Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2018 Earnings Presentation
23 slides from Kkr Real Estate Finance Trust's earnings presentation, Feb 20, 2019
Slide 1: 4th Quarter 2018 Supplemental Information
KKR Real Estate Finance Trust Inc. 4th Quarter 2018 Supplemental Information February 20, 2019 NOTE: The accompanying presentation updates the presentation previously issued by the company on February 20, 2019, in order to correct the presentation of the company’s non-GAAP financial measures Net Cor
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: 4Q'18 Key Highlights
4Q’18 Key Highlights • Net Income(1) of $19.7 million or $0.34 per share • Net Core Earnings(2) of $22.2 million or $0.38 per share Financials • Book value(3) of $1,132.3 million or $19.66 per share • Paid 4Q dividend of $0.43 per share, equating to an 8.5% annualized dividend yield(4) • Originated
Slide 4: 4Q'18 Financial Summary
4Q’18 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 4Q18 4Q18 Net Interest Income $27.4 Total Portfolio $4,133.5 Secured Debt Outstanding Face Other Income 1.3 1,157.3 Amount Convertible Notes Face Amount 143.8 Operatin
Slide 5: Recent Operating Performance
Recent Operating Performance • 4Q 2018 Net Income attributable to common stockholders of $19.7 million or $0.34 per share; 2018 Net Income attributable to common stockholders of $87.3 million or $1.58 per share • 4Q Net Core Earnings(1) of $22.2 million or $0.38 per share; 2018 Net Core Earnings(1)
Slide 6: 4Q'18 Loan Originations
4Q’18 Loan Originations Summary of 4Q’18 Originations Outstanding Portfolio ($ in Millions) 7 • New loans originated $4,563 Future Funding ($111) $430 Obligations(2) $908mm • Committed to new loans $862 100% • Senior loans 100% • Floating-rate loans +22% $4,134 69% • Weighted average LTV $3,383 • We
Slide 7: 2018 Loan Originations
2018 Loan Originations • 2018 Originations of $2.7 billion of floating-rate senior loans • December 31, 2018 total portfolio of $4.1 billion, up $2.1 billion or 98% since December 31, 2017 • Subsequent to quarter-end, originated one floating-rate senior loan totaling $76.0 million Summary of 2018 Or
Slide 8: 4Q'18 Loan Originations – Case Studies
4Q’18 Loan Originations – Case Studies Investment Queens Multifamily Philadelphia Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $45 million $77 million Location Queens, NY Philadelphia, PA Collateral 126-unit Class-A Multifamily 510-unit Class-B+ Multifamily Loa
Slide 9: 4Q'18 Loan Originations – Case Studies
4Q’18 Loan Originations – Case Studies Investment West Palm Beach Multifamily Ft. Lauderdale Hospitality Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $135 million $150 million Location West Palm Beach, FL Ft. Lauderdale, FL 346-Key Full-Service Hotel & Condo Rental Managem
Slide 10: 4Q'18 Loan Originations – Case Studies
4Q’18 Loan Originations – Case Studies Investment San Diego Multifamily New York Multifamily New York Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $104 million $163 million $235 million Location San Diego, CA New York, NY New York, NY
Slide 11: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $4.1 billion as of December 31, 2018 • 98% increase in portfolio size since December 31, 2017 and 227% since June 30, 2017 (first quarter-end post IPO) • Office and multifamily loans comprise 86% of the portfolio Total Portfolio Growth P
Slide 12: 4Q'18 KREF Portfolio by the Numbers
4Q’18 KREF Portfolio by the Numbers • $4.1 billion portfolio comprised of 43 investments • Portfolio weighted average LTV of 68%(1) Geography(2) Investment Type(3) Mezz CMBS 1% 1% Senior Loans 98% Interest Rate Type Fixed 2% Floating 98% Note: Map does not include Midwest Mezzanine portfolio ($5.5 m
Slide 13: 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 14: Financing Overview
Financing Overview • Total financing capacity of $4.1 billion(1) with $1.3 billion of undrawn capacity • Issued a $1.0 billion managed collateralized loan obligation, providing $810.0 million of non-mark-to-market financing • Increased Term Loan Facility from $600.0 million to $1.0 billion • Added a
Slide 15: 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 $4.4 million or $0.08 per share over the next 12 months(1)(2) Net Interest Income S
Slide 16: Appendix
Appendix 16
Slide 17: Portfolio Details
Portfolio Details ($ 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 Queens, NY Office 5/9/2018 $350.0 $255.2 $151.
Slide 18: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio. (2) Net equity reflects
Slide 19: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 4.0 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,259.7 $2,000 $1,500 $1,000.6 $1,000 $500 $295.7 $329.5 $190.2 $0.0 $18.2 $0.0 $0 2019 2020 2021 2022 2023 2024 2025 2026 Fully extended maturity
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2018 December 31, 2017 Assets Cash and cash equivalents $ 86,531 $ 103,120 Restricted cash - 400 Commercial mortgage loans, held-for-investment, net 4,001,820 1,888,510 Equity method investments, at fair value
Slide 21: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Year Ended December 31, December 31, December 31, December 31, December 31, 2018 2017 2018 2017 2016 Net Interest Income Interest income $ 59,623 $ 28,385 $ 183,575 $ 83,145 $ 32,659 Interest expens
Slide 22: Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings
Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings 2018 4Q18 3Q18 2Q18 1Q18 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $87,293 $19,709 $20,821 $23,483 $23,280 Adjustments Non-cash equity compensation expense 1,973 387 295 27
Slide 23: 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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