Part I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Blackstone Mortgage Trust's unaudited consolidated financial statements for Q2 and H1 2021, covering key financial statements and detailed notes [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Total assets grew to **$17.90 billion** by June 30, 2021, driven by loans, with Q2 2021 net income significantly improving to **$132.5 million** due to reduced credit loss provisions Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$17,901,747** | **$16,958,955** | | Loans receivable, net | $17,307,898 | $16,399,166 | | **Total Liabilities** | **$13,944,792** | **$13,054,724** | | Secured debt, net | $8,709,818 | $7,880,536 | | **Total Equity** | **$3,956,955** | **$3,904,231** | Consolidated Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Income from loans, net | $113,951 | $107,129 | $223,104 | $207,765 | | (Decrease) increase in CECL reserve | $50,906 | $(56,819) | $52,199 | $(179,521) | | **Net income (loss)** | **$132,468** | **$18,505** | **$213,008** | **$(34,780)** | | **Net income (loss) per share** | **$0.89** | **$0.13** | **$1.44** | **$(0.26)** | Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $165,373 | $175,708 | | Net cash used in investing activities | $(924,972) | $(234,728) | | Net cash provided by financing activities | $806,118 | $1,169,772 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the company's accounting policies, loan portfolio, financing, CECL, derivatives, equity, and commitments - The company is a real estate finance company organized as a REIT, originating senior loans collateralized by commercial real estate in North America, Europe, and Australia[31](index=31&type=chunk) - The company's CECL reserve estimation uses the Weighted Average Remaining Maturity (WARM) method, augmented with market loan loss data from Trepp LLC, focusing on comparable CMBS data[48](index=48&type=chunk)[51](index=51&type=chunk) - The company acknowledges that the COVID-19 pandemic creates uncertainty, making estimates and assumptions as of June 30, 2021, inherently less certain[39](index=39&type=chunk) - The company is actively managing the transition from LIBOR to alternative reference rates like SOFR and SONIA, with some financing facilities already transitioned[94](index=94&type=chunk)[95](index=95&type=chunk) [Note 3: Loans Receivable, Net](index=22&type=section&id=Note%203%3A%20Loans%20Receivable%2C%20Net) The loan portfolio expanded to **$17.5 billion** by June 30, 2021, primarily floating-rate senior loans, with improved credit quality and a reduced CECL reserve Loan Portfolio Overview (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Number of loans | 124 | 120 | | Principal balance | $17,529,542 | $16,652,824 | | Net book value | $17,307,898 | $16,399,166 | | Unfunded loan commitments | $3,353,259 | $3,160,084 | Loan Portfolio Composition by Property Type (June 30, 2021) | Property Type | Percentage of Portfolio | | :--- | :--- | | Office | 53% | | Hospitality | 14% | | Multifamily | 14% | | Industrial | 5% | | Other | 14% | Loan Portfolio by Risk Rating (Total Loan Exposure) | Risk Rating | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | 1 - Very Low Risk | $877.7M | $778.3M | | 2 - Low Risk | $3,849.0M | $2,528.8M | | 3 - Medium Risk | $11,116.9M | $10,763.5M | | 4 - High Risk | $2,346.4M | $3,045.3M | | 5 - Impaired/Loss Likely | $338.7M | $338.7M | | **Weighted-Average** | **2.9** | **3.0** | - The CECL reserve for loans receivable decreased by **$44.6 million** during the first six months of 2021 to **$128.9 million**, reflecting the ongoing market recovery from COVID-19. Two loans with an aggregate principal of **$338.7 million** remain on non-accrual status with a specific CECL reserve of **$69.7 million**[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [Note 5-9: Financing and Debt Structure](index=31&type=section&id=Note%205-9%3A%20Financing%20and%20Debt%20Structure) The company's financing strategy includes **$8.7 billion** in secured credit facilities, **$2.8 billion** in CLOs, and other debt, with new facilities and increased term loan borrowings in Q2 2021 - In Q2 2021, the company entered into a new **€1.5 billion** Master Repurchase Agreement with Banco Santander and increased an existing facility with Citibank by **$500 million** to **$2.0 billion**[389](index=389&type=chunk)[393](index=393&type=chunk) Financing Structure (Net Book Value, in thousands) | Debt Type | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Secured debt, net | $8,709,818 | $7,880,536 | | Securitized debt obligations, net | $2,833,778 | $2,922,499 | | Asset-specific debt, net | $292,122 | $391,269 | | Term loans, net | $1,332,130 | $1,041,704 | | Convertible notes, net | $618,111 | $616,389 | - During H1 2021, the company increased borrowings under its term loan facilities by a net **$300.0 million**[153](index=153&type=chunk) - In Q2 2021, the company issued a new **$803.8 million** CLO (2021 FL4), collateralized by **$1.0 billion** of loans[147](index=147&type=chunk)[148](index=148&type=chunk) [Note 10: Derivative Financial Instruments](index=38&type=section&id=Note%2010%3A%20Derivative%20Financial%20Instruments) The company uses derivatives like foreign currency forwards and interest rate caps to hedge investment and financing risks, holding **$19.9 million** in derivative assets and **$13.7 million** in liabilities - The sole objective for using derivatives is to minimize risks and costs associated with investments and financing; they are not used for speculative purposes[164](index=164&type=chunk) - The company uses foreign currency forward contracts as net investment hedges to protect against currency risk and interest rate caps as cash flow hedges for interest rate risk[166](index=166&type=chunk)[168](index=168&type=chunk) Fair Value of Derivative Instruments (in thousands) | Position | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Derivative Assets | $19,860 | $522 | | Derivative Liabilities | $13,749 | $58,915 | [Note 11: Equity](index=41&type=section&id=Note%2011%3A%20Equity) As of June 30, 2021, the company had **147.0 million** shares outstanding, declared a **$0.62**/share dividend, reported **$0.89** Q2 EPS, and made no ATM sales - A dividend of **$0.62 per share** (**$91.1 million** in aggregate) was declared on June 15, 2021[186](index=186&type=chunk) Earnings Per Share (EPS) | Period | Net Income (Loss) Attributable to BXMT (in thousands) | Weighted-Average Shares | Basic & Diluted EPS | | :--- | :--- | :--- | :--- | | **Q2 2021** | $131,595 | 147,342,822 | **$0.89** | | **Q2 2020** | $17,544 | 138,299,418 | **$0.13** | | **H1 2021** | $211,497 | 147,339,895 | **$1.44** | | **H1 2020** | $(35,808) | 136,959,341 | **$(0.26)** | - No shares were sold under the At-The-Market (ATM) stock offering program during the six months ended June 30, 2021. An aggregate of **$363.8 million** remained available for issuance[184](index=184&type=chunk) [Note 18: Commitments and Contingencies](index=48&type=section&id=Note%2018%3A%20Commitments%20and%20Contingencies) The company's commitments total **$15.1 billion**, including **$3.4 billion** in unfunded loan commitments, with **$1.2 billion** due within one year, alongside ongoing COVID-19 uncertainty - As of June 30, 2021, the company had unfunded commitments of **$3.4 billion** related to 86 loans receivable, with an average future funding period of **3.1 years**[234](index=234&type=chunk) Contractual Obligations and Commitments (in thousands) | Obligation Type | Total Obligation | Less Than 1 Year | 1 to 3 Years | 3 to 5 Years | More Than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Unfunded loan commitments | $3,353,259 | $153,985 | $1,666,386 | $1,525,438 | $7,450 | | Principal debt repayments | $11,007,522 | $812,386 | $3,865,234 | $5,848,654 | $481,248 | | Interest payments | $722,833 | $233,663 | $325,750 | $159,561 | $3,859 | | **Total** | **$15,083,614** | **$1,196,034** | **$5,851,200** | **$7,533,653** | **$502,727** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=50&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A highlights Q2 2021 Distributable Earnings of **$0.61**/share, **$2.2 billion** in loan originations, **$19.2 billion** portfolio, improved credit quality, **$1.4 billion** liquidity, and increased net income due to reduced CECL reserve [Key Financial Measures and Indicators](index=52&type=section&id=Key%20Financial%20Measures%20and%20Indicators) Key metrics for Q2 2021 include **$0.89** GAAP EPS, **$0.62** dividend, **$0.61** Distributable Earnings, and **$26.68** book value per share, with Distributable Earnings as a non-GAAP dividend capacity indicator Key Metrics per Share - Q2 2021 | Metric | Value | | :--- | :--- | | Earnings Per Share (GAAP) | $0.89 | | Dividends Declared | $0.62 | | Distributable Earnings (Non-GAAP) | $0.61 | | Book Value Per Share | $26.68 | Reconciliation of GAAP Net Income to Distributable Earnings (Q2 2021, in thousands) | Line Item | Amount | | :--- | :--- | | Net income attributable to Blackstone Mortgage Trust | $131,595 | | *Less:* Decrease in CECL reserve | $(50,906) | | *Add:* Non-cash compensation expense | $8,020 | | *Add:* Other adjustments | $1,186 | | **Distributable Earnings** | **$89,895** | [Loan Portfolio Analysis](index=54&type=section&id=Loan%20Portfolio%20Analysis) Strong Q2 2021 loan originations of **$2.2 billion** grew the portfolio to **$19.2 billion**, with improved credit quality (**2.9** risk rating), **100%** interest collection, and a reduced CECL reserve of **$133.1 million** - Originated or acquired **$2.2 billion** of loans in Q2 2021 and **$3.9 billion** in the first six months of 2021[264](index=264&type=chunk)[265](index=265&type=chunk) Total Investment Portfolio Statistics (June 30, 2021) | Metric | Value | | :--- | :--- | | Total Investment Exposure | $19.2 billion | | Number of Investments | 125 | | Weighted-Average Origination LTV | 64.8% | | Weighted-Average All-in Yield | +3.56% | - During Q2 2021, the company collected **100%** of contractual interest payments due under its loans, with virtually no interest deferrals[272](index=272&type=chunk) - The total CECL reserve (for loans, debt securities, and unfunded commitments) decreased by an aggregate **$52.2 million** during H1 2021 to a total of **$133.1 million** as of June 30, 2021[279](index=279&type=chunk) [Portfolio Financing and Capital Resources](index=59&type=section&id=Portfolio%20Financing%20and%20Capital%20Resources) The company maintains a robust capital structure with **$13.4 billion** in asset-level financing, **$2.0 billion** in corporate debt, **2.7x** debt-to-equity, **3.8x** total leverage, and **$1.4 billion** liquidity, with floating-rate financing positively correlated to rising rates Leverage Ratios | Ratio | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Debt-to-equity ratio | 2.7x | 2.5x | | Total leverage ratio | 3.8x | 3.6x | Sources of Liquidity (in thousands) | Source | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $289,552 | $289,970 | | Available borrowings under secured debt | $1,068,649 | $829,165 | | Loan principal payments held by servicer, net | $27,612 | $19,460 | | **Total Liquidity** | **$1,385,813** | **$1,138,595** | - As of June 30, 2021, **98%** of the company's investments by total exposure earned a floating rate of interest, financed with floating-rate liabilities, resulting in a positive correlation to rising interest rates[306](index=306&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Q2 2021 net income rose to **$131.6 million** (**$0.89**/share), primarily due to a **$49.6 million** decrease in the CECL reserve and increased net interest income, leading to **$211.5 million** net income for H1 2021 Quarter-over-Quarter Results of Operations (in thousands) | Metric | Q2 2021 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Net interest income | $113,951 | $109,152 | $4,799 | | Decrease in CECL reserve | $50,906 | $1,293 | $49,613 | | **Net income attributable to BXMT** | **$131,595** | **$79,902** | **$51,693** | Year-over-Year (Six Months) Results of Operations (in thousands) | Metric | H1 2021 | H1 2020 | Change | | :--- | :--- | :--- | :--- | | Net interest income | $223,104 | $207,765 | $15,339 | | (Decrease) increase in CECL reserve | $52,199 | $(179,521) | $231,720 | | **Net income (loss) attributable to BXMT** | **$211,497** | **$(35,808)** | **$247,305** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, with **98%** floating-rate investments, projecting a **$10.0 million** decrease in net interest income for a **50 bps** rate increase, while credit and currency risks are mitigated Annualized Interest Rate Sensitivity Analysis (in thousands) | Rate Change | Impact on Net Interest Income | | :--- | :--- | | +50 bps | $(10,043) | | +25 bps | $(5,592) | | -25 bps | $4,134 | | -50 bps | $4,200 | - Credit risk is managed through disciplined underwriting and active asset management, benefiting from Blackstone's real estate platform. The portfolio's low weighted-average LTV of **64.8%** provides significant equity protection[368](index=368&type=chunk)[369](index=369&type=chunk) - Currency risk is substantially mitigated by matching the currency of foreign assets with corresponding borrowings and using foreign currency forward contracts to hedge the net asset exposure[375](index=375&type=chunk)[377](index=377&type=chunk) - Margin call provisions in credit facilities are limited to collateral-specific credit marks and do not permit valuation adjustments based on general capital markets events[371](index=371&type=chunk) [Item 4. Controls and Procedures](index=81&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective in ensuring timely and accurate reporting as required by the SEC[378](index=378&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[379](index=379&type=chunk) Part II. Other Information [Summary of Part II Items](index=82&type=section&id=Summary%20of%20Part%20II%20Items) Part II reports no material legal proceedings, risk factor changes, or defaults, detailing debt agreement amendments including refinancing term loans and new/increased repurchase agreements - The company reports no material legal proceedings, no material changes to risk factors, and no defaults on senior securities[381](index=381&type=chunk)[382](index=382&type=chunk)[384](index=384&type=chunk) - On June 21, 2021, the company amended its Term Loan Credit Agreement to refinance and increase its B-2 term loans by **$100.0 million**, while reducing the interest rate spread to **2.75%** from **4.75%**[387](index=387&type=chunk) - On May 14, 2021, subsidiaries entered into a new Master Repurchase Agreement with Banco Santander for up to **€1.5 billion**[389](index=389&type=chunk)[390](index=390&type=chunk) - On April 16, 2021, the company amended its Master Repurchase Agreement with Citibank, increasing the maximum facility size from **$1.5 billion** to **$2.0 billion**[393](index=393&type=chunk)

Blackstone Mortgage Trust, Inc. (NYSE:BXMT) Q1 2021 Earnings Conference Call April 28, 2021 9:00 AM ET Company Participants Steve Plavin - CEO Katie Keenan - President Tony Marone - CFO Doug Armer - EVP, Capital Markets Weston Tucker - Head, IR Conference Call Participants Timothy Hayes - BTIG Doug Harter - Credit Suisse Charlie Arestia - J.P. Morgan Jade Rahmani - KBW Don Fandetti - Wells Fargo Securities Stephen Laws - Raymond James Operator Good day, and welcome to the Blackstone Mortgage Trust, First Qu ...

