10202017Headline:

Starwood Property Trust Reports Results for the Quarter Ended March 31, 2017

May 9, 2017 - (Newswire)

- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended March 31, 2017. The Company's first quarter 2017 GAAP net income was $102.4 million, or $0.39 per diluted share, and Core Earnings (a non-GAAP financial measure) was $131.8 million, or $0.51 per diluted share.

"I am pleased with our strong start to 2017. We deployed $1.4 billion of capital, including over $930 million of originations in our floating-rate loan portfolio at expected returns of 12.5%," stated Barry Sternlicht, Chairman and CEO of Starwood Property Trust. "From a credit perspective, our portfolio continues to perform quite well, with our total LTV of 63% improving since the end of last quarter. Our earnings were slightly impacted by the excess liquidity from the capital raise in December but coupled with a robust pipeline of investment opportunities across our segments, we feel we are superbly positioned to continue to deliver compelling total returns for our shareholders."

Dividend

On May 9, 2017, the Company's Board of Directors declared a dividend of $0.48 per share of common stock for the quarter ending June 30, 2017. The dividend is payable on July 14, 2017 to common stockholders of record as of June 30, 2017.

Supplemental Schedules

The Company has published supplemental earnings schedules on its website in order to provide additional disclosure and financial information for the benefit of the Company's stakeholders. Specifically, these materials can be found at the Company's website in the Investor Relations section under "Financial Information" at www.starwoodpropertytrust.com.

Conference Call and Webcast Information

The Company will host a webcast and conference call on Tuesday, May 9, 2017, at 10:00 a.m. Eastern Time to discuss first quarter financial results and recent events. A webcast will be available on the Company's website at www.starwoodpropertytrust.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register and download and install any necessary audio software.

To Participate in the Telephone Conference Call:

Dial in at least five minutes prior to start time.

Domestic: 1-877-397-0292
International: 1-719-325-4817

Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 1600682

The playback can be accessed through May 23, 2017.

About Starwood Property Trust, Inc.

Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is the largest commercial mortgage real estate investment trust in the United States. The Company's core business focuses on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt and equity investments. Through its subsidiary LNR Property, LLC, Starwood Property Trust also operates as the largest commercial mortgage special servicer in the United States. With total capital deployed since inception of over $33 billion, Starwood Property Trust continues to solidify its position as one of the premier real estate finance companies in the country.

Forward-Looking Statements

Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Starwood Property Trust, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include completion of pending investments, continued ability to acquire additional investments, competition within the finance and real estate industries, economic conditions, availability of financing and other risks detailed from time to time in the Company's reports filed with the SEC.

View Table Fullscreen

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the three months ended March 31, 2017

(Amounts in thousands)






Investing








Investing





Lending


and Servicing


Property






and Servicing





Segment


Segment


Segment


Corporate


Subtotal


VIEs


Total

Revenues:






















Interest income from loans


$

109,046


$

2,837


$


$


$

111,883


$


$

111,883

Interest income from investment securities



12,719



34,836







47,555



(32,331)



15,224

Servicing fees



210



30,081







30,291



(16,189)



14,102

Rental income





12,189



44,853





57,042





57,042

Other revenues



79



464



45





588



(119)



469

Total revenues



122,054



80,407



44,898





247,359



(48,639)



198,720

Costs and expenses:






















Management fees



454



18





23,862



24,334



50



24,384

Interest expense



19,957



4,358



10,207



31,607



66,129



(269)



65,860

General and administrative



4,211



22,580



1,381



2,170



30,342



87



30,429

Acquisition and investment pursuit costs



515



(16)



172





671





671

Costs of rental operations





5,487



15,391





20,878





20,878

Depreciation and amortization



17



5,054



17,157





22,228





22,228

Loan loss allowance, net



(305)









(305)





(305)

Other expense





758







758





758

Total costs and expenses



24,849



38,239



44,308



57,639



165,035



(132)



164,903

Income (loss) before other income (loss), income taxes and non-controlling interests



97,205



42,168



590



(57,639)



82,324



(48,507)



33,817

Other income (loss):






















Change in net assets related to consolidated VIEs













69,170



69,170

Change in fair value of servicing rights





(9,637)







(9,637)



1,204



(8,433)

Change in fair value of investment securities, net



172



19,045







19,217



(20,388)



(1,171)

Change in fair value of mortgage loans held-for-sale, net





10,593







10,593





10,593

Earnings from unconsolidated entities



470



1,017



2,461





3,948



(961)



2,987

Loss on sale of investments and other assets, net



(56)









(56)





(56)

(Loss) gain on derivative financial instruments, net



(4,535)



697



(511)





(4,349)





(4,349)

Foreign currency gain, net



4,863



1







4,864





4,864

Loss on extinguishment of debt









(5,916)



(5,916)





(5,916)

Other income, net





365







365





365

Total other income (loss)



914



22,081



1,950



(5,916)



19,029



49,025



68,054

Income (loss) before income taxes



98,119



64,249



2,540



(63,555)



101,353



518



101,871

Income tax (provision) benefit



(215)



1,198







983





983

Net income (loss)



97,904



65,447



2,540



(63,555)



102,336



518



102,854

Net (income) loss attributable to non-controlling interests



(354)



376







22



(518)



(496)

Net income (loss) attributable to Starwood Property Trust, Inc.


$

97,550


$

65,823


$

2,540


$

(63,555)


$

102,358


$


$

102,358

Definition of Core Earnings

Core Earnings, a non-GAAP financial measure, is used to compute the Company's incentive fees to its external manager and is an appropriate supplemental disclosure for a mortgage REIT. For the Company's purposes, Core Earnings is defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee due to the Company's external manager, acquisition costs from successful acquisitions, depreciation and amortization of real estate and associated intangibles and any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. The amount is adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash adjustments as determined by the Company's external manager and approved by a majority of the Company's independent directors.

