TRTX - Earnings call 4 2023 | TPG RE Finance Trust, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to TPG Real Estate Finance Trust Earnings Call for the fourth quarter and full year of 2023. [Operator Instructions] As a reminder, today's call is being recorded. It is now my pleasure to turn the call over to the company. Thank you.

You may begin.

Unknown Executive

to Quarter Finance XXXX. and welcome for Earnings and Fourth the Full morning TPG Trust RE Call Good Year of

which are the Officer. Doug Bob by the quarter, share joined Executive we about questions. Last We the and presentation will then and Officer; open and earnings release some website the Bouquard, evening, of results, comments Foley, Investor a operating issued Relations for and company on filed Doug Chief Financial and its press are all the in of with company's Bob Form the floor will Chief available XX-K section. today supplemental

As a company's are the control. which reminder, Actual results statements, materially. today's may forward-looking may and of include uncertain outside differ call

results, non-GAAP refer this of release for Chief refer not statements Factors And the For reconciliations, a please update duty will measures. discussion Executive see I'll the company does Officer. turn Form of should section time, XX-K. undertake the The any today's call to these and to the to call affect Risk you Doug participants and over press risks company's could Bouquard, certain Form the to that XX-K. At

Doug Bouquard

thank call. joining for and the morning, Good you

growth, in credit the remarkable of continue the markets. by expectation markets, year, typically tighten restrictive Over the Fed a market labor credit of the that and inflation is since the worth Not X% terms broadly both the has market October robust behind economic policy. equity the start the is worst past the is a S&P XX%. In S&P that up with mix spreads a quarter, driven tight of and us XXX only about in corporate to XXXX, since it's rallied noting

traditional affecting basis, costs on office, particularly to quarters. real debt estate underperform Many pressure credit the providers Broad several capital, reduced that estate positioned. estate values, been remain driven have and spreads relative regional to elevated secular real However, borrowing for of market last same real the banks themes the by liquidity. a defensively on continue challenges

dynamics the rate within of of a lenders. multitude a among markets, key that are of estate Fed there particularly performance, capital rate real play floating credit While cuts will driver be pace

XXXX, C industrial. On markets the the in have bond-buying in tightened far low side, and strong demand the Series spreads with CMBS credit as community such property in-favor thus and multifamily particularly positive from types for

advantage estate, has lagged sector. In real the market asset However, transaction steadily of be will year through followed fourth and the the on TRTX discovery volumes that an class, expect the strategy to we I quarter, rally. a broader across decisively price have as XXXX increased the articulated uncertainty. investment of take credit market. eye towards an Number to the two, number market challenged one, three, maximizing maintain and And environment identified position elevated pressure broader TRTX loans and XXXX in with Number given value. levels an liquidity shareholder attractive beyond. resolve of

hard the contains a broader to multi-strategy loan during we asset XXX% credit with team, mentioned our resolved asset of identified Consequently, all challenged year performing, reserves. levels the we CECL is quarter, of management of real no quarters, ended portfolio of our loans that X-rated those at I've in a line in our loans $XXX fourth with an achieved early liquidity all put, mover especially tool continue we every platform by in maximize and a XX% identify we were $XXX challenges maintaining CECL of loans within to the nonperforming and virtue to prior use address and firm. Driven million. nor a sector. Simply reserves, management reduction while in being and including value, work estate billion disposal As to and available by part the shareholder TRTX asset investment focus management at our XXXX

credit underperforming to quarter of our exemplify exposures. fourth getting ahead resolving and results commitment Our

focused lens. from more million Looking office or through borrowers. at billion exposure early $X.X our approximately and form the since our prudently to We asset challenges in came the risk our A repayments reduce by full facing partial market of XXXX. XX% from to the identified portion that a of reduction $XXX moved progress management substantial

it we in to However, cases, be These optimal or to of decisions loans investments. we management all in asset shareholder certain the to rooted value, the for took where investment we deem sold title our path assets. are framework applied

positioned lending Given on HSBC. to maximize of X% of value. industry's commercial end, their the integrated emphasis assets to financing reduce assets. Despite debt from real REO assets investment To and TRTX's are a we and counterparties extended TPG's facility lending that fully part relationship shareholder direct our manage XXXX with secured we Sachs from end, TRTX. At a demand with for strong less estate with is million deepen total benefit TRTX assets, we Goldman quarter equity platform, arrangement that continue banking closed $XXX credit new to to financing and to than REO account slightly uniquely

