Franklin BSP Realty Trust, Inc.

and welcome to the Franklin BSP Realty Trust first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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 your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Lindsay Crabb. Please go ahead, ma'am.

Good morning. Thank you, Chuck, for hosting our call today. Welcome to the Franklin VSP Realty Trust First Quarter 2024 Earnings Conference Call. As the operator mentioned, I'm Lindsay Crabb. With me on the call today are Richard Byrne, Chairman and CEO of FBRT, Jerry Baglian, Chief Financial Officer and Chief Operating Officer of FBRT, and Michael Comparato, 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, April 30, 2024. The company assumes no obligation to update any statements made during the call, including any forward-listed 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 relief and supplementary slide deck, each of which are available on our website at www.fbrtread.com. We will refer to the supplementary slide deck on today's call. With that, I'll turn the call over to Richburn.

Great. Thanks, Lindsay, and good morning, everyone, and thank you for joining us today. As Lindsay mentioned, our earnings release and supplemental debt were published to our website yesterday. We will begin today's call on slide four and I'm going to review our first quarter results and then open the call up as always for your questions. First, we were pleased with our first quarter results. FDRT's distributable earnings increased to 41 cents per fully converted share compared to 39 cents in the prior quarter. This equates to a 10.4% distributable earnings return on common equity. Our distributable earnings dividend coverage for the quarter was 115%. Our strong earnings are the result of stable portfolio size throughout most of the quarter, which had the continued benefit of higher base rates as well as a strong contribution from our conduit business. Our conduit is an alternative business line that can be an earnings enhancer. CMBS has again become one of the lower cost financing options in the market. So we remain cautiously optimistic that conduit revenues will continue to benefit our earnings in future quarters. Our core portfolio ended the quarter at 5.2 billion of principal balance, which is an increase from the last quarter. This was due to very strong originations in Q1. In fact, q1 was our fourth largest origination quarter since the inception of our company we added 591 million of new loan commitments in the quarter and committed to 756 million of originations through the entire year to date as of yesterday most of our q1 portfolio growth happened towards the back half of the quarter so We did not see the full benefit of the larger portfolio in our first quarter net interest margin. We expect to enjoy this positive impact in future quarters. Multifamily continues to be our main sector. This represents 75% of our commercial real estate loan portfolio. We closed the quarter with $1 billion in available liquidity, including $240 million of unrestricted cash. Our cash balance decreased by 98 million in the quarter versus Q4 due to our active deployment into new originations. Our strong liquidity position allows us to capitalize on the current abundance of attractive new investment opportunities and provides us flexibility to resolve credit issues to the extent they arise. Turning to our watch list, we ended the quarter with six loans with a risk rating of four. on our watch list. Our watch list represents approximately 5% of our core portfolio. As previously disclosed, one asset was removed from our watch list during this quarter, taken as REO and then liquidated at a modest gain. We have been successful in working through problem loans and achieving positive outcomes. While there will continue to be changes to our watch list each quarter, with loans potentially being added and or removed. We are optimistic about our team's ability to continue to manage this process. Mike will provide more watch list detail in his comments, including promising feedback on several assets. The risk profile of our portfolio remains low with an average overall risk rating of 2.3 at quarter end, unchanged from the prior quarter. and 95% of our loans are risk-rated three or better. Our foreclosure REO positions also remains unchanged, sitting at three at quarter end. The Walgreens retail portfolio continues to make up most of this balance. And as we have said previously, the portfolio is being actively marketed for sale. In aggregate, our foreclosure REO positions represent 2.2% of our total assets. Lastly, I want to mention that we purchased $1.9 million of FDRT common stock during the first quarter. We continue to be active in the second quarter, and so far we've repurchased an additional $2.0 million of our common stock through April 19, 2024. This totals $3.8 million year-to-date. In total, since our program began, the company and its advisor purchased 68 million of FBRT common stock. Our company buyback program is authorized through the end of 2024. Finally, FBRT's first quarter was a strong start to 2024. Our distributable earnings once again comfortably exceeded our dividend level, and we were able to grow our loan portfolio, adding what we would call a new vintage of loans that offers strong credit quality, which will also enhance FBRT's earnings power. While we continue to see a challenging environment for commercial real estate, especially as many loans reach initial maturity this year, we are confident in the resilience of our multifamily-focused portfolio and our ability to effectively resolve challenging loans. Now, with all that, Jerry, I'm going to turn things over to you to cover our financial results.