Franklin BSP Realty Trust, Inc.

Good morning, and welcome to the Franklin BSP Realty Trust third quarter 2023 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Lindsey Crabb, Director of Investor Relations. Please go ahead.

Good morning. Thank you, Jason, for hosting our call today, and thank you, everyone, for joining us. Welcome to the Franklin BSP Realty Trust Third Quarter Earnings Conference Call. As the operator mentioned, I am Lindsay Krause. With me on the call today are Richard Byrne, Chairman and CEO of FBRT, Jerome Bagliam, Chief Financial Officer and Chief Operating Officer of FBRT, and Michael Camperato, 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 report, and actual future results may differ materially. The information conveyed on this call is current only as of the date of this call, October 31, 2023. The company assumes no obligation to update any statements made during this call, including any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, we will refer to certain non-GAAP financial measures which are reconciled to GAAP figures in our earnings release and supplementary slide deck, each of which are available on our website at www.fbrtreit.com. We will refer to the supplementary slide deck on today's call. With that, I will turn the call over to Rich Byrne.

Great. Thanks, Lindsay, and good morning, everyone. Thank you all for joining us today. As Lindsay said, I'm Rich Byrne. I'm chairman and CEO of FBRT. As Lindsay also mentioned, our earnings release and supplemental deck were published to our website yesterday. We're going to begin today's call by reviewing our third quarter results. And then, of course, as always, we'll open up the call for your questions. I'm going to start on slide four. So let's just jump in. FDRT earned distributable earnings of 43 cents for fully converted share in the third quarter. This represented a 10.7% return on equity. As you all may recall, we realized a one-time gain in the second quarter from the resolution of our Williamsburg hotel loan, excluding the impact of the Williamsburg loan and another small one-time charge. Our portfolio produced distributable earnings which were just very similar to what we earned in the second quarter. Our third quarter distributable earnings once again comfortably covered our common dividend of 35.5 cents. This produced dividend coverage of nearly 120%. This represents a yield of approximately 11.6% on our current share price as of last week on October 27th. Our portfolio ended the quarter at $5 billion, of which 78% of our portfolio's collateral is multifamily. Q3 was a lighter originations quarter for us, resulting in a slight decrease in our portfolio. We originated 153 million of new loan commitments and received repayments of 290 million. Year to date, we have originated 586 million of new loan commitments. Deal flow remained subdued in the quarter, but the spread and terms on the new deals we did were very attractive. In fact, it was one of the best markets that we have seen in years. Also, deal flow has picked up meaningfully in the past 30 days or so. Since the end of the third quarter, we have funded $138 million already in new loan commitments. Mike will cover this in more detail in his commentary. During the quarter, we closed an approximately $900 million CRE CLO at a SOFR plus $229 cost of debt with an 18-month reinvestment period. This further lowered our recourse net debt to equity to 0.1 times. The issuance increased our overall lending capacity and improved our total liquidity position. At the end of the quarter, we had $411 million of unrestricted cash, which represents 7% of our total assets and total liquidity of $1.8 billion. As I mentioned, we are comfortably over covering our dividend despite all of this undeployed capital. When we do deploy this capital, we expect it to be meaningfully accretive to earnings. In the meantime, this liquidity cushion will help to protect us against any unforeseen credit events. Last quarter, we provided more details on our approach to risk management and our active engagement with borrowers. Our average risk rating remained unchanged at 2.2 for the quarter. Our portfolio has continued to perform well. Our watch list at September 30th consisted of three loans versus five in the prior quarter. All three loans on our watch list are rated four and represent only 1.7% of our total portfolio. Also, we took no asset-specific CECL charges. Our general CECL reserve modestly increased by $2.8 million in the quarter. We had two positions held as foreclosure REO at the end of the quarter, effectively unchanged from the prior quarter. The vast, vast majority of our foreclosure REO consisted of our Walgreens retail portfolio. The total foreclosure REO represents about 1.9% of our total assets. In a moment, Mike's going to provide a fulsome update on both our watch list and REO in his comments. Finally, our company's buyback authorization had $39 million remaining at quarter end. We will not hesitate to repurchase our shares when we determine it to be the best use of our capital. As such, we have been active in the market post-quarter end. We purchased $2.2 million of our shares through October 25th. That was earlier last week. Our board of directors has extended our company buyback program through December 31, 2024. Let me just end here by saying the commercial real estate lending market faces both opportunities and challenges going forward. We continue to actively look to originate new deals and think the vintage of deals we are seeing now is very attractive. We will continue to be selective as we originate loans, looking for the best credits at the best terms. Our capital position remains strong, and we are confident we will continue to strike the right balance between playing offense and playing defense. With that, I'll turn the call over to Jerry now to discuss our financial results.