Franklin Bsp Realty Trust, Inc. · NYSE:FBRT
Franklin Bsp Realty Trust — Q4 2022 Earnings Presentation
27 slides from Franklin Bsp Realty Trust's earnings presentation, Feb 23, 2023
Slide 1: Franklin BSP Realty Trust Supplemental Information Fourth Quarter 2022
Franklin BSP Realty Trust Supplemental Information Fourth Quarter 2022
Slide 2: Important Information
Important Information The information herein relates to the Company’s business and financial information as of December 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 section entitled “Risk Factors”
Slide 3: FBRT 4Q 2022 Financial Update
FBRT 4Q 2022 Financial Update 3
Slide 4: Fourth Quarter 2022 Highlights
FBRT 4Q 2022 Financial Update: Fourth Quarter 2022 Highlights Earnings ― GAAP Net Income of $27.2 million and $0.25 per diluted common share and $0.25 per fully converted share (1) ― Distributable Earnings (2) of $38.8 million and $0.37 per fully converted share (1) ― Declared a cash dividend of $0.
Slide 5: QTD Highlights
FBRT 4Q 2022 Financial Update: QTD Highlights Income Statement Balance Sheet - Assets (End of Quarter) Net interest income / other income $54.7 Total core portfolio $5,228.9 (1) Operating expenses (16.6) Total real estate securities $456.8 Trading and derivatives gain/(loss) on ARMs (5.5) Cash and r
Slide 6: Earnings and Distributions
FBRT 4Q 2022 Financial Update: Earnings and Distributions Distributable Earnings ($M) (1) GAAP Net Income (Loss) ($M) $38.8 $35.3 $34.4 $27.2 $30.7 1Q'22 2Q'22 3Q'22 4Q'22 $12.1 ($22.5) ($25.7) 1Q'22 2Q'22 3Q'22 4Q'22 $0.355 $0.355 $0.355 $0.355 Dividend per share Distributable earnings per share, f
Slide 7: Core Loan Originations
FBRT 4Q 2022 Financial Update: Core Loan Originations 4Q 2022 ($M) FY 2022 ($M) $2,302 Total Total Total Commitment Commitment Commitment $6,036 $5,923 $5,923 $209 Total Commitment $4,815 +$1.1Bn Total Commitment (1) (1) Note: All numbers in millions. Numbers in charts above represent principal bala
Slide 8: Capitalization Overview
FBRT 4Q 2022 Financial Update: Capitalization Overview Financing Sources (1) Net Leverage FBRT average debt cost including financing costs 3.00x was 5.8% in 4Q22 vs. 4.2% last quarter 2.54x Asset Specific Unsecured Financings Debt 2.50x Repo - Securities 2% 2% 10% 2.00x Warehouse 16% 1.50x $4.4Bn To
Slide 9: Financing Detail
FBRT 4Q 2022 Financial Update: Financing Detail CLOs Warehouse/Revolver/Other Reinvest CLO Name Debt Amount (1) End Date Cost of Debt Name Commitment (3) BSPRT 2019-FL5 $210 million Ended L + 1.77% Barclays (Warehouse) $500 million BSPRT 2021-FL6 $585 million 9/15/23 L + 1.42% Wells Fargo $500 milli
Slide 10: Liquidity
FBRT 4Q 2022 Financial Update: Liquidity Liquidity ($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 − $5.3 billion total portfolio Senior 99.7% Multifamily 76% − 156 senior loans; average size of ~$34 million − 5 mezzanine loans; average size of ~$4 million Office 8% Mezzanine − Two non-performing lo
Slide 13: Core Originations in the Quarter
Portfolio: Core Originations in the Quarter Overview By Collateral − 8 loans; $209 million total Hospitality 21% commitment ($194 million of initial funding / $15 million of future funding) − 4.33% weighted average spread; 8.69% all-in coupon(1). 1.0% and 0.5% weighted average origination and exit M
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) (1) (1) Investment Brooklyn Hotel Single Tenant Retail Portfolio High-Rise Apartment Complex CBD Office Complex Limited Service Hotel Loan Type Floating Rate Senior Loan Floating Rate Senior Loan Floating Rate Senior Loan F
