Franklin Bsp Realty Trust, Inc. · NYSE:FBRT
Franklin Bsp Realty Trust — Q3 2023 Earnings Presentation
28 slides from Franklin Bsp Realty Trust's earnings presentation, Oct 31, 2023
Slide 1: Franklin BSP Realty Trust Supplemental Information Third Quarter 2023
Franklin BSP Realty Trust Supplemental Information Third Quarter 2023
Slide 2: Important Information
Important Information The information herein relates to the Company’s business and financial information as of September 30, 2023 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
Slide 3: FBRT 3Q 2023 Financial Update
FBRT 3Q 2023 Financial Update 3
Slide 4: Third Quarter 2023 Highlights
FBRT 3Q 2023 Financial Update: Third Quarter 2023 Highlights Earnings ― GAAP Net Income of $31.0 million and $0.30 per diluted common share and $0.30 per fully converted share (1) ― Distributable Earnings (2) of $42.0 million and $0.43 per fully converted share (1) ― Declared a cash dividend of $0.3
Slide 5: QTD Highlights
FBRT 3Q 2023 Financial Update: QTD Highlights Income Statement Balance Sheet - Assets (End of Quarter) Net interest income / other income $62.6 Total core portfolio $4,913.6 (1) Operating expenses (19.2) Total real estate securities $193.1 Trading and derivatives gain/(loss) on ARMs/Securities (3.1)
Slide 6: Earnings and Distributions
FBRT 3Q 2023 Financial Update: Earnings and Distributions Distributable Earnings ($M) (1) GAAP Net Income (Loss) ($M) $63.5 Williamsburg Hotel Sale $15.0 (3) $44.8 $43.8 $42.0 $39.6 $38.8 $31.0 $27.2 4Q'22 1Q'23 2Q'23 3Q'23 4Q'22 1Q'23 2Q'23 3Q'23 $0.355 $0.355 $0.355 $0.355 Dividend per share Distr
Slide 7: Core Loan Originations
FBRT 3Q 2023 Financial Update: Core Loan Originations 3Q 2023 ($M) YTD 2023 ($M) (1) (1) (2) (2) Note: All numbers in millions. Numbers in charts above represent principal balance. 1. As of September 30, 2023, future funding remaining on the loans outstanding was $388 million. 7 2. Includes full pay
Slide 8: Capitalization Overview
FBRT 3Q 2023 Financial Update: Capitalization Overview Financing Sources (1) Net Leverage FBRT average debt cost including financing costs 2.50x was 7.7% in 3Q23 vs. 7.3% last quarter 2.18x Asset Specific Financings Unsecured 2.00x Repo - 1% Debt Securities 2% 6% Warehouse 6% 1.50x $4.1Bn 1.00x Tota
Slide 9: Financing Detail
FBRT 3Q 2023 Financial Update: Financing Detail CLOs Warehouse/Revolver/Other Reinvest Cost of CLO Name Debt Amount (1) End Date Debt Name Commitment (4) BSPRT 2019-FL5 Called 3Q23 n/a n/a Barclays (Warehouse) $500 million BSPRT 2021-FL6 $583 million 10/6/23 S + 1.42% Wells Fargo $500 million BSPRT
Slide 10: Liquidity
FBRT 3Q 2023 Financial Update: Liquidity Liquidity ($M) (1) Note: All numbers in millions. 10 1. Represents cash available we can invest at a market advance rate utilizing our available capacity on financing lines.
Slide 11: Portfolio
Portfolio 11
Slide 12: Core Loan Portfolio Composition
Portfolio: Core Loan Portfolio Composition Portfolio Overview Portfolio Summary Collateral Summary − $5.0 billion total portfolio Senior 99.6% Multifamily 78% − 139 senior loans; average size of ~$36 million − 6 mezzanine loans; average size of ~$3 million − Three non-performing Mezzanine Other Hosp
Slide 13: Core Originations in the Quarter
Portfolio: Core Originations in the Quarter Overview By Collateral − 4 loans; $153 million total commitment Manufactured Housing ($134 million of initial funding / $19 16% million of future funding) − 3.98% weighted average spread; 9.30% all-in coupon(1). 1.0% and 0.3% Hospitality Multifamily weight
Slide 14: Core Portfolio - Case Studies: Watch List Loans (Risk Rating 4&5)
Portfolio: Core Portfolio - Case Studies: Watch List Loans (Risk Rating 4&5) 16-Building Investment CBD Office Building Suburban Office Park Apartment Complex Loan Type Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan Investment Date Q1 2021 Q4 2019 Q1 2021 Default Date
Slide 15: Foreclosure Real Estate Owned (REO)
