BrightSpire Capital(BRSP)2024-10-30 21:00Financial Performance - Net interest income for the three months ended September 30, 2024, was $20,725 thousand, down 35.0% from $31,983 thousand for the same period in 2023[14]. - Net income attributable to BrightSpire Capital, Inc. common stockholders for the three months ended September 30, 2024, was $12,729 thousand, slightly up from $12,389 thousand in the same period of 2023[14]. - Net income for the three months ended September 30, 2024, was $11,421,000, compared to a net income of $12,392,000 for the same period in 2023, reflecting a decrease of approximately 7%[15]. - Comprehensive income attributable to common stockholders for the three months ended September 30, 2024, was $13,132,000, compared to $12,894,000 in the prior year, indicating an increase of about 2%[15]. - The company reported a net income (loss) per common share - basic of $0.10 for the three months ended September 30, 2024, consistent with the same period in 2023[14]. Assets and Liabilities - Total assets decreased from $4,198,254 thousand as of December 31, 2023, to $3,838,425 thousand as of September 30, 2024, representing a decline of approximately 8.6%[9]. - Total liabilities decreased from $2,919,788 thousand to $2,751,900 thousand, a decline of approximately 5.7%[9]. - Total stockholders' equity as of September 30, 2023, was $1,315,294,000, a decrease from $1,322,542,000 as of June 30, 2023[17]. - As of September 30, 2024, total stockholders' equity was $1,086,525, a decrease from $1,278,466 as of December 31, 2023[19]. - The company had $1.2 billion carrying value of CRE debt investments financed with $848.4 million under the Master Repurchase Facilities as of September 30, 2024[195]. Loans and Credit Losses - Loans held for investment decreased from $2,936,506 thousand as of December 31, 2023, to $2,586,341 thousand as of September 30, 2024, a reduction of approximately 11.9%[9]. - The current expected credit loss reserve increased significantly from $76,028 thousand to $155,490 thousand, indicating a rise of 104.5%[9]. - The Company increased its CECL reserve by $115,556 thousand for the nine months ended September 30, 2024, compared to an increase of $76,083 thousand for the same period in 2023[121]. - The Company charged off $28,022 thousand related to loans held for investment during the nine months ended September 30, 2024, compared to $14,477 thousand for the same period in 2023[121]. - The Company’s total loans held for investment as of September 30, 2024, amounted to $2,586,341 thousand, with $149,060 thousand classified as 90 days or more past due[128]. Income and Expenses - Total expenses for the three months ended September 30, 2024, were $37,661 thousand, down from $46,315 thousand in the same period of 2023, a decrease of approximately 18.0%[14]. - The company recorded income tax expense of $0.2 million for the three months ended September 30, 2024, consistent with the $0.2 million recorded in the same period of 2023[108]. - For the nine months ended September 30, 2024, the Company recorded income tax expense of $0.7 million, a decrease from $0.9 million in the same period of 2023[108]. Real Estate and Property Operations - Property operating income for the three months ended September 30, 2024, was $26,051 thousand, an increase of 7.4% compared to $24,247 thousand for the same period in 2023[14]. - The company recorded $45.2 million of impairment related to three office properties in Q2 2024 due to a reduction in the expected holding period[154]. - The company sold a Washington D.C. office property for a gross sales price of $21.5 million, resulting in a gain on sale of $0.1 million during Q3 2024[157]. - The company consolidated the assets and liabilities of a multifamily property in Arlington, Texas, in Q3 2024, which was previously determined to be a variable interest entity (VIE)[147]. - The company acquired four office properties and one multifamily property during the year ended December 31, 2023, with a total purchase price of $181.864 million[152]. Shareholder Equity and Dividends - The company declared dividends of $0.20 per share, totaling $26,000,000 for the three months ended September 30, 2023[17]. - The company declared dividends and distributions of $0.20 per share, totaling $(26,233) for the nine months ended September 30, 2024[22]. - The weighted average shares of common stock outstanding - basic increased from 127,197 thousand to 127,515 thousand, reflecting a growth of 0.25%[14]. Market Conditions and Strategy - The market for office properties remains challenged, with rising vacancy rates and lower demand compared to pre-COVID-19 levels, posing risks for future valuation impairments[29]. - The Company continues to focus on originating first mortgage loans as its primary investment strategy, with plans to selectively originate mezzanine loans and preferred equity investments[27]. - The Federal Reserve's interest rate cuts in the second half of 2024 may impact the Company's financing and refinancing opportunities, although the timing and extent of future cuts remain uncertain[29]. Accounting and Compliance - The Company is evaluating the impact of new accounting standards issued by the FASB, including ASU No. 2023-07 and ASU No. 2023-09, which will affect segment reporting and income tax disclosures respectively[117][118]. - The Company evaluates acquisitions to determine if they qualify as business combinations, impacting how assets and liabilities are recognized and measured[53]. - The Company had no loans classified as held for sale as of September 30, 2024, and December 31, 2023[61].