Franklin BSP Realty Trust, Inc. Announces First Quarter 2024 Results
Franklin BSP Realty Trust, Inc. (NYSE: FBRT) reported GAAP net income of $35.8 million for Q1 2024, increase from $30.0 million in Q4 2023. Diluted EPS rose to $0.35 from $0.28. Distributable Earnings grew to $41.0 million, or $0.41 per diluted common share. First Quarter 2024 Summary: GAAP and Distributable Earnings ROE of 8.9% and 10.4%, respectively. Book value of $15.68 per diluted common share. Declared a $0.355 dividend. Closed $591 million in new loans. Total liquidity at $1.0 billion. Repurchased 151,123 shares. The Company remains optimistic about its future growth and performance.
Increased GAAP net income from Q4 2023 to Q1 2024, showing financial growth and stability.
Rise in diluted EPS to $0.35 from $0.28 indicates strong earnings per share performance.
Growth in Distributable Earnings to $41.0 million, or $0.41 per diluted common share, reflects financial strength.
Declared a common stock cash dividend of $0.355, showcasing a commitment to shareholders and a 9.1% yield on book value per share.
Closed $591 million of new loan commitments with a weighted average spread of 464 basis points, indicating loan growth and investment activity.
Repurchased 151,123 shares of common stock at an average price of $12.42 per share, demonstrating confidence in the Company's value and future prospects.
An additional incremental provision for credit losses of $2.9 million was recognized during the quarter, which may impact future financial performance.
The Company's exposure to office loans is only 6%, which may indicate a potential risk concentration in other sectors.
Insights
The uptick in GAAP net income and diluted EPS for Franklin BSP Realty Trust, Inc. is a positive signal, reflecting an improved profitability over the past quarter. An increase from
The new loan commitments valuing
The strategic emphasis on multifamily-focused portfolio is indicative of the company's risk management approach, as these types of properties often exhibit resilience during economic downturns. Moreover, the low exposure to office loans at
In assessing the performance of real estate investment trusts (REITs), the book value is an important metric. Franklin BSP's book value registered at
From an investment strategy standpoint, the company's robust liquidity position of
For retail investors, the declared common stock cash dividend of
Reported GAAP net income of
Reported Distributable Earnings (a non-GAAP financial measure) of
First Quarter 2024 Summary
-
Produced a first quarter GAAP and Distributable Earnings ROE (a non-GAAP financial measure) of
8.9% and10.4% , respectively -
Book value of
$15.68 -
Declared first quarter common stock cash dividend of
$0.35 59.1% yield on book value per share, fully converted(1) -
GAAP and Distributable Earnings dividend coverage of
99% and115% , respectively -
Closed
$591 million -
Core portfolio principal balance of
$5.2 billion $199 million -
Total liquidity of
$1.0 billion $240 million -
Repurchased 151,123 shares of common stock at a net average price of
$12.42 $1.9 million $0.01
Richard Byrne, Chairman and Chief Executive Officer of FBRT, said, “We are very pleased with the Company's distributable earnings growth versus last quarter. Importantly, our multifamily-focused portfolio continues to demonstrate stability which positions us to deliver consistent performance over the long term.”
Further commenting on the Company's results, Michael Comparato, President of FBRT, added, “We have been actively originating loans, and have committed to
Core Portfolio
For the quarter ended March 31, 2024, the Company closed
Conduit
For the quarter ended March 31, 2024, the Company closed
Allowance for Credit Losses
During the quarter, the Company recognized an additional incremental provision for credit losses of approximately
Book Value
As of March 31, 2024, book value was
Share Repurchase Program
During the quarter, the Company repurchased 151,123 shares of the Company's common stock under the Company's
Distributable Earnings and Distributable Earnings to Common
Distributable Earnings is a non-GAAP measure, which the Company defines as GAAP net income (loss), adjusted for (i) non-cash CLO amortization acceleration and amortization over the expected useful life of the Company's CLOs, (ii) unrealized gains and losses on loans, derivatives and ARMs, including CECL reserves and impairments, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) subordinated performance fee accruals/(reversal), (vi) realized gains and losses on debt extinguishment and CLO calls, and (vii) certain other non-cash items. Further, Distributable Earnings to Common, a non-GAAP measure, presents Distributable Earnings net of (i) perpetual preferred stock dividend payments and (ii) non-controlling interests in joint ventures.
The Company believes that Distributable Earnings and Distributable Earnings to Common provide meaningful information to consider in addition to the disclosed GAAP results. The Company believes Distributable Earnings and Distributable Earnings to Common are useful financial metrics for existing and potential future holders of its common stock as historically, over time, Distributable Earnings to Common has been an indicator of common dividends per share. As a REIT, the Company generally must distribute annually at least
Distributable Earnings and Distributable Earnings to Common do not represent net income (loss) and should not be considered as an alternative to GAAP net income (loss). The methodology for calculating Distributable Earnings and Distributable Earnings to Common may differ from the methodologies employed by other companies and thus may not be comparable to the Distributable Earnings reported by other companies.
