1 unchanged sentence
Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the definition of "disclosure controls and procedures" in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
+Added: We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance.
In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.
−Removed: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.
+Added: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of December 31, 2023, that our disclosure controls and procedures are effective to provide the reasonable assurance described above.
Internal Control Over Financial Reporting
−Removed: Management's Annual Reporting on Internal Controls over Financial Reporting
−Removed: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act.
−Removed: Our internal control system is designed to provide reasonable assurance to our management and the board of directors regarding the preparation and fair presentation of published financial statements.
−Removed: All internal control systems, no matter how well designed, have inherent limitations.
−Removed: Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
−Removed: In connection with the preparation of our Annual Report on Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.
+Added: Management's Annual Reporting on Internal Control over Financial Reporting
+Added: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act.
+Added: Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.
In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
Based on its assessment, our management concluded that, as of December 31, 2023, our internal control over financial reporting was effective.
−Removed: Our independent registered public accounting firm, Ernst and Young LLP (“EY”), has audited the effectiveness of our internal control over financial reporting as of December 31, 2022, as stated in its report which is included herein.
+Added: Our independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), audited the effectiveness of our internal control over financial reporting as of December 31, 2023.
+Added: Their report dated February 26, 2024, which is included herein, expressed an unqualified opinion on the effectiveness of our internal control over financial reporting
Changes in Internal Control Over Financial Reporting
During the quarter ended December 31, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: To the Stockholders and the Board of Directors of Franklin BSP Realty Trust, Inc.
−Removed: Opinion on Internal Control Over Financial Reporting
−Removed: We have audited Franklin BSP Realty Trust, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
−Removed: In our opinion, Franklin BSP Realty Trust, Inc.
−Removed: (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
−Removed: We also have audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule IV and our report dated March 16, 2023 expressed an unqualified opinion thereon .
−Removed: Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Reporting on Internal Controls over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Definition and Limitations of Internal Control Over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: /s/ Ernst & Young LLP
−Removed: New York, New York
−Removed: March 16, 2023
Other Information.
+Added: During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
1 unchanged sentence
Directors, Executive Officers and Corporate Governance.
−Removed: The Board of Directors maintains a Code of Ethics is applicable to our directors, officers, our Advisor and employees of the Advisor performing substantial services for the Company.
+Added: The Board of Directors maintains a Code of Ethics that is applicable to our directors, officers, our Advisor and employees of the Advisor performing substantial services for the Company.
It covers topics including, but not limited to, conflicts of interest, confidentiality of information, full and fair disclosure, reporting of violations and compliance with laws and regulations.
11 unchanged sentences
Equity Compensation Plan Information
−Removed: The following table provides information about our common stock that may be issued under our equity compensation plans as of December 31, 2022:
+Added: The following table provides information about the Company's common stock that may be issued under our equity compensation plans as of December 31, 2023:
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)
−Removed: Weighted-Average Exercise of Price of Outstanding Options, Warrants, and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (2)
+Added: Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (2)
Equity compensation plans approved by security holders — — —
5 unchanged sentences
One share of the Company’s common stock will be issued for each restricted stock unit that vests.
−Removed: (2) The number of securities remaining available for future issuance consists of an aggregate of 3,915,797 shares issuable under our employee and director incentive restricted share plan (“RSP”), which expired on February 7, 2023 and 5,007,893 shares issuable under the Franklin BSP Realty Trust, Inc.
−Removed: 2021 Equity Incentive Plan.
−Removed: Each of our equity compensation plans were adopted and approved by our Board of Directors prior to the listing of our common stock on the NYSE.
+Added: (2) The number of securities remaining available for future issuance consists of shares issuable under the Franklin BSP Realty Trust, Inc.
+Added: 2021 Equity Incentive Plan, which was adopted and approved by our Board of Directors prior to the listing of our common stock on the NYSE.
Certain Relationships and Related Transactions, and Director Independence.
