Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q1 2021 Earnings Presentation
24 slides from Kkr Real Estate Finance Trust's earnings presentation, Apr 26, 2021
Slide 1: First Quarter 2021 Supplemental Information
KKR Real Estate Finance Trust Inc. First Quarter 2021 Supplemental Information April 26, 2021
Slide 2: Legal Disclosures
Legal Disclosures 2 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 Fina
Slide 3: KKR Real Estate Finance Trust Inc. Overview
3 KKR Real Estate Finance Trust Inc. Overview Best In Class Portfolio Conservative Balance Sheet Fully Integrated with KKR $5.3 Billion Investment Portfolio 98.8% Senior Loans 85% Multifamily & Office $123 Million Average Loan Size 7.8% Unfunded Purpose built portfolio of senior loans secured primar
Slide 4: First Quarter 2021 Highlights
First Quarter 2021 Highlights 4 • 1Q Net income(1) of $0.52 per diluted share and Distributable Earnings(2) of $0.55 per diluted share; 128% dividend coverage in 1Q • Book value(3) of $18.89 per share, compared to $18.76 per share in 4Q’20 • Earnings benefited from portfolio performance and in-place
Slide 5: 1Q'21 Financial Summary
1Q'21 Financial Summary 5 (1) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. (2) Represents the GAAP principal amount on senior and mezzanine/other loans, and net equity in RECOP I. (3) Represents (i) total debt less cash to (ii) total permanent
Slide 6: Recent Operating Performance
$18.45 $18.76 $18.89 $1.22 $1.09 $1.06 1Q'20 4Q'20 1Q'21 BVPS Post-CECL CECL Impact $19.67 Recent Operating Performance 6 (1) Represents Net Income attributable to common stockholders. (2) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. Net Incom
Slide 7: Conservative Portfolio Construction
67% 99% 98% 6% 27% 0% 20% 40% 60% 80% 100% At IPO 1Q'20 1Q'21 Senior Loan Non-Senior/ Other Loan Securities <2%<1% Conservative Portfolio Construction 7 $50 $130 $123 $0 $50 $100 $150 At IPO 1Q'20 1Q'21 Average Funded Loan Size 62% 85% 85% 31% 8% 6% 0% 20% 40% 60% 80% 100% At IPO 1Q'20 1Q'21 Multifa
Slide 8: Last Twelve Months Loan Activity
$5,233 $5,257 $5,035 $4,998 $5,330 $593 $78 $512 $52 $462 $498 $472 $576 $454 $54 $274 $535 $244 1Q'20 Portfolio 2Q'20 Fundings 2Q'20 Repayments 2Q'20 Portfolio 3Q'20 Fundings 3Q'20 Repayments 3Q'20 Portfolio 4Q'20 Fundings 4Q'20 Repayments 4Q'20 Portfolio 1Q'21 Fundings 1Q'21 Repayments 1Q'21 Portf
Slide 9: 1Q'21 Loan Originations – Case Studies
1Q’21 Loan Originations – Case Studies 9 Investment Dallas Office Boston Office Los Angeles Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $87.0 million $187.5 million(1) $260.0 million Location Dallas, TX Boston, MA Los Angeles, CA Coll
Slide 10: KREF Loan Portfolio by the Numbers
Multifamily 50% Office 35% Condo (Residential) 6% Hospitality 4% Retail 2% Industrial 2% Student Housing 1% Floating 99.9% Fixed 0.1% Senior Loans 98.8% Mezz/Other 1.2% Class-A 89% Class-B 11% Multifamily Class-A 80% Class-B 20% Office KREF Loan Portfolio by the Numbers 10 Geography(2) Investment Ty
Slide 11: Portfolio Credit Quality Remains Strong
0% 4% 86% 8% 1 2 3 4 5 0% 7% 77% 14% 2% 1 2 3 4 5 Portfolio Credit Quality Remains Strong • Collected 97.1% of interest payments due on loan portfolio 11 Loan-to-Value(1,2) Risk Rating Distribution Weighted Average Risk Rating(3): 3.1 Weighted Average LTV(3): 67% (1) LTV is generally based on the in
Slide 12: Case Studies: Watch List Loans