Financial Performance - First quarter 2021 GAAP earnings per share (EPS) was $0.54, and Distributable EPS was $0.59[11] - A dividend of $0.62 per share was paid[11] - The company's current income from its first mortgage portfolio generated an attractive 90% yield on book relative to USD LIBOR of 01%[11] Portfolio Growth and Composition - $17 billion of new loans were closed in the first quarter of 2021[2,10] - The portfolio grew by nearly $700 million, reaching a record $187 billion at quarter-end[2,10] - Originations were focused on industrial (33%), multifamily (31%), and life sciences (28%) sectors[11,14] - The senior loan portfolio totaled $187 billion, secured by institutional quality real estate in top markets, with a weighted average origination LTV of 65%[11,15] Liquidity and Capitalization - Total liquidity stood at $11 billion, including $280 million in cash and $837 million of available borrowings under credit facilities[10,12] - $13 billion of accretive credit facility financing was closed on increasingly favorable terms[11,17] - A $10 billion CLO was issued post quarter-end, increasing total CLOs outstanding to $35 billion[11] Credit Performance - 100% interest collection was achieved in the first quarter[10,11,15]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited consolidated financial statements for Blackstone Mortgage Trust, Inc. as of March 31, 2021, including balance sheets, operations, cash flows, and explanatory notes [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Q1 2021 total assets reached **$17.35 billion**, with net income of **$79.9 million** (**$0.54** per share), a significant recovery from the prior year Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$17,354,710** | **$16,958,955** | | Loans receivable, net | $16,888,002 | $16,399,166 | | **Total Liabilities** | **$13,450,617** | **$13,054,724** | | Secured debt agreements, net | $8,124,787 | $7,880,536 | | Securitized debt obligations, net | $2,875,241 | $2,922,499 | | **Total Equity** | **$3,904,093** | **$3,904,231** | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 (in thousands, except per share data) | Three Months Ended March 31, 2020 (in thousands, except per share data) | | :--- | :--- | :--- | | Income from loans and other investments, net | $109,152 | $100,636 | | Decrease (increase) in CECL reserve | $1,293 | $(122,702) | | **Net income (loss) attributable to Company** | **$79,902** | **$(53,350)** | | **Net income (loss) per share** | **$0.54** | **$(0.39)** | Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $83,048 | $68,617 | | Net cash used in investing activities | $(523,591) | $(249,266) | | Net cash provided by financing activities | $431,693 | $389,077 | | **Net (decrease) increase in cash** | **$(8,850)** | **$208,428** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details company operations as a REIT, key accounting policies including CECL, and breakdowns of the loan portfolio, financing, derivatives, and equity - The company is a real estate finance company originating senior loans collateralized by commercial real estate, operating as a REIT and externally managed by a Blackstone subsidiary[28](index=28&type=chunk) - The company estimates its Current Expected Credit Loss (CECL) reserve using the Weighted Average Remaining Maturity (WARM) method, incorporating historical CMBS data and economic forecasts[42](index=42&type=chunk)[43](index=43&type=chunk) - An internal 5-point loan risk rating system, from 'Very Low Risk' (1) to 'Impaired/Loss Likely' (5), is the primary indicator for CECL reserve assessment[49](index=49&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=47&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2021 performance, highlighting **$0.59** Distributable Earnings per share, **$1.7 billion** loan originations, **100%** interest collection, and **$1.1 billion** liquidity - The company's investment objective is to preserve shareholder capital and generate attractive risk-adjusted returns, primarily via senior loan portfolio dividends[213](index=213&type=chunk) - Economic recovery from COVID-19 is gradual and uneven, with ongoing uncertainty despite fiscal stimulus and vaccine distribution[216](index=216&type=chunk)[217](index=217&type=chunk) Key Financial Indicators - Q1 2021 | Indicator | Value (per share) | | :--- | :--- | | Earnings Per Share | $0.54 | | Dividends Declared Per Share | $0.62 | | Distributable Earnings Per Share | $0.59 | | Book Value Per Share | $26.35 | [Loan Portfolio](index=52&type=section&id=Loan%20Portfolio) Q1 2021 saw **$1.7 billion** in loan originations, **$692.8 million** net fundings, an **$18.7 billion** portfolio with **64.5%** LTV, and **100%** interest collection Loan Activity (in thousands) | Activity | Q1 2021 (in thousands) | Q4 2020 (in thousands) | | :--- | :--- | :--- | | Loan originations | $1,735,129 | $228,900 | | Loan fundings | $1,491,682 | $478,464 | | Loan repayments and sales | $(798,839) | $(561,740) | | **Total net fundings (repayments)** | **$692,843** | **$(83,276)** | - The total investment portfolio was **$18.7 billion** as of March 31, 2021, with a weighted-average origination LTV of **64.5%** and a maximum maturity of **3.1 years**[233](index=233&type=chunk)[239](index=239&type=chunk) - The company collected **100%** of contractual interest payments in Q1 2021, with virtually no deferrals, including on hospitality assets[236](index=236&type=chunk) - The total Current Expected Credit Loss (CECL) reserve was **$184.0 million** as of March 31, 2021, reflecting COVID-19 macroeconomic impact and **$69.7 million** in specific impairments on two loans[243](index=243&type=chunk)[244](index=244&type=chunk)[247](index=247&type=chunk) [Portfolio Financing](index=56&type=section&id=Portfolio%20Financing) The portfolio is supported by **$13.0 billion** in asset-level financing and **$1.9 billion** in corporate