14 unchanged sentences
1 to Articles Supplementary of Franklin BSP Realty Trust, Inc., effective January 19, 2023, relating to Series H Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 20, 2023).
−Removed: Articles Supplementary of Franklin BSP Realty Trust, Inc.
−Removed: effective October 12, 2022, relating to Series I Convertible Preferred Stock (incorporate d by reference to Exhibit 3.1 to the Current Report on Form 8-K Filed with the SEC on October 14, 2022).
+Added: Amendment No.
+Added: 2 to Articles Supplementary of Franklin BSP Realty Trust, Inc., effective January 10, 2024, relating to Series H Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 12, 2024)
Amended and Restated Bylaws of Franklin BSP Realty Trust, Inc.
−Removed: (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on October 8, 2021).
+Added: (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on June 16, 2022)
4.1 Amended and Restated Agreement of Limited Partnership of Benefit Street Partners Realty Operating Partnership, L.P., dated as of December 31, 2014 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 6, 2015).
1 unchanged sentence
1 to the Amended and Restated Agreement of Limited Partnership of Benefit Street Partners Realty Operating Partnership, L.P., dated as of February 9, 2017 (incorporated by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 29, 2017).
−Removed: 4.3* Description of Securities of the Registrant
+Added: 4.3 Description of Securities of the Registrant (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 16, 2023).
10.1 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 14, 2016).
−Removed: 10.2† Amended and Restated Employee and Director Incentive Restricted Share Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 29, 2017).
−Removed: 10.3† Form of Director Restricted Share Award Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 29, 2017).
10.2† Franklin BSP Realty Trust, Inc.
8 unchanged sentences
(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 18, 2021).
−Removed: Indenture, dated as of May 30, 2019, by and among BSPRT 2010-FL5 Issuer, Ltd., BSPRT 2019-FL5 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S.
−Removed: Bank National Association, as trustee, note administrator and custodian (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 5, 2019).
10.6 Indenture, dated as of March 25, 2021, by and among BSPRT 2021-FL6 Issuer, Ltd., BSPRT 2021-FL6 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S.
7 unchanged sentences
Bank National Association as custodian (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 1, 2022).
−Removed: 10.13 Exchange Agreement, dated June 21, 2022, by and between Franklin BSP Realty Trust, Inc.
−Removed: and the holder of the Company’s Series D Convertible Preferred Stock (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 24, 2022) .
+Added: 10.10† Form of Director Restricted Stock Award Agreement under Franklin BSP Realty Trust, Inc.
+Added: 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 3, 2023).
+Added: 10.11 Indenture, dated as of September 28, 2023, by and among BSPRT 2023-FL10 Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, U.S.
+Added: Bank Trust Company, National Association, as trustee and note administrator, and U.S.
+Added: Bank National Association as custodian (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on October 3, 2023)
21* Subsidiaries of the Registrant
+Added: 23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Ernst & Young LLP
3 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: 97.1†* Compensation Recovery Policy
101* XBRL (eXtensible Business Reporting Language).
1 unchanged sentence
(i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.
+Added: 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
____________________________________________
4 unchanged sentences
Franklin BSP Realty Trust, Inc.
−Removed: March 16, 2023 By /s/ Richard J.
−Removed: Chief Executive Officer and President
+Added: February 26, 2024 By /s/ Richard J.
+Added: Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
1 unchanged sentence
/s/ Richard J.
−Removed: Byrne Chairman, Chief Executive Officer and President March 16, 2023
+Added: Byrne Chairman and Chief Executive Officer February 26, 2024
Byrne (Principal Executive Officer)
/s/ Jerome S.
−Removed: Baglien Chief Financial Officer, Chief Operating Officer and Treasurer (Principal Financial and Accounting Officer) March 16, 2023
+Added: Baglien Chief Financial Officer, Chief Operating Officer and Treasurer (Principal Financial and Accounting Officer) February 26, 2024
/s/ Elizabeth K.