Please refer to the financial statements and reconciliation of GAAP Net Income to Distributable Earnings and Distributable Earnings to Common included at the end of this release for further information.
| 1 Fully converted per share information in this press release assumes applicable conversion of our series of outstanding convertible preferred stock into common stock and the vesting of our outstanding equity compensation awards. |
Supplemental Information
The Company published a supplemental earnings presentation for the quarter ended March 31, 2024 on its website to provide additional disclosure and financial information. These materials can be found on the Company’s website at http://www.fbrtreit.com under the Presentations tab.
Conference Call and Webcast
The Company will host a conference call and live audio webcast to discuss its financial results on Tuesday, April 30, 2024, at 9:00 a.m. ET. Participants are encouraged to pre-register for the call and webcast at https://dpregister.com/sreg/10187136/fbca98b380. If you are unable to pre-register, the conference call may be accessed by dialing (844) 701-1166 (Domestic) or (412) 317-5795 (International). Ask to join the Franklin BSP Realty Trust conference call. Participants should call in at least five minutes prior to the start of the call.
The call will also be accessible via live webcast at https://ccmediaframe.com?id=2vxLzVHs. Please allow extra time prior to the call to download and install audio software, if needed. A slide presentation containing supplemental information may also be accessed through the Company’s website in advance of the call.
An audio replay of the live broadcast will be available approximately one hour after the end of the conference call on FBRT’s website. The replay will be available for 90 days on the Company’s website.
About Franklin BSP Realty Trust, Inc.
Franklin BSP Realty Trust, Inc. (NYSE: FBRT) is a real estate investment trust that originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located in
Forward-Looking Statements
Certain statements included in this press release are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
The Company's forward-looking statements are subject to various risks and uncertainties. Factors that could cause actual outcomes to differ materially from our forward-looking statements include macroeconomic factors in
FRANKLIN BSP REALTY TRUST, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) |
|||||||
|
March 31, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
240,030 |
|
|
$ |
337,595 |
|
Restricted cash |
|
8,092 |
|
|
|
6,092 |
|
Commercial mortgage loans, held for investment, net of allowance for credit losses of |
|
5,184,205 |
|
|
|
4,989,767 |
|
Commercial mortgage loans, held for sale, measured at fair value |
|
30,457 |
|
|
|
— |
|
Real estate securities, available for sale, measured at fair value, amortized cost of |
|
217,855 |
|
|
|
242,569 |
|
Receivable for loan repayment(1) |
|
26,683 |
|
|
|
55,174 |
|
Accrued interest receivable |
|
39,628 |
|
|
|
42,490 |
|
Prepaid expenses and other assets |
|
19,911 |
|
|
|
19,213 |
|
Intangible lease asset, net of amortization |
|
42,037 |
|
|
|
42,793 |
|
Real estate owned, net of depreciation |
|
115,169 |
|
|
|
115,830 |
|
Real estate owned, held for sale |
|
103,657 |
|
|
|
103,657 |
|
Total assets |
$ |
6,027,724 |
|
|
$ |
5,955,180 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Collateralized loan obligations |
$ |
3,530,740 |
|
|
$ |
3,567,166 |
|
Repurchase agreements and revolving credit facilities - commercial mortgage loans |
|
412,556 |
|
|
|
299,707 |
|
Repurchase agreements - real estate securities |
|
194,769 |
|
|
|
174,055 |
|
Mortgage note payable |
|
23,998 |
|
|
|
23,998 |
|
Other financings |
|
12,865 |
|
|
|
36,534 |
|
Unsecured debt |
|
81,320 |
|
|
|
81,295 |
|
Derivative instruments, measured at fair value |
|
524 |
|
