TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX” or the
“Company”) reported its operating results for the quarter ended
September 30, 2024.
Regarding third quarter results, Doug Bouquard, Chief Executive
Officer of TRTX, said: “Over the past quarter, TRTX delivered
strong operating earnings, outearned our dividend by more than 115%
and had no risk rating migration while maintaining a stable CECL
reserve. As we seek to continue to take advantage of the attractive
opportunity set within real estate credit, TPG’s integrated global
real estate investing platform team enabled us to originate $204
million of new investments. We believe that this capital deployment
combined with our strong balance sheet and liquidity profile
positions us well to continue to drive long-term shareholder
value.”
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 of September 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 on October 25, 2024 to common
stockholders of record as of September 27, 2024. The Company paid
on September 30, 2024 to stockholders of record as of September 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 from June 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 of June
30, 2024. The quarter-end allowance equals 205 basis points of
total loan commitments as of September 30, 2024 compared to 208
basis points as of June 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 at September 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 of
September 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 9:00 a.m. ET on Wednesday, October 30, 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, October 30, 2024 through 11:59 p.m. ET on
Wednesday, November 13, 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 13745416. 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 take advantage of the attractive
opportunity set within real estate credit and drive long-term
shareholder value, 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,
September 30, 2024
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029406549/en/
INVESTOR RELATIONS +1 (212) 405-8500
IR@tpgrefinance.com
MEDIA TPG RE Finance Trust, Inc. Courtney Power +1 (415)
743-1550 media@tpg.com
TPG Real Estate Finance (NYSE:TRTX)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
TPG Real Estate Finance (NYSE:TRTX)
Historical Stock Chart
Von Dez 2023 bis Dez 2024
