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Franklin BSP Realty Trust, Inc. Announces Second Quarter 2024 Results

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Franklin BSP Realty Trust (NYSE: FBRT) announced its Q2 2024 financial results. Key highlights include:

  • GAAP net loss of $3.8 million, compared to $35.8 million profit in Q1 2024
  • Diluted EPS of $(0.11), down from $0.35 in Q1 2024
  • Distributable Earnings of $32.4 million ($0.31 per diluted share), compared to $41.0 million ($0.41 per share) in Q1 2024
  • Core portfolio principal balance increased by $195 million to $5.4 billion
  • Closed $622 million of new loan commitments at a weighted average spread of 318 basis points
  • Declared Q2 common stock cash dividend of $0.355, representing a 9.3% annualized yield on book value per share
  • Book value of $15.27 per diluted common share
  • Repurchased 240,740 shares at an average price of $12.42 per share

Franklin BSP Realty Trust (NYSE: FBRT) ha annunciato i risultati finanziari per il secondo trimestre del 2024. I punti salienti includono:

  • Perdita netta GAAP di 3,8 milioni di dollari, rispetto a un profitto di 35,8 milioni di dollari nel primo trimestre del 2024
  • EPS diluito di $(0,11), in calo rispetto a $0,35 nel primo trimestre del 2024
  • Utili distribuibili di 32,4 milioni di dollari ($0,31 per azione diluita), rispetto a 41,0 milioni di dollari ($0,41 per azione) nel primo trimestre del 2024
  • Il saldo principale del portafoglio centrale è aumentato di 195 milioni di dollari, raggiungendo 5,4 miliardi di dollari
  • Chiusura di 622 milioni di dollari di nuovi impegni di prestito con uno spread medio ponderato di 318 punti base
  • Dichiarato un dividendo in denaro per azioni ordinarie del secondo trimestre di 0,355 dollari, che rappresenta un rendimento annualizzato del 9,3% sul valore contabile per azione
  • Valore contabile di 15,27 dollari per azione comune diluita
  • Riacquistate 240.740 azioni a un prezzo medio di 12,42 dollari per azione

Franklin BSP Realty Trust (NYSE: FBRT) anunció sus resultados financieros del segundo trimestre de 2024. Los aspectos destacados incluyen:

  • Pérdida neta GAAP de $3.8 millones, en comparación con una ganancia de $35.8 millones en el primer trimestre de 2024
  • EPS diluido de $(0.11), una disminución respecto a $0.35 en el primer trimestre de 2024
  • Ganancias distribuibles de $32.4 millones ($0.31 por acción diluida), comparado con $41.0 millones ($0.41 por acción) en el primer trimestre de 2024
  • El saldo principal de la cartera principal aumentó en $195 millones hasta alcanzar $5.4 mil millones
  • Cerrado $622 millones en nuevos compromisos de préstamo con un diferencial promedio ponderado de 318 puntos base
  • Declarado un dividendo en efectivo de acciones comunes del segundo trimestre de $0.355, que representa un rendimiento anualizado del 9.3% sobre el valor contable por acción
  • Valor contable de $15.27 por acción común diluida
  • Recompradas 240,740 acciones a un precio promedio de $12.42 por acción

Franklin BSP Realty Trust (NYSE: FBRT)는 2024년 2분기 금융 결과를 발표했습니다. 주요 하이라이트는 다음과 같습니다:

  • GAAP 순손실이 380만 달러로, 2024년 1분기에 3580만 달러의 이익과 비교됩니다
  • 희석 주당 순이익(EPS)은 $(0.11)로, 2024년 1분기의 $0.35에서 감소했습니다
  • 배당 가능한 수익은 3240만 달러($0.31 per 희석 주당)로, 2024년 1분기의 4100만 달러($0.41 per 주당)와 비교됩니다
  • 핵심 포트폴리오의 원금 잔고가 1억 9500만 달러 증가하여 54억 달러에 도달했습니다
  • 318베이시스 포인트의 가중 평균 스프레드로 6억 2200만 달러의 신규 대출 약정을 체결했습니다
  • 2024년 2분기 보통주 현금 배당금을 $0.355 선언했으며, 이는 주당 장부가치에 대한 연율화 수익률 9.3%를 나타냅니다
  • 희석된 보통주당 장부가치는 $15.27입니다
  • 주당 평균 가격 $12.42로 240,740주를 재매입했습니다