|
|
— |
|
Interest payable |
|
15,052 |
|
|
|
15,383 |
|
Distributions payable |
|
36,308 |
|
|
|
36,133 |
|
Accounts payable and accrued expenses |
|
11,195 |
|
|
|
13,339 |
|
Due to affiliates |
|
20,969 |
|
|
|
19,316 |
|
Intangible lease liability, held for sale |
|
12,297 |
|
|
|
12,297 |
|
Total liabilities |
$ |
4,352,593 |
|
|
$ |
4,279,223 |
|
Commitments and Contingencies |
|
|
|
||||
Redeemable convertible preferred stock: |
|
|
|
||||
Redeemable convertible preferred stock Series H, |
$ |
89,748 |
|
|
$ |
89,748 |
|
Total redeemable convertible preferred stock |
$ |
89,748 |
|
|
$ |
89,748 |
|
Equity: |
|
|
|
||||
Preferred stock, |
$ |
258,742 |
|
|
$ |
258,742 |
|
Common stock, |
|
820 |
|
|
|
820 |
|
Additional paid-in capital |
|
1,597,611 |
|
|
|
1,599,197 |
|
Accumulated other comprehensive income (loss) |
|
530 |
|
|
|
(703 |
) |
Accumulated deficit |
|
(299,326 |
) |
|
|
(298,942 |
) |
Total stockholders' equity |
$ |
1,558,377 |
|
|
$ |
1,559,114 |
|
Non-controlling interest |
|
27,006 |
|
|
|
27,095 |
|
Total equity |
$ |
1,585,383 |
|
|
$ |
1,586,209 |
|
Total liabilities, redeemable convertible preferred stock and equity |
$ |
6,027,724 |
|
|
$ |
5,955,180 |
|
_______________________ |
||
(1) |
Includes |
|
FRANKLIN BSP REALTY TRUST, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Income |
|
|
|
||||
Interest income |
$ |
130,558 |
|
|
$ |
130,536 |
|
Less: Interest expense |
|
81,318 |
|
|
|
71,075 |
|
Net interest income |
|
49,240 |
|
|
|
59,461 |
|
Revenue from real estate owned |
|
4,712 |
|
|
|
3,312 |
|
Total income |
$ |
53,952 |
|
|
$ |
62,773 |
|
Expenses |
|
|
|
||||
Asset management and subordinated performance fee |
$ |
7,865 |
|
|
$ |
8,085 |
|
Acquisition expenses |
|
238 |
|
|
|
378 |
|
Administrative services expenses |
|
2,860 |
|
|
|
4,029 |
|
Professional fees |
|
4,084 |
|
|
|
4,814 |
|
Share-based compensation |
|
1,799 |
|
|
|
1,022 |
|
Depreciation and amortization |
|
1,417 |
|
|
|
1,805 |
|
Other expenses |
|
2,363 |
|
|
|
2,166 |
|
Total expenses |
$ |
20,626 |
|
|
$ |
22,299 |
|
Other income/(loss) |
|
|
|
||||
(Provision)/benefit for credit losses |
$ |
(2,880 |
) |
|
$ |
(4,360 |
) |
Realized gain/(loss) on extinguishment of debt |
|
— |
|
|
|
4,767 |
|
Realized gain/(loss) on real estate securities, available for sale |
|
88 |
|
|
|
596 |
|
Realized gain/(loss) on sale of commercial mortgage loans, held for sale, measured at fair value |
|
5,513 |
|
|
|
— |
|
Unrealized gain/(loss) on commercial mortgage loans, held for sale, measured at fair value |
|
457 |
|
|
|
347 |
|
Gain/(loss) on other real estate investments |
|
6 |
|
|
|
(1,339 |
) |
Trading gain/(loss) |
|
— |
|
|
|
2,968 |
|
Unrealized gain/(loss) on derivatives |
|
(138 |
) |
|
|
(320 |
) |
Realized gain/(loss) on derivatives |
|
290 |
|
|
|
44 |
|
Total other income/(loss) |
$ |
3,336 |
|
|
$ |
2,703 |
|
Income/(loss) before taxes |
|
36,662 |
|
|
|
43,177 |
|
(Provision)/benefit for income tax |
|
(835 |
) |
|
|
662 |
|
Net income/(loss) |
$ |
35,827 |
|
|
$ |
43,839 |
|
Net (income)/loss attributable to non-controlling interest |
|
93 |
|
|
|
(9 |
) |
Net income/(loss) attributable to Franklin BSP Realty Trust, Inc. |
$ |
35,920 |
|
|
$ |
43,830 |
|
Less: Preferred stock dividends |
|
6,748 |
|
|
|
6,748 |
|
Net income/(loss) applicable to common stock |
$ |
29,172 |
|
|
$ |
37,082 |
|
|
|
|
|
||||
Basic earnings per share |
$ |
0.35 |
|
|
$ |
0.44 |
|
Diluted earnings per share |
$ |
0.35 |
|
|
$ |
0.44 |
|
Basic weighted average shares outstanding |
|
81,994,096 |
|
|
|
82,774,771 |
|
Diluted weighted average shares outstanding |
|
81,994,096 |
|
|
|
82,774,771 |
|
FRANKLIN BSP REALTY TRUST, INC. RECONCILIATION OF GAAP NET INCOME TO DISTRIBUTABLE EARNINGS (In thousands, except share and per share data) (Unaudited) |
|||||||