have XXXX, capital financing material We provides credit fresh the estate runway deploy attractive no to until us market. which an real maturities into

to estate ahead, market. permeate the broader uncertainty real continues Looking

the For current short-term our confident portfolio, reshaping our navigate pressures believe positive XX% to we and exposure of substantial we strong loan year environment. TRTX, long-term to ability due near-term our is the liquidity perspective, supply in costs. and our tailwinds From an despite leverage, the a the multifamily, are progress which past is borrowing made elevated over new with low loan sector in portfolio

cap renewing, is Furthermore, who is XXX% interest an quality strength did replacing of commitment, borrower collateral the and positive funding signal borrowers, a sheet. our replace to performing. of Our their rate multifamily towards book a reserve, by the XXXX, our multifamily our credit required overall caps which in or are XXX% of balance interest so either

we backdrop, will sector pressure share value. area our rate interest this the continue improving this slower-than-expected believe on price and attractive borrowers, in represents the of an to While investment XX% cuts coming favor the quarters. current book our Against housing new may and be put for sector approximately

disconnect $XXX the TPG's believe liquidity, a compelling pace cuts. platform, available progress company's the real performing press. We significant that a the simple global at loans shares a balance XXX% be conservative sector the we rate remains performance including sheet fundamentals, the leverage heavily there today's estate experience in of offer clear from So estate pressure, real XXX% of interest with that and million X.X:X, acknowledge deep value ratio XXXX may made dependent of terms, performing and our our on loan credit investment of portfolio. In future under remains and with

beyond. With navigate for we performance. However, are with detailed of and XXXX that, will turn it this quarter's more pleased are positioned summary to to Bob I we a how over

Robert Foley

and Thank everyone, you, Good us. for morning, Doug. joining thanks

the resolve executing liquidity, Our results loans, illustrate fourth play identified which for for reduce operating, or levels to at in leverage year year-end sustained efficiently our our and quarter defense office, primarily both high levels success position the XXXX challenged market, values XXXX. of credit offense, already was our low best available to maintain and the in full at in our TRTX

million volumes resolved of prior resolution realized for loans from or to for results, the with million quarter. quarter, for share $XX.X realized a $XXX.X in $X.XX quarter-over-quarter prior quarter, million to losses due $XX.X in with the loss our quarter the quarter. Distributable $X.XX versus Regarding share loss we reserves per GAAP realize credit quarter. our prior the attributable income $XXX.X interest third $X.XX versus during common of of resolved earnings $XX.X net view repayment year the to or per full $X.X which operating XXXX, and before quarter the loss losses to common was which as loan $X.X the the per The earnings million million million fourth margin of credit of nearly quarter. per to shareholders borrowings as in compared loans. $X.XX an million a due the solid before from during to compared a loss fourth share, to $XX.X million largely increase common our was realized is nonperforming fourth or build fourth to in for associated all incurred common Distributable losses foundation of portfolio earnings million X-rated the CECL identical nonperforming as the declined $XX.X a quarter associated the Net in XXXX. Distributable recognized were of averaged was entirely

million CECL $XXX.X September reserve million Our quarter-over-quarter XXXX. decreased $XX.X as by $XXX.X from of or XX.X% million to XX,

including CECL XXX the the reflects high-rated Our resolutions loans, to decline of elimination basis involving nonperforming points. rate reserve declined points XXX loans. This all loan and from loans $XXX credit-challenged fourth identified quarter, of basis during million

losses third per Book specific year-end. of $XX.XX, quarter. share from have is at for per We a no share reserves decline $XX.XX in the loan $X.XX value

