TPG RE Finance Trust, Inc. Reports Operating Results for the Fourth Quarter and Full Year Ended December 31, 2020
February 24 2021 - 5:10PM
Business Wire
TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX” or the
“Company”) reported its operating results for the fourth quarter
and full year ended December 31, 2020.
FOURTH QUARTER 2020 ACTIVITY
- GAAP net income attributable to common stockholders was $6.6
million, net income per diluted common share was $0.09 based on a
diluted weighted average share count of 79.3 million common shares,
and book value per common share at December 31, 2020 was
$16.50.
- Net interest margin narrowed to $40.6 million during the three
months ending December 31, 2020 compared to $48.4 million for the
preceding quarter, a decrease of $7.8 million, or 16.1%, due
primarily to a decline in average principal balance of loans
outstanding during the quarter of $345.2 million.
- Declared on December 15, 2020 a cash dividend of $0.20 per
share of common stock and a non-recurring special cash dividend of
$0.18 per share of common stock. The full dividend, regular and
special, was paid on January 22, 2021 to common stockholders of
record as of December 28, 2020. The Company paid on December 31,
2020 a dividend on the Company’s 11.0% Series B Preferred Stock of
$6.2 million, or $0.69 per preferred share, for the quarterly
period ending December 30, 2020.
- Carried at quarter-end an allowance for expected credit loss of
$62.8 million, an increase from the prior quarter of $3.5 million.
The CECL reserve equaled 127 basis points of total loan
commitments, up from 109 basis points at September 30, 2020. Credit
expense for the quarter was $16.3 million comprised of an increase
in the general reserve of $6.3 million and a $10.0 million reserve
for an individually-assessed loan. The company charged-off an
existing reserve of $12.8 million due to the conversion to Real
Estate Owned (“REO”) of a previously defaulted mortgage loan.
- The Company acquired 27 acres on the Las Vegas Strip through a
deed-in-lieu of foreclosure, and at quarter-end placed on
non-accrual status a $31.2 million first mortgage loan secured by a
shopping center in Southern California due to a failure of the
borrower to remit interest. All other loans were current at
quarter-end.
- Received five full loan repayments totaling $362.4 million, and
the extinguishment via foreclosure of a first mortgage loan with an
unpaid principal balance of $112.0 million.
- Available liquidity of $342.6 million comprised of cash and
cash equivalents of $319.7 million, or 6.5% of total assets,
undrawn capacity under secured borrowing arrangements of $22.8
million of which $0.8 million was immediately available, and $0.1
million of cash in CLOs available for investment in eligible
collateral. Net of liquidity covenant requirements, the Company
held $300.6 million of cash-on-hand for investments and other
corporate purposes.
- The Company’s non-mark-to-market debt represented 63.5% of
total debt at December 31, 2020, an increase of 9.4 points from
54.1% in the prior quarter.
- Benefited from LIBOR floors in our loan portfolio with a
weighted average LIBOR of 1.66%, approximately 152 basis points
higher than one-month LIBOR as of December 31, 2020.
FULL YEAR 2020 ACTIVITY
- Generated GAAP net loss attributable to common stockholders of
$155.5 million, or $(2.03) per diluted common share, based on a
weighted average share count of 76.7 million common shares, an
increase of 3.9 million common shares, or 5.4%, from the prior
year.
- Declared dividends of $93.6 million, or $1.21 per common share,
including a special non-recurring dividend of $0.18 declared in
December 2020, representing a dividend yield of 7.3% on a book
value per common share of $16.50 as of December 31, 2020. Declared
and paid dividends in relation to the Company’s 11.0% Series B
Preferred Stock of $14.7 million, or $1.63 per preferred
share.
- Originated six first mortgage loans with an aggregate
commitment amount of $526.3 million, an initial unpaid principal
balance of $431.9 million, unfunded commitments upon closing of
$94.4 million, and a weighted average interest rate of LIBOR plus
2.9%.
- Funded $237.9 million in future funding obligations associated
with existing loans.
- Loan repayments totaled $885.6 million, loan sales were $145.7
million and an extinguishment via foreclosure was $112.0 million,
for a total reduction in principal balance outstanding of $1.1
billion.
- Issued and sold, for an aggregate cash purchase price of $225.0
million, 9.0 million shares of 11.0% Series B Cumulative Redeemable
Preferred Stock, and detachable, five-year, net-settlement warrants
to purchase up to 12.0 million shares of TRTX common stock at an
exercise price of $7.50 per share.
- CECL reserve totaled $62.8 million at December 31, 2020. Credit
loss expense was $69.8 million, or $(0.91) per share, for the
year.
- Sold prior to April 30, 2020 the Company’s entire portfolio of
CRE debt securities, and retired all liabilities associated
therewith, at a loss of $203.4 million.
SUBSEQUENT EVENTS
- On February 16, 2021, the Company extended for a term of one
year, through May 4, 2022, the existing secured credit facility
with Morgan Stanley Bank with a commitment amount of $500.0
million.
- At February 23, 2021, the Company is in the process of closing
one first mortgage loan with a commitment of $50.2 million and an
expected initial funding of $47.7 million. The loan will be funded
with a combination of cash-on-hand and borrowings.
The Company issued a supplemental presentation detailing its
fourth quarter and full year 2020 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 8:30 a.m. ET on Thursday, February 25, 2021. 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 11:30
a.m. ET on Thursday, February 25, 2021 through 11:59 p.m. ET on
Thursday, March 11, 2021. To access the replay, listeners may use
+1 (844) 512-2921 (domestic) or +1 (412) 317-6671 (international).
The passcode for the replay is 13715483. The recorded 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 firm TPG. For more
information regarding TRTX, visit https://www.tpgrefinance.com/
FORWARD-LOOKING STATEMENTS
The information contained in 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 the Company; the ultimate
geographic spread, severity and duration of pandemics such as the
recent outbreak of novel coronavirus (“COVID-19”), actions that may
be taken by governmental authorities to contain or address the
impact of such pandemics, and the potential negative impacts of
such pandemics on the global economy and the Company’s financial
condition and results of operations; the Company’s ability to
originate loans that are in the pipeline and under evaluation by
the Company; and financing needs and arrangements. 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 continuing impact of COVID-19 on the Company’s business,
financial condition and results of operations and the Company’s
ability to generate future growth and deliver returns are
forward-looking statements, and the Company cannot assure you that
TRTX 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.
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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
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