8-K
Franklin BSP Realty Trust, Inc. (FBRT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 29, 2024
Franklin BSP Realty Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Maryland | 001-40923 | 46-1406086 |
|---|---|---|
| (State or other jurisdiction | (Commission File Number) | (I.R.S. Employer |
| of incorporation) | Identification No.) |
1345 Avenue of the Americas, Suite 32A
New York, New York 10105
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (212) 588-6770
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | FBRT | New York Stock Exchange |
| 7.50% Series E Cumulative Redeemable Preferred Stock, par value $0.01 per share | FBRT PRE | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 2.02. Results of Operations and Financial Condition.
On April 29, 2024, Franklin BSP Realty Trust, Inc. (the “Company”) issued a press release and supplemental slide presentation reporting the Company’s financial results for the quarter ended March 31, 2024. Copies of the press release and supplemental slide presentation are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
The information in this Item 2.02 (including Exhibits 99.1 and 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| EXHIBIT INDEX | |
|---|---|
| Exhibit<br>No. | Description |
| 99.1 | Press Release dated April 29, 2024 announcing the Company’s financial results for the quarter ended March 31, 2024 |
| 99.2 | Supplemental Presentation for the quarter ended March 31, 2024 |
| 104.1 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FRANKLIN BSP REALTY TRUST, INC. | |
|---|---|
| By: | /s/ Jerome S. Baglien |
| Name: | Jerome S. Baglien |
| Title: | Chief Financial Officer, Chief Operating Officer and Treasurer |
Date: April 29, 2024
3
Document
| Investor Relations Contact:<br><br>Lindsey Crabbe<br><br>l.crabbe@benefitstreetpartners.com<br>(214) 874-2339 |
|---|
Franklin BSP Realty Trust, Inc. Announces First Quarter 2024 Results
New York City, NY – April 29, 2024 – Franklin BSP Realty Trust, Inc. (NYSE: FBRT) (“FBRT” or the “Company”) today announced financial results for the quarter ended March 31, 2024.
Reported GAAP net income of $35.8 million for the three months ended March 31, 2024, compared to $30.0 million for the three months ended December 31, 2023. Reported diluted earnings per share ("EPS") to common stockholders of $0.35 for the three months ended March 31, 2024, compared to $0.28 for the three months ended December 31, 2023.
Reported Distributable Earnings (a non-GAAP financial measure) of $41.0 million, or $0.41 per diluted common share on a fully converted basis(1), for the three months ended March 31, 2024, compared to $39.3 million, or $0.39 per diluted common share on a fully converted basis(1), for the three months ended December 31, 2023.
First Quarter 2024 Summary
•Produced a first quarter GAAP and Distributable Earnings ROE (a non-GAAP financial measure) of 8.9% and 10.4%, respectively
•Book value of $15.68 per diluted common share on a fully converted basis(1)
•Declared first quarter common stock cash dividend of $0.355, representing an annualized 9.1% yield on book value per share , fully converted(1)
•GAAP and Distributable Earnings dividend coverage of 99% and 115%, respectively
•Closed $591 million of new loan commitments at a weighted average spread of 464 basis points
•Core portfolio principal balance of $5.2 billion, an increase of $199 million
•Total liquidity of $1.0 billion, which includes $240 million in cash and cash equivalents
•Repurchased 151,123 shares of common stock at a net average price of $12.42 per share for an aggregate of $1.9 million, which represents a $0.01 per share increase to book value
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 $756 million of originations year-to-date. This has fueled net growth in our portfolio. With our robust pipeline and ample liquidity, we are well-positioned to further grow our portfolio and capitalize on market opportunities, all while keeping an active eye on the existing legacy portfolio and working through issues as needed."
Core Portfolio
For the quarter ended March 31, 2024, the Company closed $591 million of new loan commitments, funded $487 million of principal balance on new and existing loans, and received loan repayments of $252 million. The Company's core portfolio at the end of the quarter consisted of 145 loans with an aggregate principal balance of approximately $5.2 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 75% of the portfolio is collateralized by multifamily properties. The Company's exposure to office loans is only 6%. As of March 31, 2024, the Company had six loans on its watch list, all of which are risk rated a four.
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.
Conduit
For the quarter ended March 31, 2024, the Company closed $131 million of fixed rate loans that were sold or will be sold through FBRT's conduit program. During the same period, the Company sold $101 million of conduit loans for a gain of $5.5 million, gross of related derivatives.
