Q3 2024 Franklin BSP Realty Trust Inc Earnings Call Transcript
Key Points
- Franklin BSP Realty Trust Inc (FBRT) has significantly reduced its office exposure to only 4% of its portfolio, with further reductions expected.
- The company has originated over $1.6 billion in new loan commitments year-to-date, with 40% of its portfolio consisting of loans originated after January 2023.
- FBRT's liquidity position is strong, with $1.1 billion in available liquidity, bolstered by a recent CLO issuance.
- The company has made progress in resolving watchlist loans and REO assets, reducing watchlist loans from 7 to 3 this quarter.
- FBRT's focus on multifamily loans, which account for 74% of its portfolio, positions it well for future market conditions as new multifamily supply is expected to decrease.
- FBRT reported a negative distributable earnings of $0.10 per diluted common share for the quarter, indicating challenges in covering its dividend.
- The company has a foreclosure REO portfolio that increased to 13 positions this quarter, which could impact future earnings until resolved.
- Office sector challenges persist, with FBRT acknowledging significant declines in office asset valuations and ongoing delinquencies.
- The company's net interest income was slightly lower quarter-over-quarter due to a decrease in loan portfolio size and constant REO levels.
- FBRT faces potential delays in redeploying capital from REO sales back into loans, which could affect its ability to cover dividends in the short term.
Good day, and welcome to the Franklin BSP Realty Trust Third Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Lindsey Crabbe, Director of Investor Relations. Please go ahead.
Good morning. Thank you, Wyatt, for hosting our call today, and thanks, everyone, for joining us. With me on the call today are Richard Byrne, Chairman and CEO of FBRT; Jerry Baglien, Chief Financial Officer, and Chief Operating Officer of FBRT; and Michael Comparato, President of FBRT.
Before we begin, I want to mention that some of today's comments are forward-looking statements and are based on certain assumptions. Those comments and assumptions are subject to inherent risks and uncertainties as described in our most recently filed SEC periodic reports and actual future results may differ materially.
The information conveyed on this call is current only as of the date of this call, November 5, 2024. The
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