Portfolio: Foreclosure Real Estate Owned (“REO”) Investment Single Tenant Retail Portfolio CBD Office Complex Loan Investment Date Q2 2022 Q1 2020 Foreclosure / Deed-In-Lieu Date Q4 2022 - Q2 2023 Q3 2023 Collateral Type Retail Office Collateral Detail 23 Freestanding Retail Properties 124k Square F
Slide 16: Appendix
Appendix 16
Slide 17: Core Portfolio - FBRT Portfolio Details – Top Loans
Appendix: Core Portfolio - FBRT Portfolio Details – Top 15 Loans Origination Current Total Principal Fully Extended (1) (2) Loan Type Date Commitment Balance Carrying Value Spread All-in Yield Maturity State Collateral Type As-is LTV Loan 1 Senior Loan 5/26/21 $155 $151 $150 + 4.55% 10.32% 6/9/26 Fl
Slide 18: Core Portfolio - Risk Ratings
Appendix: Core Portfolio - Risk Ratings Average risk rating was 2.2 for the quarter vs. 2.2 last quarter 82.3% 16.1% 0.0% 1.7% 0.0% Risk Rating 1 2 3 4 5 # of Loans - 115 27 3 - + vs 2Q23 - +4 +9 - - - vs 2Q23 -2 -16 -4 -1 -1 +/- vs 2Q23 -2 -12 +5 -1 -1 Principal $- $4,081 $797 $83 $- Balance Non-Ac
Slide 19: Earnings Sensitivity
Appendix: Earnings Sensitivity Positive earnings correlation to rising rates Sensitivity on Index Rates As of 10/26/23: (Annual EPS Impact) 1M SOFR: 5.33% $0.22 As of 9/30/23 $0.16 1M SOFR = 5.32% $0.11 $0.05 $0.00 ($0.05) -0.50% 9/30/2023 +0.50% +1.00% +1.50% +2.00% Change in Floating Base Rate Ind
Slide 20: Rate Cap Sensitivity
Appendix: Rate Cap Sensitivity 93% of our loans have a rate cap (average of 2.6% rate cap) and 90% were activated as of 9/30/23 Percentage and Number of Loans with Rate Caps Activated All loans with rate caps are activated at +1.00% and above 91%; 132 loans 93%; 135 loans 90%; 130 loans Current +0.5
Slide 21: Core Portfolio – Fully Extended Maturities
Appendix: Core Portfolio – Fully Extended Maturities Fully Extended Maturity by Year $1 ,960 $1 ,950 $395 $333 $21 4 $23 4Q23 2024 2025 2026 2027 2028 21 Note: All numbers in millions. Excludes loans on non-accrual and loans in maturity default at 9/30/23.
Slide 22: Core Portfolio – Allowance For Loan Loss
Appendix: Core Portfolio – Allowance For Loan Loss Allowance for Loan Loss by Collateral Type $ millions Office Other 1% Allowance for Loan Loss Balance at 6/30/23 - General 1% $40.2 Reserve Hospitality 15% Provision for Credit Loss - General Reserve 2.8 Allowance for Loan Loss Balance at 9/30/23 -
Slide 23: Segment Reporting Summary
Appendix: Segment Reporting Summary Weighted Average Shares Earnings Daily Average Nominal Outstanding, Fully Per Share, Fully Common Equity Return on (3) (3) ($000s) Converted Converted ($000s) Common Equity GAAP Net Income (Loss) $30,995 88,390,522 $0.30 $1,402,370 7.7% (1) $46,671 88,390,522 $0.4
Slide 24: GAAP Net Income to Distributable Earnings Reconciliation
Appendix: GAAP Net Income to Distributable Earnings Reconciliation 4Q'22 1Q'23 2Q'23 3Q'23 GAAP Net Income (Loss) 27.2 43.8 39.6 31.0 Adjustments: CLO Amortization Acceleration (1) (1.4) (1.5) (1.2) (1.3) (2) 6.2 0.6 2.7 4.3 Unrealized (Gain) / Loss (3) (2.5) (0.6) 2.6 1.6 Subordinated Performance F
Slide 25: Book Value Per Share & Shares Outstanding
Appendix: Book Value Per Share & Shares Outstanding September 30, 2023 December 31, 2022 Stockholders' equity applicable to convertible common stock $ 1,397,920 $ 1,398,986 Shares: Common stock 82,210,624 82,479,743 Equity compensation awards (restricted stock) 809,257 513,041 Series H convertible p
Slide 26: FBRT Income Statement
Appendix: FBRT Income Statement Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Income Interest income $ 137,042 $ 94,131 $ 420,470 $ 239,602 Less: Interest expense 77,973 46,157 224,347 96,262 Net interest income 59,069 47,974 196,123 143,340 Revenue from real e
Slide 27: FBRT Balance Sheet
Appendix: FBRT Balance Sheet September 30, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 411,437 $ 179,314 Restricted cash 6,655 11,173 Commercial mortgage loans, held for investment, net of allowance for credit losses of $37,512 and $40,848 as of September 30, 2023 and 4,913,644 5,228,9
Slide 28: Definitions
Definitions Distributable Earnings and Run-Rate Distributable Earnings 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)
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