Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q1 2023 Earnings Presentation
24 slides from Kkr Real Estate Finance Trust's earnings presentation, Apr 25, 2023
Slide 1: First Quarter 2023 Supplemental Information
First Quarter 2023 Supplemental Information APRIL 24, 2023
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 KREF’s Manager Fully Best In Class Portfolio Conservative Balance Sheet Integrated with KKR $8.0 B $9.0 B 14% Investment Portfolio Financing Capacity KKR Ownership in KREF 100% 57% 76% $504 B $24 B (2) Senior Loans Multifamily & Fully Non-Mark-to-Market Gl
Slide 4: First Quarter 2023 Highlights
First Quarter 2023 Highlights • 1Q Net Loss(1) of ($0.45) per diluted share (includes a CECL provision of $60 million, or ($0.88) per diluted share) • 1Q Distributable Earnings(2) of $0.48 per diluted share Financials • Book Value per Common Share (“BVPS”) of $17.16 per share, compared to $18.00 per
Slide 5: 1Q'23 Financial Summary
1Q'23 Financial Summary Income Statement Balance Sheet ($ in Millions) 1Q'23 ($ in Millions) 1Q'23 (2) Net Interest Income $46.6 Total Portfolio $8,034.0 Other Income 4.6 Term Credit Facilities 1,528.7 Term Lending Agreements 1,536.6 Operating Expenses (15.8) Secured Term Loan 345.6 Provision for Cr
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income and Distributable Earnings Dividends and Book Value Per Share ($ in Millions) 1Q'22 4Q'22 1Q'23 1Q'22 4Q'22 1Q'23 Net income (loss)(1): Dividend per share: $29.8 $14.6 ($30.8) $0.43 $0.43 $0.43 Distributable earnings(2): Dividend yield on book value per share:
Slide 7: Last Twelve Months Loan Activity
Last Twelve Months Loan Activity Portfolio Funding Activity – Outstanding Principal(1) ($ in Millions) Future Funding Obligations(2) $9,300 $9,375 $9,460 $9,381 $8,703 $1,412 $1,649 $1,544 $1,347 $1,449 $444 $424 $25 $1,078 $225 $387 $204 $87 $209 $7,888 $7,888 $7,888 $7,726 $7,726 $7,726 $7,726 $7,
Slide 8: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio Growth Investment Type(2) Interest Rate Type ($ in Millions) 100% Floating $8,034 $7,254 Senior LIBOR $5,233 $5,330 Loans 36% SOFR 100% 64% $3,745 Property Type 1Q'19 1Q'20 1Q'21 1Q'22 1Q'23 (4) Other Hospitality (1) 5% Geography 5% (3) Life Science
Slide 9: Portfolio Credit Quality Overview
Portfolio Credit Quality Overview Collected 100% of interest payments due on loan portfolio Loan-to-Value(1)(2) Risk Rating Distribution (% of loan portfolio) (% of loan portfolio) Weighted Average Weighted Average 4Q'22 LTV(3): 66% 4Q'22 88% Risk Rating(3): 3.2 31% 24% 21% 20% 6% 6% 4% 0% 0% 1 2 3
Slide 10: Case Studies: Watch List Loans (Risk Rating 5)
Case Studies: Watch List Loans (Risk Rating 5) Investment Minneapolis Office Philadelphia Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date November 2017 April 2019 Collateral Two Class-A Office Buildings 4-Building, 711k RSF Office Portfolio totaling 1.1mm SF Loan
Slide 11: Case Studies: Watch List Loans (Risk Rating 4)
Case Studies: Watch List Loans (Risk Rating 4) West Hollywood Investment Mountain View Office Washington, D.C. Office Washington, D.C. Office Chicago Office Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Sen
Slide 12: Financing Overview: 76% Non-Mark-To-Market
Financing Overview: 76% Non-Mark-To-Market Diversified financing sources totaling $9.0 billion with $2.7 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios Maximum Outstanding Weighted Avg. Advance Non- ($ in Millions) Capacity Face Amount Coupon(1) Rate MTM (2) Term Credit
Slide 13: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Total or Counterparty Weighted Average Drawn $715 $574 $240 $1,529 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal 10 Loans / $974 11 Loans / $822 7 Loans / $422 28 Loans / $2,218 Balance Final Stated Maturity(1) September 202
Slide 14: Liquidity Overview
Liquidity Overview In addition to the available liquidity below, KREF had $100 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval as of March 31, 2023 Sources of Available Liquidity ($ in Millions) $1,000 $900 $28 $800 $700 $600 $610 $500 $864
Slide 15: Portfolio Positioned for Rate Environment
Portfolio Positioned for Rate Environment 100% floating-rate loan portfolio continues to benefit from a rising rate environment 64% indexed to Term SOFR and 36% to one-month LIBOR Annual Net Interest Income Per Share Sensitivity to Change in Market Rates One-month LIBOR = 4.86% ($ Impact Per Share)
Slide 16: Appendix
Appendix KREF
Slide 17: Portfolio Details
Portfolio Details ($ in Millions) Investment Total Whole Committed Current Net Max Remaining Loan Per Risk # Investment(1) Location Property Type Principal Principal Coupon(4)(5) LTV(4)(8) Date Loan(2) Equity(3) Term (Yrs)(4)(6) SF / Unit / Key(7) Rating Amount(2) Amount (9) Senior Loans 1 Senior Lo
Slide 18: Portfolio Details
Portfolio Details ($ in Millions) Investment Total Whole Committed Current Net Max Remaining Loan Per Risk # Investment(1) Location Property Type Principal Principal Coupon(4)(5) LTV(4)(8) Date Loan(2) Equity(3) Term (Yrs)(4)(6) SF / Unit / Key(7) Rating Amount(2) Amount (9) Senior Loans 51 Senior L
Slide 19: Portfolio Details
Portfolio Details (1) Our total portfolio represents the current principal amount on senior and mezzanine loans, net equity in RECOP I, which holds CMBS B-Piece investments, and net carrying value of our sole REO investment. Excludes one impaired mezzanine loan with an outstanding principal of $5.5
Slide 20: Fully Extended Loan Maturities
Fully Extended Loan Maturities Fully extended weighted average loan maturity of 3.2 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $3,500 $3,068 $2,979 $3,000 $2,500 $2,000 $1,500 $1,000 $845 $578 $500 $345 $103 $0 2023 2024 2025 2026 2027 2028 (1) Excludes CMBS B-Pieces held through an
Slide 21: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) March 31, 2023 December 31, 2022 Assets Cash and cash equivalents(1) $ 254,096 $ 239,791 Commercial real estate loans, held-for-investment 7,612,238 7,494,138 Less: Allowance for credit losses (167,360) (106,974) Commercial
Slide 22: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Net Interest Income Interest income $ 152,530 $ 143,508 $ 73,230 Interest expense 105,976 91,592 32,459 Total net ineterest income 46,554 51,916 40,77
Slide 23: Reconciliation of GAAP Net Income (Loss) to Distributable Earnings
Reconciliation of GAAP Net Income (Loss) to Distributable Earnings (in thousands - except share and per share data) Three Months Ended Per Diluted December 31, Per Diluted Per Diluted March 31, 2023 Share(1) 2022 Share(1) March 31, 2022 Share(1) Net Income (Loss) Attributable to Common Stockholders
Slide 24: 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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