Franklin BSP Realty Trust (NYSE: FBRT) a annoncé ses résultats financiers pour le deuxième trimestre 2024. Les points clés incluent :

  • Perte nette GAAP de 3,8 millions de dollars, par rapport à un bénéfice de 35,8 millions de dollars au premier trimestre 2024
  • BPA dilué de $(0,11), en baisse par rapport à 0,35 $ au premier trimestre 2024
  • Bénéfices distribuables de 32,4 millions de dollars (0,31 $ par action diluée), contre 41,0 millions de dollars (0,41 $ par action) au premier trimestre 2024
  • Le solde principal du portefeuille principal a augmenté de 195 millions de dollars pour atteindre 5,4 milliards de dollars
  • Clôturé 622 millions de dollars de nouveaux engagements de prêt avec un différentiel moyen pondéré de 318 points de base
  • Dividende en espèces sur actions ordinaires du deuxième trimestre de 0,355 $, représentant un rendement annualisé de 9,3 % sur la valeur comptable par action
  • Valeur comptable de 15,27 $ par action ordinaire diluée
  • A racheté 240 740 actions à un prix moyen de 12,42 $ par action

Franklin BSP Realty Trust (NYSE: FBRT) hat die finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht. Die wichtigsten Punkte umfassen:

  • GAAP Nettoverlust von 3,8 Millionen Dollar, verglichen mit einem Gewinn von 35,8 Millionen Dollar im ersten Quartal 2024
  • Verwässertes EPS von $(0,11), ein Rückgang von 0,35 Dollar im ersten Quartal 2024
  • Verteilbare Erträge von 32,4 Millionen Dollar (0,31 Dollar pro verwässerter Aktie), im Vergleich zu 41,0 Millionen Dollar (0,41 Dollar pro Aktie) im ersten Quartal 2024
  • Der Hauptkreditportfoliostand erhöhte sich um 195 Millionen Dollar auf 5,4 Milliarden Dollar
  • Verschlossene 622 Millionen Dollar an neuen Kreditverpflichtungen mit einem gewichteten Durchschnittsspread von 318 Basispunkten
  • Erklärte eine Barausschüttung auf Stammaktien im zweiten Quartal von 0,355 Dollar, was eine annualisierte Rendite von 9,3% auf den Buchwert pro Aktie darstellt
  • Buchwert von 15,27 Dollar pro verwässerter Stammaktie
  • Erwarb 240.740 Aktien zu einem Durchschnittspreis von 12,42 Dollar pro Aktie
Positive
  • Core portfolio principal balance increased by $195 million to $5.4 billion
  • Closed $622 million of new loan commitments at a weighted average spread of 318 basis points
  • Total liquidity of $699 million, including $95 million in cash and cash equivalents
  • 74% of the portfolio is collateralized by multifamily properties
  • Only 4.7% exposure to office loans
Negative
  • GAAP net loss of $3.8 million, compared to $35.8 million profit in Q1 2024
  • Diluted EPS decreased to $(0.11) from $0.35 in Q1 2024
  • Distributable Earnings decreased to $32.4 million from $41.0 million in Q1 2024
  • GAAP and Distributable Earnings dividend coverage of -22% and 87%, respectively
  • Recognized an additional incremental provision for credit losses of $32.2 million

Insights

Franklin BSP Realty Trust's Q2 2024 results present a mixed picture. The company reported a GAAP net loss of $3.8 million, a significant drop from the $35.8 million profit in Q1 2024. However, the core portfolio grew by $195 million to $5.4 billion, demonstrating continued expansion.

The company's focus on multifamily properties (74% of the portfolio) and exposure to office loans (4.7%) is strategically sound given current market conditions. The new loan commitments of $622 million at a weighted average spread of 318 basis points indicate strong deal flow and potentially attractive yields.

However, the Distributable Earnings of $32.4 million ($0.31 per share) show a decline from Q1's $41.0 million ($0.41 per share). This, combined with the dividend coverage ratio of 87%, suggests some pressure on the company's ability to maintain its current dividend level in the long term if this trend continues.

The additional provision for credit losses of $32.2 million is concerning and warrants close monitoring in future quarters. The sale of Walgreens stores from the REO portfolio, resulting in losses, indicates ongoing challenges in managing acquired real estate assets.

