Franklin Bsp Realty Trust, Inc. · NYSE:FBRT
Franklin Bsp Realty Trust — Nareit REITweek 2022 Investor Conference
26 slides from Franklin Bsp Realty Trust's conference presentation, Jun 6, 2022
Slide 1: Franklin BSP Realty Trust Investor Presentation
Franklin BSP Realty Trust Investor Presentation June 2022
Slide 2: Important Information
Important Information Unless otherwise specified, the information herein relates to the Company’s business and financial information as of March 31, 2022 and does not reflect subsequent developments. Risk Factors Investing in and owning our common stock involves a high degree of risk. See the sectio
Slide 3: Presenters
Presenters Richard J. Byrne Jerome Baglien Michael Comparato Chairman, President and COO / CFO and Treasurer of Head of Real Estate CEO of FBRT FBRT 3
Slide 4: BSP (FBRT's External Manager) Overview
BSP (FBRT’s External Manager) Overview 4
Slide 5: BSP Overview: Platform Overview
BSP Overview Platform Overview Franklin BSP Realty Trust, Inc. (“FBRT”) is externally managed by Benefit Street Partners, L.L.C (“BSP”), a leading $39 billion credit focused alternative asset management and subsidiary of Franklin Templeton Benefit Street Partners: $39 billion 236 6 Benefit Street To
Slide 6: BSP Overview: CRE Platform History
BSP Overview CRE Platform History BSP Real Estate (“BSP RE”) is a middle-market focused real estate team within BSP’s platform $ $9.0 BN 76 7 56 Assets under Employees3 Offices Investment management1,2 Professionals3 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2016 2018 2021 Inceptio
Slide 7: FBRT Overview: Merger with Capstead
FBRT Overview: Merger with Capstead ― In October 2021, Benefit Street Partners Realty Trust (“BSPRT”) and Capstead Mortgage Corporation (“CMO”) merged creating Franklin BSP Realty Trust, Inc. (“FBRT”) ― The merger significantly increased FBRT’s scale. The current book value is approximately $1.75 bi
Slide 8: FBRT Overview
FBRT Overview 8
Slide 9: FBRT Overview: Highlights
FBRT Overview: Highlights Commercial Mortgage REIT 99% Senior Secured Mortgage Loans $7.1bn Total Assets $1.75bn Total Equity Value 2.95x Debt / Equity Leverage Ratio 8.6% dividend yield on book value Note: All financial metrics as of March 31, 2022 9
Slide 10: FBRT Overview: Key Differentiators
FBRT Overview: Key Differentiators 1 2 3 Diversified Portfolio of Differentiated Strategy is Strong Team/Sponsorship Senior, Floating Rate Intended to Produce Best Loans Risk/Reward 4 5 6 Attractive NIM Spread & Conservative and Flexible Credit Focused Culture Leverage Balance Sheet 10
Slide 11: FBRT Portfolio
FBRT Portfolio 11
Slide 12: FBRT Portfolio: Core Loan Portfolio Composition
FBRT Portfolio: 1Q2021 - Core Loan Portfolio Composition Portfolio Overview Portfolio Summary Collateral Summary − Total portfolio of $4.6 Senior Multifamily 99% 72% billion, 166 loans with average size of ~$27 million − 160 senior loans with Office average size of ~$28 10% Other million Mezzanine 1
Slide 13: FBRT Portfolio: Core Loan Originations
FBRT Portfolio: 1Q 2021 - Core Loan Originations 1Q 2022 Total Total Total Commitment Commitment Commitment $4,815 $603 $5,070 (1) Note: All numbers in millions. Numbers in charts above represent principal balance. 13 1. Includes full paydowns, dispositions, partial paydowns and amortization.
