TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX” or the
“Company”) reported its operating results for the quarter ended
June 30, 2024.
Regarding second quarter results, Doug Bouquard, Chief Executive
Officer of TRTX, said: “Our investment portfolio delivered strong
performance in the face of an uncertain macroeconomic and real
estate investing environment. During the quarter, TRTX generated
Distributable Earnings of $0.28 per share representing a dividend
coverage ratio of 1.2x. TRTX maintained both ample liquidity of
$389 million and a conservative debt-to-equity ratio of 2:1 which
enhances our ability to seek new investment opportunities across
the evolving real estate credit landscape.”
SECOND QUARTER 2024 ACTIVITY
- Recognized GAAP net income attributable to common stockholders
of $21.0 million, or $0.26 per common share, based on a diluted
weighted average share count of 80.9 million common shares. Book
value per common share was $11.40 as of June 30, 2024.
- Generated Distributable Earnings of $22.3 million, or $0.28 per
common share, based on a diluted weighed average share count of
80.9 million common shares.
- Declared on June 17, 2024 a cash dividend of $0.24 per share of
common stock which was paid on July 25, 2024 to common stockholders
of record as of June 27, 2024. The Company paid on June 28, 2024 to
stockholders of record as of June 18, 2024 a quarterly dividend on
its 6.25% Series C Cumulative Redeemable Preferred Stock of $0.3906
per share.
- Received loan repayments of $186.1 million, including three
full loan repayments of $162.5 million, involving the following
property types: 51.5% office; 35.8% industrial; 11.1% multifamily;
and 1.6% hotel. Additionally, funded $18.1 million of future
funding obligations associated with previously originated and
acquired loans.
- Weighted average risk rating of the Company’s loan portfolio
was 3.0 as of June 30, 2024, unchanged from March 31, 2024.
- Carried at quarter-end an allowance for credit losses of $69.6
million, a decrease of $4.5 million from $74.1 million as of March
31, 2024. The quarter-end allowance equals 208 basis points of
total loan commitments as of June 30, 2024 compared to 210 basis
points as of March 31, 2024.
- Ended the quarter with $389.4 million of near-term liquidity:
$244.2 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 $127.7 million; and undrawn
capacity under asset-specific financing arrangements and secured
revolving credit facility of $2.4 million.
- Non-mark-to-market borrowings represented 78.7% of total
borrowings at June 30, 2024.
- Filed an S-3 registration statement, which the SEC declared
effective on June 28, 2024, to register the resale of approximately
2.6 million common shares that were acquired by an affiliate of
Starwood Capital Group pursuant to its exercise of warrants in May
2024.
SUBSEQUENT EVENTS
- Closed one first mortgage loan with a total loan commitment of
$96.0 million and initial funding of $95.5 million. The first
mortgage loan is secured by two multifamily properties.
- Received a full loan repayment of one mixed-use first mortgage
loan with a total loan commitment and unpaid principal amount of
$36.4 million and $33.9 million, respectively.
The Company issued a supplemental presentation detailing its
second 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 9:00 a.m. ET on Wednesday, July 31, 2024. To participate in the
conference call, callers from the United States and Canada should
dial +1 (877) 407-9716, and international callers should dial +1
(201) 493-6779, ten minutes prior to the scheduled call time. The
webcast may also be accessed live by visiting the Company’s
investor relations website at
http://investors.tpgrefinance.com/event.
REPLAY INFORMATION
A replay of the conference call will be available after 12:00
p.m. ET on Wednesday, July 31, 2024 through 11:59 p.m. ET on
Wednesday, August 14, 2024. To access the replay, listeners may use
+1 (844) 512-2921 (domestic) or +1 (412) 317-6671 (international).
The passcode for the replay is 13745185. The replay will be
available on the Company’s website for one year after the call
date.