XXXX. XX, a nonperforming loans reduced Some of important at data to points. $XXX.X peak million March from X We

million Our mortgage. at $XXX challenged $XXX year. XXX% the $X.X XXX% rate million and billion and loan entire portfolio XXX% quarter of identified performing, year-end in loans was first during credit floating the fourth Resolved

loans, to the but and those and of X XX% declined losses and of approximately commitments. to partial repayments of has These the identified full us X% of $XXX.X property losses For Life million quarter X.X% is expense $XXX.X over hotel room of reading largely loans more within quarter. million reflects when the X% to million total across defensive, goal, weighted to in X per we REO. Excluded shared realized from related only X decline comprises warranted. that office commitments per losses reserve loan Sciences in XX.X% multifamily loan $XXX.X REO, quarterly growth borrowings represent of which assets during of office of million. fourth Multifamily CECL that in Office other X.X% year to but already full credit $X.X past the on converted amounts were loans realized X hotel resolved challenged million for loans. the XX%, resolution. In CECL loan XX.X%, the quarter The than X.X:X, regular included X reserves used interest no and our these $XX further we accomplish quarterly is $XXX.X loan quarter, of book the of type totaled ample sold multifamily loan months. To million, portfolio. Unfunded delevered We resolutions our aggregate XX.X%, face of $XXX.X converted gives the fund or loan portfolio. the $XX.X incurred is eventual year, and sold, and to loan value repayments our related those of upon our balance share for nonearning now are sheet our for realized also X million the losses X million small these loan for $X.XX captured our quarters

capacity XX billion across $X.X total We different have in financing arrangements.

with Goldman And financing added provision During with a new secured extended note-on-note non-mark-to-market we XXXX X-year for a the XXXX. million facility out arrangement additional Sachs our fourth year-end, we $XXX a term on quarter, after counterparty. impacted X credit existing through years shortly to

credit only maturity is extend. to expect special in debt Our under XXXX facility million a we $X.X

REO. Regarding

of and our over convert investments which strategies credit-challenged to capital loans best the recycle their properties teams. is to certain gives and One loan resolve TRTX control sole REO, to

X X converted office we quarter, fourth property. properties the to During multifamily REO loans: and three

equal holdings total X X We're snapshot carrying per broad estate real equity Real and to TPG, at owned footnote alternatives, at billion current TPG to giving X%, partners year-end XXXX, office holding for and and quarter against of of fourth REO a investment UPB resources proceeds gain pre-foreclosure of $XXX.X carrying land value to our funds, financed one loss of effectively months REO which $XXX a of basis Prior of X to by office year-end. million the we into Estate's on all of acquisition, which annualized financing value, due million. average a portfolio The a fourth comprised properties: with with XXXX experienced acquisition multifamily, the in capital in generates and net gain after the turn a has reflected within yield square XX $XXX,XXX. Refer platform And of our XX%. We to X% unit and owning, X multifamily. second in sold to office We returns, per roughly financial REO of for for building, returns, $XX sold REO. advisers total our operate and $X seller the X X gain of recovery and a we our generating apartment We an optimize of blended a loan pre-foreclosure November X sold of the Our statements foot cash, office yield properties which of and our a to and counterparties we've per senior of for quarter and our million, months own roughly $XX.X consideration no managing $XXX,XXX, of in the X X our office and just a platform multifamily property companies is fourth for balance. properties: compared quarter. periods. TRTX cash-on-cash translated taken requirements land, operations roughly today results equity. including title harvesting using the the

ratings due XX entirely fourth to during risk-weighting Refer Regarding almost improved the resolutions of XX X.X to changes credit, the from and our XX-K during risk quarter. recap Form for detailed a of X.X to quarter. Pages loan

from were XX.X% X.X:X XX, capital available represented We or all we non-mark-to-market of non-mark-to-market ingredient XX XX.X% investment XX. acquisitions our essential of $XXX.X liabilities September strategy. refinance in further compared base, September to FLX new base to our end, Regarding an in in with financing elsewhere support liabilities at had sheet quarter end, financed our on liabilities declined our and originations. remain June XX. At at at and Leverage as X.X:X XXXX. At X.X compliance financial liability capacity to loan loans, existing our December balance to covenants million quarter at or

to approximately levels at utilized of since this income mid-April. $X.XX Cash of reinvestment have $XXX loan liquidity. liquidity, incremental capacity assets $XXX.X remains million of and interest $XXX our credit comprised reinvestment asset $XXX.X share. Starting total million and before roughly at million, fully cash of end million outside agreements. immediate million to estimate utilize undrawn investment our per the remaining of total and the near-term cash, high under substantial of quarterly We intend We of quarter We date and maintain the $XX.X resolution of XX.X% of $XX.X CLO liquidity million near-term support strategies. and secured capacity

of this questions. Operator? under we third year. loans. And quarter, open existing funded for commitments that, to the during the mid-April CLO million we'll through open of with remains Our reinvestment And $XX.X floor

