Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2019 Earnings Presentation
24 slides from Kkr Real Estate Finance Trust's earnings presentation, Feb 19, 2020
Slide 1: 4th Quarter 2019 Supplemental Information
KKR Real Estate Finance Trust Inc. 4th Quarter 2019 Supplemental Information February 19, 2020
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'19 Key Highlights
4Q’19 Key Highlights • Net Income(1) of $24.8 million or $0.43 per diluted share • Net Core Earnings(2) of $25.5 million or $0.44 per diluted share Financials • Book value(3) of $1,122.0 million or $19.52 per share • Paid 4Q dividend of $0.43 per share, equating to an 8.0% annualized dividend yield(
Slide 4: Successfully Executing on Business Strategy with Strong Growth
Successfully Executing on Business Strategy with Strong Growth Total Portfolio(1) Total Loan Originations ($ in Millions) ($ in Millions) CAGR CAGR +56% +45% $5,075 $3,112 $4,134 $2,729 Total Loan Originations $173 $1,483 $2,083 Average Loan Size $144 $124 2017 2018 2019 2017 2018 2019 Net Core Earn
Slide 5: 4Q'19 Financial Summary
4Q’19 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) ($ in Millions, except per share data) 4Q19 4Q19 Net Interest Income $31.1 Total Portfolio $5,075.0 Term Credit Facilities 1,088.2 Other Income 1.8 Term Lending Agreement 870.1 Operating Expenses and Other
Slide 6: Recent Operating Performance
Recent Operating Performance • 4Q'19 Net Income attributable to common stockholders of $24.8 million or $0.43 per diluted share; 2019 Net Income attributable to common stockholders of $90.5 million or $1.57 per diluted share • 4Q'19 Net Core Earnings(1) of $25.5 million or $0.44 per diluted share; 2
Slide 7: 4Q'19 Loan Activity
4Q’19 Loan Activity Summary of 4Q’19 Originations $764mm 100% 100% Committed to 6 New Loans Senior Loans Floating-Rate Loans 63% L+2.8% 10.7% Weighted Average LTV Weighted Average Coupon Weighted Average Underwritten IRR (1) Portfolio Funding Activity(2) ($ in Millions) Future Funding $5,777 $5,696
Slide 8: 4Q'19 Loan Originations – Case Studies
4Q’19 Loan Originations – Case Studies Investment State College Student Housing Irvine Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $93.4 million $183.3 million Location State College, PA Irvine, CA Collateral 439-unit Five-building Student Housing Two Class-A Offic
Slide 9: 4Q'19 Loan Originations – Case Studies
4Q’19 Loan Originations – Case Studies Investment Los Angeles Multifamily Retail Portfolio Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $91.0 million $147.0 million Location Los Angeles, CA Various (MA, CT, RI, SC, GA, NJ, NY, NC, PA, VA) Collateral 216-unit Class-A Multif
Slide 10: 4Q'19 Loan Originations – Case Studies
4Q’19 Loan Originations – Case Studies Investment Washington, DC Office Herndon Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $175.5 million $73.9 million Location Washington, DC Herndon, VA Collateral Class-A Office totaling 200k SF 294-unit Class-A Multifamily
Slide 11: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $5.1 billion as of December 31, 2019 • 23% increase in portfolio size YoY. Increased 301% since June 30, 2017 (first quarter-end post IPO) • Multifamily and office loans comprise 84% of the portfolio Total Portfolio Growth Property Type(
Slide 12: 4Q'19 KREF Loan Portfolio
4Q’19 KREF Loan Portfolio • $5.0 billion loan portfolio comprised of 39 investments • Portfolio weighted average LTV of 66%(1) Geography(2) Investment Type(3) Mezz <0.1% Senior Loans 99.9% Interest Rate Type Fixed <0.1% Floating 99.9% Other (<5%) NY Property Type 22% 22% Condo Industrial Student (Re
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 Loan-to-Value(1,2) Risk Rating Distribution(2) (% of total portfolio) (% of portfolio) Weighted Average Weighted Average LTV(3): 67% Risk Rating(3): 2.9 3Q’19 3Q’19 87% 32% 25% 17%
Slide 14: Financing Overview: 72% Non-Mark-To-Market
Financing Overview: 72% Non-Mark-To-Market • Diversified financing sources totaling $5.5 billion with $1.6 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios 3.6x ($ in Millions) Weighted 3.4x 3.5x Maximum Outstanding Average Capacity Face Amount Coupon 2.3x 2.0x 1.9x Term
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity • 99.9% of the portfolio is indexed to one-month USD LIBOR • Approximately half of the loan portfolio is subject to a LIBOR floor of at least 2.00% Quarterly Per Share Net Interest Income Sensitivity to Movements in Spot LIBOR(1)(2) ($ impact per share, diluted) $0.25 $0.20
Slide 16: Appendix
Appendix 16
Slide 17: Portfolio Details
Portfolio Details ($ 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 $358
Slide 18: Portfolio Details (notes)
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes pari passu a
Slide 19: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 4.1 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,160.9 $2,000 $1,660.6 $1,500 $1,000 $500 $401.3 $318.7 $224.3 $125.0 $148.4 $0 2020 2021 2022 2023 2024 2025 2026 Fully extended maturity (1) Exc
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2019 December 31, 2018 Assets Cash and cash equivalents $ 67,619 $ 86,531 Commercial mortgage loans, held-for-investment, net 4,931,042 4,001,820 Equity method investments 37,469 30,734 Accrued interest receiva
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, 2019 2018 2019 2018 2017 Net Interest Income Interest income $ 72,417 $ 59,623 $ 274,335 $ 183,575 $ 83,145 Interest expen
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 2019 4Q19 3Q19 2Q19 1Q19 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $ 90,492 $ 24,789 $ 23,617 $ 17,381 $ 24,705 Adjustments Non-cash equity compensation expense 4,091 1,017
Slide 23: Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings
Reconciliation of GAAP Net Income to Core Earnings and Net Core Earnings 2019 2018 2017 ($ in thousands, except share and per share data) Net Income Attributable to Common Stockholders $ 90,492 $ 87,293 $ 58,818 Adjustments Non-cash equity compensation expense 4,091 1,973 65 Incentive compensation t
Slide 24: 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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