financing, predominantly floating-rate to match its asset base Portfolio Financing Breakdown (in thousands) | Financing Type | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Secured debt agreements | $8,142,728 | $7,896,863 | | Securitizations | $3,508,303 | $3,596,980 | | Asset-specific financings | $1,328,352 | $1,201,495 | | **Total portfolio financing** | **$12,979,383** | **$12,695,338** | Corporate Financing Breakdown (in thousands) | Financing Type | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Secured term loans | $1,259,575 | $1,062,766 | | Convertible notes | $622,500 | $622,500 | | **Total corporate financing** | **$1,882,075** | **$1,685,266** | - As of March 31, 2021, **98%** of investments were floating-rate, financed with floating-rate liabilities, creating a net equity position positively correlated to rising interest rates[268](index=268&type=chunk) [Results of Operations](index=62&type=section&id=Our%20Results%20of%20Operations) Q1 2021 net income was **$79.9 million**, a decrease from Q4 2020 but a significant turnaround from Q1 2020, driven by CECL reserve changes and LIBOR impact Quarterly Results of Operations (in thousands) | Metric | Q1 2021 (in thousands) | Q4 2020 (in thousands) | | :--- | :--- | :--- | | Net interest income | $109,152 | $109,450 | | Total other expenses | $29,804 | $30,709 | | Decrease in CECL reserve | $1,293 | $5,813 | | **Net income attributable to Company** | **$79,902** | **$83,616** | Year-over-Year Quarterly Results (in thousands) | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Net interest income | $109,152 | $100,636 | | Total other expenses | $29,804 | $31,068 | | Change in CECL reserve | $1,293 | $(122,702) | | **Net income (loss) attributable to Company** | **$79,902** | **$(53,350)** | [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, total liquidity was **$1.1 billion** with a **3.8x** leverage ratio, facing **$3.5 billion** in unfunded loan commitments, supported by capital market access Leverage Ratios | Ratio | March 31, 2021 (ratio) | December 31, 2020 (ratio) | | :--- | :--- | :--- | | Debt-to-equity ratio | 2.6x | 2.5x | | Total leverage ratio | 3.8x | 3.6x | Sources of Liquidity (in thousands) | Source | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $280,126 | $289,970 | | Available borrowings under secured debt | $836,916 | $829,165 | | Loan principal payments held by servicer, net | $2,578 | $19,460 | | **Total** | **$1,119,620** | **$1,138,595** | - Unfunded loan commitments totaled **$3.5 billion** as of March 31, 2021, with **$2.4 billion** already financed through existing credit facilities[295](index=295&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risk is interest rate risk, with **98%** floating-rate investments benefiting from rising rates, alongside managed credit and hedged currency risks, and LIBOR transition uncertainty - The business model is positively correlated with rising interest rates, with **98%** of investments earning floating rates and financed by floating-rate liabilities[321](index=321&type=chunk) - Credit risk from borrower non-performance is mitigated by a low **64.5%** origination LTV, strong sponsor relationships, and robust asset management by Blackstone's real estate platform[327](index=327&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk) - Currency risk on foreign-denominated loans is substantially mitigated by matching asset and financing currencies and using foreign currency forward contracts for hedging[336](index=336&type=chunk)[337](index=337&type=chunk) - The upcoming discontinuation of LIBOR and transition to alternative rates like SOFR presents uncertainty and risk to net interest income and investment values[322](index=322&type=chunk) [Controls and Procedures](index=78&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2021[338](index=338&type=chunk) - No material changes to internal control over financial reporting occurred during Q1 2021[339](index=339&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=79&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company was not involved in any material legal proceedings as of March 31, 2021 - No material legal proceedings were reported as of March 31, 2021[343](index=343&type=chunk) [Risk Factors](index=79&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to risk factors were reported for the quarter[344](index=344&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities were reported during the period - None[345](index=345&type=chunk) [Exhibits](index=80&type=section&id=ITEM%206.%20EXHIBITS) Lists exhibits filed with Form 10-Q, including credit agreement amendments, CEO/CFO certifications, and Inline XBRL data files - Exhibits filed include amendments to Term Loan Credit Agreement and Master Repurchase Agreements, plus required CEO/CFO certifications[349](index=349&type=chunk)

Mortgage Trust Blackstone Mortgage Trust Reports Fourth Quarter and Full Year 2020 Results New York, February 10, 2021: Blackstone Mortgage Trust, Inc. (NYSE:BXMT) today reported its fourth quarter and full year 2020 results. Full year EPS, Distributable EPS, and dividends paid per share were $0.97, $2.48, and $2.48, respectively. Stephen D. Plavin, Chief Executive Officer, said, "BXMT's strong 2020 results reflect the power and stability of our senior lending business. We generated consistent earnings in a ...

Blackstone Mortgage Trust, Inc. (NYSE:BXMT) Q4 2020 Earnings Conference Call February 10, 2021 9:00 AM ET Company Representatives Mike Nash - Executive Chairman Steve Plavin - Chief Executive Officer Jonathan Pollack - Global Head of Real Estate Debt Strategies Katie Keenan - President Tony Marone - Chief Financial Officer Doug Armer - Executive Vice President, Capital Markets Weston Tucker - Head of Investor Relations Conference Call Participants Charlie Arestia - J.P. Morgan Stephen Laws - Raymond James J ...