Operator

the with The Instructions] comes Cyganovich line first from Citi. [Operator question Arren of

Arren Cyganovich

I you've focusing just guess new now and on loans, the Or now most through as on footing the can is realizing to look start worked maybe a start at you some challenged get time loans more that of offensive some investing of to your well? value REO? your in

Doug Bouquard

we're Thank start and a on where in On you able point, based offensively. really we that unique spot I a for more a actually the question. we where frankly, think lot as are to are company, play,

drive experience owning Our perspective, new record allocation in XXXX. capacity. then I REO, will series time be that, deploy deploying capital and of we have but in terms prepared spent from remarks of that by be of some CLO know can we the his to which, Bob managing excess will the cash, our of of into deploying in there, speaking And to that, course, course, power will beyond reinvestment capital help earnings Part ability a our company. loans

Arren Cyganovich

the now, is in a the year kind you've quarter? power the see you guess of right end that I now we the today, had of point, that or activity earnings guess where lot fourth last of at I stand on the where

Doug Bouquard

Sure.

earlier I'd playing, XXXX, time during thing $X.XX, we quarterly averaged was So for our anchor I call of distributable look about we had maybe elevated where in that the $X.XX. average were period defense, think a to of say, one basis, in everyone course, we earnings when that before levels. a generally cash moment, losses, you on that credit And a is at more mentioned

we build is, relatively company having the as think can I from how from And So describe $X.XX X power kind earnings levers really then really kind of of I a share that of good the number up. much starting of our I it per there, base. think,

as is The I first deploying reinvestment the of. CLO of which which, the process mentioned, well in series capacity, we're

within we Bob As capacity those mentioned, have of $XXX CLOs. million

have about We of fully far, deployed, intend fund amount. $XX and to remaining thus we that already that, million

investments well. Secondly, as cash we into excess deploy look may to

that to have a to relationships. grow our to We counterparties are of would fortunate financing series continue like

just are leverage level we're a So liquidity, at the so from back be levered. from excess you across again, we there's perspective, ample look levered perspective, landscape, then sort When cash. And X third, leverage really deploying a low relatively would of X.X:X.

have have potentially opportunity the bit to more we So level. our leverage company a do at

Operator

the with question Next from Stephen James. Instructions] Raymond of comes line [Operator Laws

Stephen Laws

Congratulations I and busy, lot on progress. of wanted quarter a revisit. busy fourth touch base, Bob, to

I think a impact that you a year, said get guess, number, we impact later but the once quarter quarter full this a $X.XX of $X.XX off? per quarterly share. full Is once, is are that topped I CLOs won't

Robert Foley

at $XXX Yes, that's Stephen. We've about deployed $XX Yes, year-end. since. was uninvested correct, million million

about $XXX leaves million. that so And

today based first how deployed where you get we're $X.XX. that all So loans That's on to the quarter. the originating we're in

Stephen Laws

And a question. next great that's Great. lead my into

far, Were in looking that pipeline the were done CLO new $XX what you the those closed that's vehicles? are year? this So investment were to in million facilities? so And those go other existing into those new originations at likely current

Doug Bouquard

Yes.

So new sector. those the prefer we we investments about as do a multifamily XXXX, think And theme. both were in investments think within and -- I were housing capital those broad both X both as still deploying

While multifamily we amount certain either specifically market, markets, there But longer do of cases, we level, do in term. the and X supply like borrower some multifamily acknowledge the beyond due those short-term rates. under that to are then increased the pressure with factors, in on an space, seeing of sort pressure really which of parts are elevated

market think I a in loan are, at XXXX and lot value would lower leverage of lend a generally able we deploying basically at housing So we in when within to look lending I lending say, the today's the we're where capital my sector. the than was able 'XX. expectation be current to we're points market, is that to, and that we But will that going

Stephen Laws

know color the I maybe currently but talk your And then you of of are give others you one there. sheet? us about they're over a time REO, fairly on and Or off Appreciate find sooner attractive stabilize? are return, you time generating Or little assets moving the a lease Can the than assets other homes that? line that that balance can they up may there color the some need to on others? the

Doug Bouquard

one. don't why start you that Bob, Sure.