View Table Fullscreen

Reconciliation of Net Income to Core Earnings

For the three months ended March 31, 2017

(Amounts in thousands except per share data)






Investing










Lending


and Servicing


Property








Segment


Segment


Segment


Corporate


Total

Net income (loss) attributable to Starwood Property Trust, Inc.


$

97,550


$

65,823


$

2,540


$

(63,555)


$

102,358

Add / (Deduct):
















Non-cash equity compensation expense



749



629



21



1,752



3,151

Management incentive fee









5,470



5,470

Acquisition and investment pursuit costs





5



60





65

Depreciation and amortization



17



4,474



17,371





21,862

Loan loss allowance, net



(305)









(305)

Interest income adjustment for securities



(248)



2,069







1,821

Other non-cash items





773



(580)



5,916



6,109

Reversal of unrealized (gains) / losses on:
















Loans held-for-sale





(10,593)







(10,593)

Securities



(172)



(19,045)







(19,217)

Derivatives



4,021



(1,111)



(10)





2,900

Foreign currency



(4,863)



(1)







(4,864)

Earnings from unconsolidated entities



(470)



(1,017)



(2,461)





(3,948)

Recognition of realized gains / (losses) on:
















Loans held-for-sale





10,732







10,732

Securities





10,593







10,593

Derivatives



14,923



2,318



158





17,399

Foreign currency



(13,581)



(830)







(14,411)

Earnings from unconsolidated entities



450



466



1,772





2,688

Core Earnings (Loss)


$

98,071


$

65,285


$

18,871


$

(50,417)


$

131,810

Core Earnings (Loss) per Weighted Average Diluted Share


$

0.38


$

0.25


$

0.07


$

(0.19)


$

0.51

View Table Fullscreen

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of March 31, 2017

(Amounts in thousands)






Investing








Investing





Lending


and Servicing


Property






and Servicing





Segment


Segment


Segment


Corporate


Subtotal


VIEs


Total

Assets:






















Cash and cash equivalents


$

654


$

46,711


$

15,048


$

158,869


$

221,282


$

1,236


$

222,518

Restricted cash



19,784



10,349



9,883





40,016





40,016

Loans held-for-investment, net



6,210,717



20,102







6,230,819





6,230,819

Loans held-for-sale



189,334



150,932







340,266





340,266

Loans transferred as secured borrowings



35,000









35,000





35,000

Investment securities



714,699



1,015,146







1,729,845



(999,674)



730,171

Properties, net





277,253



1,660,715





1,937,968





1,937,968

Intangible assets





111,728



123,399





235,127



(33,033)



202,094

Investment in unconsolidated entities



31,125



53,974



125,307





210,406



(8,583)



201,823

Goodwill





140,437







140,437





140,437

Derivative assets



26,594



1,713



42,733





71,040





71,040

Accrued interest receivable



31,950



809







32,759





32,759

Other assets



17,775



51,043



40,373



1,497



110,688



(2,709)



107,979

VIE assets, at fair value













60,185,851



60,185,851

Total Assets


$

7,277,632


$

1,880,197


$

2,017,458


$

160,366


$

11,335,653


$

59,143,088


$

70,478,741

Liabilities and Equity






















Liabilities:






















Accounts payable, accrued expenses and other liabilities


$

23,132


$

43,985


$

57,615


$

25,750


$

150,482


$

923


$

151,405

Related-party payable





94





25,903



25,997





25,997

Dividends payable









126,048



126,048





126,048

Derivative liabilities



1,113



454







1,567





1,567

Secured financing agreements, net



2,485,056



450,181



1,207,281



296,099



4,438,617



(23,700)



4,414,917

Unsecured senior notes, net









2,033,384



2,033,384





2,033,384

Secured borrowings on transferred loans



35,000









35,000





35,000

VIE liabilities, at fair value













59,147,068



59,147,068

Total Liabilities



2,544,301



494,714



1,264,896



2,507,184



6,811,095



59,124,291



65,935,386

Equity:






















Starwood Property Trust, Inc. Stockholders' Equity:






















Common stock









2,648



2,648





2,648

Additional paid-in capital



2,391,134



917,208



713,255



668,101



4,689,698





4,689,698

Treasury stock









(92,104)



(92,104)





(92,104)

Accumulated other comprehensive income (loss)



46,825



(396)



(6,362)





40,067





40,067

Retained earnings (accumulated deficit)



2,284,352



456,742



45,669



(2,925,463)



(138,700)





(138,700)

Total Starwood Property Trust, Inc. Stockholders' Equity



4,722,311



1,373,554



752,562



(2,346,818)



4,501,609





4,501,609

Non-controlling interests in consolidated subsidiaries



11,020



11,929







22,949



18,797



41,746

Total Equity



4,733,331



1,385,483



752,562



(2,346,818)



4,524,558



18,797



4,543,355

Total Liabilities and Equity


$

7,277,632


$

1,880,197


$

2,017,458


$

160,366


$

11,335,653


$

59,143,088


$

70,478,741

Additional information can be found on the Company's website at www.starwoodpropertytrust.com.

Contact:

Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com

SOURCE Starwood Property Trust, Inc.

Related Links

www.starwoodpropertytrust.com

Original Source: https://www.newswire.com/news/starwood-property-trust-reports-results-for-the-quarter-ended-march-31-2017

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