Franklin BSP Realty Trust(US:FBRT)2023-10-29 16:00Financial Performance - Interest income for Q3 2023 totaled $137.0 million, an increase of $42.9 million from $94.1 million in Q3 2022, primarily due to a 307 basis point increase in daily average SOFR rates [192]. - Interest expense for Q3 2023 was $78.0 million, up $31.8 million from $46.2 million in Q3 2022, driven by a similar increase in SOFR rates [195]. - Net interest income for Q3 2023 was $58.1 million, reflecting a spread of 3.1%, compared to $48.0 million and a spread of 2.6% in Q3 2022 [191]. - Interest income for the nine months ended September 30, 2023, was $420.5 million, an increase of $180.9 million compared to $239.6 million in 2022 [212]. - Interest expense for the nine months ended September 30, 2023, was $224.3 million, up $128.1 million from $96.3 million in 2022 [214]. - GAAP Net Income for Q3 2023 was $30,995,000, a decrease from $35,258,000 in Q3 2022 [291]. - Run-Rate Distributable Earnings for Q3 2023 increased to $46,672,000, up from $34,268,000 in Q3 2022, representing a 36.5% growth [291]. - Distributable Earnings for Q3 2023 were $41,988,000, compared to $34,423,000 in Q3 2022, reflecting a 21.5% increase [291]. Asset and Loan Portfolio - As of September 30, 2023, the total carrying value of commercial mortgage loans held for investment was $4,913.6 million, down from $5,228.9 million as of December 31, 2022, representing a decrease of approximately 6% [171]. - The weighted average coupon for commercial mortgage loans held for investment, excluding non-performing loans, was 9.1% as of September 30, 2023, up from 8.3% as of December 31, 2022 [174]. - The Company held 145 commercial mortgage loans for investment as of September 30, 2023, down from 166 loans in the previous year [192]. - The Company’s real estate owned, held for investment portfolio had a carrying value of $104.6 million as of September 30, 2023, down from $127.8 million as of December 31, 2022 [171]. - The Company’s total commercial mortgage loans held for sale had a fair value of $17.0 million as of September 30, 2023, compared to $15.6 million as of December 31, 2022 [171]. - The portfolio includes 50 senior debt loans, with a significant focus on multifamily properties, accounting for 40% of the total loans [182]. - The company has a significant focus on multifamily properties, with 75% of the senior debt allocated to this sector [183]. - The company has a significant focus on multifamily properties, with 70% of the loans categorized under this type, indicating a strong market presence in this sector [184]. Equity and Shareholder Information - The book value per share increased to $15.76 as of September 30, 2023, compared to $15.72 as of December 31, 2022, reflecting a growth of 0.25% [166]. - The total outstanding shares as of September 30, 2023, was 83,019,881, slightly up from 82,992,784 as of December 31, 2022 [166]. - The Company’s total stockholders' equity applicable to common stock was $1,308,172 thousand as of September 30, 2023, compared to $1,304,238 thousand as of December 31, 2022 [166]. - The Company declared a third quarter 2023 dividend of $0.355 per share on common stock, equivalent to $1.42 per annum [274]. - Total distributions paid in cash on common stock for the nine months ended September 30, 2023 amounted to $87.784 million, compared to $57.030 million in the same period of 2022 [275]. Debt Management - The net debt-to-equity ratio as of September 30, 2023, was 2.2x, down from 2.5x as of December 31, 2022 [255]. - The company is actively managing its debt portfolio, with adjustments based on the 1M SOFR Term rates [183]. - The company has extended maturities for most of its senior debt, with the majority maturing in 2026 [183]. - The company has extended maturities for several loans until 2028, indicating a long-term strategy for debt management [184]. - The Company has a share repurchase program authorized for $65.0 million, with $39.3 million remaining available as of September 30, 2023 [285]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2023 was $141.5 million, driven by net income of $114.5 million [276]. - Net cash provided by investing activities for the nine months ended September 30, 2023 was $554.8 million, primarily from the sale of real estate securities and principal repayments on commercial mortgage loans [277]. - Net cash used in financing activities for the nine months ended September 30, 2023 was $468.7 million, with significant repayments on real estate securities and unsecured debt [278]. - The total liquidity as of September 30, 2023, was $1.8 billion, compared to $1.0 billion as of December 31, 2022 [256]. - Unrestricted cash as of September 30, 2023, was $411 million, an increase from $179 million as of December 31, 2022 [256]. Market and Economic Risks - The company is exposed to credit risk, with default rates influenced by various factors including borrower financial condition and regional economics [292]. - The company faces capital market risk due to its requirement to distribute a significant portion of taxable income annually, impacting cash flow accumulation [293]. - Market uncertainty may lead to margin calls from lenders, affecting the company's ability to manage its financing obligations [294].