Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2021 Earnings Presentation
26 slides from Kkr Real Estate Finance Trust's earnings presentation, Feb 9, 2022
Slide 1: Fourth Quarter and Full Year 2021 Supplemental Information
KKR Real Estate Finance Trust Inc. Fourth Quarter and Full Year 2021 Supplemental Information February 8, 2022
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 KREF’s Manager Fully Portfolio Balance Sheet Integrated with KKR $6.8 Billion $6.7 Billion 23% Investment Portfolio Financing Capacity KKR Ownership in KREF 99% 74% 71% $471 Billion $25 Billion Senior Loans Multifamily & Office F
Slide 4: Fourth Quarter and Full Year 2021 Highlights
Fourth Quarter and Full Year 2021 Highlights • Net income(1) of $0.59 and $2.21 per diluted share for 4Q and full year 2021, respectively • Distributable Earnings(2) of ($0.05) and $1.63 per diluted share for 4Q and full year 2021, respectively. Distributable earnings is net of $32.9 million, or $0.
Slide 5: 4Q'21 Financial Summary
4Q'21 Financial Summary Income Statement Balance Sheet ($ in Millions) 4Q21 ($ in Millions) 4Q21 Net Interest Income $42.4 Total Portfolio $6,478.4(2) Other Income 7.4 Term Credit Facilities 1,554.8 Operating Expenses and Other (12.7) Term Lending Agreements 1,117.6 Preferred stock dividends and red
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income(1) and Distributable Earnings(2) Dividends and Book Value Per Share 1Q'21 2Q'21 3Q'21 4Q'21 ($ in Millions) 1Q'21 2Q'21 3Q'21 4Q'21 Net income: Dividend per share: $29.2 $29.3 $32.0 $35.2 $0.43 $0.43 $0.43 $0.43 Distributable earnings: Dividend yield on book v
Slide 7: Last Twelve Months Loan Activity
Last Twelve Months Loan Activity Portfolio Funding Activity – Outstanding Principal(1) ($ in Millions) Future Funding Obligations(2) $8,160 $7,051 $1,368 $680 $33 $6,466 $1,679 $935 $1,225 $5,784 $848 $1,143 $5,470 $271 $454 $559 $244 $472 $576 $6,792 $5,618 $5,826 $5,330 $4,998 4Q'20 1Q'21 (3) 1Q'2
Slide 8: 4Q'21 Loan Originations – Select Case Studies
4Q’21 Loan Originations – Select Case Studies Investment Washington, D.C. Office West Palm Beach Multifamily Seattle Life Science Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $187.7 million $171.5 million $140.3 million(1) Location Washington, D.C
Slide 9: 4Q'21 Loan Originations – Select Case Studies
4Q’21 Loan Originations – Select Case Studies Investment Dallas Office Cambridge Life Science Doral Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $138.0 million $115.7 million(1) $106.0 million(2) Location Dallas, TX Cambridge, MA Doral
Slide 10: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio Growth Investment Type(3) Interest Rate Type ($ in Millions) Non-Senior Current Portfolio: 0.6% $7.1 billion(1) $6,792 Including net funding and repayment activity subsequent to quarter-end $5,075 $4,998 Floating $4,134 100.0% Senior Loans $2,083 99
Slide 11: Portfolio Credit Quality Remains Strong
Portfolio Credit Quality Remains Strong • Collected 97.3% of interest payments due on loan portfolio and 100% on loans rated 4 or better Loan-to-Value(1,2) Risk Rating Distribution (% of total loan portfolio) (% of loan portfolio) Weighted Average Weighted Average 3Q'21 LTV(3): 67% 3Q'21 82% Risk Ra
Slide 12: Case Studies: Watch List Loans (Risk Rating 4 & 5)
Case Studies: Watch List Loans (Risk Rating 4 & 5) Investment New York Condo Queens Industrial New York Condo Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date December 2018 July 2017 August 2017 Collateral 126-Unit Class-A Residential Condominiu
Slide 13: Financing Overview: 71% Non-Mark-To-Market
Financing Overview: 71% Non-Mark-To-Market • Diversified financing sources totaling $6.7 billion with $1.4 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios ($ in Millions) Maximum Outstanding Weighted Avg. Advance Non- Capacity Face Amount Coupon Rate MTM (1) Term Credit
Slide 14: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Counterparty Total / Weighted Average Drawn $981 $384 $191 $1,555 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal 14 Loans / $1,396 8 Loans / $552 6 Loans / $282 28 Loans / $2,230 Balance Final Stated Maturity(1) September 202
Slide 15: Liquidity Overview
Liquidity Overview • In addition to the available liquidity below, KREF had $235.3 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval, as of December 31, 2021. Sources of Available Liquidity ($ in Millions) $600.0 $528.9 $500.0 $57.4 $400.0 $2
Slide 16: Portfolio Repositioning for Higher Rate Environment
Portfolio Repositioning for Higher Rate Environment • 100% of the loan portfolio is indexed to one-month USD LIBOR • 54% of the portfolio is subject to a LIBOR floor of at least 0.25% and 9% of total outstanding financing, including the Secured Term Loan, is subject to a LIBOR floor greater than 0.0
Slide 17: Appendix
Appendix 17
Slide 18: Portfolio Details
Portfolio Details ($ in Millions) Investment Total Whole Committed Current Net Future (5)(6) Max Remaining Loan Per (5)(8) Risk # Investment Location Property Type (2) (2) (3) (4) Coupon (5)(7) LTV Date Loan Principal Amount Principal Amount Equity Funding Term (Yrs) SF / Unit / Key Rating Senior Lo
Slide 19: Portfolio Details
Portfolio Details ($ in Millions) Investment Total Whole Committed Current Net Future Max Remaining Loan Per Risk # Investment Location Property Type (2) (2) (3) (4) Coupon(5)(6) (5)(7) LTV(5)(8) Date Loan Principal Amount Principal Amount Equity Funding Term (Yrs) SF / Unit / Key Rating (1) Senior
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 3.6 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $3,000 $2,803.9 $2,500 $2,000 $1,508.6 $1,500 $1,000 $917.7 $609.7 $535.5 $500 $301.8 $0 2022 2023 2024 2025 2026 2027 (1) Excludes RECOP I CMBS B-Piece in
Slide 22: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2021 December 31, 2020 Assets Cash and cash equivalents(1) $ 271,487 $ 110,832 Commercial real estate loans, held-for-investment 6,316,733 4,844,534 Less: Allowance for credit losses (22,244) (59,801) Commercia
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, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 December 31, 2019 Net Interest Income Interest income $ 72,715 $ 75,320 $ 63,201 $ 279,950 $ 269
Slide 24: 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 Three Months Ended December 31, Per Diluted December 31, September 30, June 30, March 31, 2021 Share(4)(5) 2021 2021 2021 2021 Net Income (Loss) Attributable to Common Stockholders
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, Per Diluted December 31, Per Diluted December 31, Per Diluted 2021 Share(4) 2020 Share(4) 2019 Share(4) Net Income (Loss) Attributable to Common Stockholders $ 125,635
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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