Financial Performance - The book value per share decreased to $15.18 as of June 30, 2024, down from $15.71 as of December 31, 2023[116]. - The fully-converted book value per share was $15.27 as of June 30, 2024, down from $15.77 as of December 31, 2023[117]. - Net interest income for Q2 2024 was $133.5 million, a decrease of $19.3 million from $152.9 million in Q2 2023, primarily due to an increase in non-accrual loans totaling $225.4 million[144]. - Interest income for the six months ended June 30, 2024 was $264.1 million, down from $283.4 million in 2023, a decrease of $19.3 million due to loans placed on non-accrual status[155]. - Distributable Earnings for the six months ended June 30, 2024, were $73,399 million, down from $108,259 million in 2023, representing a decrease of approximately 32.3%[199]. - The company reported a ROE of (2.0)% for GAAP Net Income/(Loss) in Q2 2024, compared to 9.8% in Q2 2023[199]. - Distributable Earnings Per Share, Fully Converted, was $0.31 for Q2 2024, down from $0.66 in Q2 2023, a decline of approximately 53%[199]. Loan Portfolio - As of June 30, 2024, the total carrying value of commercial mortgage loans held for investment was $5,347.4 million, an increase from $4,989.8 million as of December 31, 2023[122]. - The company had 153 commercial mortgage loans held for investment as of June 30, 2024, up from 144 as of December 31, 2023[122]. - The weighted average coupon for commercial mortgage loans held for investment was 9.0% as of June 30, 2024, compared to 9.2% as of December 31, 2023[122]. - The company had 25 properties classified as real estate owned, held for sale, with combined carrying values of $271.3 million as of June 30, 2024, compared to $103.7 million as of December 31, 2023[122]. - The company held 153 commercial mortgage loans for investment and four commercial mortgage loans held for sale as of June 30, 2024, compared to 156 and one, respectively, in the previous year[144]. - The total par value of loans is $5,438,885, with an amortized cost of $5,427,931[133]. - The effective yield across all loans is 9.00%[133]. - The average loan-to-value ratio is 63.4%[133]. - The majority of loans are in the multifamily sector, with significant amounts in Texas[133]. Debt and Financing - Senior Debt stands at 52 million with an interest rate of Adj. 1M SOFR Term + 2.88%[1]. - The company reported a total par value of $1.2 billion across various senior debt instruments, with an average interest rate of approximately 3.5%[132]. - The company has a senior debt ratio of 8.45% and a debt service coverage ratio of 73.3%[1]. - The adjusted debt service coverage ratio improved to 8.33% with a coverage ratio of 74.8%[1]. - The company has extended the maturity dates for several loans, with the latest maturity set for 2028, enhancing liquidity[132]. - The company reported a loan-to-value (LTV) ratio of 44.0% for its commercial mortgage loans as of June 30, 2024[135]. - The net debt-to-equity ratio increased to 2.7x as of June 30, 2024, up from 2.3x at the end of 2023[176]. - Total leverage ratio rose to 2.8x as of June 30, 2024, compared to 2.5x at the end of 2023[176]. Real Estate and Investments - The company had $215.3 million in real estate securities available for sale as of June 30, 2024, down from $242.6 million as of December 31, 2023[122]. - The total fair value of real estate owned, held for investment, was $155.8 million as of June 30, 2024, including net real estate owned of $114.5 million and intangible lease assets of $41.3 million[136]. - Revenue from real estate owned for Q2 2024 was $4.1 million, down from $6.4 million in Q2 2023, a decrease of $2.3 million attributed to a one-time revenue catch-up in 2023[147]. - Revenue from real estate owned for the six months ended June 30, 2024 was $8.8 million, down from $9.8 million in 2023, a decrease of $1.0 million due to reduced rental revenue[157]. Credit Losses and Provisions - Provision for credit losses increased to $32.2 million in Q2 2024 from $21.6 million in Q2 2023, with specific provision rising to $33.0 million from $11.9 million[147]. - The company experienced a provision for credit losses of $32,178 million in Q2 2024, compared to $21,624 million in Q2 2023, indicating an increase of approximately 48.5%[199]. - General provision for credit losses was $2.1 million in the first half of 2024, significantly lower than $13.3 million in the same period of 2023[157]. Market and Economic Conditions - The company is exposed to significant credit risk due to potential loan defaults, which are influenced by various economic factors[200]. - The company faces capital market risks that may affect its ability to finance operations through debt instruments[201]. - The company is actively managing its interest rate exposure, with most loans linked to the 1M SOFR Term rate[132]. Dividends and Shareholder Returns - The company declared a Q2 2024 dividend of $0.355 per share on common stock, equivalent to $1.42 per annum[186]. - During the six months ended June 30, 2024, the company paid $58.9 million in common stock distributions, compared to $58.3 million in the same period of 2023[186]. - The company has a quarterly cash dividend of $0.355 per share of common stock, with a share repurchase program authorized for $65 million, of which $31.1 million remained available as of June 30, 2024[193].
Franklin BSP Realty Trust(FBRT) - 2024 Q2 - Quarterly Report