Starwood Property Trust Reports Results for the Quarter Ended March 31, 2021

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GREENWICH, Conn., May 6, 2021 /PRNewswire/ -- Starwood Property Trust, Inc. STWD today announced operating results for the fiscal quarter ended March 31, 2021.  The Company's first quarter 2021 GAAP net income was $111.4 million, or $0.38 per diluted share, and Distributable Earnings (a non-GAAP financial measure) was $150.8 million, or $0.50 per diluted share.

"We benefited from a strong start to the year with $2.7 billion of capital deployed in the first quarter across our business cylinders, including $2.2 billion in Commercial Lending, bringing our post-COVID capital deployment to $5.7 billion. The credit performance of our diversified business lines coupled with our robust liquidity position gave us the confidence to continue our strong pace of investment activity.  Eleven years into our journey, the LTV of our loan book remains low at 60.1%, and we continue to provide an attractive yield in a low rate world," commented Barry Sternlicht, Chairman and CEO of Starwood Property Trust. 

"After quarter end, we closed two CLOs totaling $1.8 billion: our inaugural Infrastructure CLO for $500 million and our second CRE CLO for $1.3 billion. These financings allowed us to further de-risk our balance sheet and diversify our funding sources.

"After a year of unprecedented distress which led to record volume in our special servicer, LNR was upgraded by Fitch to its highest servicer rating and is the only CMBS special servicer at this level globally.  We are extremely proud of this achievement which recognizes the strength and tenure of our team, years of operating at the highest level, our commitment to technology and our exemplary performance," commented Jeff DiModica, President of Starwood Property Trust.

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 on the Company's website in the Investor Relations section under "Quarterly Results" at www.starwoodpropertytrust.com.

Webcast and Conference Call Information 

The Company will host a live webcast and conference call on Thursday, May 6, 2021, at 10:00 a.m. Eastern Time.  To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.  The webcast is available at www.starwoodpropertytrust.com in the Investor Relations section of the website.  The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. 

To Participate via Telephone Conference Call:

Dial in at least 15 minutes prior to start time.

Domestic:  1-877-407-9039 

International:  1-201-689-8470

Conference Call Playback:

Domestic:  1-844-512-2921

International:  1-412-317-6671

Passcode:  13718432

The playback can be accessed through May 13, 2021.

About Starwood Property Trust, Inc.

Starwood Property Trust STWD is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm Starwood Capital Group, the Company has successfully deployed over $69 billion of capital since inception and manages a portfolio of over $18 billion across debt and equity investments. Starwood Property Trust's investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk adjusted returning investments across its target assets. Additional information can be found at www.starwoodpropertytrust.com.

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.  Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words "believe," "expect," "anticipate" and other similar expressions.  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, but are not limited to, the severity and duration of economic disruption caused by the COVID-19 global pandemic, completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing and other risks detailed under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as well as other risks and uncertainties set forth from time to time in the Company's reports filed with the SEC.

In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained herein will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.

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

 



Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the three months ended March 31, 2021

(Amounts in thousands)







 Commercial and

































Residential



Infrastructure







Investing





















Lending



Lending



Property



and Servicing











Securitization









Segment



Segment



Segment



Segment



Corporate



Subtotal



VIEs



Total

Revenues:

















































Interest income from loans



$

170,593



$

18,808



$



$

1,174



$



$

190,575



$



$

190,575

Interest income from investment securities





18,385





564









20,940









39,889





(28,279)





11,610

Servicing fees





124













12,456









12,580





(4,178)





8,402

Rental income





1,339









65,104





9,895









76,338









76,338

Other revenues





90





93





40





82









305









305

Total revenues 





190,531





19,465





65,144





44,547









319,687





(32,457)





287,230

Costs and expenses:

















































Management fees





315













222





38,188





38,725





11





38,736

Interest expense





44,295





8,841





15,832





5,449





29,148





103,565





(191)





103,374

General and administrative





11,333





3,442





1,023





18,440





4,311





38,549





87





38,636

Acquisition and investment pursuit costs





185





















185









185

Costs of rental operations





477









23,960





4,308









28,745









28,745

Depreciation and amortization





307





100





18,100





3,967









22,474









22,474

Credit loss (reversal) provision, net





(529)