Allowance for Credit Losses
During the quarter, the Company recognized an additional incremental provision for credit losses of approximately $2.9 million, with $0.7 million of the increase related to an asset-specific provision.
Book Value
As of March 31, 2024, book value was $15.68 per diluted common share on a fully converted basis(1).
Share Repurchase Program
During the quarter, the Company repurchased 151,123 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 $1.9 million. As of April 19, 2024, $32.1 million remains available under the $65 million share repurchase plan.
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 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 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 the United States. As of March 31, 2024, FBRT had approximately $6.0 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, 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)
| 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 $49,215 and $47,175 as of March 31, 2024 and December 31, 2023, respectively | 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 $217,324 and $243,272 as of March 31, 2024 and December 31, 2023, respectively (includes pledged assets of $217,855 and $167,948 as of March 31, 2024 and December 31, 2023, respectively) | 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, $0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of March 31, 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 March 31, 2024 and December 31, 2023 | $ | 258,742 | $ | 258,742 |
| Common stock, $0.01 par value, 900,000,000 shares authorized, 83,254,483 and 82,751,913 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 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 $26.6 million and $55.1 million of cash held by servicer related to the CLOs as of March 31, 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 <br>March 31, | ||||
|---|---|---|---|---|
| 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 |
| 7.5% Series E Cumulative Redeemable Preferred Stock Dividend | (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.
a1q24investorsupplementa
Franklin BSP Realty Trust First Quarter 2024 Supplemental Information
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 2 Important Information The information herein relates to the Company’s business and financial information as of March 31, 2024 and does not reflect subsequent developments. Risk Factors Investing in and owning our common stock involves a high degree of risk. See the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on February 26, 2024, and the risk disclosures in our subsequent periodic reports filed with the SEC for a discussion of these risks. Forward-Looking Statements Certain statements included in this presentation are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Franklin BSP Realty Trust, Inc. (“FBRT” or the “Company”) and may include 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. 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, the extent of any recoveries on delinquent loans, and the financial stability of our borrowers, and the other factors set forth in the risk factors section of our most recent Form 10-K and Form 10-Q. The extent to which these factors impact us and our borrowers will depend on future developments, which are highly uncertain and cannot be predicted with confidence. 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, except as required by law. Additional Important Information The summary information provided in this presentation does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. Nothing shall be relied upon as a promise or representation as to the future performance of the Company. This summary is not an offer to sell securities and is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted. This summary is not advice, a recommendation or an offer to enter into any transaction with us or any of our affiliated funds. There is no guarantee that any of the goals, targets or objectives described in this summary will be achieved. The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal, ERISA or tax advice or investment recommendations. Investors should also seek advice from their own independent tax, accounting, financial, ERISA, investment and legal advisors to properly assess the merits and risks associated with their investment in light of their own financial condition and other circumstances. The information contained herein is qualified in its entirety by reference to our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. You may obtain a copy of the most recent Annual Report or Quarterly Report by calling (844) 785-4393 and/or visiting www.fbrtreit.com. This presentation contains information regarding FBRT’s financial results that is calculated and presented on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States (“GAAP”), including Distributable Earnings. Please refer to the appendix for the reconciliation of the applicable GAAP financial measures to non-GAAP financial measures. PAST PERFORMANCE IS NOT A GUARANTEE OR INDICATIVE OF FUTURE RESULTS. INVESTMENTS INVOLVE SIGNIFICANT RISKS, INCLUDING LOSS OF THE ENTIRE INVESTMENT. There is no guarantee that any of the estimates, targets or projections illustrated in this summary will be achieved. Any references herein to any of the Company’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objective of the Company will be achieved. Any investment entails a risk of loss. An investor could lose all or substantially all of his or her investment. Please refer to our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q for a more complete list of risk factors. The following slides contain summaries of certain financial information about the Company. The information contained in this presentation is summary information that is intended to be considered in the context of our filings with the Securities and Exchange Commission and other public announcements that we may make, by press release or otherwise, from time to time.