−Removed: Tuppeny Lead Independent Director March 16, 2023
−Removed: /s/ Pat Augustine Director March 16, 2023
+Added: Tuppeny Lead Independent Director February 26, 2024
+Added: /s/ Pat Augustine Director February 26, 2024
Pat Augustine
−Removed: /s/ Joe Dumars Director March 16, 2023
−Removed: /s/ Jamie Handwerker Director March 16, 2023
+Added: /s/ Joe Dumars Director February 26, 2024
+Added: /s/ Jamie Handwerker Director February 26, 2024
Jamie Handwerker
−Removed: /s/ Gary Keiser Director March 16, 2023
−Removed: /s/ Peter McDonough Director March 16, 2023
+Added: /s/ Peter McDonough Director February 26, 2024
Peter McDonough
−Removed: /s/ Buford Ortale Director March 16, 2023
+Added: /s/ Buford Ortale Director February 26, 2024
Buford Ortale
1 unchanged sentence
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Report of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP (PCAOB ID 238 )
Report of Independent Registered Public Accounting Firm, Ernst & Young LLP (PCAOB ID 42)
8 unchanged sentences
Report of Independent Registered Public Accounting Firm
+Added: To the Board of Directors and Stockholders of Franklin BSP Realty Trust, Inc.
+Added: Opinions on the Financial Statements and Internal Control over Financial Reporting
+Added: We have audited the accompanying consolidated balance sheet of Franklin BSP Realty Trust, Inc.
+Added: and its subsidiaries (the “Company”) as of December 31, 2023 and the related consolidated statements of operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for the year then ended, including the related notes and financial statement schedule listed in the accompanying index as of December 31, 2023 (collectively referred to as the “consolidated financial statements”).
+Added: We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
+Added: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
+Added: Basis for Opinions
+Added: The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Reporting on Internal Control over Financial Reporting appearing under Item 9A.
+Added: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
+Added: Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
+Added: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
+Added: Our audit also included performing such other procedures as we considered necessary in the circumstances.
+Added: We believe that our audit provides a reasonable basis for our opinions.
+Added: Definition and Limitations of Internal Control over Financial Reporting
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Critical Audit Matters
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Allowance for Credit Losses - Commercial Mortgage Loans, Held for Investment
+Added: As described in Notes 2 and 3 to the consolidated financial statements, the allowance for credit losses on the Company’s commercial mortgage loans, held for investment was $47.2 million as of December 31, 2023, inclusive of the general and specific allowances for credit losses of $47.2 million and $0, respectively.
+Added: The general allowance for credit losses for the Company’s loans carried at amortized cost, such as loans held for investment, represents a lifetime estimate of expected credit losses.
+Added: The Company’s model to determine the general allowance for credit losses principally utilizes historical loss rates derived from a commercial mortgage-backed securities database with historical losses provided by a third party, forecasting the loss parameters based on a projected macroeconomic scenario using a probability-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses.
+Added: For loans held for investment which management identifies reasonable doubt as to whether the collection of contractual components can be satisfied, a specific allowance for credit losses analysis is performed and management may elect to use the fair value of the collateral at the reporting date as a practical expedient.
+Added: The specific allowance for credit losses is assessed on an individual basis for such loans by comparing the estimated fair value of the underlying collateral, less costs to sell to the book value of the respective loan.
+Added: The estimated fair value of underlying collateral requires judgments, which may include assumptions regarding capitalization rates and discount rates or other factors deemed relevant by management.
+Added: The principal considerations for our determination that performing procedures relating to the allowance for credit losses for commercial mortgage loans, held for investment is a critical audit matter are (i) the significant judgment by management when developing the allowance for credit losses;
+Added: (ii) a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating (a) management’s projected macroeconomic scenario used when developing the general allowance for credit losses and (b) management’s assumptions related to capitalization rates and discount rates used when developing the fair value estimate of the underlying collateral used in the specific allowance for credit losses;
+Added: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
+Added: These procedures included testing the effectiveness of controls relating to the allowance for credit losses for commercial mortgage loans, held for investment, including controls over management’s projected macroeconomic scenario used in the general allowance for credit losses and assumptions used in developing the fair value estimate of the underlying collateral used in the specific allowance for credit losses.
