KKR Real Estate Finance Trust (KREF)2025-04-23 21:24Financial Performance - Net income attributable to common stockholders was (8,739) in the same period last year, indicating a worsening performance[17]. - Net income for the three months ended March 31, 2025, was a loss of 3,429,000 for the same period in 2024, indicating a decline in profitability[24]. - KREF reported a decrease in interest income from 36,971,000 in Q1 2025, a decline of 24.3%[154]. - KREF's net interest income for the three months ended March 31, 2025, was 14,495,000 in the same period of 2024[154]. - The company declared a dividend of 16,956,000 for the quarter ended March 31, 2025[177]. Assets and Liabilities - Total assets increased to 6,350,398 as of December 31, 2024, representing a growth of approximately 3.2%[15]. - Total liabilities rose to 4,951,519 as of December 31, 2024[15]. - Total equity decreased to 1,398,879, a decline of approximately 2.5%[15]. - KREF's total assets amounted to 2,113,282,000 on December 31, 2024[154]. - KREF's total liabilities decreased from 1,584,648,000 as of March 31, 2025, reflecting a reduction of 10.5%[154]. Credit Losses and Allowances - Provision for credit losses, net, was 33,266 in the prior year[17]. - The allowance for credit losses increased to 117,103, reflecting a rise of 21.5%[15]. - The allowance for credit losses increased to 117.1 million at the end of 2024, reflecting a provision of 20,005,000 to 15,916,000 in Q1 2025, down from 220,466,000 in Q1 2025, contrasting with net cash provided of 182,095,000 in Q1 2025, compared to 0.25 per share for common stock, consistent with the previous year[17]. - KREF's common stock repurchase program allows for up to 80,200,000 remaining capacity as of March 31, 2025[171]. - During the three months ended March 31, 2025, KREF repurchased 889,100 shares at an average price of 9,800,000[171]. - KREF declared 0.3 million of nonforfeitable dividends on unvested RSUs and outstanding deferred stock units (DSUs) for the three months ended March 31, 2025 and 2024, respectively[188]. Loan Portfolio and Risk Ratings - As of March 31, 2025, KREF's total loans held-for-investment amounted to 5,966,650[102]. - The loan portfolio activity for the three months ended March 31, 2025, included originations of 183,595, resulting in a net increase in amortized cost[105]. - KREF's commercial real estate loan portfolio had an average risk rating of 3.1 as of March 31, 2025, consistent with the previous quarter[113]. - The carrying value of loans rated 3 was 194.4 million, 85.2 million respectively[118][119][120]. Financing and Debt - KREF's secured financing agreements are treated as floating-rate collateralized financing arrangements carried at their contractual amounts, net of unamortized debt issuance costs[73]. - The weighted average funding cost for KREF's secured financing was 6.4% as of March 31, 2025[145]. - KREF's master repurchase agreements with Wells Fargo and Morgan Stanley had outstanding principals of 731,249, respectively, representing 47.8% of stockholders' equity[142]. - The total principal borrowings for the three months ended March 31, 2025, were 377,004[145]. Management and Strategy - KREF's management continues to focus on originating and acquiring transitional senior loans secured by commercial real estate assets, aligning with its business strategy as a mortgage REIT[27]. - KREF applies the Current Expected Credit Loss (CECL) model to estimate expected credit losses, incorporating historical experience and forward-looking information[61]. - KREF's board of directors may exclude one-time events and certain material non-cash income or expense items from distributable earnings for incentive compensation calculations[206].