Starwood Property Trust, Inc. (NYSE:STWD) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 10:00 am ET

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Starwood Property Trust, Inc. (NYSE:STWD) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings. Welcome to the Starwood Property Trust First Quarter 2020 Earnings Call.

[Operator Instructions]

At this time, I'll turn the conference over to Zachary Tanenbaum, Director of Investor Relations. You may begin.

Executive
Zachary Tanenbaum

Thank you, operator. Good morning, and welcome to Starwood Property Trust earnings call. This morning, the Company released its financial results for the quarter ended March 31st, 2020, filed its Form 10-Q with the Securities and Exchange Commission and posted its earnings supplement to its website. These documents are available in the Investor Relations section of the Company's website at www.starwoodpropertytrust.com.

Before the call begins, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

I refer you to the Company's filings made with the SEC for a more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The Company undertakes no duty to update any forward-looking statements that may be made during the course of this call.

Additionally, certain non-GAAP financial measures will be discussed in this conference call. A presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC at www.sec.gov.

Joining me on the call today are Barry Sternlicht, the Company's Chief Executive Officer; Jeff DiModica, the Company's President; Rina Paniry, the Company's Chief Financial Officer; and Andrew Sossen, the Company's Chief Operating Officer.

With that, I am now going to turn the call over to Rina.

Executive
Rina Paniry

Thank you, Zach, and good morning, everyone.

Despite a clearly volatile market backdrop resulting from the impacts of COVID-19, our liquidity, core earnings and portfolio performance were strong this quarter, once again demonstrating the benefits of our diverse platform with multiple business lines. Core earnings for the quarter was $162 million or $0.55 per share. However, as I will discuss later, our GAAP results were impacted by the current economic environment and our implementation of the new credit loss accounting standard known as CECL. We do not believe the GAAP charges we took against our assets this quarter are reflective of the credit characteristics of these assets.

I will divide my comments this morning into three main parts, First, I will discuss our quarterly results across each segment; I will then highlight several items that impacted our GAAP results, including CECL and mark-to-market; and finally, I will conclude with comments on our capitalization, financing facilities and liquidity.

Our performance this quarter was led by our largest segment, Commercial and Residential