Case Studies: Watch List Loans(1) (Risk Rating 4 & 5) 12 Investment Portland Retail(2) New York Condo New York Condo Brooklyn Hotel Queens Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment
Slide 13: Financing Overview: 76% Non-Mark-To-Market
Term Loan Facility 21% Term Lending Agreement 21% Collateralized Loan Obligation 19% Senior Loan Interests 7% Secured Term Loan 7% Asset Specific Financing 1% Term Credit Facilities 24% 2.0x 3.5x 0.1x 0.2x Debt-to-Equity Ratio Total Leverage Ratio CECL Impact Pre-CECL Financing Overview: 76% Non-Mar
Slide 14: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities 14 Counterparty Total / Weighted Average Drawn $520 $421 $77 $1,018 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal Balance 5 Loans / $804 8 Loans / $588 2 Loans / $158 15 Loans / $1,549 Final Stated Maturity(1) November 2023 December 2022 Oc
Slide 15: Liquidity Overview
Liquidity Overview $209.3 $335.0 $26.8 $571.1 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Cash Undrawn Corporate Revolver Approved and Undrawn Credit Capacity Total Available Liquidity 15 ($ in Millions) (1) Represents under-levered amounts under financing facilities. While these amounts were pre
Slide 16: Portfolio Benefits from Attractive in the Money LIBOR Floors
Portfolio Benefits from Attractive in the Money LIBOR Floors 16 • 99.9% of the loan portfolio is indexed to one-month USD LIBOR • Portfolio benefits from current low rate environment given in-place LIBOR floors 69% and 50% of the portfolio is subject to a LIBOR floor of at least 1.0% and 1.65%, re
Slide 17: Appendix
Appendix 17
Slide 18: Loan Portfolio Details
# Investment Location Property Type Investment Date Total Whole Loan (2) Committed Principal Amount (2) Current Principal Amount Net Equity (3) Future Funding (4) Coupon (5)(6) Max Remaining Term (Yrs) (5)(7) Loan Per SF / Unit / Key LTV (5)(8) Risk Rating Senior Loans (1) 1 Senior Loan Chicago, IL
Slide 19: 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 20: Fully Extended Loan Maturities
Fully Extended Loan Maturities 20 Fully Extended Loan Maturities(1) ($ in Millions) (1) Excludes RECOP I CMBS B-Piece investment. • Fully extended weighted average loan maturity of 3.3 years(1) $208.7 $261.3 $1,083.6 $2,199.9 $652.6 $888.3 $0 $500 $1,000 $1,500 $2,000 $2,500 2021 2022 2023 2024 2025
Slide 21: Consolidated Balance Sheets
21 Consolidated Balance Sheets (1) Includes $40.0 million of loan repayment proceeds held by the servicer and receivable by the CLO as of March 31, 2021. Includes $15.9 million of loan repayment proceeds held by the servicer and receivable by KREF as of December 31, 2020. (2) Includes $0.6 million a
Slide 22: Consolidated Statements of Income
22 Consolidated Statements of Income (in thousands - except share and per share data) March 31, 2021 December 31, 2020 March 31, 2020 Net Interest Income Interest income $ 64,766 $ 63,201 $ 71,079 Interest expense 27,383 28,835 39,082 Total net interest income 37,383 34,366 31,997 Other Income Incom
Slide 23: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 23 (1) Includes $0.7 million, ($0.1) million, and $0.4 million non-cash redemption value adjustment of our SNVPS during 1Q'21, 4Q'20 and 1Q'20, respectively. (2) Includes $0.0 million, ($0.1) million, and $3.0 million of unrealized loss (ga
Slide 24: Key Definitions
Key Definitions 24 “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 wi
KKR Real Estate Finance Trust — Q1 2021 Earnings Presentation on 6ix