Overall, while FBRT continues to grow its loan portfolio, the declining profitability and increasing credit provisions suggest caution is warranted.

FBRT's Q2 2024 results reflect the broader trends in the real estate market. The company's strategic focus on multifamily properties, which comprise 74% of its portfolio, is prudent given the sector's resilience. The 4.7% exposure to office loans is particularly noteworthy, as it insulates FBRT from the ongoing challenges in the commercial office space market.

The new loan commitments of $622 million at a 318 basis point spread indicate that FBRT is finding attractive opportunities in the market. This suggests that despite broader economic uncertainties, there's still demand for commercial real estate financing, particularly in the multifamily sector.

However, the increase in the watch list to seven loans, with two rated at the highest risk level, signals potential stress in parts of the portfolio. This, coupled with the additional $32.2 million provision for credit losses, suggests that FBRT is preparing for potential deterioration in credit quality.

The sale of Walgreens stores from the REO portfolio at a loss highlights the challenges in the retail real estate sector. This trend may continue as the retail landscape evolves post-pandemic.

The book value per share of $15.27 and the share repurchase program at an average price of $12.42 indicate that management sees the stock as undervalued. However, investors should weigh this against the declining earnings and increased credit provisions.

In summary, while FBRT's strategy appears sound, the company is not immune to broader market pressures and investors should closely monitor credit quality and earnings trends in coming quarters.

NEW YORK--(BUSINESS WIRE)-- Franklin BSP Realty Trust, Inc. (NYSE: FBRT) (“FBRT” or the “Company”) today announced financial results for the quarter ended June 30, 2024.

Reported GAAP net income (loss) of $(3.8) million for the three months ended June 30, 2024, compared to $35.8 million for the three months ended March 31, 2024. Reported diluted earnings per share ("EPS") to common stockholders of $(0.11) for the three months ended June 30, 2024, compared to $0.35 for the three months ended March 31, 2024.

Reported Distributable Earnings (a non-GAAP financial measure) of $32.4 million, or $0.31 per diluted common share on a fully converted basis(1), for the three months ended June 30, 2024, compared to $41.0 million, or $0.41 per diluted common share on a fully converted basis(1), for the three months ended March 31, 2024.

Second Quarter 2024 Summary

  • Core portfolio principal balance of $5.4 billion, an increase of $195 million from the prior quarter
  • Closed $622 million of new loan commitments at a weighted average spread of 318 basis points, bringing total commitments for the first two quarters of 2024 to $1.2 billion
  • Total liquidity of $699 million, which includes $95 million in cash and cash equivalents
  • Produced a second quarter GAAP and Distributable Earnings return on equity (a non-GAAP financial measure) of (2.0)% and 8.0%, respectively
  • Declared second quarter common stock cash dividend of $0.355, representing an annualized 9.3% yield on book value per share , fully converted(1)
  • GAAP and Distributable Earnings dividend coverage of (22%) and 87%, respectively
  • Book value of $15.27 per diluted common share on a fully converted basis(1)
  • Repurchased 240,740 shares of common stock at a net average price of $12.42 per share for an aggregate of $3.0 million, which represents a $0.01 per share increase to book value
  • During the quarter, the Company sold two Walgreens stores that were part of the REO single tenant retail portfolio. Subsequent to quarter-end, the Company sold an additional 16 Walgreens stores

Richard Byrne, Chairman and Chief Executive Officer of FBRT, said, “We continue to take advantage of attractive market opportunities and have originated over $1.3 billion in total commitments for FBRT year-to-date in 2024."

Further commenting on the Company's results, Michael Comparato, President of FBRT, added, “Our 74% multifamily portfolio is performing well, and our team continues to make exceptional progress working through our watch list and REO positions. We continue to deploy capital and grow our balance sheet because of the conviction we have in our portfolio."

Portfolio and Investment Activity

Core Portfolio: For the quarter ended June 30, 2024, the Company closed $622 million of new loan commitments, funded $615 million of principal balance on new and existing loans, and received loan repayments of $240 million. The Company's core portfolio at the end of the quarter consisted of 153 loans with an aggregate principal balance of approximately $5.4 billion. The average loan size was approximately $36 million. Over 99% of the aggregate principal balance of the Company's portfolio is in senior mortgage loans with approximately 97% in floating rate loans and approximately 74% of the portfolio is collateralized by multifamily properties. The Company's exposure to office loans is only 4.7%. As of June 30, 2024, the Company had seven loans on its watch list, two of which are risk rated a five and the remaining risk rated a four.

