Blackstone Mortgage Trust, Inc.

Welcome to the Blackstone Mortgage Trust second quarter 2022 investor conference call. During the presentation, your lines remain on less than only. If you need help at any time, please press star then zero on your device, and an operator will be happy to assist. To ask a question during the conference call, please press star and one on your device. To answer a question, press star two. I would like to advise everyone that this conference is being recorded, and with that, I am handing over to Weston Tucker, head of shareholder relations.

Thank you and good morning and welcome to Blackstone Mortgage Trust's second quarter conference call. I am joined today by Mike Nash, Executive Chairman, Katie Keenan, Chief Executive Officer, Austin Pena, Executive Vice President, Investments, Tony Marone, Chief Financial Officer, and Tim Hayes, Shareholder Relations. This morning, we filed our 10-Q and issued a press release with a 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 uncertain and outside of the company's control. Actual results may differ materially. For discussion of some of the risks that could affect results, please see the risk factor section of our most recent 10-K. We do not undertake any duty to update forward-looking statements. We'll also refer to certain non-GAAP measures on the call, and for reconciliations, you should refer to the press release in our 10-Q. This audio cast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent. For the second quarter, we reported gap net income per share of $0.55, while distributable earnings were $0.67 per share. A few weeks ago, we paid a dividend of $0.62 per share with respect to the second quarter. If you have any questions following today's call, please let Tim or I know. And with that, I'll now turn things over to Katie.

Thanks, Weston. BXMT's standout results this quarter are a testament to the resilience of our business model, even in turbulent markets. Despite a backdrop characterized by widespread volatility, tighter financing availability, and slowing real estate transaction volume, we generated higher distributable earnings, grew our portfolio, and increased our liquidity position, all while maintaining our strong credit quality. These results underscore the four key advantages I outlined last quarter, which positioned BXMT exceptionally well to outperform in today's environment. First, as a floating rate lender, our earnings are enhanced, not pressured by rising rates. Second, we have defensive assets. Our low leverage senior loans have strong downside protection and well-capitalized sponsors, supporting credit performance in a wide range of macro scenarios. Third, Blackstone's unparalleled real estate platform gives us access to the broadest pipeline of investment opportunities globally and the tools to select the most compelling among them. And fourth, our continued access to a wide variety of capital sources across asset level and corporate markets allows us to capitalize our investments accretively and continuously enhance the diversity and stability of our balance sheet. The real world impact of these dynamics proved out in our results this quarter, and we expect they will continue to power our business forward. Starting with earnings, we achieved 67 cents per share of distributable earnings for the second quarter, up from $0.62 last quarter. The combination of a fully scaled portfolio and higher interest rates is yielding a strong, growing earnings stream, covering our dividend by 108%. Our business has several inherent benefits that support the stability and expansion of this income. Because our portfolio is match funded, we lock in an attractive levered spread but also benefit as base rates increase and drive earnings higher in our floating rate loan portfolio. And our income generation is not dependent on the pace of new deal activity. In periods when transaction volume slows, like today, we see fewer originations but also fewer repayments, allowing us to remain optimally invested. The reliability of this income stream is further underpinned by our continued credit performance. a function of our rigorous asset selection and underwriting process, informed by the deep knowledge and experience of the Blackstone real estate platform. We have long been focused on constructing a portfolio of assets that would be resilient in periods of inflation and volatility. We did this by creating multiple layers of protection for our senior loan investments.