10Q Quarterly Report - Q3 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

• QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

OR

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM

TO

Commission File Number: 001-14788

Blackstone Mortgage Trust, Inc.

(Exact name of Registrant as specified in its charter)

Maryland						94-6181186
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)			345 Park Avenue, 24th Floor	Identification No.)
				New York, New York 10154
			(Address of principal executive offices)(Zip Code)
		[phone]
		(Registrant's telephone number, including area code)
				N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class			Trading	Name of each exchange
		symbol(s)	on which registered
Class A common stock, par value $0.01 per				BXMT		New York Stock Exchange
share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒	No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒	No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of the registrant's shares of class A common stock, par value $0.01 per share, outstanding as of October 20, 2021 was 157,080,951.

	TABLE OF CONTENTS
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and
	2020	5
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2021 and 2020, June 30, 2021
	and 2020, and September 30, 2021 and 2020	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	8
	Notes to Consolidated Financial Statements	10
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
	OPERATIONS	51
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	80
ITEM 4.	CONTROLS AND PROCEDURES	83
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	84
ITEM 1A.	RISK FACTORS	84
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	84
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	84
ITEM 4.	MINE SAFETY DISCLOSURES	84
ITEM 5.	OTHER INFORMATION	84
ITEM 6.	EXHIBITS	85
SIGNATURES	86

TABLE OF CONTENTS

Website Disclosure

We use our website (www.blackstonemortgagetrust.com) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, Securities and Exchange Commission, or SEC, filings and public conference calls, and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone Mortgage Trust when you enroll your email address by visiting the "Contact Us & E-mail Alerts" section of our website at http://ir.blackstonemortgagetrust.com. The contents of our website and any alerts are not, however, a part of this report.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

		September 30,		December 31,
			2021				2020
Assets
Cash and cash equivalents	$	211,180		$	289,970
Loans receivable		20,406,466				16,572,715
Current expected credit loss reserve		(130,388)			(173,549)
Loans receivable, net		20,276,078				16,399,166
Other assets		218,614				269,819
Total Assets	$	20,705,872		$	16,958,955
Liabilities and Equity
Secured debt, net	$	11,170,330		$	7,880,536
Securitized debt obligations, net		2,836,049				2,922,499
Asset-specific debt, net		320,895				391,269
Term loans, net		1,329,637				1,041,704
Convertible notes, net		618,985				616,389
Other liabilities		159,424				202,327
Total Liabilities		16,435,320				13,054,724
Commitments and contingencies		-				-
Equity
Class A common stock, $0.01 par value, 400,000,000 shares authorized, 157,015,689 and 146,780,031 shares issued
and outstanding as of September 30, 2021 and December 31, 2020, respectively		1,570			1,468
Additional paid-in capital		5,039,384				4,702,713
Accumulated other comprehensive income		9,874			11,170
Accumulated deficit		(814,278)			(829,284)
Total Blackstone Mortgage Trust, Inc. stockholders' equity		4,236,550			3,886,067
Non-controlling interests		34,002			18,164
Total Equity		4,270,552				3,904,231
Total Liabilities and Equity	$	20,705,872		$	16,958,955

Note: The consolidated balance sheets as of September 30, 2021 and December 31, 2020 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of September 30, 2021 and December 31, 2020, assets of the consolidated VIEs totaled $3.5 billion and $3.6 billion, respectively, and liabilities of the consolidated VIEs totaled $2.8 billion and $2.9 billion, respectively. Refer to Note 16 for additional discussion of the VIEs.

See accompanying notes to consolidated financial statements.

3

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data)

			Three Months Ended		Nine Months Ended
			September 30,		September 30,
			2021			2020			2021				2020
Income from loans and other investments
Interest and related income	$	200,114	$	193,939	$	583,941	$	590,797
Less: Interest and related expenses			82,690		78,978			243,413				268,070
Income from loans and other investments, net			117,424			114,961			340,528				322,727
Other expenses
Management and incentive fees			19,342		18,985		60,094			58,758
General and administrative expenses			10,841		11,242		32,108				34,320
Total other expenses
		30,183			30,227		92,202			93,078
(Increase) decrease in current expected credit loss reserve			(2,767)		6,055		49,432			(173,466)
Income before income taxes
		84,474			90,789		297,758			56,183
Income tax provision			70		20		346			192
Net income
		84,404			90,769		297,412			55,991
Net income attributable to non-controlling interests			(647)		(909)		(2,158)			(1,937)
Net income attributable to Blackstone Mortgage Trust, Inc.
$	83,757		$	89,860		$	295,254	$	54,054
Net income per share of common stock basic and diluted	$	0.56		$	0.61		$	2.00		$	0.39
Weighted-average shares of common stock outstanding,
basic and diluted			149,214,819			146,484,651			147,971,737				140,157,620

See accompanying notes to consolidated financial statements.

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