PART I [Business](index=5&type=section&id=ITEM%201.%20BUSINESS) The company is a real estate finance REIT focused on originating senior loans for commercial properties in major global markets - Blackstone Mortgage Trust is a real estate finance company focused on originating senior loans for commercial real estate in North America, Europe, and Australia and operates as a REIT externally managed by a subsidiary of Blackstone[13](index=13&type=chunk) - The company's investment guidelines stipulate that no more than **25% of its equity** can be invested in a single investment without board committee approval[36](index=36&type=chunk) Investment Portfolio Overview as of December 31, 2020 | Metric | Balance Sheet Portfolio | Total Loan Exposure | Total Investment Portfolio | | :--- | :--- | :--- | :--- | | Number of investments | 120 | 120 | 121 | | Principal balance | $16.7 billion | $17.5 billion | $18.2 billion | | Net book value | $16.4 billion | $16.4 billion | $16.5 billion | | Unfunded loan commitments | $3.2 billion | $4.0 billion | $4.0 billion | | Weighted-average all-in yield | L + 3.53% | L + 3.58% | L + 3.56% | | Origination LTV | 64.9% | 64.9% | 64.0% | Portfolio Financing as of December 31, 2020 | Financing Type | Outstanding Principal Balance | | :--- | :--- | | Secured debt agreements | $7.90 billion | | Securitizations | $3.60 billion | | Asset-specific financings | $1.20 billion | | **Total portfolio financing** | **$12.70 billion** | [Risk Factors](index=13&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from the COVID-19 pandemic, lending activities, financing, and its external management structure [Risks Related to the Ongoing COVID-19 Pandemic](index=13&type=section&id=Risks%20Related%20to%20the%20Ongoing%20COVID-19%20Pandemic) The COVID-19 pandemic adversely impacted collateral values, increased loan modifications, and materially raised credit loss reserves - The company's portfolio, particularly assets in the hotel and retail sectors, has been negatively impacted, with **17% of total investment exposure in hospitality assets** as of December 31, 2020[51](index=51&type=chunk) - The company processed **49 loan modifications in 2020**, representing an aggregate principal balance of **$6.5 billion**, including term extensions and covenant waivers[51](index=51&type=chunk) - The company materially increased its Current Expected Credit Loss (CECL) reserve, with a **net increase of $167.7 million** recorded during 2020, bringing the total to **$185.4 million**[53](index=53&type=chunk) [Risks Related to Our Lending and Investment Activities](index=15&type=section&id=Risks%20Related%20to%20Our%20Lending%20and%20Investment%20Activities) Lending risks include borrower defaults, intense competition, asset illiquidity, and the transition away from LIBOR - The company faces **significant competition** from other financial entities, which may limit loan origination opportunities and negatively affect yields[39](index=39&type=chunk)[70](index=70&type=chunk) - The adoption of the **Current Expected Credit Loss (CECL) model** has materially affected the allowance for loan losses, potentially creating more earnings volatility[83](index=83&type=chunk)[85](index=85&type=chunk) - Investments in subordinated instruments like B-Notes and mezzanine loans expose the company to a **greater risk of loss** in a default scenario[90](index=90&type=chunk)[93](index=93&type=chunk) - The planned discontinuation of LIBOR creates uncertainty, as the transition to alternative rates like SOFR may **adversely affect net interest income** and increase financing costs[35](index=35&type=chunk)[113](index=113&type=chunk) [Risks Related to Our Financing and Hedging](index=31&type=section&id=Risks%20Related%20to%20Our%20Financing%20and%20Hedging) Significant debt usage exposes the company to restrictive covenants, margin calls, and imperfect hedging outcomes - The company's **significant debt** exposes it to risks such as insufficient cash flow for payments and violation of covenants[138](index=138&type=chunk)[140](index=140&type=chunk) - Financing facilities may require the company to provide **additional collateral or repay debt** if the market value of pledged assets declines[143](index=143&type=chunk)[144](index=144&type=chunk) - The use of non-recourse securitizations exposes the company to **magnified losses**, and Dodd-Frank risk retention rules may increase costs[155](index=155&type=chunk)[157](index=157&type=chunk) - Hedging activities may be ineffective and expose the company to counterparty credit risk, with derivative agreements totaling **$1.7 billion in notional value** as of December 31, 2020[159](index=159&type=chunk)[163](index=163&type=chunk) [Risks Related to Our Relationship with Our Manager and its Affiliates](index=38&type=section&id=Risks%20Related%20to%20Our%20Relationship%20with%20Our%20Manager%20and%20its%20Affiliates) The company's reliance on its external manager, a Blackstone affiliate, creates potential conflicts of interest and high termination costs - The company is **completely reliant on its external Manager**, an affiliate of Blackstone, and has no employees of its own[170](index=170&type=chunk)[171](index=171&type=chunk) - The Manager's fee structure may incentivize strategies that are **not optimal for stockholders**, such as taking on riskier investments to boost short-term income[175](index=175&type=chunk)[177](index=177&type=chunk) - **Significant conflicts of interest** exist as Blackstone manages other vehicles with overlapping investment strategies, potentially reducing opportunities for the company[178](index=178&type=chunk)[180](index=180&type=chunk) - Terminating the Management Agreement without cause is costly, requiring a termination fee equal to **three times the average annual base management and incentive fees**[194](index=194&type=chunk) [Risks Related to Our Company](index=48&type=section&id=Risks%20Related%20to%20Our%20Company) Operational risks include maintaining exclusion from the Investment Company Act, regulatory changes, and cybersecurity threats - The company must conduct its operations to **avoid being regulated as an investment company**, which may restrict certain attractive investments[200](index=200&type=chunk)[203](index=203&type=chunk) - **Changes in laws and regulations**, such as the Dodd-Frank Act, could negatively impact operations and impose additional costs[209](index=209&type=chunk)[213](index=213&type=chunk) - The company is exposed to operational risks, including **cybersecurity threats and system failures**, which could result in significant losses and business disruption[226](index=226&type=chunk)[228](index=228&type=chunk) [Risks Related to our REIT Status and Certain Other Tax Items](index=55&type=section&id=Risks%20Related%20to%20our%20REIT%20Status%20and%20Certain%20Other%20Tax%20Items) Maintaining REIT status requires strict compliance with tax code provisions, including annual distribution requirements - **Failure to maintain REIT qualification** would subject the company to corporate income tax and prevent requalification for four years[235](index=235&type=chunk) - To comply with REIT asset tests, the company must ensure that at least **75% of its assets are qualified real estate assets** at the end of each quarter[239](index=239&type=chunk) - The company may recognize **"phantom income"** where taxable income exceeds cash received, complicating its ability to meet the 90% distribution requirement[254](index=254&type=chunk)[255](index=255&type=chunk) [Risks Related to Our Class A Common Stock](index=61&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Common%20Stock) The company's stock price is subject to high volatility, and charter provisions may deter potential takeovers - The market price of the company's class A common stock has been **highly volatile**, fluctuating between a high of **$40.51** and a low of **$13.02** following the COVID-19 outbreak[269](index=269&type=chunk) - Provisions in the company's charter and Maryland law may **deter potential acquisitions**, limiting opportunities for stockholders to sell shares at a premium[272](index=272&type=chunk)[273](index=273&type=chunk)[276](index=276&type=chunk) - **Future issuances of equity or debt securities** may dilute existing shareholders' ownership and adversely affect the market price of the stock[287](index=287&type=chunk) [Unresolved Staff Comments](index=67&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are **no unresolved staff comments**[298](index=298&type=chunk) [Properties](index=67&type=section&id=ITEM%202.