Franklin BSP Realty Trust, Inc.

Good day and welcome to Franklin BSP Realty Trust first quarter 2025 earnings conference call. All participants will be in the 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, press star then one on your touchtone keypad. To withdraw your question, please press star, then two. This event is being recorded. I would now like to turn the conference over to Lindsay Crabb, Head of Investor Relations. Please go ahead.

Good morning. Thank you for hosting our call today, and welcome to the FDRT First Quarter Earnings Conference Call. As the operator mentioned, I'm Lindsay Crabb. With me on the call today are Rich Byrne, Chairman and CEO of FDRT, Gary Baglian, Chief Financial Officer in Chief Operating Officer of FBRT and Mike 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. I subscribe that our most recently filed SEC periodic reports and actual future results may differ materially. The information conveyed on this call is current only as of the date of this call, April 29, 2025. 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 calls. With that, I'll turn the call over to Rich.

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. I'm going to review our first quarter results, and then we will open the call, as we always do, for your questions. I'll highlight the key developments for the first quarter. Jerry will cover our financial results in more detail. He'll also provide an update on our recently announced acquisition of Newpoint. And then Mike will discuss market conditions and the changes to our watch list and REO portfolio. So with that, I'll start with our team remained active in the first quarter. We originated 341 million in new loan commitments. These new loans continue to enhance our portfolio because of the high quality of the underlying properties and borrowers and because of their compelling economics and low loan-to-value ratios. We view market volatility as an important catalyst for generating opportunities, and we have a very strong track record of being a reliable capital provider in both stable and stressed market conditions. Certainty of closing is extremely valuable to our borrowers, and we have consistently delivered for them. Turning to our current portfolio, we continue to cycle through the loans originated pre-interest rate hike. We received 353 million of loan repayments in the first quarter, predominantly from loans originated in 2021 and 2022. Our continued new originations plus these repayments have brought the percentage of our portfolio originated post-interest rate hike to 56 percent. This is certainly well ahead of our peers. We believe it is a vitally important statistic when evaluating the quality of a mortgage-read portfolio. Our REO has created a near-term drag on our earnings. However, the temporarily lower NIM that REO causes may often be in our best interest. This is because we believe foreclosure can be a prudent strategy, in some cases, to obtain the highest possible recovery. This is also consistent with our proactive acknowledge and address mindset. This quarter, we determined that the reserve we had on two office loans that are now held as REO should be charged off through distributable earnings. Consistent with our DE policy, this is how we went forward. Importantly, these charge-offs have already been recognized in GAAP earnings in prior quarters. As a result, our distributable earnings were negative, DE excluding realized losses worth 31 cents per fully converted share. This represents dividend coverage of 86 percent. For the avoidance of confusion, we have no new office loan loss reserve. We are simply running previously recognized GAAP losses through distributable earnings in accordance with our distributable earnings definition. Excluding our largest office loan, which is a triple net leased headquarters and distribution facility, Our traditional multi-tenant exposure is only 2.1% of our total portfolio, and the remaining loans and assets have been significantly marked down to reflect market conditions. As we have discussed previously, we anticipate we will likely fall short of dividend coverage in the near term. This is because of the short-term drag from our REO and non-performing loan portfolios. We are planning to keep cash balances somewhat higher than normal due to market conditions and to satisfy the upcoming cash component of our new point acquisition. Jerry will cover our dividend policy in his section. At quarter end, our liquidity stood at $913 million, including $215 million in unrestricted cash. Our average risk rating at the quarter end was 2.2%, with 146 of our 152 positions risk-weighted a 2 or 3. Our watch list loans represent 4 percent of our total portfolio, comprising six names at the end of the quarter. Mike will provide a comprehensive update on our watch list and REO in his remarks. Looking ahead, we are very excited about the pending acquisition of NewPoint. We believe this transaction will provide meaningful synergies. It also aligns perfectly with our strategic focus on the multifamily sector and enhances the quality and consistency of our earnings. We think the acquisition will be another catalyst for driving long-term value for our stockholders. We believe that FBRT is well positioned for sustained growth. With the potential for our stock to trade at a premium to book value similar to other agency-focused platforms, especially as we continue to successfully recycle the bulk of our legacy book into current vintage loans. So with all that, I'll hand it over to Jerry now.