TPG RE Finance Trust, Inc. Reports Operating Results for the Quarter Ended September 30, 2024
Regarding third quarter results,
THIRD QUARTER 2024 ACTIVITY
-
Recognized GAAP net income attributable to common stockholders of
$18.7 million , or$0.23 per common share, based on a diluted weighted average share count of 81.4 million common shares. Book value per common share was$11.41 as ofSeptember 30, 2024 . -
Generated Distributable Earnings of
$23.0 million , or$0.28 per common share, based on a diluted weighted average share count of 81.4 million common shares. -
Declared on
September 13, 2024 a cash dividend of$0.24 per share of common stock which was paid onOctober 25, 2024 to common stockholders of record as ofSeptember 27, 2024 . The Company paid onSeptember 30, 2024 to stockholders of record as ofSeptember 20, 2024 a quarterly dividend on its 6.25% Series C Cumulative Redeemable Preferred Stock of$0.3906 per share. -
Originated three first mortgage loans with total loan commitments of
$204.0 million , an initial aggregate unpaid principal balance of$199.8 million , a weighted average interest rate of Term SOFR plus 3.17%, a weighted average interest rate floor of 3.33% and a weighted average as-is loan-to-value ratio of 63.3%. Additionally, funded$7.6 million of future funding obligations associated with previously originated and acquired loans. -
Received loan repayments of
$149.3 million , including three full loan repayments of$141.1 million , involving the following property types: 41.5% hotel; 35.8% multifamily; and 22.7% mixed-use. -
Weighted average risk rating of the Company’s loan portfolio was 3.0 as of
September 30, 2024 , unchanged fromJune 30, 2024 . -
Carried at quarter-end an allowance for credit losses of
$69.3 million , a decrease of$0.3 million from$69.6 million as ofJune 30, 2024 . The quarter-end allowance equals 205 basis points of total loan commitments as ofSeptember 30, 2024 compared to 208 basis points as ofJune 30, 2024 . -
Ended the quarter with
$357.0 million of near-term liquidity:$211.3 million of cash-on-hand available for investment, net of$15.0 million held to satisfy liquidity covenants under the Company’s secured financing agreements; undrawn capacity under secured financing arrangements of$128.1 million ; and undrawn capacity under asset-specific financing arrangements and secured revolving credit facility of$2.6 million . -
Increased non-recourse, non-mark-to-market asset specific financings by
$72.0 million . Non-mark-to-market borrowings represented 79.7% of total borrowings atSeptember 30, 2024 .
SUBSEQUENT EVENTS
-
Received full loan repayments of two multifamily first mortgage loans with aggregate total loan commitments and aggregate unpaid principal balances of
$70.6 million and$70.6 million , respectively. The loans carried a risk rating of 3.0 as ofSeptember 30, 2024 .
The Company issued a supplemental presentation detailing its third quarter 2024 operating results, which can be viewed at http://investors.tpgrefinance.com/.
CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host a conference call and webcast to review its financial results with investors and other interested parties at
REPLAY INFORMATION
A replay of the conference call will be available after
ABOUT TRTX
FORWARD-LOOKING STATEMENTS
This earnings release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to various risks and uncertainties, including, without limitation, statements relating to the performance of the investments of
Non-GAAP Financial Measures Reconciliation
Distributable Earnings
Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses from loan write-offs, loan sales and other loan resolutions (including conversions to real estate owned (“REO”)), regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and excluding (i) non-cash stock compensation expense, (ii) depreciation and amortization expense, (iii) unrealized gains (losses) (including credit loss expense (benefit), net), and (iv) certain non-cash or income and expense items. The exclusion of depreciation and amortization expense from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments.
We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We generally must distribute at least 90% of our net taxable income annually, subject to certain adjustments and excluding any net capital gains, for us to continue to qualify as a real estate investment trust for
Distributable Earnings excludes the impact of our credit loss provision or reversals of our credit loss provision, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period.
A loan will be written off as a realized loss when it is deemed non-recoverable or upon a realization event. Such a realized loss would generally be recognized at the time the loan receivable is settled, transferred or exchanged, or in the case of foreclosure, when the underlying property is foreclosed upon or sold. Non-recoverability may also be concluded by us if, in our determination, it is nearly certain that all amounts due will not be collected. A realized loss may equal the difference between the cash or consideration received or expected to be received, and the net book value of the loan, reflecting our economics as it relates to the ultimate realization of the asset.
Distributable Earnings does not represent net income (loss) or cash generated from operating activities and should not be considered as an alternative to GAAP net income (loss), an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.
Reconciliation of GAAP Net Income Attributable to Common Stockholders to Distributable Earnings
The table below reconciles GAAP net income attributable to common stockholders and related diluted per share amounts to Distributable Earnings and related diluted per share amounts ($ in thousands, except per share data):
|
Three Months Ended, |
||||||
|
|
|
Per Diluted Share(1) |
||||
Net income attributable to common stockholders |
$ |
18,676 |
|
|
$ |
0.23 |
|
Depreciation and amortization |
|
3,453 |
|
|
|
0.04 |
|
Non-cash stock compensation expense |
|
1,141 |
|
|
|
0.01 |
|
Credit loss (benefit), net |
|
(301 |
) |
|
|
— |
|
Distributable earnings before realized losses from loan sales and other loan resolutions |
$ |
22,969 |
|
|
$ |
0.28 |
|
Realized loss on loan write-offs, loan sales and REO conversions |
|
— |
|
|
|
— |
|
Distributable earnings |
$ |
22,969 |
|
|
$ |
0.28 |
|
Weighted average common shares outstanding, diluted |
|
81,365,205 |
|
|
|
_______________________________ |
||
(1) |
Numbers presented may not foot due to rounding. |
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IR@tpgrefinance.com
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