Core Insights - Market volatility is highlighted, with the Dow Jones Industrial Average experiencing a significant drop of 1,300 points over two days, indicating a turbulent market environment [2] Group 1: Investment Focus - iREIT+HOYA Capital emphasizes income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging opportunities [1] Group 2: Analyst Position - The analyst has disclosed a beneficial long position in the shares of ET and STWD, indicating a personal investment interest in these companies [3]

Core Viewpoint - Starwood Property Trust, Inc. (STWD) reported mixed financial results for the fourth quarter of 2024, with adjusted distributable earnings beating estimates but showing a decline compared to the previous year [1][3]. Financial Performance - Fourth-quarter 2024 adjusted distributable earnings were 48 cents per share, exceeding the Zacks Consensus Estimate of 46 cents, but down from 58 cents per share in the same quarter last year [1][2]. - The company's net income for the fourth quarter was $51.6 million, reflecting a 27.2% decrease year over year [2]. - Total revenues for the fourth quarter were $454.4 million, down 12.9% year over year, and missed the Zacks Consensus Estimate by 3.7% [4]. - For the full year 2024, adjusted distributable earnings were $2.02 per share, slightly above the Zacks Consensus Estimate of $2.00 per share, but down from $2.05 per share in 2023 [3]. - Total revenues for 2024 were $1.9 billion, a decrease of 5% year over year, also missing the Zacks Consensus Estimate by 3% [4]. Balance Sheet and Cash Position - As of December 31, 2024, cash and cash equivalents stood at $377.8 million, up 5.6% from the prior quarter [6]. - The book value per share (BVPS) was $19.08, down 4.4% from $19.95 in the prior-year quarter [5]. - The company recorded repayments and sales of $1.5 billion in the reported quarter, compared to $1.1 billion in the prior-year quarter [5]. Strategic Outlook - Starwood Property's focus on commercial mortgage-backed securities and commercial real estate debt investments is aimed at generating stable income while adapting to market conditions [7]. - The company anticipates increasing its investment pace significantly in 2025, despite concerns over declining book value [8].

SUPPLEMENTAL REPORTING INFORMATION PROPERTY TRUST GM 015 | Press Release | Page | 1 | | --- | --- | --- | | Highlights | Page | 9 | | Commercial and Residential Lending Segment | Page | 12 | | Infrastructure Lending Segment | Page | 20 | | Property Segment | Page | 21 | | Investing and Servicing Segment | Page | 24 | | Capitalization | Page | 26 | | Appendix | Page | 32 | Cover photo: Architectural Rendering of Property Segment asset located at 1200 K Street in Washington, DC (i) PRESS RELEASE For Immediate ...

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $167 million or $0.48 per share for Q4 2024, and $675 million or $2.02 per share for the full year [6] - The loan portfolio ended the year at $13.7 billion with a weighted average risk rating of 3.0%, consistent with the prior quarter [8] - The CECL reserve increased by $36 million in the quarter to a balance of $482 million, representing 4.6% of the lending and REO portfolios [11] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $193 million for the quarter, with commercial lending originations totaling $477 million for the quarter and $1.7 billion for the year [7] - The property segment recognized DE of $14 million for the quarter, driven by the Florida affordable multifamily portfolio, with an unrealized fair value increase of $60 million [13] - The investing and servicing segment contributed DE of $49 million for the quarter, with five securitizations totaling $595 million completed [15][16] - Infrastructure lending contributed DE of $22 million for the quarter, with new loan commitments of $532 million bringing the total for the year to $1.4 billion [18] Market Data and Key Metrics Changes - The company ended the year with a liquidity position of $1.8 billion, not including potential liquidity from asset sales or leveraging unencumbered assets [20] - The company has $10.5 billion of availability under existing financing lines, with unencumbered assets of $4.9 billion [21] Company Strategy and Development Direction - The company plans to significantly increase its investing pace across various business lines, aiming to write the most loans in any year since inception, excluding 2021 [27] - The management is focused on reducing the portfolio of non-accrual and REO assets by half in 2025 and again in 2026 [29] - The company is exploring inorganic growth opportunities while maintaining a diversified business model [95][97] Management's Comments on Operating Environment and Future Outlook - The management expressed concerns about the current economic environment, noting inflationary pressures and uncertainty in consumer sentiment [44][48] - The company is positioned well in the real estate market, with construction costs rising and potential for rent increases due to supply shortages [50][51] - The management believes that the current lending environment presents significant opportunities for growth, particularly in infrastructure lending [40][67] Other Important Information - The company executed $2.3 billion in debt transactions during the quarter, extending the average term on corporate debt from 2.2 to 3.5 years [23] - The company has a strong focus on maintaining low leverage, with an adjusted debt to undepreciated equity ratio of 2.1 times, the lowest level in over four years [21] Q&A Session Summary Question: Concerns about higher operational costs and interest expenses - Management acknowledged higher operational costs due to maintenance and expects them to return to run rate, with two and a half years remaining on the debt [83][85] Question: Inquiry about fair value mark and valuation gains - Management explained that the appraisal method used for valuation reflects current market conditions and expects cap rates to continue to decrease [87][90] Question: Discussion on trading at a premium and potential acquisitions - Management indicated openness to acquisitions if they are accretive, emphasizing the company's unique position and diversified business model [94][95] Question: Challenges in the life sciences sector - Management noted limited exposure to life sciences and acknowledged the difficulties in the sector due to oversupply and high basis [114][116] Question: Interest in GSE Multifamily - Management expressed interest in acquiring a GSE Multifamily lender and highlighted the potential for servicing fees from existing assets [120][121]