ABOUT TRTX
TPG RE Finance Trust, Inc. is a commercial real estate finance
company that originates, acquires, and manages primarily first
mortgage loans secured by institutional properties located in
primary and select secondary markets in the United States. The
Company is externally managed by TPG RE Finance Trust Management,
L.P., a part of TPG Real Estate, which is the real estate
investment platform of global alternative asset management firm TPG
Inc. (NASDAQ: TPG). For more information regarding TRTX, visit
https://www.tpgrefinance.com/.
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 TPG RE Finance
Trust, Inc. (the “Company” or “TRTX”); global economic trends and
economic conditions, including heightened inflation, slower growth
or recession, changes to fiscal and monetary policy, higher
interest rates, stress to the commercial banking systems of the
U.S. and Western Europe, labor shortages, currency fluctuations and
challenges in global supply chains; the Company's ability to
originate loans that are in the pipeline and under evaluation by
the Company; financing needs and arrangements; and the risks,
uncertainties and factors set forth under the heading “Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, as such risk factors may be updated
from time to time in the Company’s periodic filings with the
Securities and Exchange Commission (the “SEC”), which are
accessible on the SEC’s website at www.sec.gov. Forward‐looking
statements are generally identifiable by use of forward‐looking
terminology such as “may,” “will,” “should,” “potential,” “intend,”
“expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,”
“could,” “project,” “predict,” “continue” or other similar words or
expressions. Forward‐looking statements are based on certain
assumptions, discuss future expectations, describe existing or
future plans and strategies, contain projections of results of
operations, liquidity and/or financial condition or state other
forward‐looking information. Statements, among others, relating to
the Company’s ability to seek new investment opportunities across
the evolving real estate credit landscape, are forward-looking
statements, and the Company cannot assure you that it will achieve
such results. The ability of TRTX to predict future events or
conditions or their impact or the actual effect of existing or
future plans or strategies is inherently uncertain. Although the
Company believes that such forward‐looking statements are based on
reasonable assumptions, actual results and performance in the
future could differ materially from those set forth in or implied
by such forward‐looking statements. You are cautioned not to place
undue reliance on these forward‐looking statements, which reflect
the Company’s views only as of the date of this earnings release.
Except as required by law, neither the Company nor any other person
assumes responsibility for the accuracy and completeness of the
forward‐looking statements appearing in this earnings release. The
Company does not undertake any obligation to update any
forward-looking statements contained in this earnings release as a
result of new information, future events or otherwise. Past
performance is not indicative nor a guarantee of future returns.
Yield data are shown for illustrative purposes only and have
limitations when used for comparison or for other purposes due to,
among other matters, volatility, credit or other factors.
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 U.S. federal income tax purposes. We believe
that one of the primary reasons investors purchase our common stock
is to receive our dividends. Because of our investors’ continued
focus on our ability to pay dividends, Distributable Earnings is an
important measure for us to consider when determining our
distribution policy and dividends per common share. Further,
Distributable Earnings helps us to evaluate our performance
excluding the effects of certain transactions and GAAP adjustments
that we believe are not necessarily indicative of our current loan
investment and operating activities.
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,
June 30, 2024
Per Diluted Share(1)
Net income attributable to common
stockholders
$
21,026
$
0.26
Depreciation and amortization
4,156
0.05
Non-cash stock compensation expense
1,688
0.02
Credit loss (benefit), net
(4,537
)
(0.06
)
Distributable earnings before realized
losses from loan sales and other loan resolutions
$
22,333
$
0.28
Realized loss on loan write-offs, loan
sales and REO conversions
—
—
Distributable earnings
$
22,333
$
0.28
Weighted average common shares
outstanding, diluted
80,907,705
_______________________________
(1) Numbers presented may not foot due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730453870/en/
INVESTOR RELATIONS CONTACT +1 (212) 405-8500
IR@tpgrefinance.com
MEDIA CONTACT TPG RE Finance Trust, Inc. Courtney Power
+1 (415) 743-1550 media@tpg.com
TPG Real Estate Finance (NYSE:TRTX)
Historical Stock Chart
From Nov 2024 to Dec 2024
TPG Real Estate Finance (NYSE:TRTX)
Historical Stock Chart
From Dec 2023 to Dec 2024