Conduit: For the quarter ended June 30, 2024, the Company closed $70 million of fixed rate loans that were sold or will be sold through FBRT's conduit program. During the same period, the Company sold $39 million of conduit loans for a gain of $1.4 million, gross of related derivatives.

Real Estate Owned: During the second quarter, the Company sold two Walgreens stores that were part of the single tenant retail portfolio held in REO. The Company recorded a loss of $0.8 million, net of minority interest, related to those sales. Additionally, the Company recorded a loss of $3.5 million, net of minority interest, in the second quarter related to the portfolio sale of 16 Walgreens stores subsequent to quarter-end. The loss consisted of a deferred rent write off and fair value adjustment based on the July 1, 2024 sales price. See subsequent event paragraph for further details on the sale.

Allowance for Credit Losses: During the quarter, the Company recognized an additional incremental provision for credit losses of approximately $32.2 million, comprised of a $32.3 million asset-specific provision and a $(0.1) million general allowance benefit.

Book Value

As of June 30, 2024, book value was $15.27 per diluted common share on a fully converted basis(1).

Share Repurchase Program

During the quarter, the Company repurchased 240,740 shares of the Company's common stock under the Company's $65 million share repurchase program. These shares were repurchased at an average price of $12.42 per share, inclusive of any broker's fees or commissions, for an aggregate of $3.0 million. As of July 24, 2024, $31.1 million remains available under the $65 million share repurchase plan.

Subsequent Event

Subsequent to the quarter ended June 30, 2024, the Company sold 16 of the 21 remaining retail properties in the Walgreens Portfolio for a sale price of $60.9 million. The transaction was financed by the Company.

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 and derivatives, including CECL reserves and impairments, net of realized gains and losses, as described further below, (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.

As noted in (ii) above, we exclude unrealized gains and losses on loans and other investments, including CECL reserves and impairments, from our calculation of Distributable Earnings and include realized gains and losses. The nature of these adjustments is described more fully in the footnotes to our reconciliation tables. GAAP loan loss reserves and any property impairment losses have been excluded from Distributable Earnings consistent with other unrealized losses pursuant to our existing definition of Distributable Earnings. We expect to only recognize such potential credit or property impairment losses in Distributable Earnings if and when such amounts are deemed nonrecoverable upon a realization event. This is generally at the time a loan is repaid, or in the case of a foreclosure or other property, when the underlying asset is sold. The realized loss amount reflected in Distributable Earnings will generally equal the difference between the cash received and the Distributable Earnings basis of the asset. The timing of any such loss realization in our Distributable Earnings may differ materially from the timing of the corresponding loss reserves, charge-offs or impairments in our consolidated financial statements prepared in accordance with GAAP.

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 90% of its taxable income, subject to certain adjustments, and therefore believes dividends are one of the principal reasons stockholders may invest in its common stock. Further, Distributable Earnings to Common helps investors evaluate performance excluding the effects of certain transactions and GAAP adjustments that the Company does not believe are necessarily indicative of current loan portfolio performance and the Company's operations and is one of the performance metrics the Company's board of directors considers when dividends are declared.

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 June 30, 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 Thursday, August 1, 2024, at 9:00 a.m. ET. Participants are encouraged to pre-register for the call and webcast at https://dpregister.com/sreg/10190149/fcd91dd337. 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=MxpMVJBX. 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 the United States. As of June 30, 2024, FBRT had approximately $6.3 billion of assets. FBRT is externally managed by Benefit Street Partners L.L.C., a wholly owned subsidiary of Franklin Resources, Inc. For further information, please visit www.fbrtreit.com.

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 the United States including inflation, changing interest rates and economic contraction, impairments in the value of real estate property securing our loans or that we own, the extent of any recoveries on delinquent loans, the financial stability of our borrowers and the other risks and important factors contained and identified in the Company’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and its subsequent filings with the SEC, any of which could cause actual results to differ materially from the forward-looking statements. The forward-looking statements included in this communication are made only as of the date hereof.

