BrightSpire Capital, Inc. Announces First Quarter 2024 Financial Results

Rhea-AI Summary

BrightSpire Capital, Inc. (NYSE: BRSP) reported first quarter 2024 GAAP net loss of ($57.1) million, Distributable Earnings of $22.5 million, and Adjusted Distributable Earnings of $29.7 million. GAAP net book value was $9.10 per share with a dividend of $0.20 per share. The Company also announced a stock repurchase program up to $50 million.

Positive

• Positive financial results with Distributable Earnings of $22.5 million and Adjusted Distributable Earnings of $29.7 million for Q1 2024.

• Declared quarterly cash dividend of $0.20 per share for the first quarter of 2024.

• Authorization of a stock repurchase program up to $50 million until April 30, 2025, replacing the prior program.

Negative

• Reported first quarter 2024 GAAP net loss of ($57.1) million.

• Board of Directors declared a quarterly cash dividend of $0.20 per share for the fourth quarter of 2023.

Insights

Financial Analyst

BrightSpire Capital, Inc.'s reported GAAP net loss of $57.1 million represents a key indicator of the company's financial health and merits deeper evaluation. It is essential to compare this loss to previous quarters and the industry average to understand the trajectory of the firm's financial performance. The announcement of Distributable Earnings and Adjusted Distributable Earnings, which are non-GAAP measures, suggests management is attempting to present a more favorable view of profitability by adjusting for non-cash or non-recurring expenses. Understanding the composition of these adjustments is crucial, as they can sometimes obscure the company's core operating performance. The declared dividend of $0.20 per share in the context of the net loss raises questions about the sustainability of such payouts. Could this signal confidence by the board in future earnings, or is it an effort to maintain investor loyalty in a challenging period? The newly authorized stock repurchase program indicates a belief by management that the stock may be undervalued. The repurchase of shares can be accretive to earnings per share if executed below the intrinsic value of the company. However, if this capital allocation decision is made at the expense of investing in growth opportunities or maintaining liquidity, it could raise concerns about long-term value creation.

Market Research Analyst

From a market perspective, the financial health of BrightSpire Capital is a reflection of broader commercial real estate (CRE) market trends. The CRE market is sensitive to interest rates, economic growth and sector-specific trends. The financial strain indicated by the GAAP net loss may be symptomatic of larger market challenges, such as rising interest rates leading to higher borrowing costs or a slowdown in commercial real estate demand. Furthermore, the stock repurchase program could signal management's intent to bolster stock prices in the face of market headwinds. Investors should assess how these external factors could influence the company's performance going forward, particularly in the U.S. market where BrightSpire predominantly operates. Additionally, the company's focus on first mortgage loans as a primary investment strategy should be evaluated in light of current credit market conditions and default risks.

Real Estate Investment Trust (REIT) Analyst

When analyzing a REIT such as BrightSpire Capital, the net book value per share figures, both GAAP and undepreciated, offer insight into the underlying asset value in relation to the market price. A spread between the market price and book values can indicate market sentiment about future performance or potential market inefficiencies. As a REIT, BrightSpire's ability to maintain dividends is pivotal, given the tax structure obligations to distribute a majority of taxable income. A careful look at the underlying profitability and cash flow is essential to ascertain the likelihood of sustained dividends. The CRE focus means that portfolio diversity, property occupancy rates, lease durations and the credit quality of tenants are all factors that directly impact income stability and, consequently, the ability to meet dividend commitments.

NEW YORK--(BUSINESS WIRE)-- BrightSpire Capital, Inc. (NYSE: BRSP) (“BrightSpire Capital” or the “Company”) today announced its financial results for the first quarter 2024 and certain updates. The Company reported first quarter 2024 GAAP net loss attributable to common stockholders of ($57.1) million, or ($0.45) per share, Distributable Earnings of $22.5 million, or $0.17 per share, and Adjusted Distributable Earnings of $29.7 million, or $0.23 per share. The Company reported GAAP net book value of $9.10 per share and undepreciated book value of $10.67 per share as of March 31, 2024.

Michael J. Mazzei, Chief Executive Officer, commented, “We continue to remain focused on the balance sheet and maintaining ample liquidity until market conditions improve.”

Supplemental Financial Report

A First Quarter 2024 Supplemental Financial Report is available on the Shareholders – Events and Presentations section of the Company’s website at www.brightspire.com. This information will be furnished to the SEC in a Current Report on Form 8-K.

We refer to “Distributable Earnings” and “Adjusted Distributable Earnings”, which are non-GAAP financial measures, in this release. A reconciliation to net income/(loss) attributable to BrightSpire Capital common stockholders, the most directly comparable GAAP measure, is included in our full detailed First Quarter 2024 Supplemental Financial Report and is available on our website at www.brightspire.com.

First Quarter 2024 Conference Call

The Company will conduct a conference call to discuss the financial results on May 1, 2024 at 10:00 a.m. ET / 7:00 a.m. PT. To participate in the event by telephone, please dial (877) 407-0784 ten minutes prior to the start time (to allow time for registration). International callers should dial (201) 689-8560. The call will also be broadcast live over the Internet and can be accessed on the Shareholders section of the Company’s website at www.brightspire.com. A webcast of the call will be available for 90 days on the Company’s website.

For those unable to participate during the live call, a replay will be available starting May 1, 2024 at 1:00 p.m. ET / 10:00 a.m. PT, through May 8, 2024, at 11:59 p.m. ET / 8:59 p.m. PT. To access the replay, dial (844) 512-2921 and use conference ID code 13745217. International callers should dial (412) 317-6671 and enter the same conference ID.

