EX-99.1 2 ex-99d1.htm EX-99.1 stwd_Current folio_Press Release

 

Exhibit 99.1

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For Immediate Release

Starwood Property Trust Reports Results for the

Quarter Ended March 31, 2017

 

– Quarterly GAAP Earnings of $0.39 and Core Earnings of $0.51 per Diluted Common Share –

– Deploys $1.4 Billion of Capital –

– Issues $250 Million of 4.375% Convertible Notes Due 2023 –

– Declares Dividend of $0.48 per share for the Second Quarter of 2017 –

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.  

 

 

1

 

 

 

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.  

2

 

 

 

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

 

3

 

 

 

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

Core Earnings (Loss) per Weighted Average Diluted Share

 

$

0.38

 

$

0.25

 

$

0.07

 

$

(0.19)

 

$

0.51

 

4

 

 

 

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

5