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Cash and cash equivalents

$

94,779

 

 

$

337,595

 

Restricted cash

 

10,957

 

 

 

6,092

 

Commercial mortgage loans, held for investment, net of allowance for credit losses of $80,536 and $47,175 as of June 30, 2024 and December 31, 2023, respectively

 

5,347,395

 

 

 

4,989,767

 

Commercial mortgage loans, held for sale, measured at fair value

 

62,165

 

 

 

 

Real estate securities, available for sale, measured at fair value, amortized cost of $214,752 and $243,272 as of June 30, 2024 and December 31, 2023, respectively (includes pledged assets of $215,327 and $167,948 as of June 30, 2024 and December 31, 2023, respectively)

 

215,327

 

 

 

242,569

 

Receivable for loan repayment(1)

 

54,483

 

 

 

55,174

 

Accrued interest receivable

 

39,819

 

 

 

42,490

 

Prepaid expenses and other assets

 

17,306

 

 

 

19,213

 

Intangible lease asset, net of amortization

 

41,280

 

 

 

42,793

 

Real estate owned, net of depreciation

 

114,509

 

 

 

115,830

 

Real estate owned, held for sale

 

271,316

 

 

 

103,657

 

Total assets

$

6,269,336

 

 

$

5,955,180

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Collateralized loan obligations

$

3,420,137

 

 

$

3,567,166

 

Repurchase agreements and revolving credit facilities - commercial mortgage loans

 

762,437

 

 

 

299,707

 

Repurchase agreements - real estate securities

 

243,646

 

 

 

174,055

 

Mortgage note payable

 

23,998

 

 

 

23,998

 

Other financings

 

12,865

 

 

 

36,534

 

Unsecured debt

 

81,345

 

 

 

81,295

 

Derivative instruments, measured at fair value

 

1,013

 

 

 

 

Interest payable

 

13,531

 

 

 

15,383

 

Distributions payable

 

36,233

 

 

 

36,133

 

Accounts payable and accrued expenses

 

13,014

 

 

 

13,339

 

Due to affiliates

 

16,550

 

 

 

19,316

 

Intangible lease liability, held for sale

 

10,934

 

 

 

12,297

 

Total liabilities

$

4,635,703

 

 

$

4,279,223

 

Commitments and Contingencies

 

 

 

Redeemable convertible preferred stock:

 

 

 

Redeemable convertible preferred stock Series H, $0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of June 30, 2024 and December 31, 2023

$

89,748

 

 

$

89,748

 

Total redeemable convertible preferred stock

$

89,748

 

 

$

89,748

 

Equity:

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, 7.5% Cumulative Redeemable Preferred Stock, Series E, 10,329,039 shares issued and outstanding as of June 30, 2024 and December 31, 2023

$

258,742

 

 

$

258,742

 

Common stock, $0.01 par value, 900,000,000 shares authorized, 83,054,639 and 82,751,913 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

 

818

 

 

 

820

 

Additional paid-in capital

 

1,596,709

 

 

 

1,599,197

 

Accumulated other comprehensive income (loss)

 

575

 

 

 

(703

)

Accumulated deficit

 

(337,734

)

 

 

(298,942

)

Total stockholders' equity

$

1,519,110

 

 

$

1,559,114

 

Non-controlling interest

 

24,775

 

 

 

27,095

 

Total equity

$

1,543,885

 

 

$

1,586,209

 

Total liabilities, redeemable convertible preferred stock and equity

$

6,269,336

 

 

$

5,955,180

 

_________________________________________________________

(1)

Includes $36.3 million and $55.1 million of cash held by servicer related to the CLOs as of June 30, 2024 and December 31, 2023, respectively.

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Income

 

 

 

 

 

 

 

Interest income

$

133,553

 

 

$

152,892

 

 

$

264,111

 

 

$

283,428

 

Less: Interest expense

 

86,740

 

 

 

75,299

 

 

 

168,058

 

 

 

146,374

 

Net interest income

 

46,813

 

 

 

77,593

 

 

 

96,053

 

 

 

137,054

 

Revenue from real estate owned

 

4,072

 

 

 

6,438

 

 

 

8,784

 

 

 

9,750

 

Total income

$

50,885

 

 

$

84,031

 

 

$

104,837

 

 

$

146,804

 

Expenses

 

 

 

 

 

 

 

Asset management and subordinated performance fee

$

6,252

 

 

$

8,900

 

 

$

14,117

 

 

$

16,985

 

Acquisition expenses

 

195

 

 

