TPG RE Finance Trust(TRTX) - 2020 Q3 - Quarterly Report

Financial Performance - Total assets decreased to $5.15 billion as of September 30, 2020, down from $5.89 billion at December 31, 2019, reflecting a decline of approximately 12.5%[15] - Net interest income for the three months ended September 30, 2020, was $48.4 million, compared to $44.5 million for the same period in 2019, representing an increase of about 4.1%[18] - Interest income for the nine months ended September 30, 2020, was $221.7 million, down from $257.2 million in 2019, a decrease of approximately 13.8%[18] - Net income attributable to TPG RE Finance Trust, Inc. for the three months ended September 30, 2020, was $32.2 million, compared to $33.0 million in 2019, a slight decrease of about 2.4%[18] - The company reported a net loss of $151.4 million for the nine months ended September 30, 2020, compared to a net income of $93.4 million for the same period in 2019[18] - The company reported a net loss of $232.79 million for the period[20] - The company reported a net income of $28,412 thousand for the period, reflecting a significant increase compared to previous periods[22] - For the three months ended September 30, 2020, the Company recognized a net income attributable to common stockholders of $30.8 million, compared to $32.9 million for the same period in 2019, reflecting a decrease of approximately 6.5%[194] Equity and Dividends - The company declared dividends payable of $15.4 million for the three months ended September 30, 2020, down from $32.8 million in the same period of 2019, a decrease of approximately 53%[15] - The company declared dividends on common stock at $0.20 per share, totaling $15.44 million[20] - Dividends declared on common stock were $31,160 thousand, with a per share dividend of $0.43[22] - The Company issued up to 13,000,000 shares of 11.0% Series B Preferred Stock for an aggregate cash purchase price of up to $325 million as part of an investment agreement[195] - Series B Preferred Stock bears an 11% annual dividend, payable quarterly in cash, with up to 2.0% of the liquidation preference payable in additional shares[198] Assets and Liabilities - Total liabilities decreased to $3.67 billion as of September 30, 2020, from $4.39 billion at December 31, 2019, a reduction of approximately 16.4%[15] - Total equity as of June 30, 2020, was $1.27 billion, reflecting a decrease from previous periods[20] - Total equity increased to $1,474,554 thousand, up from $1,443,549 thousand in the prior quarter, indicating a growth of approximately 2.15%[22] - The total number of common shares outstanding as of June 30, 2020, was approximately 76.79 million[20] Credit Losses and Risk Management - The allowance for credit losses was $56.7 million as of September 30, 2020, reflecting a proactive approach to potential credit risks[15] - The allowance for credit losses was adjusted to $(56,660,000) as of September 30, 2020, reflecting a cumulative impact from the adoption of ASU 2016-13[91] - The allowance for credit losses totaled $59,329,000 as of September 30, 2020, reflecting an increase of $19.6 million due to the adoption of the CECL methodology[110] - The Company employs a model-based approach for estimating credit losses, utilizing historical data from over 100,000 commercial real estate loans[54] - The Company maintains a separate allowance for credit losses from unfunded loan commitments, which is included in accrued expenses[58] Loan Portfolio - As of September 30, 2020, the Company had a total loan portfolio balance of $4,939,369,000, with total loan commitments amounting to $5,581,448,000[95] - The Company originated loans held for investment totaling $351.650 million, a decrease from $1.783 billion in the prior year[24] - The Company reported a net loan balance of $4,871,809,000 after accounting for the allowance for credit losses as of September 30, 2020[98] - The weighted average loan-to-value (LTV) ratio was 65.8% as of September 30, 2020[95] - The Company had 63 loans in its portfolio, all of which were floating rate loans indexed to LIBOR[95] Cash Flow and Liquidity - Net cash provided by operating activities increased to $102.118 million from $87.866 million year-over-year[24] - The company reported net cash provided by investing activities of $637.826 million, a significant recovery from a net cash used of $1.262 billion in the previous year[24] - The Company ended the period with cash, cash equivalents, and restricted cash totaling $225.554 million, up from $99.697 million at the end of the previous year[24] - The Company is required to maintain minimum cash of $10 million or 5% of aggregate recourse indebtedness, holding $21.7 million as of September 30, 2020[82] Market Conditions and Economic Impact - The ongoing impact of COVID-19 has created significant uncertainty regarding the company's financial condition and results of operations[29] - The Company’s estimate of expected credit losses increased due to recessionary macroeconomic conditions influenced by the COVID-19 pandemic[111] Securities and Financing - The Company recorded losses of $203.4 million from the sale of CRE debt securities with an aggregate face value of $781.7 million, impacting its financial performance for the period[179] - The Company transferred 100% of senior mortgage loans on a non-recourse basis to third-party lenders, accounting for these syndications as sales under GAAP[65] - The Company had a total of $4,732,038 thousand in secured credit facilities as of December 31, 2019, with an outstanding balance of $2,537,054 thousand[141] Compliance and Regulations - The Company qualifies as a REIT and must distribute at least 90% of its REIT taxable income to avoid federal income taxes[74] - The Company was in compliance with all financial covenants as of September 30, 2020, despite challenges posed by COVID-19[163]