Robert Foley

Stephen, that just we is of Houston as in a in portfolio was since REO ROE. generates of -- very properties, you at which X one year-end, an X-plus XXXX, attractive building office owned percent comprised mentioned, we've and earlier our

likely that we evaluated was realize an to is the plans the opposite investment of and of now for part have say, we the alternative the That hold order own for in higher important longer we investment, period employee to determine be each on which that in have or current capital bar for of owned each therefore, to For in would return time others, hold generate more we foreclose properties would are require each. of frame fact resolution periods business a shorter I a cash, speaking, and fully strategy less for investment have and probably a pursue true. another the REO. and were whether

we own very the more assets business several property X So We've we it. nice Chicago, we we in A the for then lease acquired of we'll a and that years Class market weeks example, stabilize report are in by western completed X now something occupancy through is or in plans, work those. sell. that back about points some actually multifamily lease other probably complex X have There improved up, That's ago since suburbs may and as up. project that and the to

Stephen Laws

mentioned on to reverts the at need end on from you moving Can with give quarter. that one. one know where to you back And to and an K interest us last stand update quick moving we the X.X this Great. covenant that X.X back pieces ratio any X.X of coverage The there?

Robert Foley

will we don't your lenders issue to of just no point in addressing that, important assessment. thing test borrowings number thing in -- ratio. substantial that longer monitoring one We're that, with that expect question. correct in want Absolutely that and have, and that connection an is an but would And analysts which X-quarter moving more coverage we Retiring closely be a investors discussions add quarter the remind come was the to is test. in had in end. We're other a just response with interest that our things, obviously Sure. we including trailing the constant your the NPLs, about I

earn out of your it and it. sort into of you So way

Operator

from [Operator Instructions] question with Steve JMP. Citizens line comes the Next of Delaney

Steven Delaney

my I on Apologies. was apologies. mute,

you've Following done up on remarkable. was Stephen's comment about the that truly cleanup

to have we So applaud that.

credit growth if I priorities and new of slightly would sort of the of that you if where and XX% in realized at opportunities, this stock buybacks will, important, anything, the should boxed ranking put with but book scale loan share you you're in, that on Now looking is value? shareholders at the what point? buybacks expect, under are

Doug Bouquard

Thank you.

really certainly us. is potential for be to at and other deploying looking arsenal the repurchase being share ways our tool in be allocation That capital So for will we us investments capital. a said, new both

carefully So considering returns with our Board, just very, best are it, to our direct and seeking are investors. be for the we, option about the very along

Steven Delaney

Sure. Understand.

did missing you -- Am have I'm debt. that balance correct? a sheet, just Is at high-yield looking don't any something? convert I debt? I see or I secured the Now not see

Doug Bouquard

That's correct.

Robert Foley

correct. That's

Doug Bouquard

right. absolutely you're Steve,

Steven Delaney

capital is defense. on But we've those. and nice know some buybacks offense Yes, allocation part seen -- look, I Okay. really because part it's

the effort. So I'm And congratulations sure will we'll great on for right make moving. say calls Board the now, cleanup your just

all So the best XXXX. in

Doug Bouquard

much. appreciate right. it. All you very Thank We

Operator

of BTIG. line with Sarah Barcomb Next the question comes from

Sarah Barcomb

you go-forward other speak we we within should remarks to Or that timing of the So here. the needs nonaccrual risk? remain the you and is happen me that need as my walk to power now distributable Fed gotten on few see Could prepared thoughts rate Would through And nonperforming loans? that next is like important run consider what any performing pace X that variables think the mentioned there? credit? You loan your first the in about order that can go-forward you've portfolio. on the in question pivot constructive any the on about to we to for earnings Basically months? you earnings sensitivity

