Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q3 2019 Earnings Presentation
21 slides from Kkr Real Estate Finance Trust's earnings presentation, Oct 30, 2019
Slide 1: 3rd Quarter 2019 Supplemental Information
KKR Real Estate Finance Trust Inc. 3rd Quarter 2019 Supplemental Information October 30, 2019
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'19 Key Highlights
3Q’19 Key Highlights • Net Income(1) of $23.6 million or $0.41 per share • Net Core Earnings(2) of $25.0 million or $0.43 per share Financials • Book value(3) of $1,122.0 million or $19.54 per share • Paid 3Q dividend of $0.43 per share, equating to an 8.5% annualized dividend yield(4) • Originated
Slide 4: 3Q'19 Financial Summary
3Q’19 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 3Q19 3Q19 Total Portfolio $5,220.6 Net Interest Income $28.6 Term Credit Facilities 1,025.3 Other Income 2.3 Term Lending Agreement 875.5 Operating Expenses and Other
Slide 5: Recent Operating Performance
Recent Operating Performance • 3Q'19 Net Income attributable to common stockholders of $23.6 million or $0.41 per share • 3Q'19 Net Core Earnings(1) of $25.0 million or $0.43 per share • Book value of $1,122.0 million or $19.54 per share in 3Q'19(3) compared to $1,122.0 million or $19.54 per share i
Slide 6: 3Q'19 Loan Activity
3Q’19 Loan Activity • September 30, 2019 total portfolio of $5.2 billion, up $1.8 billion or 54% since September 30, 2018 and $0.3 million or 5% since June 30, 2019 • Subsequent to quarter-end, originated one floating-rate senior loan totaling $93.4 million Summary of 3Q’19 Originations $484mm 100%
Slide 7: 3Q'19 Loan Originations – Case Studies
3Q’19 Loan Originations – Case Studies Investment Chicago Office Atlanta Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $170 million $62 million Location Chicago, IL Atlanta, GA Collateral 39-story, Class-A Office Building 360-unit Class-B+ Multifamily Loan Purpo
Slide 8: 3Q'19 Loan Originations – Case Studies
3Q’19 Loan Originations – Case Studies Investment Denver Multifamily Austin Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $185 million $68 million Location Denver, CO Austin, TX Collateral 594-unit Luxury Apartment Complex 353-unit Class-A Multifamily Loan Purpo
Slide 9: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $5.2 billion as of September 30, 2019 • 54% increase in portfolio size YoY. Increased 313% since June 30, 2017 (first quarter-end post IPO). • Multifamily and office loans comprise 88% of the portfolio Total Portfolio Growth Property Typ
Slide 10: 3Q'19 KREF Portfolio
3Q’19 KREF Portfolio • $5.2 billion portfolio comprised of 38 investments • Portfolio weighted average LTV of 67%(1) Geography(2) Investment Type(3) CMBS Mezz <1% <1% Senior Loans 99% Interest Rate Type Fixed <1% Floating 99% (2) Other (<5%) Property Type 17% NY Industrial Retail 25% Condo 3% 3% MN
Slide 11: Portfolio Credit Quality Remains Strong
Portfolio Credit Quality Remains Strong • KREF’s loan portfolio is 100% performing, with no defaulted or impaired loans Loan-to-Value(1,2) Risk Rating Distribution(2,4) (% of total portfolio) (% of portfolio) Weighted Average Weighted Average LTV(3): 66% Risk Rating(3): 2.8 2Q’19 2Q’19 90% 27% 24% 2
Slide 12: Financing Overview: 74% Non-Mark-To-Market
Financing Overview: 74% Non-Mark-To-Market • Diversified financing sources totaling $5.7 billion with $1.5 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios 3.6x ($ in Millions) Weighted 3.4x Maximum Outstanding Average Capacity Face Amount 2.6x Coupon 2.3x 1.9x 2.0x Term
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity • 99% of the portfolio is indexed to one-month USD LIBOR • KREF benefits both in a rising rate environment and in a declining rate environment • Approximately 50% of the loan portfolio is subject to a LIBOR floor of at least 2.00% Net Interest Income Sensitivity to LIBOR Mo
Slide 14: Appendix
Appendix 14
Slide 15: Portfolio Details
Portfolio Details ($ in millions) Investment Committed Current Net Future Max Remaining # Investment Location Property Type Coupon(4)(5) LTV(4)(7) Date Principal Amount Principal Amount Equity(2) Funding(3) Term (Yrs)(4)(6) Senior Loans(1) 1 Senior Loan Brooklyn, NY Multifamily 5/22/2019 $386.0 $342
Slide 16: Portfolio Details (footnotes)
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes pari passu l
Slide 17: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 4.1 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $1,950.8 $2,000 $1,851.8 $1,500 $1,000 $623.0 $500 $314.6 $314.3 $125.0 $0.0 $5.5 $0 2019 2020 2021 2022 2023 2024 2025 2026 Fully extended maturity
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) September 30, 2019 December 31, 2018 Assets Cash and cash equivalents $ 74,517 $ 86,531 Commercial mortgage loans, held-for-investment, net 5,077,038 4,001,820 Equity method investments, at fair value 37,230 30,734 Accrued
Slide 19: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2019 2019 2018 2019 2018 Net Interest Income Interest income $ 74,223 $ 62,944 $ 51,895 $ 201,918 $ 123,952 Interes
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 3Q19 2Q19 3Q18 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $23,617 $17,381 $20,821 Adjustments Non-cash equity compensation expense 1,040 1,043 295 Incentive compensation to
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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