 

283

 

 

 

433

 

 

 

661

 

Administrative services expenses

 

704

 

 

 

3,398

 

 

 

3,564

 

 

 

7,427

 

Professional fees

 

3,864

 

 

 

2,794

 

 

 

7,948

 

 

 

7,608

 

Share-based compensation

 

2,087

 

 

 

1,228

 

 

 

3,886

 

 

 

2,250

 

Depreciation and amortization

 

1,417

 

 

 

2,196

 

 

 

2,835

 

 

 

4,001

 

Other expenses

 

3,202

 

 

 

4,301

 

 

 

5,565

 

 

 

6,467

 

Total expenses

$

17,721

 

 

$

23,100

 

 

$

38,348

 

 

$

45,399

 

Other income/(loss)

 

 

 

 

 

 

 

(Provision)/benefit for credit losses

$

(32,178

)

 

$

(21,624

)

 

$

(35,059

)

 

$

(25,984

)

Realized gain/(loss) on extinguishment of debt

 

 

 

 

270

 

 

 

 

 

 

5,037

 

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

 

1,384

 

 

 

2,094

 

 

 

6,897

 

 

 

2,094

 

Unrealized gain/(loss) on commercial mortgage loans, held for sale, measured at fair value

 

158

 

 

 

(303

)

 

 

615

 

 

 

44

 

Gain/(loss) on other real estate investments

 

(6,249

)

 

 

(1,691

)

 

 

(6,243

)

 

 

(3,030

)

Trading gain/(loss)

 

 

 

 

(946

)

 

 

 

 

 

2,022

 

Unrealized gain/(loss) on derivatives

 

(183

)

 

 

393

 

 

 

(321

)

 

 

73

 

Realized gain/(loss) on derivatives

 

22

 

 

 

573

 

 

 

313

 

 

 

617

 

Total other income/(loss)

$

(37,046

)

 

$

(21,234

)

 

$

(33,710

)

 

$

(18,531

)

Income/(loss) before taxes

 

(3,882

)

 

 

39,697

 

 

 

32,779

 

 

 

82,874

 

(Provision)/benefit for income tax

 

117

 

 

 

(53

)

 

 

(717

)

 

 

609

 

Net income/(loss)

$

(3,765

)

 

$

39,644

 

 

$

32,062

 

 

$

83,483

 

Net (income)/loss attributable to non-controlling interest

 

1,590

 

 

 

(41

)

 

 

1,683

 

 

 

(50

)

Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.

$

(2,175

)

 

$

39,603

 

 

$

33,745

 

 

$

83,433

 

Less: Preferred stock dividends

 

6,748

 

 

 

6,749

 

 

 

13,497

 

 

 

13,497

 

Net income/(loss) applicable to common stock

$

(8,923

)

 

$

32,854

 

 

$

20,248

 

 

$

69,936

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

(0.11

)

 

$

0.39

 

 

$

0.24

 

 

$

0.83

 

Diluted earnings per share

$

(0.11

)

 

$

0.39

 

 

$

0.24

 

 

$

0.83

 

Basic weighted average shares outstanding

 

81,815,681

 

 

 

82,252,979

 

 

 

81,904,888

 

 

 

82,512,434

 

Diluted weighted average shares outstanding

 

81,815,681

 

 

 

82,252,979

 

 

 

81,904,888

 

 

 

82,512,434

 

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 and six months ended June 30, 2024 and 2023 (amounts in thousands, except share and per share data):

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP Net Income (Loss)

$

(3,765

)

 

$

39,644

 

 

$

32,062

 

 

$

83,483

 

Adjustments:

 

 

 

 

 

 

 

CLO amortization acceleration(1)

 

 

 

 

(1,197

)

 

 

 

 

 

(2,665

)

Unrealized (gain)/loss on financial instruments(2)

 

6,274

 

 

 

1,601

 

 

 

5,949

 

 

 

2,913

 

Unrealized (gain)/loss - ARMs

 

 

 

 

1,149

 

 

 

 

 

 

415

 

(Reversal of)/Provision for credit losses

 

32,178

 

 

 

21,624

 

 

 

35,059

 

 

 

25,984

 

Non-Cash Compensation Expense

 

2,087

 

 

 

1,228

 

 

 

3,886

 

 

 

2,250

 

Depreciation and amortization

 

1,417

 

 

 

