STARWOOD PROPERTY TRUST, INC. GREENWICH, Conn., May 9, 2017 /PRNewswire/ -- 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.
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
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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.
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
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Core Earnings (Loss) per Weighted Average Diluted Share $0.38 $0.25 $0.07 $(0.19) $0.51
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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
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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
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SOURCE Starwood Property Trust, Inc.
