KKR Real Estate Finance Trust (KREF) - 2025 Q4 - Annual Results

Financial Performance - Reported net loss attributable to common stockholders of $32.0 million and $69.9 million, or $0.49 and $1.05 per diluted share for Q4 and full year 2025, respectively [2] - For the year ended December 31, 2025, the net income attributable to common stockholders was $(69.885) million, resulting in a loss of $(1.05) per diluted share [16] - Distributable Earnings for 2025 were $26.324 million, or $0.39 per diluted share, compared to a loss of $(70.683) million, or $(1.02) per diluted share in 2024 [16] - The company reported distributable earnings before realized gains and losses of $59.960 million, or $0.90 per diluted share for 2025, down from $103.478 million, or $1.49 per diluted share in 2024 [16] Liquidity and Capital Structure - Liquidity position of $886.6 million, including $84.6 million in cash and $700.0 million of undrawn capacity on the corporate revolving credit agreement as of December 31, 2025 [6] - Repurchased 4,629,824 shares at an average price of $9.35 for a total of $43.3 million during the year [8] - Entered into a new $250.0 million term lending agreement and a £300.0 million term credit agreement to finance European originations [6] Loan Portfolio and Credit Quality - Current loan portfolio of $5.4 billion, with 99% floating rate and a weighted average unlevered all-in yield of 7.3% [6] - Originated and funded $424.4 million in floating-rate senior loans in Q4 2025, with a weighted average loan-to-value (LTV) ratio of 68% [9] - Collected 100% of interest payments due on the loan portfolio, with an average risk rating of 3.2 [6] - Increased CECL allowance for risk-rated 5 loans to $204.1 million, or $3.15 per share, primarily due to additional reserves [6][8] - The provision for credit losses, net, was $119.372 million, equating to $1.79 per diluted share for 2025, an increase from $80.605 million, or $1.16 per diluted share in 2024 [16] - The company expects to downgrade a life science loan in Boston, MA, with an outstanding principal balance of $229.6 million, which was risk-rated 3 as of December 31, 2025 [17] - The company anticipates an increase in the allowance for credit losses related to the aforementioned loan in Q1 2026, although the amount cannot be estimated at this time [17] Management and Future Outlook - Focus for 2026 includes accelerating the resolution of select REO and watchlist assets to unlock value and position the company for durable earnings growth [7] - The diluted weighted average common shares outstanding for 2025 were 66,807,432, compared to 69,396,890 in 2024 [16] - KKR Real Estate Finance Trust Inc. had $723.2 billion in assets under management as of September 30, 2025 [22] - The company is externally managed by KKR Real Estate Finance Manager LLC, an indirect subsidiary of KKR & Co. Inc. [22] - The company will host a teleconference on February 4, 2026, to discuss its financial results for Q4 2025 [19]