TPG RE Finance Trust(US:TRTX)2024-10-29 20:15Financial Performance - Net interest income for the three months ended September 30, 2024, was $29.28 million, compared to $19.55 million for the same period in 2023, representing a 49.0% increase [13]. - Net income for the three months ended September 30, 2024, was $22.19 million, a significant recovery from a net loss of $61.21 million in the same period of 2023 [13]. - Earnings per common share for the three months ended September 30, 2024, was $0.23, compared to a loss of $0.83 per share in the same period of 2023 [13]. - Other revenue for the three months ended September 30, 2024, increased to $10.86 million, up from $7.47 million in the same period of 2023 [13]. - The company reported a credit loss benefit of $0.30 million for the three months ended September 30, 2024, contrasting with an expense of $75.81 million in the same period of 2023 [13]. - For the quarter ending June 30, 2024, net income was reported at $22,194,000, reflecting a positive performance compared to previous quarters [16]. - The net income attributable to common stockholders for the three months ended September 30, 2024, was $18.7 million, compared to a net loss of $64.6 million in the same period of 2023 [181]. Assets and Liabilities - Total assets as of September 30, 2024, were $3.66 billion, a decrease from $4.21 billion as of December 31, 2023 [12]. - Total liabilities decreased to $2.54 billion as of September 30, 2024, from $3.09 billion as of December 31, 2023 [12]. - Loans held for investment, net, decreased to $3.19 billion as of September 30, 2024, from $3.41 billion as of December 31, 2023 [12]. - Total stockholders' equity remained relatively stable at $1.12 billion as of September 30, 2024, compared to $1.12 billion as of December 31, 2023 [12]. - The carrying value of loans held for investment was $3,192.61 million as of September 30, 2024, with a fair value of $3,235.15 million [159]. Cash Flow and Financing Activities - Net cash provided by operating activities increased to $86,634, up from $56,903 in the prior year, representing a 52.3% increase [19]. - Net cash provided by investing activities was $558,279, a decrease from $982,534 in the previous year, indicating a 43.1% decline [19]. - Net cash used in financing activities decreased to $625,132 from $991,407, reflecting a 36.9% reduction [19]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $226,799, down from $302,345 a year earlier, a decrease of 25% [19]. - Interest paid during the period was $151,682, compared to $203,615 in the same period last year, a reduction of 25.5% [19]. Credit Losses and Allowance - The allowance for credit losses was $66.68 million as of September 30, 2024, slightly down from $67.09 million as of December 31, 2023 [12]. - The company reported a significant decrease in the allowance for credit losses, with a net decrease of $482 compared to an increase of $172,658 in the previous year [19]. - The allowance for credit losses is adjusted by credit loss (expense) benefits, which are reported in the consolidated statements of income and comprehensive income [33]. - The allowance for credit losses related to senior loans was $66,680 as of September 30, 2024 [96]. - The total allowance for credit losses for loans held for investment was $236,629 as of September 30, 2023 [95]. Real Estate and Investments - The Company operates primarily as a real estate investment trust (REIT), maintaining its qualification to avoid U.S. federal income taxes on its taxable income [21]. - The carrying value of the Company's real estate owned (REO) assets was $188.5 million as of September 30, 2024, down from $198.0 million at acquisition [111]. - The Company modified loans to extend maturities and increase credit spreads, with one loan modification requiring an additional cash injection of $11.3 million from the borrower [108]. - The estimated fair value of the Company's loans held for investment portfolio was $3.2 billion as of September 30, 2024, with a weighted average gross credit spread of 3.71% [160]. - The Company incurred capital expenditures of $4.4 million for the nine months ended September 30, 2024, including $1.0 million of accrued capital expenditures [116]. Dividends and Stockholder Equity - Dividends on common stock declared per share remained at $0.24, with total dividends amounting to $19,798,000 for the quarter ending June 30, 2024 [16]. - The Company declared a cash dividend of $0.24 per share of common stock for Q3 2024, totaling $19.7 million, to be paid on October 25, 2024 [192]. - For the nine months ended September 30, 2024, common stock dividends amounted to $58.7 million, compared to $56.9 million for the same period in 2023, reflecting a year-over-year increase of 3.2% [195]. - The Company has a share repurchase program authorized for up to $25.0 million, with $24.96 million remaining capacity as of September 30, 2024 [190]. - Preferred stock dividends for the three months ended September 30, 2024, were $3.1 million, consistent with the previous year [181]. Management and Fees - The base management fee paid to the Manager is the greater of $250,000 per annum or 1.50% per annum of the Company's Equity [173]. - For the three months ended September 30, 2024, management fees incurred were $5.1 million, a decrease of 7.9% from $5.5 million in the same period of 2023 [176]. - The total management and incentive fees paid during the three months ended September 30, 2024, were $5.0 million, down from $5.9 million in 2023, reflecting a 15.2% decrease [176]. - The Company reimbursed the Manager $0.4 million for services rendered during the three months ended September 30, 2024, compared to $0.3 million in 2023 [178]. Compliance and Covenants - The Company must maintain a minimum cash liquidity of $15 million or 5% of recourse indebtedness as part of its financial covenants [153]. - The Company’s debt-to-equity ratio must not exceed 4.25 to 1.0 as per its financial covenants [153]. - The Company is in compliance with all financial covenants for its investment portfolio financing arrangements as of September 30, 2024 [155]. - The Company received a waiver for the minimum interest coverage ratio covenant, which was reduced from 1.5 to 1.0 to 1.4 to 1.0 effective June 30, 2023 [153].