+Added: These procedures also included, among others, (i) testing management’s process for developing the allowance for credit losses for commercial mortgage loans, held for investment;
+Added: (ii) testing the completeness and accuracy of data used in developing the allowance for credit losses;
+Added: and (iii) the involvement of professionals with specialized skill and knowledge to assist in evaluating (a) the appropriateness of the model used by management for the general allowance for credit losses and the methodology used by management for the specific allowance for credit losses, (b) the reasonableness of the projected macroeconomic scenario when estimating the general allowance for credit losses, and (c) the reasonableness of management’s assumptions related to capitalization rates and discount rates used when estimating the fair value of the underlying collateral used when developing the specific allowance for credit losses.
+Added: /s/ PricewaterhouseCoopers LLP
+Added: Atlanta, Georgia
+Added: February 26, 2024
+Added: We have served as the Company’s auditor since 2023.
+Added: Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Franklin BSP Realty Trust, Inc.
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Franklin BSP Realty Trust, Inc.
−Removed: (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule IV (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.
+Added: We have audited the accompanying consolidated balance sheet of Franklin BSP Realty Trust, Inc.
+Added: (the Company) as of December 31, 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with U.S.
generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 16, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
9 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.
−Removed: Allowance for credit losses
−Removed: Description of the Matter As of December 31, 2022, the allowance for credit losses totaled $40.8 million comprising a general allowance component and a specific allowance component of $26.6 million and $14.2 million, respectively.
−Removed: As disclosed in Note 2 to the consolidated financial statements, the general allowance for credit losses for the Company’s financial instruments carried at amortized cost, such as loans held for investment, represents a lifetime estimate of expected credit losses.
−Removed: In measuring the general allowance for credit losses for commercial mortgage loans held for investment, the Company primarily applies a probability of default/loss given model for loans that are collectively assessed (“expected loss model”).
−Removed: The Company’s expected loss model uses historical loss rates, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months (the “economic scenario”), followed by an immediate reversion to average historical losses.
−Removed: Also as disclosed in Note 2, for commercial loans where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, a specific allowance for credit losses is assessed by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
−Removed: The estimated fair value of the collateral at the reporting date when determining the allowance for credit losses requires judgment, which includes assumptions regarding the market capitalization rates.
−Removed: Auditing the Allowance for credit losses was complex due to the use of the expected loss model and the judgmental nature of the economic scenario.
−Removed: For the specific allowance, determining the fair value of the collateral may consider a number of assumptions including, but not limited to, the market capitalization rates.
−Removed: Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties which leads to a high degree of subjectivity.
−Removed: How We Addressed the Matter in Our Audit For the general allowance, these procedures included, among others, understanding, evaluating the design, and testing the operating effectiveness of controls, including the significant assumptions related to the selection of the economic scenario.
−Removed: With the support of specialists, we assessed the economic scenario by, among other procedures, evaluating management’s methodology and agreeing a sample of key economic variables used to external sources.
−Removed: We also performed and considered the results of various sensitivity analyses and analytical procedures, including comparison of a sample of the key economic variables to alternative external sources, historical statistics and peer real estate investment trust information.
−Removed: With respect to the expected loss model, with the support of specialists, we evaluated the model calculation design and the model output for reasonableness.
−Removed: We also tested the appropriateness of a sample of key inputs used in the model, agreed significant inputs and underlying data to internal and external sources, as well as performed recalculations when required.
−Removed: With the support of our specialists, we evaluated the general allowance amount, including model estimates, and whether the recorded Allowance for credit losses appropriately reflects expected credit losses on the portfolio of financial instruments carried at amortized cost.
