TPG RE Finance Trust Inc. (NYSE: TRTX) reported Q2 EPS of $0.52, $0.25 better than the analyst estimate of $0.27.

SECOND QUARTER 2020 ACTIVITY

• Generated GAAP net income attributable to common stockholders of $40.1 million, or $0.52 per diluted common share, based on a weighted average share count of 76.6 million common shares.
• Increased net interest margin to $44.2 million during the three months ending June 30, 2020 compared to $41.8 million for the three months ended June 30, 2019 and $43.3 million for the three months ended March 31, 2020, an increase of $2.4 million, or 5.7%, over the same period of the prior year, and an increase of $0.9 million, or 2.1%, over the prior quarter.
• Issued and sold, for an aggregate cash purchase price of $225.0 million, 9.0 million shares of 11.0% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”), and detachable, five-year, net settled warrants to purchase up to 12.0 million shares of TRTX common stock at an exercise price of $7.50 per share, to an investment fund managed by Starwood Capital Group (“SCG”). TRTX may elect to sell to SCG, at any time prior to December 31, 2020, up to 4.0 million shares of Series B Preferred Stock and warrants to purchase 3.0 million shares of TRTX common stock for an additional aggregate purchase price of $100.0 million, which may be issued in two tranches.
• Declared on June 16, 2020 a dividend per common share of $0.20 which was paid on July 24, 2020 to shareholders of record as of June 26, 2020. Paid on June 30, 2020 a dividend on the Series B Preferred Stock of $2.25 million, or $0.25 per preferred share, for the period from issuance through June 29, 2020.
• Recorded a reduction in allowance for credit loss of $24.3 million, driven by the reversal of the reserve associated with one loan sold during the second quarter of 2020 of $24.8 million, offset by an increase in the general reserve of $0.5 million.
• Funded $62.5 million of unfunded commitments in connection with existing loans.
• Financed on a non-recourse, non-mark-to-market basis, four loans or participation interests therein totaling $64.6 million using available reinvestment capacity in TRTX 2018-FL2 and TRTX 2019-FL3. These reinvestments generated net cash proceeds of $22.5 million after repaying $42.1 million of existing financing. At June 30, 2020, 52.4% of the Company’s financings were without recourse or mark-to-market provisions.
• Extended secured revolving repurchase and credit agreements with Morgan Stanley Bank, N.A. ($500.0 million commitment through May 4, 2021), Goldman Sachs Bank USA ($250.0 million commitment through August 19, 2021) and Bank of America, N.A. ($200.0 million commitment through September 29, 2021). The latter two facilities include options for future increases in commitments to $500.0 million each.
• Held at quarter-end cash and cash equivalents of $196.2 million and had undrawn capacity under secured borrowing arrangements of $56.1 million, of which $46.2 million was immediately available.
• Benefited from LIBOR floors on our loan portfolio with a weighted average LIBOR of 1.67%, approximately 151 basis points higher than one-month LIBOR as of June 30, 2020.

Greta Guggenheim, Chief Executive Officer, commented: “Our focus this quarter was on strengthening our balance sheet and actively managing each of our existing loan positions. The earnings capacity of our portfolio and its attractive net interest margin enabled us to offset unusually high expenses this quarter, many of which were COVID-related. We repaid our credit facilities by $157.7 million, extended the maturity of three facilities, and improved our liquidity position. We remain focused on maximizing shareholder value through these unprecedented times.”

For earnings history and earnings-related data on TPG RE Finance Trust Inc. (TRTX) click here.