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TPG RE Finance Trust, Inc. (TRTX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 EPS was $0.09 and Distributable Earnings per diluted share were $0.10, with net interest income of $24.68M; book value per share declined to $11.27 from $11.41 in Q3, driven by dividends and credit loss expense .
  • Liquidity remained strong at $320.8M; non-mark-to-market financing comprised 77.0% of borrowings; CECL allowance fell to $64.0M (187 bps of commitments), reflecting stable credit quality and a 100% performing loan portfolio at year-end .
  • Originations totaled $242.0M (SOFR+3.33%, 59.6% LTV) and repayments were $110.2M; the company registered its second consecutive quarter of net earning asset growth .
  • Subsequent event: secured revolving credit facility upsized and extended to $375.0M (from $290.0M) through Feb 2028, enhancing funding capacity; management reiterated run-rate coverage of the $0.24 quarterly dividend and expects leverage to “march up steadily” as deployment accelerates (no formal numeric guidance) .
  • Wall Street consensus estimates via S&P Global were unavailable due to access limits; beats/misses versus consensus cannot be assessed this quarter [GetEstimates error messages].

What Went Well and What Went Wrong

What Went Well

  • “We ended the year with $321 million of cash and near-term available liquidity, a 100% performing loan portfolio, unchanged risk ratings, and a $5 million quarter-over-quarter decline in our CECL reserve” (CEO) .
  • Net earning assets grew for a second straight quarter; Q4 originations were $242.0M and management highlighted an active 2025 pipeline with >$300M of live opportunities (CEO) .
  • Liability structure improved: non-MTM financing steady at 77%, and post-quarter the secured revolver was upsized to $375.0M with extended maturity and full syndicate support (CFO) .

What Went Wrong

  • Book value per share decreased to $11.27 from $11.41 QoQ, largely due to common and preferred dividends and credit loss expense reflected in equity bridge .
  • Q4 Distributable Earnings per diluted share ($0.10) did not cover the $0.24 dividend for the quarter, reflecting realized REO-related losses and CECL expense in the period .
  • REO portfolio expanded via two foreclosures (three multifamily assets, $89.9M fair value); while strategy is to monetize at or above carrying value, near-term REO operating expenses increased for the San Antonio property (management commentary) .

Financial Results

Income Statement Comparison (YoY)

MetricQ4 2023Q4 2024
Interest income ($USD Millions)$84.062 $68.992
Interest expense ($USD Millions)$62.805 $44.312
Net interest income ($USD Millions)$21.257 $24.680
Other revenue ($USD Millions)$10.230 $10.061
Total other expenses ($USD Millions)$14.815 $19.587
Credit loss expense ($USD Millions)$17.254 $4.629
Net income attributable to common ($USD Millions)$2.632 $6.909
EPS diluted ($USD)$0.03 $0.09

Sequential Earnings Metrics

MetricQ2 2024Q3 2024Q4 2024
EPS diluted ($USD)$0.26 $0.23 $0.09
Distributable Earnings per diluted share ($USD)$0.28 $0.28 $0.10
Book value per common share ($USD)$11.40 $11.41 $11.27

Capital and Credit KPIs

KPIQ3 2024Q4 2024
Liquidity ($USD Millions)$357.0 $320.8
Debt-to-Equity Ratio (x)2.02x 2.14x
Non-MTM financing (% of borrowings)79.7% 77.0%
CECL allowance ($USD Millions)$69.3 $64.0
CECL allowance (bps of commitments)205 bps 187 bps
Weighted avg risk rating3.0 3.0
Loan commitments ($USD Billions)$3.4 $3.4
Outstanding principal balance ($USD Billions)$3.3 $3.3
Common dividend declared ($USD per share)$0.24 $0.24

Portfolio Yield/Structure

MetricQ4 2024
Weighted average all-in yield (%)8.26%
Weighted average credit spread (%)3.68%
% Floating rate loans99.7%
Weighted average LTV (%)66.1%

Property Type Composition (% of commitments)

Property TypeDec 31, 2023Sep 30, 2024Dec 31, 2024
Office19.9% 18.1% 17.8%
Multifamily49.2% 54.5% 52.0%
Hotel10.6% 10.3% 10.2%
Life Science11.0% 11.7% 10.8%
Mixed-Use3.1% 2.3% 2.3%
Industrial2.9% 1.1% 4.9%
Self Storage1.4% 0.0% 0.0%
Other0.0% 2.0% 2.0%

Activity and Run-Rate Detail (Q4 2024)

MetricQ4 2024
Originations (commitments) ($USD Millions)$242.0
Initial funded ($USD Millions)$225.2
Weighted avg spread (bps over SOFR)+333
As-is LTV (%)59.6%
Repayments ($USD Millions)$110.2
Deferred fundings ($USD Millions)$4.7
Allowance for credit losses ($USD Millions)$64.0
Dividend declared ($USD per share)$0.24

