Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2020 Earnings Presentation
26 slides from Kkr Real Estate Finance Trust's earnings presentation, Feb 17, 2021
Slide 1: Fourth Quarter and Full Year 2020 Supplemental Information
KKR Real Estate Finance Trust Inc. Fourth Quarter and Full Year 2020 Supplemental Information February 16, 2021
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: KKR Real Estate Finance Trust Inc. Overview
KKR Real Estate Finance Trust Inc. Overview Best In Class Conservative Fully Integrated with KKR Portfolio Balance Sheet $5.0 Billion $6.1 Billion 36% Investment Portfolio Financing Capacity KKR Ownership in KREF 98.5% 81% 83% $252 Billion $20 Billion Senior Loans Multifamily & Office Fully Non-Mark
Slide 4: Fourth Quarter and Full Year 2020 Highlights
Fourth Quarter and Full Year 2020 Highlights • 4Q Net income(1) of $0.52 per diluted share and Distributable Earnings(2) of $0.48 per diluted share ($0.96 and $1.95, respectively, for full year 2020); 113% dividend coverage in 2020 • Book value(3) of $18.76 per share, compared to $18.73 per share in
Slide 5: 4Q'20 Financial Summary
4Q'20 Financial Summary Income Statement Balance Sheet ($ in Millions) 4Q20 ($ in Millions) 4Q20 Net Interest Income $34.4 Total Portfolio $4,905.4 Other Income 1.3 Term Credit Facilities 673.1 Operating Expenses and Other (10.3) Term Lending Agreement 900.0 Benefit From Credit Loss Provision 3.4 As
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income(1) and Distributable Earnings(2) Dividends and Book Value Per Share 1Q'20 2Q'20 3Q'20 4Q'20 ($ in Millions) 1Q'20 2Q'20 3Q'20 4Q'20 Net income: Dividend per share: ($35.2) $28.6 $31.4 $28.8 $0.43 $0.43 $0.43 $0.43 Distributable earnings: Dividend yield on book
Slide 7: Conservative Portfolio Construction
Conservative Portfolio Construction Investment Portfolio Evolution Property Type Evolution <3% <2% 100% 100% 86% 27% 81% 80% 80% 6% Senior Loan 62% Multifamily 60% 60% and Office Mezz/Other 97% 98% Loan Hospitality and 40% 40% 31% Retail Securities 67% 20% 20% 7% 9% 0% 0% At IPO 4Q'18 4Q'20 At IPO 4
Slide 8: Last Twelve Months Loan Activity
Last Twelve Months Loan Activity Portfolio Funding Activity – Outstanding Principal(1) ($ in Millions) Future Funding Obligations(2) $5,826 $5,769 $5,696 $5,497 $5,470 $593 $78 $54 $512 $52 $274 $621 $180 $498 $338 $462 $535 $472 $5,075 $5,233 $5,257 $5,035 $4,998 4Q'19 1Q'20 1Q'20 1Q'20 2Q'20 2Q'20
Slide 9: 4Q'20 Loan Originations – Select Case Studies
4Q’20 Loan Originations – Select Case Studies Investment Denver Multifamily Arlington Multifamily Oakland Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $40.0 million(1) $70.9 million(2) $159.7 million(3) Location Denver, CO Arlington, VA Oak
Slide 10: 4Q'20 Loan Originations – Select Case Studies
4Q’20 Loan Originations – Select Case Studies Investment Denver Industrial Austin Multifamily Washington D.C. Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $95.8 million $80.0 million $69.0 million Location Denver, CO Austin, TX Washing
Slide 11: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio Growth Investment Type(3) Interest Rate Type ($ in Millions) Mezz/Other Current Portfolio: 1.5% Fixed 0.1% $5.3 billion(1) Including net funding and repayment $5,075 $4,998 activity subsequent to quarter-end $4,134 Senior Floating $2,083 Loans 99.9%
Slide 12: Portfolio Credit Quality Remains Strong
Portfolio Credit Quality Remains Strong • Loan portfolio is 97.7% performing Loan-to-Value(1,2) Risk Rating Distribution(2) (% of total portfolio) (% of portfolio) Weighted Average Weighted Average 3Q'20 LTV(3): 66% 3Q'20 79% Risk Rating(3): 3.1 29% 27% 17% 18% 14% 5% 2% 0% 9% 1 2 3 4 5 0 2 27 6 2 0