Starwood Property Trust, Inc. (NYSE:STWD) Q4 2024 Earnings Conference Call February 27, 2025 10:00 AM ET Company Participants Zachary Tanenbaum - Head of Investor Relations Barry Sternlicht - Chairman & CEO Jeffrey DiModica - President Rina Paniry - Chief Financial Officer Conference Call Participants Steven Laws - Raymond James Richard Shane - JPMorgan Jade Rahmani - KBW Douglas Harter - UBS Donald Fandetti - Wells Fargo Securities Operator Greetings, and welcome to Starwood Property Trust, Inc.'s fourth q ...

Core Viewpoint - Starwood Property Trust (STWD) reported quarterly earnings of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.58 per share a year ago, indicating a 4.35% earnings surprise [1][2] Financial Performance - The company posted revenues of $454.39 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.73%, and down from $522.28 million year-over-year [2] - Over the last four quarters, Starwood Property Trust has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] Stock Performance - Starwood Property Trust shares have increased approximately 5.4% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $468 million, and for the current fiscal year, it is $1.97 on revenues of $1.88 billion [7] - The estimate revisions trend for Starwood Property Trust is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The REIT and Equity Trust industry is currently in the bottom 34% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8]

Financial Performance - Total revenues for the year ended December 31, 2024, were $1,946,843, a decrease of 5.0% from $2,049,908 in 2023[508]. - Net income attributable to Starwood Property Trust, Inc. for 2024 was $359,933, compared to $339,213 in 2023, reflecting an increase of 6.4%[508]. - Net income for the year ended December 31, 2024, was $380,577,000, a decrease of 9.0% from $418,157,000 in 2023[515]. - Comprehensive income attributable to Starwood Property Trust, Inc. was $358,175 in 2024, compared to $333,610 in 2023, an increase of 7.4%[510]. - Earnings per share (EPS) for 2024 was $1.10, consistent with the EPS of $1.07 in 2023[508]. - Total costs and expenses decreased to $1,982,072 in 2024 from $2,098,318 in 2023, a reduction of 5.6%[508]. Asset and Liability Management - As of December 31, 2024, total assets decreased to $62.56 billion from $69.50 billion in 2023, representing a decline of approximately 10.5%[506]. - Total liabilities decreased to $55.36 billion in 2024 from $62.48 billion in 2023, a decrease of around 11.3%[506]. - The Company reported a decrease in retained earnings to $235.32 million in 2024 from $505.88 million in 2023, a decline of approximately 53.7%[506]. - The Company’s total stockholders' equity increased to $6.44 billion in 2024 from $6.25 billion in 2023, an increase of about 3.0%[506]. - Cash and cash equivalents increased significantly to $377.83 million in 2024, up from $194.66 million in 2023, marking an increase of approximately 94.2%[506]. Loan and Investment Performance - Loans held-for-investment net of credit loss allowances decreased to $15.44 billion in 2024 from $17.57 billion in 2023, a reduction of about 12.1%[506]. - The total net loans as of December 31, 2024, were $17,953,021, down from $20,219,886 in 2023[608]. - The total gross loans decreased to $18,401,316 in 2024 from $20,528,925 in 2023[608]. - The company reported a credit loss provision of $165,489 thousand for the year ended December 31, 2024, compared to $232,712 thousand in 2023, indicating a reduction of approximately 29%[634]. - The credit loss allowance for funded loans increased to $436.8 million by December 31, 2024, up from $298.8 million in 2023[631]. Risk Management - The company is exposed to interest rate risk, with a series of derivative transactions entered into during 2024 to manage this risk[469]. - The company’s loans and investments are subject to credit risk, with regular monitoring of borrower performance to mitigate this risk[466]. - The estimated fair value of fixed-rate investments is expected to decrease in a rising interest rate environment, impacting overall asset valuation[476]. - Credit deterioration is evaluated quarterly, with significant declines in credit quality leading to different risk assessments and potential adjustments to credit loss allowances[560]. Foreign Currency and Hedging - Foreign currency assets in GBP, EUR, AUD, and CHF totaled £1.504 billion, €748.130 million, A$1.645 billion, and Fr. 65.995 million as of December 31, 2024[480]. - The company has hedged substantially all net asset exposure to GBP, EUR, AUD, and CHF with foreign currency forward contracts as of December 31, 2024[481]. - The foreign currency translation loss was $189,925 thousand for the year ended December 31, 2024, compared to a gain of $153,472 thousand in 2023[634]. Investment and Property Management - The company is focused on originating, acquiring, financing, and managing mortgage loans and other real estate investments across the U.S., Europe, and Australia[520]. - The company established the Woodstar Fund, managing 59 properties with 15,057 units in Florida, raising an initial aggregate subscription price of $216.0 million, adjusted to $214.2 million post-closing[565]. - The company reported total