2,196

 

 

 

2,835

 

 

 

4,001

 

Subordinated performance fee(3)

 

(2,158

)

 

 

2,614

 

 

 

(2,712

)

 

 

2,020

 

Realized (gain)/loss on debt extinguishment / CLO call

 

 

 

 

(270

)

 

 

 

 

 

(5,037

)

Realized Cash Gain/(Loss) Adjustment on REO(4)

 

(3,680

)

 

 

 

 

 

(3,680

)

 

 

 

Loan workout charges/(loan workout recoveries)(5)

 

 

 

 

(5,105

)

 

 

 

 

 

(5,105

)

Distributable Earnings

$

32,353

 

 

$

63,484

 

 

$

73,399

 

 

$

108,259

 

7.5% Series E Cumulative Redeemable Preferred Stock Dividend

 

(4,842

)

 

 

(4,842

)

 

 

(9,684

)

 

 

(9,683

)

Noncontrolling Interests in Joint Ventures Net (Income) / Loss

 

1,590

 

 

 

(41

)

 

 

1,683

 

 

 

(50

)

Noncontrolling Interests in Joint Ventures Adjusted Net (Income) / Loss DE Adjustments

 

(1,676

)

 

 

(426

)

 

 

(1,952

)

 

 

(787

)

Distributable Earnings to Common

$

27,425

 

 

$

58,175

 

 

$

63,446

 

 

$

97,739

 

Average Common Stock & Common Stock Equivalents(6)

 

1,370,731

 

 

 

1,413,493

 

 

 

1,380,321

 

 

 

1,408,571

 

GAAP Net Income/(Loss) ROE

 

(2.0

)%

 

 

9.8

%

 

 

3.5

%

 

 

5.2

%

Distributable Earnings ROE

 

8.0

%

 

 

16.5

%

 

 

9.2

%

 

 

6.9

%

GAAP Net Income/(Loss) Per Share, Diluted

$

(0.11

)

 

$

0.39

 

 

$

0.24

 

 

$

0.83

 

GAAP Net Income/(Loss) Per Share, Fully Converted(7)

$

(0.08

)

 

$

0.39

 

 

$

0.27

 

 

$

0.83

 

Distributable Earnings Per Share, Fully Converted(7)

$

0.31

 

 

$

0.66

 

 

$

0.72

 

 

$

1.10

 

________________________

(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 actual realized cash loss upon the sale of REO investments, which may be different than the GAAP basis. As of June 30, 2024, the Company has $42.8 million of GAAP loss adjustments that would run through distributable earnings if and when cash losses are realized upon asset sales.

(5)

Represents loan workout charges the Company incurred, which the Company deemed likely to be recovered. Reversal of loan workout charges represent recoveries received. During the second quarter of 2023, the Company recovered $5.1 million of loan workout charges, in aggregate, related to the loan workout charges incurred in the first, second, and third quarters of 2022 amounting to $1.9 million, $3.0 million, and $0.2 million, respectively.

(6)

Represents the average of all classes of equity except the Series E Preferred Stock.

(7)

Fully Converted assumes conversion of our series of convertible preferred stock and full vesting of our outstanding equity compensation awards.

 

Investor Relations Contact:

Lindsey Crabbe

l.crabbe@benefitstreetpartners.com

(214) 874-2339

Source: Franklin BSP Realty Trust, Inc.

FAQ

What was Franklin BSP Realty Trust's (FBRT) net income for Q2 2024?

Franklin BSP Realty Trust reported a GAAP net loss of $3.8 million for Q2 2024, compared to a net income of $35.8 million in Q1 2024.

How much did FBRT's core portfolio principal balance increase in Q2 2024?

FBRT's core portfolio principal balance increased by $195 million to $5.4 billion in Q2 2024.

What was FBRT's declared dividend for Q2 2024?

FBRT declared a Q2 2024 common stock cash dividend of $0.355 per share, representing an annualized 9.3% yield on book value per share.

How many shares did FBRT repurchase in Q2 2024?

FBRT repurchased 240,740 shares of common stock at an average price of $12.42 per share, for an aggregate of $3.0 million in Q2 2024.

What percentage of FBRT's portfolio is collateralized by multifamily properties?

Approximately 74% of FBRT's portfolio is collateralized by multifamily properties as of Q2 2024.

Franklin BSP Realty Trust, Inc.

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