Blackstone Mortgage Trust, Inc. (NYSE:BXMT) Q1 2024 Earnings Call Transcript April 24, 2024
Blackstone Mortgage Trust, Inc. beats earnings expectations. Reported EPS is $1, expectations were $0.53. BXMT isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day and welcome to the Blackstone Mortgage Trust First Quarter 2024 Investor Call. Today’s call is being recorded. At this time, all participants are in a listen-mode only. [Operator Instructions] At this time, I’d like to turn the conference over to Tim Hayes, Vice President, Shareholder Relations. Please go ahead.
Timothy Hayes: Good morning and welcome everyone to Blackstone Mortgage Trust’s first quarter 2024 earnings conference call. I’m joined today by Tim Johnson, Chair of the Board of Directors; Katie Keenan, Chief Executive Officer; Tony Marone, Chief Financial Officer; and Austin Pena, Executive Vice President of Investments. This morning, we filed our 10-Q and issued a press release with the presentation of our results, which are available on our website and have been filed with the SEC. I’d like to remind everyone that today’s call may include forward-looking statements, which are subject to risks, uncertainties, and other factors outside of the company’s control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our most recent 10-K.
We do not undertake any duty to update forward-looking statements. We will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release and our 10-Q. This audio cast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent. For the first quarter, we reported a GAAP net loss of $0.71 per share, while distributable earnings and distributable earnings prior to charge-offs were $0.33 and $0.55 per share. A few weeks ago, we paid a dividend of $0.62 per share with respect to the first quarter. Please let me know if you have any questions following today’s call. With that, I’ll now turn things over to Katie.
Katie Keenan: Thanks Tim. A quarter into the year, we continue to see a positive direction of travel for real estate. Liquidity has returned to the market with CMBS issuance multiples above year ago levels. New supply is down dramatically, with starts 50 to 90% below peak across asset classes. While expectations for the pace of rate cuts have been tempered, overall cost of capital is lower with spreads compressing across public and private lending markets. We believe values in commercial real estate are bottoming, creating an attractive entry point for new investments. With this backdrop, we continue to see strong performance on the vast majority of our portfolio, providing ballast for the subset of more challenged loans. Our portfolio remains 92% performing.
We produce $0.65 of distributable earnings prior to charge-off covering our $0.62 dividend. We collected over $1 billion of repayments this quarter, including the refinancing of one of our largest office loans through a CMBS transaction with deep investor demand. And we maintain near record liquidity levels, ending the quarter at $1.7 billion. We continue to address the ongoing credit cycle and reset and office values with impact in both our earnings and reserve bills. And of course higher for longer rates, while good for income as a floating rate lender, put additional pressure on borrowers. But more liquidity creates more transparency, prompting borrowers to more definitively pick a path for their assets, selling or refinancing where they see equity value, moving on where they don’t.
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