%20PROPERTIES) The company's principal executive offices are located in leased space in New York and it does not own any real property - The company **leases its principal executive offices** and does not own any real property[299](index=299&type=chunk) [Legal Proceedings](index=67&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) As of year-end 2020, the company was not involved in any material legal proceedings - As of December 31, 2020, there were **no material legal proceedings** involving the company[300](index=300&type=chunk) [Mine Safety Disclosures](index=67&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's business operations - **Not applicable**[301](index=301&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=68&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's stock trades on the NYSE, with dividends subject to board discretion and no Q4 2020 stock repurchases - The company's class A common stock is listed on the NYSE under the ticker symbol **"BXMT"**[304](index=304&type=chunk) - The company **did not repurchase any of its class A common stock** in the fourth quarter of 2020[306](index=306&type=chunk) [Selected Financial Data](index=69&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section presents a five-year summary of key operating and balance sheet data, showing recent financial trends Selected Operating Data (2016-2020) | (in thousands, except per share) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest and related income | $779,648 | $882,679 | $756,109 | $537,915 | $497,974 | | Net income | $140,414 | $307,393 | $285,813 | $217,968 | $246,440 | | Net income per share (Basic & Diluted) | $0.97 | $2.35 | $2.50 | $2.27 | $2.53 | | Dividends declared per share | $2.48 | $2.48 | $2.48 | $2.48 | $2.48 | Selected Balance Sheet Data (2016-2020) | (in thousands) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | $16,958,955 | $16,551,871 | $14,467,375 | $10,258,825 | $8,812,615 | | Total liabilities | $13,054,724 | $12,767,190 | $11,092,768 | $7,341,419 | $6,319,012 | | Total equity | $3,904,231 | $3,784,681 | $3,374,607 | $2,917,406 | $2,493,603 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=70&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The discussion details the financial impact of COVID-19, including a significant increase in the CECL reserve and its effect on net income [Key Financial Measures and Indicators](index=71&type=section&id=I.%20Key%20Financial%20Measures%20and%20Indicators) The company uses Distributable Earnings, a non-GAAP measure, to evaluate performance excluding certain non-cash items like the CECL reserve Key Metrics for FY 2020 | Metric | Value | | :--- | :--- | | Net Income per Share | $0.97 | | Distributable Earnings per Share | $2.48 | | Dividends Declared per Share | $2.48 | | Book Value per Share (as of 12/31/20) | $26.42 | Reconciliation of GAAP Net Income to Distributable Earnings (FY 2020 vs 2019) | (in thousands) | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Net income attributable to BXMT | $137,670 | $305,567 | | Increase in CECL reserve | $167,653 | — | | Non-cash compensation expense | $34,532 | $30,656 | | Other adjustments | $12,135 | $14,472 | | **Distributable Earnings** | **$351,990** | **$350,695** | [Loan Portfolio](index=74&type=section&id=II.%20Loan%20Portfolio) The loan portfolio saw modest net growth in 2020, with a high interest collection rate despite an increase in its overall risk rating - The company collected **99.7% of contractual interest payments** due during 2020, demonstrating the general strength of its borrowers[320](index=320&type=chunk)[337](index=337&type=chunk) - The **weighted-average risk rating** of the loan portfolio increased from **2.8 to 3.0** at year-end 2020, primarily due to downgrades of loans impacted by COVID-19[343](index=343&type=chunk) - The total **CECL reserve increased by $167.7 million** during 2020 to a total of **$185.4 million**, reflecting the macroeconomic impact of the pandemic[346](index=346&type=chunk) Loan Activity for Year Ended December 31, 2020 | Activity | Amount (in billions) | | :--- | :--- | | Loan originations | $1.6 | | Loan fundings | $2.1 | | Loan repayments and sales | $2.0 | | **Total net fundings** | **$0.14** | [Results of Operations](index=84&type=section&id=III.%20Our%20Results%20of%20Operations) Net income decreased significantly in 2020 due to a large provision for credit losses, while net interest income remained stable - The decrease in net income in 2020 was primarily due to the **$167.7 million increase in the CECL reserve**, reflecting the impact of the COVID-19 pandemic[375](index=375&type=chunk)[381](index=381&type=chunk) - **Net interest income increased by $8.0 million** year-over-year, driven by a larger loan portfolio and the benefit of interest rate floors[376](index=376&type=chunk) Consolidated Results of Operations (2018-2020) | (in thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Income from loans and other investments, net | $432,177 | $424,176 | $396,484 | | Total other expenses | $123,787 | $117,289 | $110,363 | | Increase in current expected credit loss reserve | ($167,653) | — | — | | **Net income attributable to BXMT** | **$137,670** | **$305,567** | **$285,078** | | **Net income per share – basic and diluted** | **$0.97** | **$2.35** | **$2.50** | [Liquidity and Capital Resources](index=87&type=section&id=IV.%20Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position, increasing total available liquidity to $1.1 billion and improving its debt-to-equity ratio - Primary liquidity needs include funding **$3.2 billion in unfunded loan commitments**, for which the company has identified financing for $2.2 billion[405](index=405&type=chunk) Sources of Liquidity | (in thousands) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $289,970 | $150,090 | | Available borrowings under secured debt agreements | $829,165 | $598,840 | | Loan principal payments held by servicer, net | $19,460 | $1,965 | | **Total Liquidity** | **$1,138,595** | **$750,895** | Leverage Ratios | Ratio | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Debt-to-equity ratio | 2.5x | 3.0x | | Total leverage ratio | 3.6x | 3.7x | [Other Items](index=90&type=section&id=V.%20Other%20Items) This section covers the company's REIT tax status, lack of off-balance sheet arrangements, and critical accounting policies like CECL - The company has elected to be taxed as a REIT and must **distribute at least 90% of its net taxable income annually** to maintain this status[413](index=413&type=chunk)[417](index=417&type=chunk) - The company adopted the **CECL accounting standard** on January 1, 2020, resulting in an initial charge to retained earnings of **$17.7 million**[421](index=421&type=chunk)[427](index=427&type=chunk) - The company's primary credit quality indicator is an **internal 5-point risk rating system**, and the CECL reserve for impaired loans is based on collateral fair value[425](index=425&type=chunk)[430](index=430&type=chunk) [Loan Portfolio Details](index=95&type=section&id=VI.