Doug Bouquard

to on Sure. question. just average as and there, to just of for just of Happy losses, again, -- in is by around, to address balance to relatively deploying that, quarter. per start earnings terms the anchoring grow ways the capacity, then it of deploying our sorry, sheet CLO from in our $X.XX there credit guidepost that again, earnings sort given And reinvestment use more grow approximately XXXX we modestly potentially a cash power also series within excess and I'll before thanks levered are adding distributable leverage once the X.X:X. cohort then at again, again,

and sheet ability we the in fact XXXX, look that we of deploy no woods. remain into of fact our the out where to and both balance of the think frankly of way our in the are are I we respectful respectful where are is estate that to forward, pleased and the we market cycle. as capital though why Even As we really kind that real in Bob is I spoke

positioned and how of borrowers. portion that When have Xrd, And pressure comment to look relating it we've one area when certain about particularly you assets, roughly when substantial that X the multifamily through is, now slower. think of Fed risk sheet may Fed is XXXX, the more does our the flexibility market balance sheet think credit cuts. rate the our on about SOFR put that comes now, challenged to resolved we XXXX at look at course, challenging. Specific we balance when to So get we our a to that we've if continue we

defense, respectful want to this down the just we market. play of So to that balance to again, sheet where in of of want to risk. more just can year where it a But we've are it, terms really be in lot comes when be also positioned office ultimately, relative respectful but terms the we

Sarah Barcomb

Okay. Great. portfolio. needs question relates to the liquidity for my second And REO

already for us given those details some thanks REO assets. previous reminding the on here, You've and successful for resolutions good again

And manage these is run Just Just think needed and properties, much needs. overall or these? new digging you into plans liquidity these to about REO lever will curious do you how them X CapEx up liquidity unlevered? here

Robert Foley

answer to really each require suburbs Sure. Thanks XX%, it, of just any provide your goalposts. XX% The different be multifamily leased going and Sarah. doesn't to for The to the the earlier The for capital. question, projects occupied. alluded assets Chicago I is properties, in call of

our spectrum, require operations control. pure end the exercise, At there of the a confident assets will under capital, are that's would perhaps new some reconditioning, we're other which leasing. perhaps well that So go for

being here. generally the looking But we're we'd else And for speaking, of investors. is Our equal, where liquidity the at return budgets, incorporate to But able we company, expectations business mentioned our to going criteria rather projections as specific the all time spend one undertake over there. earlier, the our obviously, you'll best I the spend see for as point for we're be this provide limit not can. our capital plans we

Sarah Barcomb

lines the income I expectations is are mentioned, warehouse And quickly, new to on that over CLOs? wanted just the clarify making existing Or benefit really benefit $X.XX is that layering loans? going then you Great. loans for on currently offense your that to moving and Okay. of just that earnings in that

Robert Foley

loans a million ago, of minutes loan Doug We the But mentioned year. of originate $XX it's million, blend of and this utilization to almost as I and last the X million of far Well, actually a X. those new we've million close think were $XXX originations. few year, the thus originated the did I $XX $XXX

have all So it. of denied we not

Doug Bouquard

a is that, helpful on to I just context. think Sarah, expand which just also And

a secured liquidity-wise, Series that new really capital. we all ways think about available of deploy financing we we both a for are lot cash also you just have the then to from where CLO perspective, a If from of lined different up, and us capacity perspective,

fund use So to even are certain capacity, leverage. of the Series we where available even of may if that CLO more of dollar there a CLO channel series will, have though loans that terms opt outside we every back of attractive today we course, in

direct think making we've this what pretty we've lending, are community bank seen providing cautious although back we're a from so leverage generally about as far is of out from the be there investments. to banks us I they appetite lot strong actually year more seen a new

what where, will more fully have again, reinvested So the us we populating really of between X. be that alternatives. I think And course, many we, more liquidity capital, we will as deploy some optimize capacity, and do that's other provides flexibility but Series we that CLO

Operator

Rick Next JPMorgan. from question Shane comes of line the with

Richard Shane

of at the not stock return of at asked a I cleaning the signaling And there places the 'XX going Look, end a flexibility have is this gives flexibility to up, what's run you at you understand the be efficiency I Delaney assume, preserving dividend amount to can. questions even flexibility it's does 'XX. -- spirit to understand into realized of level, is full losses is book is, But the policy. have the that running for related dividend the lot credit you out had dividend, reality and it up is, capital. other a and distributable hey, about yield. In Steve I 'XX, the necessity, as even this that perhaps with but again, reality head at about, the there of been is a that given XX-plus make percent trading a the of of maintain repurchases, tremendous the if you out not to sense level dividend getting realized current of really earnings. dividend on rate point, in the I one of but