FBRT 1Q 2024 Financial Update
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 4 Highlights 1. Fully converted per share information assumes applicable conversion of our outstanding series of convertible preferred stock into common stock and the full vesting of our outstanding equity compensation awards. 2. Please see appendix for GAAP net income to Distributable Earnings calculation. 3. Adjusted for accumulated depreciation and amortization of real property of $10.4 million and $9.4 million at 3/31/24 and 12/31/23, respectively. 4. Cash excludes restricted cash. Total liquidity amount includes the cash available we can invest at a market advance rate utilizing our available capacity on financing lines. FBRT 1Q 2024 Financial Update Earnings • GAAP Net Income of $35.8 million and $0.35 per diluted common share and $0.35 per fully converted share (1) • Distributable Earnings (2) of $41.0 million and $0.41 per diluted common share on a fully converted basis (1) • Declared a cash dividend of $0.355 per share, representing a yield of 9.1% on book value per share, fully converted (1). GAAP and Distributable Earnings (2) dividend coverage of 99% and 115%, respectively • Book value per share, fully converted is $15.68 vs. $15.77 last quarter (1). Undepreciated book value per share, fully converted is $15.79 vs. $15.88 last quarter (1) (3) • Net debt to equity is 2.4x; recourse net debt to equity is 0.3x • 87% of financing sources are non-mark-to-market on our core book • $1.0 billion of liquidity of which $240 million is cash and $11 million is CLO reinvest available (4). • Core Portfolio: Principal balance increased by $199 million in the quarter. Closed $591 million of new loan commitments and funded $493 million of principal balance including future funding on existing loans. Received loan repayments of $252 million • Core Portfolio of 145 CRE loans and $5.2 billion of principal balance, average size of $36 million and 75% multifamily. During the quarter, one asset was removed from the watch list. Six assets remain on the watch list, all of which are risk rated a four Capitalization Investments Portfolio
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 5 Financial Highlights FBRT 1Q 2024 Financial Update Income Statement Balance Sheet - Assets (End of Quarter) Net interest income / other income $52.2 Total core portfolio $5,184.2 Operating expenses (1) (17.9) Total real estate securities $217.9 Provision for credit loss (2.9) Cash and restricted cash $248.1 Other income/(loss) 4.4 CLO reinvestment available $10.8 GAAP net income (loss) $35.8 Other assets $366.7 Adjustments to GAAP net income (loss) (2) 5.2 Total assets $6,027.7 Distributable Earnings (2) $41.0 Balance Sheet - Debt & Equity GAAP net income (loss) per share, fully converted (3) $0.35 Collateralized loan obligations 3,530.7 GAAP return on common equity 8.9% Warehouse 412.6 GAAP dividend coverage, fully converted (2), (3) 99.0% Repo - securities 194.8 Asset specific financings 36.9 Distributable Earnings per share, fully converted (2), (3) $0.41 Unsecured debt 81.3 Distributable Earnings return on common equity (2) 10.4% Total Debt $4,256.2 Distributable Earnings dividend coverage, fully converted (2), (3) 114.7% Preferred equity (4) 348.5 Common stock/retained earnings (5) 1,326.6 Dividend per share $0.355 Total equity (4), (5) 1,675.1 Dividend per share yield on book value 9.1% Book value per share, fully converted (3) $15.68 Net debt/total equity 2.39x Recourse net debt/total equity 0.28x Note: All numbers in millions except per share and share data. 1. Does not include conduit operating expenses which are reported under Other income / (loss). 2. Please see appendix for the detail on the adjustments from GAAP net income to Distributable Earnings. 3. Fully converted per share information assumes applicable conversion of our outstanding series of convertible preferred stock into common stock and the full vesting of our outstanding equity compensation awards. 4. Includes $90 million of preferred equity that converts to common equity on 1/21/25, subject to the holder's right to accelerate the conversion. These amounts are reflected as temporary equity on the consolidated balance sheets. The remaining $259 million of preferred equity represents the Series E preferred, which does not convert to common equity. 5. Includes non-controlling interest.