%20Loan%20Portfolio%20Details) This section provides a comprehensive, loan-by-loan breakdown of the company's portfolio as of December 31, 2020 - A detailed table presents specifics for each of the **120 loans in the portfolio** as of December 31, 2020, including metrics like principal balance, coupon, and risk rating[435](index=435&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=100&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is primarily exposed to interest rate risk, credit risk heightened by the pandemic, and currency risk from foreign investments - The company's business model is **positively correlated to rising interest rates**, as 98% of its investments earn a floating rate of interest[441](index=441&type=chunk) - Credit risk is actively managed, and in response to COVID-19, the company closed **49 loan modifications in 2020**, representing **$6.5 billion in principal**[449](index=449&type=chunk) - The company mitigates currency risk by matching the currency of its foreign assets with borrowings and using **foreign currency forward contracts** to hedge its net asset exposure[457](index=457&type=chunk)[460](index=460&type=chunk) Interest Rate Sensitivity Analysis (12-Month Impact) | Change in Benchmark Rates | Impact on Net Interest Income (in thousands) | | :--- | :--- | | +50 basis points | ($16,463) | | +25 basis points | ($8,699) | | -25 basis points | $4,811 | | -50 basis points | $4,913 | [Financial Statements and Supplementary Data](index=104&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This item refers to the company's audited consolidated financial statements and supplementary data included in the report - The company's financial statements and supplementary data are located in the report **starting on page F-1**[461](index=461&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=104&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - **None reported**[462](index=462&type=chunk) [Controls and Procedures](index=104&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's **disclosure controls and procedures were effective** as of the end of the fiscal year[463](index=463&type=chunk) - Management's report on internal control over financial reporting concluded that such controls were **effective as of December 31, 2020**, with an unqualified opinion from the auditor[466](index=466&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk) [Other Information](index=105&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reports no other information for this item - **None**[471](index=471&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=106&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Required information is incorporated by reference from the company's 2021 definitive proxy statement - Information is **incorporated by reference** from the company's definitive proxy statement[473](index=473&type=chunk) [Executive Compensation](index=106&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Required information is incorporated by reference from the company's 2021 definitive proxy statement - Information is **incorporated by reference** from the company's definitive proxy statement[474](index=474&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section provides information on equity compensation plans and incorporates other details by reference - Other information required by this item is **incorporated by reference** from the company's definitive proxy statement[476](index=476&type=chunk) Equity Compensation Plan Information as of December 31, 2020 | Plan category | Securities to be issued upon exercise of outstanding options, warrants, and rights | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 306,691 | — | 2,263,098 | | Equity compensation plans not approved by security holders | — | — | — | | **Total** | **306,691** | **—** | **2,263,098** | [Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Required information is incorporated by reference from the company's 2021 definitive proxy statement - Information is **incorporated by reference** from the company's definitive proxy statement[477](index=477&type=chunk) [Principal Accountant Fees and Services](index=106&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Required information is incorporated by reference from the company's 2021 definitive proxy statement - Information is **incorporated by reference** from the company's definitive proxy statement[478](index=478&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=107&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed as part of the annual report - This item provides an **index of all financial statements, schedules, and exhibits** included with or incorporated by reference into the annual report[479](index=479&type=chunk)[481](index=481&type=chunk) [Form 10-K Summary](index=117&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company indicates that no Form 10-K summary is provided - **None**[493](index=493&type=chunk)

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.61 and core earnings of $0.63 for Q3 2020, with a dividend of $0.62 per share [6][25] - The book value increased to $26.51 per share, up by $0.06 from the previous quarter, primarily due to a reduction in CECL reserves [27] - The portfolio size was $18.1 billion, slightly up due to higher foreign exchange rates [30] Business Line Data and Key Metrics Changes - The office portfolio showed strong performance with rent collections averaging 95% despite COVID-19 impacts [17] - The company had no new four or five-rated loans and no new specific CECL reserves during the quarter, indicating strong credit performance [10][31] - The company completed 11 loan modifications, reflecting continued support from borrowers [29] Market Data and Key Metrics Changes - The company maintained a weighted average origination LTV of 64%, indicating significant equity from well-capitalized institutional borrowers [31] - The company has $1.2 billion of liquidity at quarter-end, positioning it well for new originations [10] Company Strategy and Development Direction - The company focuses on senior mortgage lending on high-quality real estate with strong sponsors, aiming to leverage its diversified balance sheet [7] - The company is seeing a reemergence of lending opportunities, with $230 million of new loans in closing [22][76] - The company emphasizes the importance of high-quality assets and sponsors to navigate the post-COVID environment [18][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's quality and the strength of the balance sheet to outperform in the recovery phase [13] - The company views the impact of COVID-19 on the hospitality sector as cyclical rather than secular, anticipating a rebound in travel and leisure [40] - Management noted that while transaction activity remains muted, there are signs of normalcy returning to the market [20][57] Other Important Information - The company has no corporate debt maturing until 2022, with 97% of asset-level financing term-matched to underlying collateral [32] - The leadership of the loan asset management function is transitioning, with Rob Sitman succeeding Tom Ruffing [36][37] Q&A Session Summary Question: Can you talk about your hotel portfolio this quarter? - Management noted that the hotel market is disrupted but believes the impact is cyclical. They have been selective in hotel lending, focusing on low LTV loans [40][41] Question: What modifications are being made? - Modifications generally involve extending timelines in exchange for additional capital from sponsors, with strong interest payments being collected [42] Question: Is there any sponsor concentration risk? - The company has a well-diversified portfolio with strong sponsors, which is viewed as a strength rather than a weakness [48][49] Question: What drove the changes in CECL reserves? - Changes in CECL reserves were primarily due to foreign exchange rates and estimated loan tenor adjustments, not indicative of credit deterioration [50][51] Question: What is the competitive environment for large loans? - The company maintains a competitive advantage in making large loans on high-quality assets, with a unique position in the market [54][55] Question: What is the outlook for new loan commitments? - The company has $230 million of new loans in closing, indicating active engagement in the market despite cautious selection [76]

Mortgage Trust Blackstone Mortgage Trust Reports Third Quarter 2020 Results New York, October 29, 2020: Blackstone Mortgage Trust, Inc. (NYSE:BXMT) today reported its third quarter 2020 results. Stephen D. Plavin, Chief Executive Officer, said, "BXMT's strong third-quarter results reflect the earnings power and credit performance of our loan portfolio, as well as the benefits of a focused strategy of senior lending backed by top-quality properties with well-capitalized, institutional borrowers." Blackstone ...