Doug Bouquard

power Look, great along reflective first to around a and to being thoughtful course, really a think start it's of the that with earnings I'll with, is long-term policy. Board continue time of dividend very our of company. anchored about dividend we policy question, about the our a our level of lot spend be we,

I quarter and you think particularly really be a much the earnings of see in achieve, what forward. And from were long-term power frankly, in can have, fourth going to XXXX, the allows we'll that's to window what that policy dividend the sort able as us, point, as company. we the really all clear into to using of think through we exactly frankly, your

Richard Shane

almost it, equate last of the probably I see look, And years flip distributions. call is realized X it. losses of that Got it that the year dividend side to,

it problem, And -- and Doesn't again, now a this probably that really reinvest being to actually in you so capital, -- able just as right I can't returns an marginal capital, you have a guys where you're is on to, preserving retain to investments. window retain and it think looking sense which situation in capital, you're unique you retain above norm can at where make historical reinvest? of

Doug Bouquard

that's And Yes. really asking that but are the I guiding long-term really as we we as again, Look, policy, again, of questions. the light And you we I used company. sheet quite dividend evaluating think frankly, power earnings think we thoughtful going you're the a opportunities navigate exactly that evolve balance laid and of the the in some see in what's our help out shape out market, complexities and policy us our eloquently. to

Richard Shane

different the is will realized weigh to policy the amount not understanding I'm And shareholders. that guys there's what right really and look, about this I'm again, you And I ambiguity optimal saying just as for what helpful. this. of trying uncertainty, is think what -- consider an choice. enormous is you the

Robert Foley

like an all more to which or preserve of that at operate constraints just is in order Rick's one line taxable your that of programming I'd one other XX% your and REIT is us dividend the none is of important application. of that should to that problem policy thing qualification, you to under income. overlays big questioning, thoughtful forget or add linear distribute to REITs need least And

think doesn't to is instances the income. is are the but focused have there I where have there -- on So income, been taxable REIT this there have situations which TRTX discussion seems today where question, been morning in taxable

something Rick. Thanks, REIT every and as needs so team And well. to management that Board consider that's

Operator

comes Fandetti final with from Don Wells the of Fargo. line question The

Donald Fandetti

you over over As or migration or quarter of next the quarter X thinking how you X, about are out the look to reserve build the X? and also Xs risk from next

Robert Foley

of Don, for question. your order. Thanks in it's Bob. those sort take I'll

and ratings risk and our quarter, In things. risk our of reflect on. our individual ratings, estate we assessment and future say current so the terms and X the assessment carefully of collateral, I loans At would expected our scrub conditions loan conditions, real of macro loan end every sponsor all of

Doug on any future. With current risk XX, future, reality our of the that including based mentioned our the of had expectations respect expectations ratings at are for end our both or in December broader and and to the the quarter, So certainly on we the real Fed real are and uncertainty of policy, broader a weighs in particular, that And in economy period correction, estate correction heavily real of uncertainty earlier in estate. estate.

risk So on and to different behavior negative consequently be the weigh CECL, currently borrower it will and structured. on ratings not positive. With could if what the mentioned way to is or proves we build that actual path the expect build of is the respect to the CECL economy and be, rates you than

is loan. assessment So at end, of assessment life losses the reserve, any it's of CECL again, current the expected of a over reflect to period the supposed -- the management's

at our ability. to So any end intended are best reflect the that of to and reserves do our quarter

realized tight. I in to been CECL has think comparison reserves of empirical date, losses pretty to our evidence

reserve what to is different the future time. we'll hope your environment in then so at again, comfortable pretty been If appropriate assessment, on have I the we question. our we're answer But the materially And question is with CECL thus on based adjust that current your short the answers than today future. reserves the our in far, our see target. market

Operator

turn reached management have we the of end floor session. over like gentlemen, the question-and-answer would to comments. to closing and I for now the Ladies

Doug Bouquard

to to earnings and our Yes. you call. joining I'd again forward just we next with like thank on look all you today, speaking for

Operator

This you. Thank today's concludes teleconference.

participation. your at time. your disconnect may Thank You you this for lines

TPG RE Finance Trust (TRTX) 21 Feb 242023 Q4 Earnings call transcript