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 6 2Q'23 3Q'23 4Q'23 1Q'24 $0.355 $0.355 $0.355 $0.355 Dividend per share $0.66 $0.43 $0.39 $0.41 Distributable earnings per share, fully converted (1), (2) 185% 120% 109% 115% Distributable dividend coverage, fully converted (1), (2) Earnings & Distributions Note: All numbers in millions except per share data. 1. Please see appendix for the detail on the adjustments from GAAP net income to Distributable Earnings 2. Fully converted per share information assumes applicable conversion of our outstanding series of convertible preferred stock into common stock and the full vesting of our outstanding equity compensation awards. 3. In Q2 2023, the sale of the Williamsburg Hotel loan accounted for approximately $15.0 million of Distributable Earnings. FBRT 1Q 2024 Financial Update Distributable Earnings ($M) (1) GAAP Net Income (Loss) ($M) $39.6 $31.0 $30.0 $35.8 2Q'23 3Q'23 4Q'23 1Q'24 $63.5 $42.0 $39.3 $41.0 2Q'23 3Q'23 4Q'23 1Q'24 Williamsburg Hotel Sale $15.0 (3)
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 7 Core Net Fundings FBRT 1Q 2024 Financial Update 1Q 2024 ($M) (1) (2) (3) Note: All numbers in millions. 1. Total commitment for 1Q 2024 totaled $591m 2. Includes full paydowns, dispositions, partial paydowns and amortization 3. In February 2024, the Company, through deed-in-lieu of foreclosure, acquired a multifamily property located in San Antonio, TX, and assumed the senior mortgage note which the Company originated in November 2021. At the time of the deed-in-lieu of foreclosure, the amortized cost of the loan was $42.2 million and contractual interest was satisfied. Subsequently thereafter, the property was sold to a third party. In connection with the sale, the senior mortgage note which the Company originated in November 2021 was assumed by the buyer and immediately modified, resulting in a $5.9 million principal paydown. As a result, the modification was accounted for as a new loan for GAAP purposes and the sale of the real estate owned transaction resulted in a net gain of $6.0 thousand recorded in Gain/(loss) on other real estate investments in the consolidated statement of operations.
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 8 Capitalization Overview 1. On our core book (excluding repo-securities), 87% of financings are non-mark-to-market FBRT 1Q 2024 Financial Update Financing Sources (1) Net Leverage Collateralized Loan Obligations 83% Warehouse 10% Repo - Securities 5% Asset Specific Financings 1% Unsecured Debt 2% 0.28x 2.39x 0.00x 0.50x 1.00x 1.50x 2.00x 2.50x 3.00x Recourse Leverage Total Leverage Average debt cost including financing was 7.8% in 1Q24 vs. 7.9% last quarter
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 9 Financing Detail 1. Outstanding balance as of March 31, 2024, and net of tranches held by FBRT 2. Cost of debt is shown before discount and transaction costs 3. Commitment for loans. Excludes bond repurchase agreements FBRT 1Q 2024 Financial Update CLOs Warehouse/Revolver/Other CLO Name Debt Amount(1) Reinvest End Date Cost of Debt(2) BSPRT 2021-FL6 $537 million Ended S + 1.44% BSPRT 2021-FL7 $675 million Ended S + 1.66% BSPRT 2022-FL8 $960 million Ended S + 1.72% BSPRT 2022-FL9 $671 million 7/8/24 S + 2.80% BSPRT 2023-FL10 $717 million 4/8/25 S + 2.59% Total $3,559 million CLO reinvestment available $11 million Repo – Securities (outstanding) $195 million Name Commitment (3) Barclays (Warehouse) $500 million Wells Fargo $400 million JP Morgan $500 million Atlas SP Partners $350 million Churchill $225 million Barclays (Secured Revolver) $250 million Total $2,225 million
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 10 Liquidity 1. Represents cash available at 3/31/2024 that we can invest at a market advance rate utilizing our available capacity on financing lines FBRT 1Q 2024 Financial Update Liquidity ($M) (1)
Portfolio