573

















44









44

Other expense





31









583





71









685









685

Total costs and expenses 





56,414





12,956





59,498





32,457





71,647





232,972





(93)





232,879

Other income (loss):

















































Change in net assets related to consolidated VIEs





























39,745





39,745

Change in fair value of servicing rights

















745









745





(1,541)





(796)

Change in fair value of investment securities, net





(2,050)













7,170









5,120





(5,426)





(306)

Change in fair value of mortgage loans, net





(10,714)













1,236









(9,478)









(9,478)

Earnings (loss) from unconsolidated entities





1,753





(254)









589









2,088





(354)





1,734

Gain on sale of investments and other assets, net





17,693





















17,693









17,693

Gain (loss) on derivative financial instruments, net





26,141





684





4,724





9,283





(6,843)





33,989









33,989

Foreign currency (loss) gain, net





(11,594)





(49)





25





(63)









(11,681)









(11,681)

Loss on extinguishment of debt





(68)





(307)





(141)













(516)









(516)

Other income, net









21

















21









21

Total other income (loss)





21,161





95





4,608





18,960





(6,843)





37,981





32,424





70,405

Income (loss) before income taxes 





155,278





6,604





10,254





31,050





(78,490)





124,696





60





124,756

Income tax provision





(1,505)





(92)









(633)









(2,230)









(2,230)

Net income (loss) 





153,773





6,512





10,254





30,417





(78,490)





122,466





60





122,526

Net income attributable to non-controlling interests





(3)









(5,077)





(6,008)









(11,088)





(60)





(11,148)

Net income (loss) attributable to Starwood

   Property Trust, Inc
.



$

153,770



$

6,512



$

5,177



$

24,409



$

(78,490)



$

111,378



$



$

111,378

 

Definition of Distributable Earnings

Distributable 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, Distributable 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 and, to the extent deducted from net income (loss), distributions payable with respect to equity securities of subsidiaries issued in exchange for properties or interests therein. 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. 

 

Reconciliation of Net Income to Distributable Earnings

For the three months ended March 31, 2021

(Amounts in thousands except per share data)







Commercial

























and



































Residential



Infrastructure







Investing













Lending



Lending



Property



and Servicing













Segment



Segment



Segment



Segment



Corporate



Total

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



$

153,770



$

6,512



$

5,177



$

24,409



$

(78,490)



$

111,378

Add / (Deduct):





































Non-controlling interests attributable to Woodstar II Class A Units













5,077













5,077

Non-cash equity compensation expense





1,781





300





31





881





7,317





10,310

Management incentive fee





















13,123





13,123

Acquisition and investment pursuit costs





(164)









(89)













(253)

Depreciation and amortization





247





91





18,161





3,603









22,102

Credit loss (reversal) provision, net





(529)





573

















44

Interest income adjustment for securities





(1,300)













3,995









2,695

Extinguishment of debt, net





















(246)





(246)

Income tax (provision) benefit associated with realized (gains) losses





(6,495)













405









(6,090)

Other non-cash items





3









(337)





207





415





288

Reversal of GAAP unrealized (gains) / losses on:





































Loans





10,714













(1,236)









9,478

Securities





2,050













(7,170)









(5,120)

Derivatives





(27,171)





(745)





(6,446)





(9,719)





9,313





(34,768)

Foreign currency





11,594





49





(25)





63









11,681

(Earnings) loss from unconsolidated entities





(1,753)





254









(589)









(2,088)

Sales of properties





(17,693)





















(17,693)

Recognition of Distributable realized gains / (losses) on:





































Loans





14,553













4,672









19,225

Realized credit loss





(7,757)





















(7,757)

Securities





(2,861)













1,776









(1,085)

Derivatives





1,950









(35)





1,595









3,510

Foreign currency





4,784





(10)





25





(63)









4,736

Earnings (loss) from unconsolidated entities





3,218





(254)