Slide 13: Case Studies: Watch List Loans (Risk Rating 4 & 5)
Case Studies: Watch List Loans(1) (Risk Rating 4 & 5) Investment Portland Retail(2) New York Condo Ft. Lauderdale Hotel San Diego Multifamily New York Condo Brooklyn Hotel Queens Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior L
Slide 14: Financing Overview: 83% Non-Mark-To-Market
Financing Overview: 83% Non-Mark-To-Market • Diversified financing sources totaling $6.1 billion with $2.3 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios ($ in Millions) Maximum Outstanding Weighted Avg. Advance Non- Capacity Face Amount Coupon Rate MTM 3.6x Term Credit
Slide 15: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Counterparty Total / Weighted Average Drawn $446 $150 $77 $673 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal 5 Loans / $684 3 Loans / $221 2 Loans / $158 10 Loans / $1,063 Balance Final Stated Maturity(1) November 2023 Decem
Slide 16: Liquidity Overview
Liquidity Overview • In addition to the available sources of liquidity noted below, KREF had $274.7 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval, as of December 31, 2020. Sources of Available Liquidity ($ in Millions) $600.0 $500.0 $481.
Slide 17: Portfolio Benefits from Attractive in the Money LIBOR Floors
Portfolio Benefits from Attractive in the Money LIBOR Floors • 99.9% of the loan portfolio is indexed to one-month USD LIBOR • Portfolio benefits from current low rate environment given in-place LIBOR floors 85% of the portfolio is subject to a LIBOR floor of at least 1.0% Portfolio weighted ave
Slide 18: Appendix
Appendix 18
Slide 19: Portfolio Details
Portfolio Details Committed Investment Total Whole Current Net Future Max Remaining Loan Per Risk # Investment Location Property Type Principal Coupon(5)(6) LTV(5)(8) Date Loan(2) Principal Amount Equity (3) Funding(4) Term (Yrs)(5)(7) SF / Unit / Key Rating Amount(2) Senior Loans (1) 1 Senior Loan
Slide 20: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes vertical loa
Slide 21: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 3.3 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $1,971.3 $2,000 $1,500 $1,394.2 $1,000 $773.8 $500 $353.1 $208.7 $261.0 $0 2021 2022 2023 2024 2025 2026 (1) Excludes RECOP I CMBS B-Piece investmen
Slide 22: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2020 December 31, 2019 Assets Cash and cash equivalents $ 110,832 $ 67,619 Commercial mortgage loans, held-for-investment 4,844,534 4,931,042 Less: Allowance for credit losses (59,801) - Commercial mortgage loa
Slide 23: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, December 31, 2020 2020 2019 2020 2019 2018 Net Interest Income Interest income $ 63,201 $ 67,689 $ 72,417 $ 269,188 $ 274
Slide 24: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings • Commencing for all periods ending on or after December 31, 2020, we have elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental method of evaluating our operating performance.
Slide 25: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings (in thousands - except share and per share data) Year Ended December 31, 2020 December 31, 2019 December 31, 2018 Net Income (Loss) Attributable to Common Stockholders $ 53,553 $ 90,492 $ 87,293 Adjustments Non-cash equity compensation expe
Slide 26: Key Definitions
Key Definitions “Distributable Earnings": Commencing for all periods ending on or after December 31, 2020, the Company has elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental basis to KREF’s net income as determined in accordance with
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