Starwood Property Trust(STWD) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenues for Q3 2025 were $488.9 million, a slight increase from $479.5 million in Q3 2024, representing a growth of 0.3%[16] - Net income attributable to Starwood Property Trust, Inc. for Q3 2025 was $72.6 million, compared to $76.1 million in Q3 2024, reflecting a decrease of 4.6%[16] - Basic earnings per share for Q3 2025 were $0.19, down from $0.23 in Q3 2024, a decrease of 17.4%[16] - Comprehensive income attributable to Starwood Property Trust, Inc. for the nine months ended September 30, 2025, was $312.97 million, compared to $309.19 million for the same period in 2024[18] - The net income for the nine months ended September 30, 2025, was $314,629,000, compared to $308,290,000 for the same period in 2024, reflecting a year-over-year increase of approximately 1%[22] Assets and Liabilities - Total assets as of September 30, 2025, were $62.4 billion, slightly down from $62.6 billion as of December 31, 2024[13] - The company’s total liabilities decreased to $54.9 billion as of September 30, 2025, from $55.4 billion as of December 31, 2024[13] - As of September 30, 2025, total equity for Starwood Property Trust, Inc. was $7,186,187,000, a decrease from $7,266,777,000 as of June 30, 2025[20] Cash Flow and Financing Activities - Net cash provided by operating activities increased to $489,102,000 in 2025 from $351,006,000 in 2024, reflecting a rise of about 39.4%[25] - Net cash provided by financing activities was $2,573,873,000 in 2025, a turnaround from a net cash used of $(1,897,736,000) in 2024[27] - The company reported a net cash (used in) provided by investing activities of $(3,078,101,000) in 2025, compared to $1,746,413,000 in 2024, indicating a significant shift in cash flow[27] Loans and Credit Quality - Loans held-for-investment increased to $18.3 billion as of September 30, 2025, up from $15.4 billion as of December 31, 2024, marking a growth of 18.7%[13] - The company reported a credit loss provision of $28.4 million for Q3 2025, significantly lower than $66.4 million in Q3 2024, indicating improved asset quality[16] - The company has no history of realized credit losses on held-for-investment loans and utilizes third-party databases to estimate expected credit losses[106] - The company categorizes credit quality indicators based on loan-to-stabilized-value (LTV) ratios, with lower LTV ratios indicating lower credit loss risk[107] Investments and Acquisitions - The company acquired net assets worth $2,204,987,000 through a merger, with liabilities assumed amounting to $1,326,494,000[27] - The merger with Fundamental Income Properties, LLC was completed for a total purchase price of $2.2 billion, including $1.3 billion of assumed debt, acquiring 468 properties across 12.3 million square feet[96] - The company established the Woodstar Fund, managing 59 properties with 15,057 units, raising an initial aggregate subscription price of $216.0 million, adjusted to $214.2 million post-closing[73] Shareholder Distributions - Dividends declared per share for the period were $1.44, totaling $507,375,000 in distributions[23] - Share-based compensation for the nine months ended September 30, 2025, amounted to $41,470,000, compared to $31,502,000 for the same period in 2024, indicating a significant increase[23] Foreign Currency and Other Losses - The company reported a foreign currency loss of $106,337,000 in 2025, compared to a loss of $24,436,000 in 2024, indicating increased exposure to currency fluctuations[25] - Other comprehensive loss for the nine months ended September 30, 2025, was $1,659,000[23] Debt and Financing Agreements - The total outstanding balance of secured financing agreements was $18,997.0 million, compared to $14,769.7 million as of December 31, 2024, reflecting an increase of approximately 28.5%[170] - The company amended several commercial credit facilities during the nine months ended September 30, 2025, resulting in a net upsize of $1.5 billion and extending the weighted average maturity by 1.4 years to 3.1 years[175] - A new term loan facility totaling $700.0 million was entered into in September 2025, with an annual interest rate of SOFR + 2.25%[174] Real Estate and Property Sales - The company sold an office building in Texas for $60.0 million, recognizing a net gain of $4.1 million after a $30.1 million impairment recorded in 2023[99] - The Master Lease Portfolio, consisting of 16 retail properties, was sold for a gross sale price of $387.1 million, with net proceeds of $188.0 million after mortgage debt assumption[102] - The company sold 16 retail properties for a gross sale price of $387.1 million, resulting in net proceeds of $188.0 million after assuming mortgage debt of $194.9 million[150]