Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q1 2020 Earnings Presentation
25 slides from Kkr Real Estate Finance Trust's earnings presentation, May 1, 2020
Slide 1: 1st Quarter 2020 Supplemental Information
KKR Real Estate Finance Trust Inc. 1st Quarter 2020 Supplemental Information April 28, 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: 1Q'20 Key Highlights
1Q'20 Key Highlights • Net Loss(1) of $35.2 million or ($0.61) per diluted share, net of $55.3 million or ($0.96) per diluted share for Current Expected Credit Loss (“CECL”) adjustment(2) • Core Earnings(3) of $25.3 million or $0.44 per diluted share • Repurchased 1.6 million shares at an average pr
Slide 4: Conservative Portfolio Construction and Liability Management
Conservative Portfolio Construction and Liability Management Investment Portfolio Evolution Property Type Evolution <3% <1% 100% 100% 86% 85% 27% 80% 80% 6% 62% Multifamily 60% Other Securities 60% and Office 97% 99% Mezz Loan Hospitality 40% 40% 31% and Retail Senior Loan 67% 20% 20% 7% 8% 0% 0% At
Slide 5: 1Q'20 Financial Summary
1Q'20 Financial Summary Income Statement Balance Sheet ($ in Millions, except per share data) 1Q20 ($ in Millions, except per share data) 1Q20 Net Interest Income $32.0 Total Portfolio $5,232.5 Other Income (1.5) Term Credit Facilities 1,095.5 Operating Expenses and Other (10.4) Term Lending Agreeme
Slide 6: Recent Operating Performance
Recent Operating Performance • 1Q'20 Net loss attributable to common stockholders of ($35.2) million or ($0.61) per diluted share, net of ($55.3) million or ($0.96) per diluted share, provision for credit losses in connection with CECL adoption • 1Q'20 Core Earnings(1) of $25.3 million or $0.44 per
Slide 7: 1Q'20 Equity Activity
1Q'20 Equity Activity Changes in Book Value per Share • Cumulative provision for credit losses of ($70.3) million or ($1.22) per diluted share during 1Q'20, inclusive of ($4.3) million or ($0.07) per diluted share allowance for unfunded loan commitments $0.40 ($0.43) ($0.26) $19.67 $19.52 $0.19 $(0.
Slide 8: 1Q'20 Loan Activity
1Q'20 Loan Activity Summary of 1Q'20 Originations $353mm 94% 100% Committed to 3 New Loans Senior Loans Floating-Rate Loans 66% L+3.2% 11.3% Weighted Average LTV Weighted Average Coupon Weighted Average Underwritten IRR (1) Portfolio Funding Activity(2) ($ in Millions) Future Funding $5,777 $5,826 $
Slide 9: 1Q'20 Loan Originations – Case Studies
1Q'20 Loan Originations – Case Studies Investment New York Multifamily San Diego Multifamily Plano Office Loan Type Floating-Rate Mezzanine Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $20.0 million $106.0 million $226.5 million Location Westbury, NY San Diego, CA Plano, TX 237
Slide 10: KREF Portfolio by the Numbers
KREF Portfolio by the Numbers • Outstanding total portfolio of $5.2 billion as of March 31, 2020 • Multifamily and office loans comprise 85% of the portfolio and hospitality and retail loans comprise 8% of the portfolio Total Portfolio Growth Property Type(2) ($ in Millions) ($ in Millions) Current
Slide 11: 1Q'20 KREF Loan Portfolio
1Q'20 KREF Loan Portfolio • $5.2 billion loan portfolio comprised of 40 investments • Portfolio weighted average LTV of 66%(1) Geography(2) Investment Type(3) Interest Rate Type Mezz Fixed 0.4% 0.1% Senior Floating Loans 99.9% 99.6% Property Type Condo Industrial (Residential) 3% Student Hospitality
Slide 12: 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): 66% 89% Risk Rating(3): 2.9 4Q'19 4Q'19 29% 25% 20%
