Franklin Bsp Realty Trust, Inc. · NYSE:FBRT
Franklin Bsp Realty Trust — Q2 2023 Earnings Presentation
28 slides from Franklin Bsp Realty Trust's earnings presentation, Aug 1, 2023
Slide 1: Franklin BSP Realty Trust Supplemental Information Second Quarter 2023
Franklin BSP Realty Trust Supplemental Information Second Quarter 2023
Slide 2: Important Information
Important Information The information herein relates to the Company’s business and financial information as of June 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” in
Slide 3: FBRT 2Q 2023 Financial Update
FBRT 2Q 2023 Financial Update 3
Slide 4: Second Quarter 2023 Highlights
FBRT 2Q 2023 Financial Update: Second Quarter 2023 Highlights Earnings ― GAAP Net Income of $39.6 million and $0.39 per diluted common share and $0.39 per fully converted share (1) ― Distributable Earnings (2) of $63.5 million and $0.66 per fully converted share (1) ― Declared a cash dividend of $0.
Slide 5: QTD Highlights
FBRT 2Q 2023 Financial Update: QTD Highlights Income Statement Balance Sheet - Assets (End of Quarter) Net interest income / other income $83.6 Total core portfolio $5,023.6 Operating expenses (1) (20.2) Total real estate securities $317.1 Trading and derivatives gain/(loss) on ARMs/Securities (0.9)
Slide 6: Earnings and Distributions
FBRT 2Q 2023 Financial Update: Earnings and Distributions Distributable Earnings ($M) (1) GAAP Net Income (Loss) ($M) $63.5 $43.8 $44.8 $39.6 $38.8 $35.3 $34.4 $27.2 3Q'22 4Q'22 1Q'23 2Q'23 3Q'22 4Q'22 1Q'23 2Q'23 $0.355 $0.355 $0.355 $0.355 Dividend per share Distributable earnings per share, fully
Slide 7: Core Loan Originations
FBRT 2Q 2023 Financial Update: Core Loan Originations 2Q 2023 ($M) YTD 2023 ($M) (1) (1) (2) (2) Note: All numbers in millions. Numbers in charts above represent principal balance. 1. As of June 30, 2023, future funding remaining on the loans outstanding was $443 million. 7 2. Includes full paydowns
Slide 8: Capitalization Overview
FBRT 2Q 2023 Financial Update: Capitalization Overview Financing Sources (1) Net Leverage FBRT average debt cost including financing costs 2.50x 2.35x was 7.3% in 2Q23 vs. 6.7% last quarter Asset Specific Financings Unsecured 2.00x Repo - 3% Debt Securities 2% 7% 1.50x Warehouse 17% 1.00x $4.2Bn Tot
Slide 9: Financing Detail
FBRT 2Q 2023 Financial Update: Financing Detail CLOs Warehouse/Revolver/Other Reinvest CLO Name Debt Amount (1) End Date Cost of Debt Name Commitment (4) BSPRT 2019-FL5 (2) $122 million Ended L + 1.89% Barclays (Warehouse) $500 million BSPRT 2021-FL6 $585 million 9/15/23 L + 1.42% Wells Fargo $500 m
Slide 10: Liquidity
FBRT 2Q 2023 Financial Update: Liquidity Liquidity ($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 − $5.1 billion total portfolio Senior 99.4% Multifamily 77% − 148 senior loans; average size of ~$34 million − 8 mezzanine loans; average size of ~$4 million Office − One non-performing loan 6% Mezzani
Slide 13: Core Originations in the Quarter
Portfolio: Core Originations in the Quarter Overview By Collateral − 7 loans; $230 million total Hospitality 22% commitment ($221 million of initial funding / $9 million of future funding) − 4.32% weighted average spread; 9.02% all-in coupon(1). 0.7% and 0.2% weighted average origination and exit Mu
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) Garden Style 16-Building Investment CBD Office Complex CBD Office Building Apartment Community Suburban Office Park Apartment Complex Floating Rate Senior Loan Loan Type Floating Rate Senior Loan Floating Rate Senior Loan F
Slide 15: Foreclosure Real Estate Owned (REO)
