Franklin BSP Realty Trust, Inc.

Good day and welcome to the Franklin BSP Realty Trust fourth quarter 2023 earnings conference 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. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would like now to turn the conference over to Lindsay Crabb, Director of Investor Relations. Please go ahead.

Good morning. Thank you, Alan, for hosting our call today. Welcome to the Franklin VST Realty Trust Fourth Quarter and Full Year 2023 Earnings Conference Call. With me on the call today are Richard Byrne, Chairman and CEO of SBRT, Jerry Baglian, Chief Financial Officer and Chief Operating Officer of SBRT, and Michael Camperato, President of SBRT. 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, February 15th, 2024. 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.SBRTREIT.com. We will refer to the supplementary slide deck on today's call. With that, I'll turn the call over to Rich Byrne.

Perfect. Thanks, Lindsay. And good morning, everyone, and thank you for joining us today. I'm Rich Byrne, Chairman and CEO of FBRT. As Lindsay mentioned, our earnings release and supplemental deck were published to our website yesterday. So we're going to begin today's call by reviewing our fourth quarter results, and then we're going to open up the call for your questions. I'm going to begin on slide four. For the year end of 2023, FBRT had distributable earnings per fully converted share of $1.92. This is a 79% year-over-year increase and equates to a 12.1% distributable earnings return on common equity. Our distributable earnings dividend coverage for 2023 for the full year was 135%. In the fourth quarter, FDRT had distributable earnings of $0.39 per fully converted share, representing an almost 10% return on common equity. Our distributable earnings dividend coverage was 109% for the quarter. Our earnings were modestly lower in the fourth quarter versus the third quarter of this past year. The difference was due to the timing of minimum interest payments. Our portfolio ended the year at $5 billion. reflecting net portfolio growth of 84 million in Q4. We have been steadily originating in every quarter throughout 2023. And in total, we originated 818 million of new loan commitments for the year. And our portfolio remains heavily focused in multifamily with 77% of our exposure in this sector. We ended the quarter with 1.5 billion in available liquidity. unrestricted cash decreased slightly to $338 million due to our net origination activity. With 5.7% of our total assets in unrestricted cash, we are not just playing defense. We are actively working to deploy capital, and we are originating very attractive investments that we believe will be meaningfully accretive to our earnings. With many other lenders on the sideline, we have been able to build a robust pipeline, which you will hear more about shortly from Mike. An area we want to provide more details on today is our watch list and general CECL reserve. We ended the quarter with six loans on our watch list versus three loans at the end of Q3. Each watch list loan is rated a four. Subsequent to quarter end, we took title to one of the watch list loans, and have already liquidated it at a modest gain to our basis, meaning that our six watch list loans are now down to five, or 4.3% of our total portfolio. Mike will provide more watch list detail in his comments, including our definition of how we characterize a four rated loan, which may be more conservative versus many of our peers. The risk profile of our portfolio is relatively low, with almost 95% of our loans rated a three or better, and an average overall risk rating of 2.3 at the end of the quarter. Our focus on originating newer, vintage, high-quality multifamily loans continues to deliver stable performance for the vast majority of our portfolio. At quarter end, we held three foreclosure REO positions, representing 2% of our total assets. Most of the balance of our foreclosure REO was our Walgreens retail portfolio, which we are marketing for sale. Mike will also provide some detail on our REO positions during his commentary. No asset-specific CECL charges were incurred in Q4, but we increased our general CECL reserve by $5.4 million. Overall, our CECL reserve is 96 basis points of our total portfolio and which we believe is conservative given our portfolio's strong credit quality and the multifamily focus that we have. Gary will provide more details on the calculation of our CECL estimate in a section which we'll get up to shortly. Finally, FBRT's buyback authorization had under 36 million remaining at the end of the quarter. We purchased 3.3 million of FBRT common stock during the fourth quarter and 12.5 million throughout 2023. In total, since our program began, the company and its advisor purchased 64 million of FVRT common stock. We continue to be active in the first quarter of 2024 of this year. We're purchasing approximately 1.6 million of our common stock through February 13th. Our company buyback is authorized through the end of 2024. Lastly, we are pleased with FDRT's strong performance in 2023. Our earnings comfortably covered our dividend and produced a competitive risk-adjusted return, and we expect our earnings power to be enhanced as we grow our portfolio in 2024. We remain confident in the resilience of our assets in our portfolio. We have ample liquidity, and we are singularly focused on delivering long-term shareholder value. With that, I'll stop there, and I'll turn things over to Jerry to discuss our financial results. Over to you, Jerry.