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Common dividend per shareQuarterly$0.24 (maintained in Q3 2024) $0.24 declared for Q4 (paid Jan 24, 2025) Maintained
Secured revolving credit facility capacityImmediate-term (post Q4)$290.0M $375.0M capacity; maturity extended to Feb 13, 2028 Raised and extended
Leverage (Debt-to-Equity) narrative2025Operated ~2.0–2.5x in 2024 Management expects steady increase toward historical 3.0–3.3x as deployment accelerates (no numeric guidance) Indicated higher (no formal target)
Funding mix (non-MTM)Current~78–80% in Q2–Q3 77% at Q4; continued emphasis on term/non-MTM financing Slightly lower, strategic emphasis maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Macro and rates“Uncertain macro” with strong dividend coverage and conservative leverage in Q2; “strong operating earnings” and no risk rating migration in Q3 Fed may forgo additional cuts; steeper yield curve is a forcing mechanism driving recapitalizations and opportunistic credit investing (CEO) More constructive tone, pipeline strengthening
Origination pipelineQ2/Q3 originations $96.0M/$204.0M, respectively Q4 originations $242.0M; >$300M live opportunities; 2 consecutive quarters of net asset growth Accelerating
Credit quality & CECLCECL down to 208–205 bps in Q2/Q3; risk ratings stable at 3.0 CECL down to 187 bps; 100% performing; only two 4-rated loans remain; no 5s (CFO) Improving/stable
REO strategyLimited commentary; business focused on loan portfolio Foreclosed two multifamily loans (three properties); plan to monetize, with two CA office assets on market; Chicago >90% leased (CFO) Active monetization path
Financing markets (CRE CLO, note-on-note)Emphasis on non-MTM financing; liquidity robust Facility upsized; spreads improving in note-on-note and CRE CLO; evaluating new CLO issuance in 2025 (CFO) Conditions improving
Sector exposures (Life Science)Life science portion of repayments in Q4 mix Exposure reduced from 4 to 3 loans; assets built out (not shell); uptick in leasing/touring activity (CEO) Cautiously constructive

Management Commentary

  • CEO: “During 2024 we out earned our annual common stock dividend rate of $0.96 per share…we originated $242 million of new loan investments…registered our second consecutive quarter of net growth in earning assets” .
  • CEO: “We currently have in excess of $300 million of live investment opportunities…These factors create an excellent dynamic for opportunistic debt investing” .
  • CFO: “100% of our loan portfolio is performing…weighted-average risk rating is 3.0…leveraged at only 2.14:1…CECL reserve of 187 bps continuing to decline” .
  • CFO: “Our share of non-mark-to-market, nonrecourse term financing held steady at 77%…liability structure will drive continued growth in earning assets” .
  • CFO: “We amended an existing office loan…received a $20 million principal repayment…loan now has an in-place debt yield of 11.7% and stabilized debt yield of 14.4%…leased occupancy of 100%” .

Q&A Highlights

  • REO foreclosures: Management enforced remedies on two multifamily loans after borrowers failed to meet modification terms; Chicago asset >90% leased and targeted for near-term sale; San Antonio requires stabilization; overall REO expenses uptick in Q4 tied to San Antonio one-time costs .
  • Leverage and CLO plans: Leverage currently 2.14x; management expects steady increase as deployment accelerates; active in note-on-note market; may participate as a new CLO issuer in 2025 depending on conditions .
  • Life Science exposure: Reduced to three assets; all built out (non-shell); slight uptick in leasing/touring over last 90–120 days; focus on high-quality sponsors and TPG platform insights .
  • CECL provisioning outlook: CECL bps expected to be flat-to-declining as book remains 100% performing; dollar CECL will grow with asset growth; Q4 general reserve driven by macro factors; realized losses aligned closely with prior reserves .
  • Asset management on remaining 4-rated loans: Expect Honolulu office repayment via sale; mixed-use SoCal under negotiation with strict modification framework (principal reduction, interest reserves, cap purchase) .

Estimates Context

  • Wall Street consensus (S&P Global) EPS and revenue estimates were unavailable due to request limits; as a result, we cannot assess beat/miss versus consensus for Q4 2024. Values would be retrieved from S&P Global if accessible.

Key Takeaways for Investors

  • Dividend sustainability: FY 2024 Distributable Earnings of $0.96 per share covered the $0.96 annual dividend; management reiterated run-rate coverage of the $0.24 quarterly dividend with upside from deployment and financing capacity .
  • Balance sheet strength: Liquidity of $320.8M and 77% non-MTM financing position TRTX to fund originations without reliance on repayments; revolver upsized to $375.0M post-quarter .
  • Credit quality: 100% performing loans, risk rating steady at 3.0, CECL allowance reduced to 187 bps; minimal migration risk per management .
  • Growth trajectory: Two consecutive quarters of net earning asset growth; Q4 originations $242.0M and >$300M pipeline suggest accelerating deployment into 2025 .
  • REO monetization: Active sales processes for CA office assets; Chicago >90% leased and targeted for quicker sale; management expects REO portfolio reduced by about half by end of 2025, recycling equity to boost distributable earnings .
  • Funding conditions improving: Note-on-note and CRE CLO spreads/structures are favorable; management may tap CLO market and back-lever assets to increase ROE and scale .
  • Tactical catalyst: The revolver upsize/extension, stable credit, and visible origination pipeline are near-term stock reaction catalysts; estimate comparisons unavailable this quarter, but narrative and capital actions are supportive .

Appendix: Additional Data Points

  • Q4 2024 interest income $68.992M; interest expense $44.312M; net interest income $24.680M .
  • Q4 2024 CECL credit loss expense $4.629M; allowance at quarter-end $64.0M (187 bps) .
  • Q4 2024 portfolio metrics: 99.7% floating; weighted average all-in yield 8.26%; weighted average LTV 66.1% .
  • Q4 2024 loan portfolio walk and commitments/unfunded levels detailed in supplemental .

Sources: Q4 2024 8-K and Exhibits (press release & supplemental) , Q4 2024 earnings call transcript –, prior quarter press releases (Q3/Q2) – –.