964









3,928

Sales of properties





8,298





















8,298

Distributable Earnings (Loss)



$

147,239



$

6,770



$

21,539



$

23,793



$

(48,568)



$

150,773

Distributable Earnings (Loss) per Weighted Average Diluted

   Share



$

0.49



$

0.02



$

0.07



$

0.08



$

(0.16)



$

0.50

 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of March 31, 2021

(Amounts in thousands)







Commercial and

































Residential



Infrastructure







Investing





















Lending



Lending



Property



and Servicing











Securitization









Segment



Segment



Segment



Segment



Corporate



Subtotal



VIEs



Total

Assets:

















































Cash and cash equivalents



$

56,629



$

7,873



$

39,791



$

29,064



$

217,049



$

350,406



$

784



$

351,190

Restricted cash





69,882





27,973





6,672





14,197









118,724









118,724

Loans held-for-investment, net





10,733,752





1,586,808









933









12,321,493









12,321,493

Loans held-for-sale





587,037





89,368









168,226









844,631









844,631

Investment securities





969,968





34,951









1,106,000









2,110,919





(1,432,632)





678,287

Properties, net





93,718









1,954,880





196,150









2,244,748









2,244,748

Intangible assets













38,833





70,857









109,690





(42,918)





66,772

Investment in unconsolidated entities





47,514





24,840









44,435









116,789





(15,882)





100,907

Goodwill









119,409









140,437









259,846









259,846

Derivative assets





13,088









162





320





24,459





38,029









38,029

Accrued interest receivable





97,853





3,310









274





408





101,845





(132)





101,713

Other assets





61,677





7,107





85,740





44,719





9,646





208,889





(16)





208,873

VIE assets, at fair value





























62,367,110





62,367,110

Total Assets



$

12,731,118



$

1,901,639



$

2,126,078



$

1,815,612



$

251,562



$

18,826,009



$

60,876,314



$

79,702,323

Liabilities and Equity

















































Liabilities:

















































Accounts payable, accrued expenses and other

   liabilities



$

37,206



$

16,010



$

44,184



$

24,110



$

56,614



$

178,124



$

91



$

178,215

Related-party payable





















36,135





36,135









36,135

Dividends payable





















138,906





138,906









138,906

Derivative liabilities





33,190





1,310









305









34,805









34,805

Secured financing agreements, net





6,502,059





1,259,813





1,871,026





653,222





631,655





10,917,775





(21,843)





10,895,932

Collateralized loan obligations, net





931,178





















931,178









931,178

Unsecured senior notes, net





















1,735,658





1,735,658









1,735,658

VIE liabilities, at fair value





























60,896,709





60,896,709

Total Liabilities





7,503,633





1,277,133





1,915,210





677,637





2,598,968





13,972,581





60,874,957





74,847,538

Equity:

















































Starwood Property Trust, Inc. Stockholders' Equity:

















































Common stock





















2,943





2,943









2,943

Additional paid-in capital





1,074,553





599,666





25,905





(298,098)





3,823,011





5,225,037









5,225,037

Treasury stock





















(138,022)





(138,022)









(138,022)

Accumulated other comprehensive income





41,654





















41,654









41,654

Retained earnings (accumulated deficit)





4,111,160





24,840





(40,641)





1,285,229





(6,035,338)





(654,750)









(654,750)

Total Starwood Property Trust, Inc. Stockholders'

   Equity





5,227,367





624,506





(14,736)





987,131





(2,347,406)





4,476,862









4,476,862

Non-controlling interests in consolidated subsidiaries





118









225,604





150,844









376,566





1,357





377,923

Total Equity





5,227,485





624,506





210,868





1,137,975





(2,347,406)





4,853,428





1,357





4,854,785

Total Liabilities and Equity



$

12,731,118



$

1,901,639



$

2,126,078



$

1,815,612



$

251,562



$

18,826,009



$

60,876,314



$

79,702,323

 

 

Cision View original content:http://www.prnewswire.com/news-releases/starwood-property-trust-reports-results-for-the-quarter-ended-march-31-2021-301285189.html

SOURCE Starwood Property Trust, Inc.

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