Slide 14: FBRT Portfolio: Differentiated Strategy
FBRT Portfolio: Differentiated Strategy FBRT’s Differentiated Strategy is Intended to Produce Attractive, Risk Adjusted Returns for Stockholders Middle Market Direct Origination ― Focused on light touch, value add transitional opportunities in the ― Middle market lending driven by proprietary, direc
Slide 15: 1Q 2022 Financial Update
FBRT 1Q 2022 Financial Update 15
Slide 16: First Quarter 2022 Highlights
FBRT 1Q 2022 Financial Update: First Quarter 2022 Highlights Earnings ― GAAP Net Income (Loss) of ($22.5) million or ($0.30) per fully converted share (1) ― Distributable Earnings before trading and derivatives gain/loss on ARMs (2) (“Run-Rate Distributable Earnings”) of $40.1M or $0.39 per fully co
Slide 17: QTD Highlights
FBRT 1Q 2022 Financial Update: QTD Highlights Income Statement Balance Sheet Net interest income / other income $54.6 Core loan total commitment in the quarter $602.8 (1) Operating expenses (20.0) Total core portfolio - end of quarter $4,530.5 Trading and derivatives gain/loss on ARMs (58.0) Other i
Slide 18: Earnings and Distributions
FBRT 1Q 2022 Financial Update: Earnings and Distributions Distributable Earnings ($M) (1) GAAP Net Income (Loss) ($M) Run-Rate Distributable Earnings (1) $48.2 $38.5 $40.1 $32.8 $30.1 $30.0 $40.0 $34.6 $32.7 $31.3 $26.6 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 ($22.5) $12.1 ($72.9) 4Q'20 1Q'21 2Q'21 3Q'2
Slide 19: Earnings Sensitivity: Positive earnings correlation to rising rates
FBRT 1Q 2022 Financial Update: Earnings Sensitivity − Positive earnings correlation to rising rates Sensitivity on Index Rates Base (as of 3/31/22): (Annual EPS Impact) 1M LIBOR = 0.46% 1M SOFR = 0.30% $0.22 $0.17 As of 6/3/22: 1M LIBOR: 1.12% $0.12 1M SOFR: 1.14% $0.08 $0.04 $0.01 $0.00 $0.00 -0.25
Slide 20: Capitalization Overview
FBRT 1Q 2022 Financial Update: Capitalization Overview Net Leverage Financing Lines Commitment (1) 3.50x Warehouse/Revolver/Other 2.95x 3.00x JP Morgan $400 million 2.50x Wells Fargo $450 million 2.00x Credit Suisse $300 million 1.50x 1.30x Barclays (Warehouse) $500 million 1.00x 0.50x Barclays (Sec
Slide 21: Credit Overview
FBRT 1Q 2022 Financial Update: Credit Overview Superior Historical Credit Performance ― Senior members of the BSP RE team have significant asset management and loan workout experience ― Asset management team with additional support from Situs (a third-party vendor) ― Proactive asset management appro
Slide 22: 2Q 2022 ARMs Update
FBRT 1Q 2022 Financial Update: 2Q 2022 ARMs Update Update on ARMs portfolio: ‒ As of May 16, 2022, value of the ARMs portfolio was $336 million compared to $7.1 billion at September 30, 2021, which represents a 95% reduction of the portfolio ‒ From April 1, 2022 to May 16, 2022, FBRT experienced los
Slide 23: Appendix
Appendix 23
Slide 24: Appendix: FBRT Income Statement
Appendix: FBRT Income Statement Three Months Ended March 31, 2022 2021 Income: Interest income $ 75,258 $ 42,237 Less: Interest expense 22,480 11,369 Net interest income 52,778 30,868 Revenue from real estate owned 2,312 716 Total income $ 55,090 $ 31,584 Expenses: Asset management and subordinated
Slide 25: Appendix: FBRT Balance Sheet
Appendix: FBRT Balance Sheet March 31, 2022 December 31, 2021 ASSETS (Unaudited) Cash and cash equivalents $ 117,064 $ 154,929 Restricted cash 12,467 13,270 Commercial mortgage loans, held for investment, net of allowance of $14,933 and $15,827 as of March 31, 2022 and December 31, 4,530,451 4,211,0
Slide 26: GAAP Net Income to Distributable Earnings Reconciliation
Appendix: GAAP Net Income to Distributable Earnings Reconciliation 2Q'21 3Q'21 4Q'21 1Q'22 GAAP Net Income (Loss) 30.0 38.5 (72.9) (22.5) Adjustments: Impairment of Acquired Assets (1) - - 88.3 - CLO Amortization Acceleration/CLO Call (2) (0.8) (0.9) 2.7 (1.0) Unrealized (Gain)/Loss Reversal (3) 2.5
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