−Removed: We reviewed historical loss statistics, peer real estate investment trust information, subsequent events and transactions and considered whether they corroborate or contradict the Company’s measurement of the general Allowance for credit losses.
−Removed: For the specific allowance, these procedures included understanding, evaluating the design, and testing the operating effectiveness of controls related to the specific allowance for credit losses, including the significant assumptions related to market capitalization rates used to determine the fair value of the collateral.
−Removed: Supported by a specialist, these procedures also included, among others, evaluating the appropriateness of the methodologies used by management, testing the completeness and accuracy of the data, and evaluating the reasonableness of the significant assumptions by considering external market data.
/s/ Ernst & Young LLP
−Removed: We have served as the Company’s auditor since 2017.
+Added: We served as the Company’s auditor from 2017-2022.
New York, New York
6 unchanged sentences
Restricted cash 6,092 11,173
−Removed: Commercial mortgage loans, held for investment, net of allowance for credit losses of $ 40,848 and $ 15,827 as of December 31, 2022 and December 31, 2021, respectively
+Added: Commercial mortgage loans, held for investment, net of allowance for credit losses of $ 47,175 and $ 40,848 as of December 31, 2023 and 2022, respectively
4,989,767 5,228,928
Commercial mortgage loans, held for sale, measured at fair value — 15,559
−Removed: Real estate securities, trading, measured at fair value 235,728 4,566,871
−Removed: Real estate securities, available for sale, measured at fair value, amortized cost of $ 220,635 as of December 31, 2022
+Added: Real estate securities, trading, measured at fair value (includes pledged assets of $ 227,610 as of December 31, 2022)
+Added: Real estate securities, available for sale, measured at fair value, amortized cost of $ 243,272 and $ 220,635 as of December 31, 2023 and 2022, respectively (includes pledged assets of $ 167,948 and $ 198,429 as of December 31, 2023 and 2022, respectively)
+Added: 242,569 221,025
Derivative instruments, measured at fair value — 415
−Removed: Other real estate investments, measured at fair value — 2,074
Receivable for loan repayment (1)
5 unchanged sentences
Real estate owned, held for sale 103,657 36,497
−Removed: Cash collateral receivable from derivative counterparties — 56,767
Total assets $ 5,955,180 $ 6,203,601
1 unchanged sentence
Collateralized loan obligations $ 3,567,166 $ 3,121,983
−Removed: Repurchase agreements - commercial mortgage loans 680,859 1,019,600
+Added: Repurchase agreements and revolving credit facilities - commercial mortgage loans 299,707 680,859
Repurchase agreements - real estate securities 174,055 440,008
Mortgage note payable 23,998 23,998
−Removed: Other financing and loan participation - commercial mortgage loans 76,301 37,903
+Added: Other financings 36,534 76,301
Unsecured debt 81,295 98,695
4 unchanged sentences
Due to affiliates 19,316 15,429
−Removed: Intangible lease liability, net of depreciation 6,428 —
+Added: Intangible lease liability, held for sale 12,297 —
+Added: Intangible lease liability, net of amortization — 6,428
Total liabilities $ 4,279,223 $ 4,530,465
+Added: Commitments and Contingencies
Redeemable convertible preferred stock:
−Removed: Redeemable convertible preferred stock Series C, $ 0.01 par value, 20,000 authorized and 1,400 issued and outstanding as of December 31, 2021
−Removed: Redeemable convertible preferred stock Series D, $ 0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of December 31, 2021
−Removed: Redeemable convertible preferred stock Series H, $ 0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of December 31, 2022
