Starwood Property Trust(STWD) - 2025 Q1 - Quarterly Report

Preliminary Information Registrant Information STWD is a Maryland corporation and large accelerated filer, with 339.5 million shares outstanding as of May 2, 2025 - Starwood Property Trust, Inc. (STWD) is a Maryland corporation and a large accelerated filer, having filed all required reports under the Securities Exchange Act of 1934[2][3] Common Stock Information | Metric | Value | | :----- | :---- | | Common stock outstanding (as of May 2, 2025) | 339,454,864 shares | | Common stock par value | $0.01 per share | | Exchange | New York Stock Exchange | Special Note Regarding Forward-Looking Statements Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements based on current beliefs and assumptions, which are subject to change due to various known and unknown events or factors[6][7] - Factors that may cause actual results to vary include borrower defaults, impairment of real estate value, availability of acquisition opportunities, timing mismatches in financing, economic conditions, geopolitical events, changes in laws, increased competition, interest rate changes, and liquidity costs[9] - Readers are cautioned not to place undue reliance on these statements, and the company disclaims any obligation to update or revise them[6][8] Part I - Financial Information Item 1. Financial Statements Unaudited condensed consolidated financial statements, including balance sheets, operations, and cash flows, are presented Condensed Consolidated Balance Sheets - Total assets decreased by approximately $393 million from December 31, 2024, to March 31, 2025, primarily driven by a decrease in VIE assets and loans held-for-sale, partially offset by an increase in loans held-for-investment[13] - Total liabilities decreased by approximately $356 million, mainly due to a reduction in VIE liabilities and unsecured senior notes, while secured financing agreements increased[13] Condensed Consolidated Balance Sheets (amounts in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------- | :---------------------- | | Assets: | | | | Cash and cash equivalents | $440,580 | $377,831 | | Total Assets | $62,163,347 | $62,556,497 | | Liabilities: | | | | Total Liabilities | $55,006,596 | $55,363,025 | | Equity: | | | | Total Starwood Property Trust, Inc. Stockholders' Equity | $6,405,665 | $6,437,107 | | Total Liabilities and Equity | $62,163,347 | $62,556,497 | Condensed Consolidated Statements of Operations - Total revenues decreased by $104.9 million (20.1%) YoY, primarily due to lower interest income from loans and investment securities[17] - Net income attributable to Starwood Property Trust, Inc. decreased by $42.1 million (27.3%) YoY, resulting in a basic EPS decrease from $0.49 to $0.33[17] Condensed Consolidated Statements of Operations (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | | Total revenues | $418,180 | $523,088 | | Total costs and expenses | $384,224 | $509,308 | | Total other income | $85,911 | $147,286 | | Net income | $116,101 | $159,860 | | Net income attributable to Starwood Property Trust, Inc. | $112,255 | $154,332 | | Basic EPS | $0.33 | $0.49 | | Diluted EPS | $0.33 | $0.48 | Condensed Consolidated Statements of Comprehensive Income - Comprehensive income attributable to Starwood Property Trust, Inc. decreased by $41.7 million YoY, mainly driven by lower net income and a slightly reduced other comprehensive loss[19] Condensed Consolidated Statements of Comprehensive Income (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income | $116,101 | $159,860 | | Other comprehensive loss | $(867) | $(1,291) | | Comprehensive income attributable to Starwood Property Trust, Inc. | $111,388 | $153,041 | Condensed Consolidated Statements of Equity - Total Starwood Property Trust, Inc. Stockholders' Equity decreased by $31.4 million from December 31, 2024, to March 31, 2025, primarily due to dividends declared exceeding net income, partially offset by proceeds from equity plans and share-based compensation[21] - Dividends declared were $0.48 per share for the three months ended March 31, 2025, totaling $163.9 million[21] Condensed Consolidated Statements of Equity (amounts in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------- | :---------------------- | | Total Starwood Property Trust, Inc. Stockholders' Equity | $6,405,665 | $6,437,107 | | Total Permanent Equity | $6,729,916 | $6,766,777 | Condensed Consolidated Statements of Cash Flows - Net cash provided by operating activities significantly increased to $238.9 million in Q1 2025 from $55.9 million in Q1 2024[24] - Investing activities shifted from providing $1.17 billion in Q1 2024 to using $906.4 million in Q1 2025, primarily due to higher originations of loans held-for-investment and lower proceeds from sales of real estate[24] - Financing activities provided $805.5 million in Q1 2025, a substantial change from using $1.08 billion in Q1 2024, driven by higher proceeds from borrowings and lower principal repayments[26] Condensed Consolidated Statements of Cash Flows (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $238,865 | $55,949 | | Net cash (used in) provided by investing activities | $(906,449) | $1,165,661 | | Net cash provided by (used in) financing activities | $805,506 | $(1,079,833) | | Net increase in cash, cash equivalents and restricted cash | $137,922 | $141,777 | | Cash, cash equivalents and restricted cash, end of period | $692,351 | $452,704 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the company's business, accounting policies, and specific financial line items Note 1 Business and Organization STWD is a Maryland REIT focused on originating, acquiring, financing, and managing mortgage loans and real estate investments - STWD is a Maryland corporation, commenced operations in August 2009, and operates as a REIT, generally not subject to U.S. federal corporate income tax on distributed net income[29][31] - The company's strategy involves originating, acquiring, financing, and managing mortgage loans and other real estate investments in the U.S., Europe, and Australia, with flexibility to adjust based on market conditions[29] - Commercial and Residential Lending Segment: Focuses on commercial first mortgages, non-agency residential mortgages, subordinated/mezzanine loans, preferred equity, CMBS, RMBS, and other real estate debt - Infrastructure Lending Segment: Engages in originating, acquiring, financing, and managing infrastructure debt investments - Property Segment: Acquires and manages equity interests in stabilized and to-be-stabilized commercial real estate properties, including multifamily - Investing and Servicing Segment: Includes a U.S. servicing business, investment