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 12 Southeast 40% Southwest 39% Mideast 7% Various (5) 8% Great Lakes 3% Rocky Mountain 3% Collateral by Region Multifamily 75% Hospitality 14% Office 6% Industrial 3% Retail 1% Other (4) 2% Rate Type Floating 97% Fixed 3% Portfolio Summary Senior 99% Mezzanine 1% Core Loan Portfolio Composition Portfolio Collateral by State Texas 35% North Carolina 13% Florida 12% Georgia 5% Various 5% South Carolina 4% Arizona 4% All Other 21% • $5.2B total portfolio; 64.3% WA LTV (1) • 139 senior loans; average UPB (2) of $38M • 6 mezzanine loans; average UPB (2) of $5M • 4 non-accrual loans (3) Portfolio Overview Collateral Summary 1. Weighted average loan-to-value percentage (WA LTV) represents the weighted average ratio of the loan amount to the appraised value of the property at the time of origination 2. Unpaid principal balance (UPB) represents the portion of the loan that has not yet been remitted to the lender 3. Two loans risk rated three and two loans risk rated four 4. Other includes Mixed Use, Manufactured Housing, and Retail 5. Various also includes New England and Plains
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 13 Multifamily 57% Industrial 17% Office 13% Hospitality 12% By State By Collateral By Region Southeast 44% Southwest 43% Rocky Mountain 12% Core Originations in the Quarter Note: Charts shown above are based on the initial funding/unpaid principal balance of the newly originated loans. 1. All-in coupon based on 3/31/24 SOFR indices. Portfolio • 11 loans; $591 million total commitment ($439 million of initial funding / $152 million of future funding) • 4.64% weighted average spread; 9.97% all-in coupon (1) • 1.1% and 0.7% weighted average origination and exit fees, respectively Overview Texas 43% Florida 27% North Carolina 17% Colorado 12%
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 14 Core Portfolio - Watch List Loans (Risk Rating 4&5) Portfolio Investment 472-Unit Apartment Community Two Property Portfolio Apartment Communities CBD Office Building 426-Unit Apartment Community Suburban Office Park Full Service Hotel Loan Type Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan Investment Date Q2 2022 Q2 2022 Q1 2021 Q2 2018 Q4 2019 Q3 2019 Default Date TBD TBD None None None None Non-Accrual Yes Yes No No No No Collateral 472-Unit, Garden Style Apartment Community Two Property, Garden- Style Apartment Communities 31-Story, 299k Square Foot Office Building 426-Unit, High Rise Apartment Community Two, 6-Story Office Buildings 279-Key, Full-Service Hotel Loan Purpose Acquisition Acquisition Refinance Acquisition Acquisition Acquisition Location Raleigh, North Carolina Mooresville & Chapel Hill, North Carolina Denver, Colorado Cleveland, OH Alpharetta, Georgia Dallas, Texas Loan Risk Rating 4 4 4 4 4 4
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 15 Foreclosure Real Estate Owned (“REO”) Note: Foreclosure REO is $122 million of book value. In addition, FBRT owns an industrial investment REO with a total net book value of $127 million, which is not presented above. Portfolio Investment Single Tenant Retail Portfolio CBD Office Complex 16-Building Apartment Complex Loan Investment Date Q2 2022 Q1 2020 Q1 2021 Foreclosure / Deed-In-Lieu Date Q4 2022 - Q2 2023 Q3 2023 Q4 2023 Collateral Type Retail Office Multifamily Collateral Detail 23 Freestanding Retail Properties 124k Square Foot Office Complex 236-Unit Apartment Complex with 16 Buildings Location Various Portland, Oregon Lubbock, Texas
Appendix
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 17 Core Portfolio – FBRT Portfolio Details – Top 15 Loans Note: All numbers in millions. 1. All-in Yield defined as: (1) current spread of the loan plus (2) any applicable index or index floor plus (3) origination and exit fees amortized over the initial maturity date of the loan. 2. As-is loan to value percentage is from metrics at origination. Predevelopment construction loans at origination will not have an LTV and therefore is nil. 3. Allowance for loan loss excludes future funding Appendix Loan Loan Type Origination Date Current Total Commitment Principal Balance Carrying Value Spread All-in Yield (1) Fully Extended Maturity State Collateral Type As-is LTV (2) Loan 1 Senior Loan 5/26/21 $155 $155 $155 + 4.35% 10.13% 6/9/26 Florida Multifamily 47.8% Loan 2 Senior Loan 6/1/22 135 130 130 + 3.95% 9.77% 6/9/27 Various Multifamily 67.8% Loan 3 Senior Loan 2/9/23 120 120 120 + 4.90% 10.89% 2/9/28 Various Hospitality 53.6% Loan 4 Senior Loan 2/25/22 86 86 86 + 3.24% 9.05% 3/9/26 New Jersey Multifamily 60.0% Loan 5 Senior Loan 2/24/22 86 86 86 + 3.15% 9.21% 3/9/27 North Carolina Multifamily 69.6% Loan 6 Senior Loan 6/1/22 86 84 84 + 3.95% 9.77% 6/9/27 North Carolina Multifamily 