slide 8: 3Q'18 Loan Originations – Case Studies
3Q’18 Loan Originations – Case Studies Investment Seattle Office Seattle Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $172 million $93 million Location Seattle, WA Seattle, WA Collateral 343k SF, 2 building, class-A office 18-story, class-A multifamily Loan Pur
Slide 9: 3Q'18 Loan Originations – Case Studies
3Q’18 Loan Originations – Case Studies Investment Atlanta & Tampa Multifamily Atlanta Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $341 million $75 million Location Atlanta, GA and Tampa, FL Atlanta, GA Collateral 2,640-unit, class-A- / B+ multifamily portfolio
Slide 10: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $3.4 billion as of September 30, 2018 • 62% increase in portfolio size since December 31, 2017 and 168% since June 30, 2017 (first quarter-end post IPO) • Office and multifamily loans comprise 87% of the portfolio Total Portfolio Growth
Slide 11: 3Q'18 KREF Portfolio by the Numbers
3Q’18 KREF Portfolio by the Numbers • $3.4 billion portfolio comprised of 37 investments • Portfolio weighted average LTV of 68%(1) Geography(2) Investment Type(3) CMBS Mezz 1% 1% Senior Loans 98% Interest Rate Type Fixed 2% Floating 98% Note: Map does not include Midwest Mezzanine portfolio ($5.5 m
Slide 12: 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 13: Financing Overview
Financing Overview • Total financing capacity of $2.9 billion(1) with $0.7 billion of undrawn capacity • Entered into $200.0 million asset specific financing facility providing matched-term financing on a non-mark to market basis • Upsized Wells Fargo Repurchase Facility from $750.0 million to $1.0
Slide 14: Interest Rate Sensitivity
Interest Rate Sensitivity • KREF benefits in a rising rate environment • 98% 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 $3.8 million or $0.07 per share over the next 12 months(1)(2) Net Interest Income S
Slide 15: Appendix
Appendix 15
Slide 16: Portfolio Details
Portfolio Details Committed Current Future Max Remaining # Investment Location Property Type Investment Date Net Equity(2) Coupon(4)(5) LTV(4)(7) ($ in millions) Principal Amount Principal Amount Funding(3) Term (Yrs)(4)(6) (1) Senior Loans 1 Senior Loan Queens, NY Office 5/9/2018 $350.0 $232.8 $128
Slide 17: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 4.0 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $1,800 $1,620.4 $1,600 $1,400 $1,200 $1,077.2 $1,000 $800 $600 $400 $320.4 $304.6 $200 $8.0 $18.2 $0 2019 2020 2021 2022 2023 2024 2025 2026 Fully extended
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) September 30, 2018 December 31, 2017 Assets Cash and cash equivalents $ 192,771 $ 103,120 Restricted cash - 400 Commercial mortgage loans, held-for-investment, net 3,261,878 1,888,510 Equity method investments, at fair valu
Slide 19: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2018 2018 2017 2018 2017 Net Interest Income Interest income $ 51,895 $ 40,363 $ 24,408 $ 123,952 $
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 3Q18 2Q18 1Q18 4Q17 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $20,821 $23,483 $23,280 $17,034 Adjustments Non-cash equity compensation expense 295 273 1,018 25 Incentive co
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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