The following table provides a reconciliation of GAAP net income to Distributable Earnings and Distributable Earnings to Common as of the three months ended March 31, 2024 and 2023 (amounts in thousands, except share and per share data): |
|||||||
|
Three months ended March 31, |
||||||
|
|
2024 |
|
|
|
2023 |
|
GAAP Net Income (Loss) |
$ |
35,827 |
|
|
$ |
43,839 |
|
Adjustments: |
|
|
|
||||
CLO amortization acceleration(1) |
|
— |
|
|
|
(1,468 |
) |
Unrealized (gain)/loss on financial instruments(2) |
|
(325 |
) |
|
|
1,312 |
|
Unrealized (gain)/loss - ARMs |
|
— |
|
|
|
(734 |
) |
(Reversal of)/Provision for credit losses |
|
2,880 |
|
|
|
4,360 |
|
Non-Cash Compensation Expense |
|
1,799 |
|
|
|
1,022 |
|
Depreciation and amortization |
|
1,417 |
|
|
|
1,805 |
|
Subordinated performance fee(3) |
|
(554 |
) |
|
|
(594 |
) |
Realized (gain)/loss on debt extinguishment / CLO call |
|
— |
|
|
|
(4,767 |
) |
Distributable Earnings |
$ |
41,044 |
|
|
$ |
44,775 |
|
|
|
(4,842 |
) |
|
|
(4,842 |
) |
Non-controlling interests in joint ventures net income/(loss) |
|
93 |
|
|
|
(9 |
) |
Noncontrolling Interests in Joint Ventures Depreciation and Amortization |
|
(276 |
) |
|
|
(360 |
) |
Distributable Earnings to Common |
$ |
36,019 |
|
|
$ |
39,564 |
|
Average Common Stock & Common Stock Equivalents(4) |
|
1,389,912 |
|
|
|
1,422,565 |
|
GAAP Net Income/(Loss) ROE |
|
8.9 |
% |
|
|
11.0 |
% |
Distributable Earnings ROE |
|
10.4 |
% |
|
|
11.1 |
% |
GAAP Net Income/(Loss) Per Share, Diluted |
$ |
0.35 |
|
|
$ |
0.44 |
|
GAAP Net Income/(Loss) Per Share, Fully Converted(5) |
$ |
0.35 |
|
|
$ |
0.44 |
|
Distributable Earnings Per Share, Fully Converted(5) |
$ |
0.41 |
|
|
$ |
0.44 |
|
| _______________________ | ||
(1) |
Before Q1 2024, we adjusted GAAP income for non-cash CLO amortization acceleration to effectively amortize the issuance costs of our CLOs over the expected lifetime of the CLOs. We assume our CLOs will be outstanding for approximately four years and amortized the financing costs over approximately four years in our distributable earnings as compared to effective yield methodology in our GAAP earnings. Starting in Q1 2024, we amortized the issuance costs incurred on our CLOs over the expected lifetime of the CLOs in our GAAP presentation, making our previous adjustment no longer necessary. | |
(2) |
Represents unrealized gains and losses on (i) commercial mortgage loans, held for sale, measured at fair value, (ii) other real estate investments, measured at fair value and (iii) derivatives. | |
(3) |
Represents accrued and unpaid subordinated performance fee. In addition, reversal of subordinated performance fee represents cash payment obligations in the quarter. | |
(4) |
Represents the average of all classes of equity except the Series E Preferred Stock. | |
(5) |
Fully Converted assumes conversion of our series of convertible preferred stock and full vesting of our outstanding equity compensation awards. | |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240429528454/en/
Investor Relations Contact:
Lindsey Crabbe
l.crabbe@benefitstreetpartners.com
(214) 874-2339
Source: Franklin BSP Realty Trust, Inc.
FAQ
<p>What is the stock symbol for Franklin BSP Realty Trust, Inc.?</p>
The stock symbol for Franklin BSP Realty Trust, Inc. is FBRT.
<p>What was the GAAP net income for Franklin BSP Realty Trust, Inc. in Q1 2024?</p>
The GAAP net income for Franklin BSP Realty Trust, Inc. in Q1 2024 was $35.8 million.
<p>What was the diluted EPS for Franklin BSP Realty Trust, Inc. in Q1 2024?</p>
The diluted EPS for Franklin BSP Realty Trust, Inc. in Q1 2024 was $0.35.
<p>How much did Franklin BSP Realty Trust, Inc. close in new loan commitments for Q1 2024?</p>
Franklin BSP Realty Trust, Inc. closed $591 million in new loan commitments for Q1 2024.
<p>What was the total liquidity for Franklin BSP Realty Trust, Inc. as of Q1 2024?</p>
The total liquidity for Franklin BSP Realty Trust, Inc. as of Q1 2024 was $1.0 billion.