Portfolio: Foreclosure Real Estate Owned (“REO”) Investment Single Tenant Retail Portfolio Office Tower Loan Investment Date Q2 2022 Q3 2018 Foreclosure / Deed-In-Lieu Date Q4 2022 - Q2 2023 Q4 2022 Collateral Type Retail Office Collateral Detail 24 Freestanding Retail Properties 21-Story Office Tow
Slide 16: Appendix
Appendix 16
Slide 17: Core 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 $143 $142 + 4.75% 10.34% 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. 2.1 last quarter 85.4% 10.5% 1.2% 2.2% 0.6% Risk Rating 1 2 3 4 5 # of Loans 2 127 22 4 1 + vs 1Q23 +1 +7 +6 +4 +1 - vs 1Q23 - -13 -4 -2 -1 +/- vs 1Q23 +1 -6 +2 +2 - Principal $62 $4,343 $535 $113 $33 Balance Non
Slide 19: Earnings Sensitivity
Appendix: Earnings Sensitivity Positive earnings correlation to rising rates Sensitivity on Index Rates (Annual EPS Impact) As of 7/27/23: 1M SOFR: 5.32% $0.25 As of 6/30/23 $0.18 1M SOFR = 5.14% $0.12 $0.06 $0.00 ($0.06) -0.50% 6/30/2023 +0.50% +1.00% +1.50% +2.00% Change in Floating Base Rate Indi
Slide 20: Rate Cap Sensitivity
Appendix: Rate Cap Sensitivity 93% of our loans have a rate cap (average of 2.5% rate cap) and 91% were activated as of 6/30/23 Percentage and Number of Loans with Rate Caps Activated All loans with rate caps are activated at +0.50% and above 91%; 142 loans 93%; 145 loans 93%; 145loans Current +0.50
Slide 21: Core Portfolio – Fully Extended Maturities
Appendix: Core Portfolio – Fully Extended Maturities Fully Extended Maturity by Year $2,105 $1,920 $372 $358 $198 $95 2023 2024 2025 2026 2027 2028 21 Note: All numbers in millions. Excludes loans on non-accrual and loans in maturity default at 6/30/23.
Slide 22: Core Portfolio – Allowance For Loan Loss
Appendix: Core Portfolio – Allowance For Loan Loss Allowance for Loan Loss by Collateral Type – Including Asset-Specific Reserve Other $ millions Hospitality 1% Allowance for Loan Loss Balance at 3/31/23 - General 15% $30.4 Reserve Provision for Credit Loss - General Reserve 9.7 Allowance for Loan L
Slide 23: Segment Reporting Summary
Appendix: Segment Reporting Summary Weighted Average Shares Earnings Daily Average Outstanding, Fully Per Share, Fully Nominal Common Equity Return on Common (3) (3) ($000s) Converted Converted ($000s) Equity GAAP Net Income (Loss) $39,644 88,421,116 $0.39 $1,413,493 9.8% (1) Run-Rate Distributable
Slide 24: GAAP Net Income to Distributable Earnings Reconciliation
Appendix: GAAP Net Income to Distributable Earnings Reconciliation 3Q'22 4Q'22 1Q'23 2Q'23 GAAP Net Income (Loss) 35.3 27.2 43.8 39.6 Adjustments: CLO Amortization Acceleration/CLO Call (1) (1.2) (1.4) (1.5) (1.2) Unrealized (Gain)/Loss (2) 1.1 6.2 0.6 2.7 (3) (2.5) (2.5) (0.6) 2.6 Subordinated Perf
Slide 25: Book Value Per Share & Shares Outstanding
Appendix: Book Value Per Share & Shares Outstanding June 30, 2023 December 31, 2022 Stockholders' equity applicable to convertible common stock $ 1,400,927 $ 1,398,986 Shares: Common stock 82,210,624 82,479,743 Equity compensation awards (restricted stock and restricted stock units) 809,257 513,041
Slide 26: FBRT Income Statement
Appendix: FBRT Income Statement Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Income Interest income $ 152,892 $ 70,213 $ 283,428 $ 145,471 Less: Interest expense 75,299 32,807 146,374 55,287 Net interest income 77,593 37,406 137,054 90,184 Revenue from real estate owned
Slide 27: FBRT Balance Sheet
Appendix: FBRT Balance Sheet June 30, 2023 December 31, 2022 ASSETS (Unaudited) Cash and cash equivalents $ 224,696 $ 179,314 Restricted cash 7,444 11,173 Commercial mortgage loans, held for investment, net of allowance for credit losses of $38,932 and $40,848 as of June 30, 2023 and December 31, 20
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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