Slide 13: Hospitality Loans – Overview
Hospitality Loans – Overview Investment Fort Lauderdale Hotel Brooklyn Hotel Current Principal Amount $140.0 million $76.0 million As % of Total KREF Portfolio 2.7% 1.5% Loan Amount / Key $404,624 $387,755 LTV(1) 62% 69% December 31, 2019 9.5% 8.2% T12 Debt Yield(2) December 31, 2019 2.0x 1.6x T12 D
Slide 14: Financing Overview: 73% Non-Mark-To-Market
Financing Overview: 73% Non-Mark-To-Market • Diversified financing sources totaling $6.1 billion with $1.7 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios ($ in Millions) Weighted Maximum Outstanding Average 4.0x Capacity Face Amount Coupon 0.3x Term Credit $2,000 $1,096
Slide 15: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Total / Weighted Counterparty Average Drawn $469 $405 $222 $1,096 Capacity $1,000 $600 $400 $2,000 Collateral: Loans / 5 Loans / $653 3 Loans / $545 3 Loans / $311 11 Loans / $1,509 Principal Balance Final Stated Maturity November 2023 Decem
Slide 16: Liquidity Overview
Liquidity Overview ($ in Millions) Sources of Available Liquidity $500.0 $450.0 Capacity $450.0 $80.1 $400.0 Cash and Cash $369.9 Equivalents $350.0 $369.9 Term Credit 6.9 Facilities $300.0 Term Lending 1.6 Agreement $250.0 Warehouse 2.9 Facility $200.0 Asset Specific 2.6 $150.0 Financing Term Loan
Slide 17: Rate Floors Provide Protection in a Declining Rate Environment
Rate Floors Provide Protection in a Declining Rate Environment • 99.9% of the portfolio is indexed to one-month USD LIBOR • Portfolio benefits from decreasing rates given in place LIBOR floors 98% of the portfolio is subject to a LIBOR floor of at least 0.95% 5% of total outstanding financing is
Slide 18: Appendix
Appendix REAL ESTATE 18 FINANCE TRUST
Slide 19: Portfolio Details
Portfolio Details Loan Per Investment Committed Current Net Future Max Remaining # Investment Location Property Type Coupon(4)(5) SQFT / Unit / LTV(4)(7) Date Principal Amount Principal Amount Equity (2) Funding(3) Term (Yrs)(4)(6) Key Senior Loans (1) 1 Senior Loan Brooklyn, NY Multifamily 5/22/201
Slide 20: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes vertical loa
Slide 21: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 3.9 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,216.3 $2,000 $1,489.9 $1,500 $1,000 $497.9 $500 $404.0 $320.3 $125.0 $143.4 $0 2020 2021 2022 2023 2024 2025 2026 (1) Excludes RECOP I CMBS B-Pie
Slide 22: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) March 31, 2020 December 31, 2019 Assets Cash and cash equivalents $ 369,867 $ 67,619 Commercial mortgage loans, held-for-investment 5,089,968 4,931,042 Less: Allowance for credit losses (65,979) - Commercial mortgage loans,
Slide 23: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended March 31, 2020 December 31, 2019 March 31, 2019 Net Interest Income Interest income $ 71,079 $ 72,417 $ 64,751 Interest expense 39,082 41,333 34,842 Total net interest income 31,997 31,084 29,909 Ot
Slide 24: Reconciliation of GAAP Net Income to Core Earnings
Reconciliation of GAAP Net Income to Core Earnings 1Q20 4Q19 1Q19 ($ in thousands, except share and per share data) Net Income (Loss) Attributable to Common Stockholders $ (35,164) $ 24,789 $ 24,705 Adjustments Non-cash equity compensation expense 1,607 1,017 991 Unrealized (gains) or losses (1) 3,4
Slide 25: Key Definitions
Key Definitions • "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. Core Earnings is a measure that is not prep
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