−Removed: Redeemable convertible preferred stock Series I, $ 0.01 par value, 1,000 authorized and 1,000 issued and outstanding as of December 31, 2022
+Added: Redeemable convertible preferred stock Series H, $ 0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of December 31, 2023 and 2022, respectively
+Added: $ 89,748 $ 89,748
+Added: Redeemable convertible preferred stock Series I, $ 0.01 par value, none issued and outstanding as of December 31, 2023, 1,000 authorized and 1,000 issued and outstanding as of December 31, 2022
Total redeemable convertible preferred stock $ 89,748 $ 94,748
2 unchanged sentences
$ 258,742 $ 258,742
−Removed: Series F Preferred stock, $ 0.01 par value, 40,000,000 authorized, 39,733,299 issued and outstanding as of December 31, 2021
Common stock, $ 0.01 par value, 900,000,000 shares authorized, 82,751,913 and 82,992,784 issued and outstanding as of December 31, 2023 and 2022, respectively
3 unchanged sentences
Total stockholders' equity $ 1,559,114 $ 1,562,980
−Removed: Noncontrolling interest 15,408 5,764
+Added: Non-controlling interest 27,095 15,408
Total equity $ 1,586,209 $ 1,578,388
1 unchanged sentence
________________________
−Removed: (1) Includes $ 42.5 million and $ 187.0 million of cash held by the servicer related to the CLOs as of December 31, 2022 and 2021, respectively, as well as $ 0.1 million and $ 65.3 million of RMBS principal paydowns receivable as of December 31, 2022 and 2021, respectively.
+Added: (1) Includes $ 55.1 million and $ 42.5 million of cash held by the servicer related to the CLOs as of December 31, 2023 and 2022, respectively.
+Added: The Company no longer holds a residential mortgage backed securities principal paydown receivable as of December 31, 2023.
+Added: The Company held a residential mortgage backed securities principal paydown receivable of $ 0.1 million as of December 31, 2022.
The accompanying notes are an integral part of these consolidated financial statements.
5 unchanged sentences
Interest income $ 552,506 $ 357,705 $ 216,890
−Removed: Interest income $ 357,705 $ 216,890 $ 179,872
Interest expense 305,577 160,526 56,193
7 unchanged sentences
Professional fees 15,270 22,566 11,650
−Removed: Share-based compensation expense 2,519 — —
−Removed: Real estate owned operating expenses — — 3,653
+Added: Share-based compensation 4,761 2,519 —
Depreciation and amortization 7,128 5,408 2,107
3 unchanged sentences
(Provision)/benefit for credit losses $ ( 33,738 ) $ ( 36,115 ) $ 5,192
−Removed: Impairment losses on real estate owned assets — — 398
Realized gain/(loss) on extinguishment of debt 2,201 ( 5,167 ) ( 4,642 )
+Added: Realized gain/(loss) on sale of available for sale trading securities 80 — —
Realized gain/(loss) on sale of commercial mortgage loans, held for sale — ( 354 ) 26
−Removed: Realized (gain)/loss on sale of real estate owned assets, held for sale — ( 9,809 ) ( 1,851 )
−Removed: Realized (gain)/loss on sale of other real estate investments, measured at fair value 33 — —
Realized gain/(loss) on sale of commercial mortgage loans, held for sale, measured at fair value 3,873 2,358 24,208
+Added: Gain/(loss) on other real estate investments ( 7,089 ) ( 692 ) 9,790
Unrealized gain/(loss) on commercial mortgage loans, held for sale, measured at fair value 44 ( 511 ) 469
−Removed: Unrealized (gain)/loss on other real estate investments, measured at fair value 659 19 32
Trading gain/(loss) ( 605 ) ( 119,220 ) ( 36,128 )
5 unchanged sentences
Net income/(loss) $ 144,509 $ 14,215 $ 25,702
−Removed: Net (income)/loss attributable to noncontrolling interest 216 — —
+Added: Net (income)/loss attributable to non-controlling interest 706 216 —
Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.