Slide 15: Foreclosure Real Estate Owned (REO)
Portfolio: Foreclosure Real Estate Owned (“REO”) Single Tenant Retail Class A Multifamily (1), (2) (1) (1), (2) Investment Portfolio Property Office Tower Loan Investment Date Q2 2022 Q4 2019 Q3 2018 Foreclosure / Deed-In-Lieu Date Q4 2022 Q4 2022 Q4 2022 Collateral Type Retail Multifamily Office 10
Slide 16: Appendix
Appendix 16
Slide 17: Core Portfolio - FBRT Portfolio Details – Top Loans
Appendix: Core Portfolio - FBRT Portfolio Details – Top 15 Loans Origination 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 9/19/22 $235 $173 $173 + 6.52% 13.07% 4/16/24 Florida M
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 90.4% 5.3% 3.0% 1.2% 0.0% Risk Rating 1 2 3 4 5 # of Loans - 141 15 4 1 + vs 3Q22 - +8 +4 +2 - - vs 3Q22 - -15 -3 -1 - +/- vs 3Q22 - -7 +1 +1 - Principal $- $4,784 $281 $161 $64 Balance Non-Accru
Slide 19: Earnings Sensitivity
Appendix: Earnings Sensitivity Positive earnings correlation to rising rates Sensitivity on Index Rates (Annual EPS Impact) As of 2/15/23: 1M LIBOR: 4.60% 1M SOFR: 4.56% $0.32 $0.24 As of 12/31/22 1M LIBOR = 4.39% $0.16 1M SOFR = 4.36% $0.08 $0.00 ($0.04) -0.25% 12/31/22 +0.50% +1.00% +1.50% +2.00%
Slide 20: Rate Cap Sensitivity
Appendix: Rate Cap Sensitivity 93% of our loans have a rate cap (average of 2.3% rate cap) and all were activated as of 12/31/22 Percentage and Number of Loans with Rate Caps Activated All loans with rate caps are activated 93%; 149 loans 93%; 149 loans 93%; 149 loans Current +0.50% +1.00% (as of 12
Slide 21: Core Portfolio – Allowance For Loan Loss
Appendix: Core Portfolio – Allowance For Loan Loss Allowance for Loan Loss by Collateral Type – Before Asset-Specific Reserve Office Retail Other $ millions 3% 1% 2% Allowance for Loan Loss Balance at 9/30/22 - Hospitality $19.4 15% General Reserve Provision for Credit Loss - General Reserve 7.5 All
Slide 22: 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) $27,174 88,704,093 $0.25 $1,416,744 6.4% (1) $38,594 88,704,093 $0.3
Slide 23: GAAP Net Income to Distributable Earnings Reconciliation
Appendix: GAAP Net Income to Distributable Earnings Reconciliation 1Q'22 2Q'22 3Q'22 4Q'22 GAAP Net Income (Loss) (22.5) (25.7) 35.3 27.2 Adjustments: CLO Amortization Acceleration/CLO Call (1) (1.0) 3.2 (1.2) (1.4) (2) 33.4 19.9 1.1 6.2 Unrealized (Gain)/Loss (3) - (3.5) (2.5) (2.5) Subordinated Pe
Slide 24: Book Value Per Share & Shares Outstanding
Appendix: Book Value Per Share & Shares Outstanding December 31, 2022 Stockholders' equity applicable to convertible common stock $ 1,398,986 Shares: Common stock 82,479,743 Restricted stock and restricted stock units 513,041 Series H convertible preferred stock 5,370,640 Series I convertible prefer
Slide 25: FBRT Income Statement
Appendix: FBRT Income Statement Year Ended December 31, 2022 2021 2020 Interest Income: Interest income $ 357,705 $ 216,890 $ 179,872 Less: Interest expense 165,708 60,835 66,556 Net interest income 191,997 156,055 113,316 Revenue from real estate owned 9,655 4,759 4,299 Total Income $ 201,652 $ 160
Slide 26: FBRT Balance Sheet
Appendix: FBRT Balance Sheet December 31, 2022 December 31, 2021 ASSETS Cash and cash equivalents $ 179,314 $ 154,929 Restricted cash 11,173 13,270 Commercial mortgage loans, held for investment, net of allowance for credit losses of $40,848 and $15,827 as of December 31, 2022 and December 31, 2021,
Slide 27: 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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