Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2022 Earnings Presentation
26 slides from Kkr Real Estate Finance Trust's earnings presentation, Feb 8, 2023
Slide 1: Fourth Quarter & Full Year 2022 Supplemental Information
FOURTH QUARTER & FULL YEAR 2022 SUPPLEMENTAL INFORMATION FEBRUARY 7, 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 Best In Class Conservative KREF’s Manager Fully Portfolio Balance Sheet Integrated with KKR $7.9 B $9.1 B 14% Investment Portfolio Financing Capacity KKR Ownership in KREF 99% 57% 77% $496 B $24 B (2) Senior Loans Multifamily & Fully Non-Mark-to-Market Glo
Slide 4: Fourth Quarter and Full Year 2022 Highlights
Fourth Quarter and Full Year 2022 Highlights • 4Q and full year 2022 Net Income(1) of $0.21 and $0.23 per diluted share (includes a CECL provision of $21 million and $112 million, or ($0.31) and ($1.66) per diluted share, respectively) • 4Q and full year 2022 Distributable Earnings(2) of $0.18 and $
Slide 5: 4Q'22 Financial Summary
4Q'22 Financial Summary Income Statement Balance Sheet ($ in Millions) 4Q'22 ($ in Millions) 4Q'22 Net Interest Income $51.9 Total Portfolio(2) $7,916.4 Other Income 4.8 Term Credit Facilities 1,436.2 Term Lending Agreements 1,391.5 Operating Expenses (15.4) Asset Specific Financing 311.5 Reversal o
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income and Distributable Earnings Dividends and Book Value Per Share ($ in Millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'22 2Q'22 3Q'22 4Q'22 Net income (loss)(1): Dividend per share: $29.8 $19.4 ($48.4) $14.6 $0.43 $0.43 $0.43 $0.43 Distributable earnings(2): Dividend yield
Slide 7: Last Twelve Months Loan Activity
Last Twelve Months Loan Activity Portfolio Funding Activity – Outstanding Principal(1) ($ in Millions) Future Funding Obligations(2) $9,300 $9,375 $9,460 $8,703 $8,160 $1,412 $1,649 $1,544 $1,449 $444 $424 $1,078 $225 $387 $1,368 $209 $25 $744 $282 $7,888 $7,888 $7,888 $7,726 $7,726 $7,726 $7,726 $7
Slide 8: 4Q'22 Loan Originations – Case Studies
4Q'22 Loan Originations – Case Studies Investment National Self Storage Miami Multifamily North Carolina Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $160 million(1) $110 million $100 million Location National Miami, FL Cary, NC 11 Ass
Slide 9: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio Growth Investment Type(2) Interest Rate Type ($ in Millions) 100% Floating Non-Senior 1% $7,916 $6,792 LIBOR SOFR $5,075 $4,998 45% 55% $4,134 Senior Loans 99% Property Type 4Q'18 4Q'19 4Q'20 4Q'21 4Q'22 (4) Hospitality Other (1) 5% Geography 5% Lif
Slide 10: 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 total loan portfolio) (% of loan portfolio) Weighted Average Weighted Average 3Q'22 LTV(3): 67% 3Q'22 88% Risk Rating(3): 3.1 32% 26% 20% 17% 7% 5% 4% 0% 1%
Slide 11: Case Studies: Watch List Loans (Risk Rating 5)
Case Studies: Watch List Loans (Risk Rating 5) Investment Minneapolis Office Philadelphia Office Philadelphia Office Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date November 2017 April 2019 June 2018 Collateral Two Class-A Office Buildings 4-Bu
Slide 12: Case Studies: Watch List Loans (Risk Rating 4)
Case Studies: Watch List Loans (Risk Rating 4) Investment Mountain View Office Washington, D.C. Office West Hollywood Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date July 2021 December 2019 January 2022 Collateral Five Class-A Offic
Slide 13: Financing Overview: 77% Non-Mark-To-Market
Financing Overview: 77% Non-Mark-To-Market Diversified financing sources totaling $9.1 billion with $2.9 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios Maximum Outstanding Weighted Avg. Advance Non- ($ in Millions) Capacity Face Amount Coupon(1) Rate MTM (2) Term Credit
Slide 14: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Total or Counterparty Weighted Average Drawn $673 $595 $169 $1,436 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal 10 Loans / $924 11 Loans / $808 7 Loans / $364 28 Loans / $2,096 Balance Final Stated Maturity(1) September 202
Slide 15: Liquidity Overview
Liquidity Overview In addition to the available liquidity below, KREF had $179 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval as of December 31, 2022 Sources of Available Liquidity ($ in Millions) $1,000 $900 $102 $800 $700 $600 $610 $500
Slide 16: Portfolio Positioned for Higher Rate Environment
Portfolio Positioned for Higher Rate Environment 100% floating-rate loan portfolio continues to benefit from a rising rate environment 55% indexed to Term SOFR and 45% to one-month LIBOR Annual Net Interest Income Per Share Sensitivity to Change in Market Rates One-month LIBOR = 4.39% ($ Impact Per
Slide 17: Appendix
Appendix KREF
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 1 Senior Lo
Slide 19: 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 20: Portfolio Details
Portfolio Details (1) Our total portfolio represents the current principal amount on senior, mezzanine and corporate 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 princip
Slide 21: Fully Extended Loan Maturities
Fully Extended Loan Maturities Fully extended weighted average loan maturity of 3.3 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $3,500 $2,984 $3,000 $2,787 $2,500 $2,000 $1,500 $1,000 $861 $609 $481 $500 $79 $0 2023 2024 2025 2026 2027 2028 (1) Excludes CMBS B-Pieces held through an e
Slide 22: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2022 December 31, 2021 Assets Cash and cash equivalents(1) $ 239,791 $ 271,487 Commercial real estate loans, held-for-investment 7,494,138 6,316,733 Less: Allowance for credit losses (106,974) (22,244) Commerci
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, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2020 Net Interest Income Interest income $ 143,508 $ 114,627 $ 72,715 $ 421,968 $ 2
Slide 24: 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) Year Ended Three Months Ended December 31, Per Diluted December 31, September 30, 2022 Share(1) 2022 2022 June 30, 2022 March 31, 2022 Net Income (Loss) Attributable to Common Stockhol
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 2022 Share(1) 2021 Share(1) 2020 Share(1) Net Income (Loss) Attributable to Common Stockholders $ 15,371
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
KKR Real Estate Finance Trust — Q4 2022 Earnings Presentation on 6ix