$ 145,215 $ 14,431 $ 25,702
−Removed: Net income/(loss) attributable to common shareholders $ ( 27,310 ) $ ( 7,885 ) $ 39,826
−Removed: Basic net income per share $ ( 0.38 ) $ ( 0.18 ) $ 0.90
−Removed: Diluted net income per share $ ( 0.38 ) $ ( 0.18 ) $ 0.90
+Added: Preferred stock dividends 26,993 41,741 33,587
+Added: Net income/(loss) attributable to common stock $ 118,222 $ ( 27,310 ) $ ( 7,885 )
+Added: Basic earnings per share $ 1.42 $ ( 0.38 ) $ ( 0.18 )
+Added: Diluted earnings per share $ 1.42 $ ( 0.38 ) $ ( 0.18 )
Basic weighted average shares outstanding 82,307,970 71,628,365 43,419,209
3 unchanged sentences
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: (Dollars In thousands)
+Added: (In thousands)
Year Ended December 31,
2023 2022 2021
−Removed: Net income $ 14,215 $ 25,702 $ 54,746
−Removed: Unrealized gain/(loss) on available for sale securities $ 390 $ 8,256 $ ( 7,278 )
+Added: Net income/(loss) $ 144,509 $ 14,215 $ 25,702
+Added: Amounts related to available for sale real estate securities:
+Added: Change in net unrealized gain/(loss) $ ( 330 ) $ 390 $ 8,256
+Added: Reclassification adjustment for amounts included in net income/(loss) ( 763 ) — —
+Added: $ ( 1,093 ) $ 390 $ 8,256
Amounts related to cash flow hedges:
2 unchanged sentences
$ — $ 62 $ ( 62 )
−Removed: Comprehensive (income)/loss attributable to noncontrolling interest $ 216 $ — $ —
−Removed: Comprehensive income attributable to Franklin BSP Realty Trust, Inc.
+Added: Comprehensive (income)/loss attributable to non-controlling interest 706 216 —
+Added: Comprehensive income/(loss) attributable to Franklin BSP Realty Trust, Inc.
$ 144,122 $ 14,883 $ 33,896
3 unchanged sentences
(In thousands, except share data)
−Removed: Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income/(Loss) Accumulated Deficit Preferred E Preferred F Total Stockholders' Equity Noncontrolling Interest Total Equity
+Added: Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income/(Loss) Accumulated Deficit Preferred E Preferred F Total Stockholders' Equity Non-Controlling Interest Total Equity
Number of Shares Par Value
Balance, December 31, 2020 44,510,051 $ 446 $ 912,725 $ ( 8,256 ) $ ( 106,471 ) $ — $ — $ 798,444 $ — $ 798,444
+Added: Issuance of preferred stock — — — — — 258,742 710,431 969,173 — 969,173
Issuance of common stock 31,887,442 319 579,207 — — — — 579,526 — 579,526
2 unchanged sentences
Share-based compensation 11,184 — 211 — — — — 211 — 211
+Added: Common stock exchanged for Series F Preferred Stock ( 39,733,299 ) ( 397 ) ( 710,034 ) — — — — ( 710,431 ) — ( 710,431 )
+Added: Series A Preferred stock converted into common stock 7,649,632 76 127,527 — — — — 127,603 — 127,603
Offering costs — — ( 68 ) — — — — ( 68 ) — ( 68 )
−Removed: Net income/(loss) — — — — 54,746 — — 54,746 — 54,746
+Added: Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.