71.8% Loan 7 Senior Loan 2/10/22 82 82 82 + 3.20% 8.90% 2/9/27 Florida Multifamily 74.5% Loan 8 Senior Loan 12/15/21 84 81 81 + 3.21% 8.78% 1/9/27 North Carolina Multifamily 76.1% Loan 9 Senior Loan 8/1/23 80 79 79 + 3.20% 9.02% 8/9/28 Texas Multifamily 58.7% Loan 10 Senior Loan 12/21/21 79 78 78 + 3.45% 8.98% 1/9/27 Florida Multifamily 78.8% Loan 11 Senior Loan 2/16/24 90 78 78 + 3.65% 9.75% 3/9/29 Texas Multifamily 53.3% Loan 12 Senior Loan 3/31/21 79 76 76 + 2.95% 8.59% 4/9/26 Texas Multifamily 72.6% Loan 13 Senior Loan 3/7/24 75 75 75 + 2.70% 8.36% 3/9/29 North Carolina Industrial 58.6% Loan 14 Senior Loan 5/18/22 71 71 71 + 3.80% 9.61% 6/9/27 Georgia Multifamily 77.9% Loan 15 Senior Loan 6/14/22 71 71 71 + 3.45% 9.58% 6/9/27 Georgia Multifamily 71.6% Loans 16 - 145 Senior & Mezz Loans Various 4,254 3,892 3,884 + 3.84% 9.70% Various Various Various 64.3% CECL Reserve (3) (49) Total/Wtd. avg. $5,632 $5,244 $5,184 + 3.79% 9.56% 2.8 years 64.3% Average Loan Size $39 $36 $36
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 18 Core Portfolio – Risk Ratings Note: Principal balance in millions. Watchlist loans are loans with a risk rating of 4 or 5 Appendix Risk Ratings Average risk rating was 2.3 for the quarter (no change from prior quarter) 0.0% 73.5% 21.5% 5.0% 0.0% 1 2 3 4 5 Risk Rating # of Loans - 111 28 6 - Addition - +13 +8 +1 - Reduction - -13 -7 -1 - +/- vs 4Q23 - - +1 - - Principal Balance $- $3,858 $1,122 $264 $- Non-Accrual - - 2 2 - Watch List - - - 6 -
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 19 Earnings Sensitivity Note: Reflects distributable earnings impact of an increase or decrease in the floating-rate indices referenced by our portfolio, assuming no change in credit spreads, portfolio composition or asset performance. Appendix EPS Sensitivity on Index Rates Positive earnings correlation to rising rates ($0.11) ($0.06) $0.00 $0.06 $0.12 -1.00% -0.50% 3/31/2024 +0.50% +1.00% Change in Floating Base Rate Indices As of 4/22/24: 1M SOFR: 5.32% As of 3/31/24: 1M SOFR: 5.33%
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 20 79%; 115 84%; 122 87%; 126 Current (as of 3/31/24) +0.50% +1.00% Change in Floating Base Rate Indices Rate Caps Sensitivity Note: The above analysis assumes fixed rate loans have rate caps that are always active and do not expire. Loans without rate caps include loans that previously had rate caps but have expired as of 3/31/24. Appendix Percentage and Number of Loans with Activated Rate Caps 87% of our loans have a rate cap (with average cap of 3.0%) and 79% were activated as of 3/31/2024 All loans with rate caps that are not expired are activated at +1.00% indices and beyond
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 21 Core Portfolio – Fully Extended Maturities Note: All numbers in millions. Excludes loans on non-accrual and loans in maturity default at 3/31/2024 Appendix Fully Extended Maturity by Year $178 $393 $1,918 $2,009 $451 $295 2024 2025 2026 2027 2028 2029
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 22 Multifamily 74% Hospitality 14% Office 5% Other 7% Core Portfolio – Allowance For Loan Loss Note: All numbers in millions. Allowance for loan loss above includes future funding. Appendix Total Allowance for Credit Loss by Collateral Type CECL Reserve Summary 12/31 Change 3/31 UPB As % of UPB General CECL Provision $48.3 2.1 $50.4 $5,185.8 1.0% Specific CECL Provision $0.0 0.7 $0.7 $58.0 1.3% Total Allowance for Credit Losses $48.3 2.9 $51.2 $5,243.8 1.0%
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 23 GAAP Net Income to Distributable Earnings Reconciliation Note: All numbers in millions except share and per share data. 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 cost incurred on our CLOs over the expected lifetime of the CLOs in our GAAP presentation, making our previous adjustments 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, (iii) derivatives, and (iv) ARMs. 3. Represents accrued and unpaid subordinated performance fee. In addition, reversal of subordinated performance fee represents cash payment obligations in the quarter. 4. 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. 5. Represents the actual realized cash loss on REO investments, which may be different than the GAAP basis. 6. Represents the average of all classes of equity except the Series E Preferred Stock. 