acquisitions/originations/additional funding of $4,781,916 thousand in 2024, compared to $3,474,242 thousand in 2023, reflecting an increase of about 37.5%[634]. Cash Flow and Dividends - Net cash provided by operating activities increased to $646,586,000 in 2024, up 22.4% from $528,597,000 in 2023[515]. - The company distributed $619,996,000 in dividends in 2024, slightly up from $601,192,000 in 2023[517]. - The company declared dividends of $1.92 per share for 2024, consistent with the previous year[512]. Property Sales and Acquisitions - On February 29, 2024, the company sold 16 retail properties for a gross sale price of $387.1 million, resulting in a net proceeds of $188.0 million after selling costs and a recognized gain of $92.0 million[604]. - The company sold an operating property within the REIS Equity Portfolio for $18.2 million, recognizing a gain of $8.3 million[605]. - The company acquired an operating property from a CMBS trust for a purchase price of $7.7 million during the year ended December 31, 2024[603]. Financial Reporting and Compliance - The Company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[498]. - The company is required to distribute at least 90% of its taxable income annually to maintain REIT qualification, which constrains cash flow accumulation[468]. - The company has elected to be taxed as a REIT, allowing a deduction for dividends paid to stockholders, thus subjecting distributed net income to taxation at the stockholder level only[591].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Starwood Property Trust due to lower revenues, with a focus on how actual results will compare to estimates [1][3]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.46 per share, reflecting a -20.7% change year-over-year, and revenues of $472 million, down 9.6% from the previous year [3]. - A positive stock movement is likely if the actual earnings exceed expectations, while a miss could lead to a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 3.09% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.84% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading is a strong predictor of an earnings beat, especially when combined with a strong Zacks Rank [8]. - Starwood Property Trust currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [11]. Historical Performance - In the last reported quarter, Starwood Property Trust had an earnings surprise of +4.35%, beating the consensus estimate of $0.46 per share by reporting $0.48 [12]. - Over the last four quarters, the company has beaten consensus EPS estimates three times [13]. Conclusion - While the company may not appear to be a compelling earnings-beat candidate, investors should consider other factors before making investment decisions [16].

Core Insights - Albert Anthony is a markets analyst and contributor on Seeking Alpha, covering over 200 companies and providing market commentary since 2023 [1] - He has a growing fan base of over 1,000 followers and operates a home-based fund called The Future Investor Fund [1] - In 2025, he plans to publish a book titled "The Future Investor: Growing a Diversified Portfolio" aimed at educating over 1 million people globally [1] Company Profile - Albert Anthony & Company is an independent sole proprietorship registered in Travis County, Texas [1] - The company does not provide personalized financial advice but offers general market commentary based on publicly available research [1] Educational Background - Albert Anthony has completed degrees and certificates from various institutions, including Drew University and UVA Darden School of Business [1] - He is a member of the Croatian Association of Economists (HDE) as of 2024 [1] Professional Experience - His experience includes working as a management and information systems analyst at large companies, including a top 10 financial firm in the US [1] - He frequently attends business and innovation conferences across the US and Europe [1]

Core Points - Starwood Property Trust, Inc. announced the tax treatment for its common stock distributions for the calendar year ended December 31, 2024, detailing cash distributions and their tax implications [1] - The total cash distribution for the year was $1.92 per share, with a breakdown of ordinary taxable dividends and capital gains [1] - The company has successfully deployed over $100 billion of capital since its inception and manages a portfolio exceeding $26 billion [2] Distribution Details - The cash distribution per share for the record dates of March 29, June 28, September 30, and December 31, 2024, was consistently $0.48, totaling $1.92 for the year [1] - The December 31, 2024 distribution included a portion that will be allocable to 2025 for federal income tax purposes [1] - The ordinary taxable dividend for the year amounted to $1.2525 per share, with total capital gains distribution of $0.3267 per share [1] Company Overview - Starwood Property Trust is a leading diversified finance company focused on real estate and infrastructure sectors [2] - The company's investment objective is to generate attractive and stable returns for shareholders primarily through dividends [2] - The company is affiliated with Starwood Capital Group, a global private investment firm [2]