Dividend Announcement

On March 15, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share to holders of Class A common stock for the first quarter of 2024, which was paid on April 15, 2024, to common stockholders of record on March 29, 2024.

On December 14, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share to holders of Class A common stock for the fourth quarter of 2023, which was paid on January 12, 2024, to common stockholders of record on December 31, 2023.

Common Stock Repurchase Plan

On April 25, 2024, the Company’s Board of Directors have authorized a stock repurchase program, under which the Company may repurchase up to $50 million of its outstanding Class A common stock until April 30, 2025 (the “Stock Repurchase Program”). Under the Stock Repurchase Program, the Company may repurchase shares in open market purchases, in privately negotiated transactions or otherwise. The Stock Repurchase Program will be utilized at management's discretion and in accordance with the requirements of the Securities and Exchange Commission. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements and other conditions.

The Stock Repurchase Program replaces in its entirety the Company’s prior repurchase program announced on May 3, 2023 and that expired on April 30, 2024.

About BrightSpire Capital, Inc.

BrightSpire Capital, Inc. (NYSE: BRSP) is internally managed and one of the largest publicly traded commercial real estate (CRE) credit REITs, focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties predominantly in the United States. CRE debt investments primarily consist of first mortgage loans, which we expect to be the primary investment strategy. BrightSpire Capital is organized as a Maryland corporation and taxed as a REIT for U.S. federal income tax purposes. For additional information regarding the Company and its management and business, please refer to www.brightspire.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond our control, and may cause actual results to differ significantly from those expressed in any forward-looking statement. Among others, the following uncertainties and other factors could cause actual results to differ from those set forth in the forward-looking statements: operating costs and business disruption may be greater than expected; uncertainties regarding the ongoing impact of the novel coronavirus (COVID-19) and its adverse impact on the real estate market, the economy and the Company’s investments, financial condition and business operation; the Company's operating results may differ materially from the information presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as in the Company’s other filings with the Securities and Exchange Commission; the fair value of the Company's investments may be subject to uncertainties (including impacts associated with accelerating inflationary trends, recent and potential further interest rate increases, the volatility of interest rates, credit spreads and the transition from LIBOR to SOFR, increased market volatility affecting commercial real estate businesses and public securities); the Company's use of leverage and interest rate mismatches between the Company’s assets and borrowings could hinder its ability to make distributions and may significantly impact its liquidity position; the ability to simplify the portfolio, realize substantial efficiencies as well as anticipated strategic and financial benefits, including, but not limited to expected cost savings through the internalization or expected returns on equity and/or yields on investments; the timing of and ability to generate additional liquidity and deploy available liquidity, including in senior mortgage loans; whether the Company will achieve its anticipated Distributable Earnings per share (as adjusted), or maintain or produce higher Distributable Earnings per share (as adjusted) in the near term or ever; the Company’s ability to maintain or grow the dividend at all in the future; defaults by borrowers in paying debt service on outstanding indebtedness; borrowers’ abilities to manage and stabilize properties; deterioration in the performance of the properties securing our investments (including the impact of higher interest expense, depletion of interest and other reserves or payment-in-kind concessions in lieu of current interest payment obligations, population shifts and migration, reduced demand for office, multifamily, hospitality or retail space) that may cause deterioration in the performance of our investments and, potentially, principal losses to us; adverse impacts on the Company's corporate revolver, including covenant compliance and borrowing base capacity; adverse impacts on the Company's liquidity, including available capacity under and margin calls on master repurchase facilities; lease payment defaults or deferrals, demands for protective advances and capital expenditures; the ability of the Company to refinance certain mortgage debt on similar terms to those currently existing or at all; the ability to execute CRE CLO’s on a go forward basis, including at a reduced cost of capital; the impact of legislative, regulatory, tax and competitive changes, regime changes and the actions of government authorities and in particular those affecting the commercial real estate finance and mortgage industry or our business; and the impact of the conflict between Russia and Ukraine, global trade tensions, and the implementation and expansion of economic and trade sanctions. The foregoing list of factors is not exhaustive. Additional information about these and other factors can be found in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as in BrightSpire Capital’s other filings with the Securities and Exchange Commission. Moreover, each of the factors referenced above are likely to also be impacted directly or indirectly by the ongoing impact of COVID-19 and investors are cautioned to interpret substantially all of such statements and risks as being heightened as a result of the ongoing impact of the COVID-19.

We caution investors not to unduly rely on any forward-looking statements. The forward-looking statements speak only as of the date of this press release. BrightSpire Capital is under no duty to update any of these forward-looking statements after the date of this press release, nor to conform prior statements to actual results or revised expectations, and BrightSpire Capital does not intend to do so.

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Investor Relations

BrightSpire Capital, Inc.

Addo Investor Relations

Anne McGuinness

310-829-5400

brsp@addo.com

Source: BrightSpire Capital, Inc.

FAQ

<p>What were BrightSpire Capital's first quarter 2024 financial results?</p>

BrightSpire Capital reported a first quarter 2024 GAAP net loss of ($57.1) million, Distributable Earnings of $22.5 million, and Adjusted Distributable Earnings of $29.7 million.

<p>When was the quarterly cash dividend declared for the first quarter of 2024?</p>

The quarterly cash dividend of $0.20 per share for the first quarter of 2024 was declared on March 15, 2024.

<p>What is the Stock Repurchase Program authorized by BrightSpire Capital's Board of Directors?</p>

The Stock Repurchase Program authorizes the repurchase of up to $50 million of its outstanding Class A common stock until April 30, 2025.