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides detailed financial statements, management's discussion and analysis, and disclosures on market risks and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, highlighting key financial positions and performance Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$16,876,804** | **$16,551,871** | | Loans receivable, net | $16,291,677 | $16,164,801 | | Cash and cash equivalents | $427,028 | $150,090 | | **Total Liabilities** | **$12,972,852** | **$12,767,190** | | Secured debt agreements, net | $8,973,810 | $10,054,930 | | **Total Equity** | **$3,903,952** | **$3,784,681** | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Income from loans and other investments, net | $114,961 | $101,916 | $322,727 | $314,465 | | Net income attributable to Blackstone Mortgage Trust | $89,860 | $74,897 | $54,054 | $226,635 | | Net income per share (diluted) | $0.61 | $0.56 | $0.39 | $1.76 | - The company adopted the new accounting standard ASU 2016-13 (CECL) on January 1, 2020, resulting in a **$17.7 million** cumulative-effect adjustment to retained earnings[91](index=91&type=chunk)[55](index=55&type=chunk) [Note 3. Loans Receivable, Net](index=20&type=section&id=Note%203.%20LOANS%20RECEIVABLE%2C%20NET) The loan portfolio, totaling **$16.6 billion** in principal, saw its weighted-average risk rating increase to 3.0 due to COVID-19, with a **$177.0 million** CECL reserve Loan Portfolio Statistics | Metric | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Number of loans | 123 | 128 | | Principal balance | $16.6 billion | $16.3 billion | | Net book value | $16.3 billion | $16.2 billion | | Unfunded loan commitments | $3.3 billion | $3.9 billion | | Weighted-average all-in yield | L + 3.53% | L + 3.55% | - The loan portfolio is primarily concentrated in Office (**60%**), Hospitality (**13%**), and Multifamily (**11%**) properties, with **70%** located in the United States[99](index=99&type=chunk)[101](index=101&type=chunk) - The weighted-average risk rating increased to **3.0** from **2.8** due to **$3.2 billion** in downgraded loans, reflecting higher risk from the COVID-19 pandemic[107](index=107&type=chunk) - The total CECL reserve for loans receivable was **$177.0 million**, including specific reserves for two troubled debt restructurings placed on non-accrual status[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Note 5. Secured Debt Agreements, Net](index=28&type=section&id=Note%205.%20SECURED%20DEBT%20AGREEMENTS%2C%20NET) Secured debt decreased to **$9.0 billion** as of September 30, 2020, with amendments made to credit facilities in Q2 2020 to suspend credit mark provisions Secured Debt Balances (in thousands) | Debt Type | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Secured credit facilities | $8,651,313 | $9,753,059 | | Asset-specific financings | $348,964 | $330,879 | | **Total secured debt** | **$9,000,277** | **$10,083,938** | - In Q2 2020, agreements with seven lenders for **$7.9 billion** in secured credit facilities were amended to temporarily suspend credit mark provisions in exchange for repayments and additional collateral[128](index=128&type=chunk) [Note 10. Equity](index=40&type=section&id=Note%2010.%20EQUITY) The company issued **10.8 million** shares of class A common stock, raising **$297.6 million** in net proceeds, and declared consistent dividends of **$0.62** per share for Q3 - In June 2020, the company completed a public offering of **10,000,000** shares of class A common stock, generating **$278.3 million** in net proceeds[179](index=179&type=chunk) Dividends Declared Per Share | Period | 2020 | 2019 | | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $0.62 | $0.62 | | **Nine Months Ended Sep 30** | $1.86 | $1.86 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the COVID-19 pandemic's impact, highlighting **99%** Q3 interest collection, **$0.62** dividend, **$0.63** Core Earnings per share, and a **$191.2 million** CECL reserve - The COVID-19 pandemic has significantly disrupted industries underlying loan collateral, prompting active engagement with borrowers and lenders[253](index=253&type=chunk)[256](index=256&type=chunk) Key Financial Indicators (Q3 2020) | Indicator | Value | | :--- | :--- | | Earnings Per Share | $0.61 | | Dividends Declared | $0.62 | | Core Earnings Per Share | $0.63 | | Book Value Per Share | $26.51 | - The company collected **99%** of Q3 2020 contractual interest payments and executed **11** loan modifications in Q3 (**$1.7 billion** principal) and **13** in Q2 (**$2.4 billion** principal) to address pandemic pressures[272](index=272&type=chunk)[273](index=273&type=chunk) - The total Current Expected Credit Loss (CECL) reserve reached **$191.2 million** as of September 30, 2020, reflecting a **$173.5 million** increase due to the COVID-19 pandemic's macroeconomic impact[283](index=283&type=chunk) Leverage Ratios | Ratio | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Debt-to-equity ratio | 2.6x | 3.0x | | Total leverage ratio | 3.6x | 3.7x | [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, with **98%** floating-rate investments, followed by heightened credit risk due to COVID-19, and mitigated currency risk - The company's net income is positively correlated with rising interest rates, as **98%** of investments are floating-rate, with a **50 basis point** rate increase decreasing net interest income by **$19.6 million** annually[346](index=346&type=chunk)[349](index=349&type=chunk) - Credit risk increased due to the COVID-19 pandemic, managed through active asset management and loan modifications, with a low weighted-average LTV of **63.6%** providing an equity cushion[355](index=355&type=chunk)[356](index=356&type=chunk) - Currency risk is actively managed by matching foreign asset and borrowing currencies and using forward contracts to hedge net exposure to major currencies[364](index=364&type=chunk)[366](index=366&type=chunk) [ITEM 4. Controls and Procedures](index=78&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the report period end[367](index=367&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[369](index=369&type=chunk) [PART II. OTHER INFORMATION](index=79&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other standard disclosures, confirming no material changes or significant events [ITEM 1. Legal Proceedings](index=80&type=section&id=ITEM%201.%20Legal%20Proceedings) The company reported no material legal proceedings as of September 30, 2020 - The company reports no material legal proceedings as of September 30, 2020[371](index=371&type=chunk) [ITEM 1A. Risk Factors](index=80&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the 2019 Form 10-K and Q1 2020 Form 10-Q were reported - No material changes to previously disclosed risk factors from the 2019 Form 10-K and Q1 2020 Form 10-Q were reported[372](index=372&type=chunk) [Other Items (Items 2-6)](index=80&type=section&id=ITEMS%202-6) This section covers standard disclosures, reporting no unregistered equity sales, no defaults on senior securities, and no other material information - The company reported no activity under Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), or Item 5 (Other Information)[373](index=373&type=chunk)[374](index=374&type=chunk)[376](index=376&type=chunk)