7. Fully converted per share information assumes applicable conversion of our outstanding series of convertible preferred stock into common stock and the full vesting of our outstanding equity compensation awards. Appendix 2Q'23 3Q'23 4Q'23 1Q'24 GAAP Net Income (Loss) 39.6 31.0 30.0 35.8 Adjustments: CLO Amortization Acceleration (1) (1.2) (1.3) (1.6) - Unrealized (Gain) / Loss (2) 2.7 4.3 (0.0) (0.3) Subordinated Performance Fee (3) 2.6 1.6 2.6 (0.6) Non-Cash Compensation Expense 1.2 1.3 1.3 1.8 Depreciation & Amortization 2.2 1.5 1.6 1.4 (Reversal of) / Provision for Credit Loss 21.6 2.4 5.4 2.9 Loan Workout Charges / (Loan Workout Recoveries) (4) (5.1) - - - Realized (Gain) / Loss on Debt Extinguishment / CLO Call (0.3) 2.8 - - Realized Cash Gain/(Loss) Adjustment on REO (5) - (1.6) - - Distributable Earnings 63.5 42.0 39.3 41.0 7.5% Series E Cumulative Reedemable Preferred Stock Dividend (4.8) (4.8) (4.8) (4.8) Noncontrolling Interests in Joint Ventures Net (Income) / Loss (0.4) 0.8 (0.0) 0.1 Noncontrolling Interests in Joint Ventures Depreciation and Amortization (0.0) (0.3) (0.3) (0.3) Distributable Earnings to Common 58.2 37.6 34.1 36.0 Average Common Stock & Common Stock Equivalents (6) 1,413.5 1,402.4 1,394.9 1,389.9 GAAP Net Income (Loss) ROE 9.8% 7.7% 7.2% 8.9% Distributable Earnings ROE 16.5% 10.7% 9.8% 10.4% GAAP Net Income / (Loss) Earnings Per Share, Diluted $0.39 $0.30 $0.28 $0.35 Fully Converted Weighted Average Shares Outstanding (7) 88,421,116 88,390,522 88,182,810 88,470,537 GAAP Net Income / (Loss) Earnings Per Share, Fully Converted (7) $0.39 $0.30 $0.29 $0.35 Distributable Earnings Per Share, Fully Converted (7) $0.66 $0.43 $0.39 $0.41
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 24 Book Value Per Share & Shares Outstanding Note: All numbers in thousands except per share and share data. Preferred stock values expressed in common stock equivalents. 1. Fully-converted book value per share reflects full conversion of our outstanding series of convertible preferred stock and vesting of our outstanding equity compensation awards. 2. Excluding the amounts for accumulated depreciation and amortization of real property of $10.4 million and $9.4 million as of March 31, 2024 and December 31, 2023, respectively, would result in a fully-converted book value per share of $15.79 and $15.88 as of March 31, 2024 and December 31, 2023, respectively. Appendix March 31, 2024 December 31, 2023 Stockholders' equity applicable to convertible common stock $ 1,389,383 $ 1,390,120 Shares: Common stock 81,990,061 81,942,656 Restricted stock and restricted stock units 1,264,422 809,257 Series H convertible preferred stock 5,370,498 5,370,498 Total outstanding shares 88,624,981 88,122,411 Fully-converted book value per share (1) (2) $ 15.68 $ 15.77
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 25 FBRT Income Statement Appendix Three Months Ended March 31, 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
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 26 FBRT Balance Sheet Appendix 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 $49,215 and $47,175 as of March 31, 2024 and December 31, 2023, respectively 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 $217,324 and $243,272 as of March 31, 2024 and December 31, 2023, respectively (includes pledged assets of $217,855 and $167,948 as of March 31, 2024 and December 31, 2023, respectively) 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, $0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of March 31, 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 March 31, 2024 and December 31, 2023 $ 258,742 $ 258,742 Common stock, $0.01 par value, 900,000,000 shares authorized, 83,254,483 and 82,751,913 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 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
B E N E F I T S T R E E T P A R T N E R S | A L C E N T R A 27 Definitions 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) loan workout charges, (vii) realized gains and losses on debt extinguishment and CLO calls, (viii) realized cash loss on a specific real estate owned ("REO") investment and (ix) 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 a 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.
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