+Added: — — — — 25,702 — — 25,702 — 25,702
Distributions declared — — — — ( 86,410 ) — — ( 86,410 ) — ( 86,410 )
−Removed: Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2) — — — — ( 7,761 ) — — ( 7,761 ) — ( 7,761 )
Other comprehensive income/(loss) — — — 8,194 — — — 8,194 — 8,194
+Added: Contributions/(distributions) in non-controlling interest, net — — — — — — — — 5,764 5,764
Balance, December 31, 2021 43,965,928 $ 441 $ 903,264 $ ( 62 ) $ ( 167,179 ) $ 258,742 $ 710,431 $ 1,705,637 $ 5,764 $ 1,711,401
−Removed: Issuance of preferred stock — $ — $ — $ — $ — $ 258,742 $ 710,431 $ 969,173 $ — $ 969,173
−Removed: Issuance of common stock 31,887,442 319 579,207 — — — — 579,526 — 579,526
Common stock repurchases ( 1,416,369 ) ( 14 ) ( 16,565 ) — — — — ( 16,579 ) — ( 16,579 )
2 unchanged sentences
Offering costs — — — — ( 91 ) — — ( 91 ) — ( 91 )
−Removed: Common stock exchanged for series F preferred stock ( 39,733,299 ) ( 397 ) ( 710,034 ) — — — — ( 710,431 ) — ( 710,431 )
−Removed: Preferred A conversion to common stock 7,649,632 76 127,527 — — — — 127,603 — 127,603
−Removed: Net income/(loss) — — — — 25,702 — — 25,702 — 25,702
+Added: Series F Preferred stock converted into common stock 39,733,299 397 710,034 — — — ( 710,431 ) — — —
+Added: Series C Preferred stock converted into common stock 119,538 1 1,996 — — — — 1,997 — 1,997
+Added: Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.
+Added: — — — — 14,431 — — 14,431 — 14,431
+Added: Net (income)/loss attributable to non-controlling interest — — — — — — — — 216 216
Distributions declared — — — — ( 146,386 ) — — ( 146,386 ) — ( 146,386 )
Other comprehensive income/(loss) — — — 452 — — — 452 — 452
−Removed: Contributions in noncontrolling interest, net — — — — — — — — 5,764 5,764
−Removed: Balance, December 31, 2021 43,965,928 $ 441 $ 903,264 $ ( 62 ) $ ( 167,179 ) $ 258,742 $ 710,431 $ 1,705,637 $ 5,764 $ 1,711,401
−Removed: The accompanying notes are an integral part of these consolidated financial statements.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: THE ACCOMPANYING CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
−Removed: (In thousands, except share data)
−Removed: Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income/(Loss) Accumulated Deficit Preferred E Preferred F Total Stockholders' Equity Noncontrolling Interest Total Equity
−Removed: Number of Shares Par Value
+Added: Contributions/(distributions) in non-controlling interest, net — — — — — — — — 9,428 9,428
Balance, December 31, 2022 82,992,784 $ 826 $ 1,602,247 $ 390 $ ( 299,225 ) $ 258,742 $ — $ 1,562,980 $ 15,408 $ 1,578,388
−Removed: Issuance of common stock — — — — — — — — — —
Common stock repurchases ( 1,026,105 ) ( 10 ) ( 12,495 ) — — — — ( 12,505 ) — ( 12,505 )
1 unchanged sentence
Share-based compensation 481,189 — 4,761 — — — — 4,761 — 4,761
+Added: Shares canceled for tax withholding on vested equity rewards ( 57,021 ) — ( 812 ) — — — — ( 812 ) — ( 812 )
+Added: Series I Preferred stock converted into common stock 299,200 3 4,997 — — — — 5,000 — 5,000
Offering costs — — ( 269 ) — — — — ( 269 ) — ( 269 )
−Removed: Preferred F exchanged for common stock 39,733,299 397 710,034 — — — ( 710,431 ) — —
−Removed: Preferred C exchanged for common stock 119,538 1 1,996 — — — — 1,997 — 1,997
Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.
— — — — 145,215 — — 145,215 — 145,215
−Removed: Net (income)/loss attributable to noncontrolling interest — — — — — — — — 216 216
+Added: Net income/(loss) attributable to non-controlling interest — — — — — — — — ( 706 ) ( 706 )
Distributions declared — — — — ( 144,932 ) — — ( 144,932 ) — ( 144,932 )
Other comprehensive income/(loss) — — — ( 1,093 ) — — — ( 1,093 ) — ( 1,093 )
−Removed: Contributions in noncontrolling interest, net — — — — — — — — 9,428 9,428
+Added: Contributions/(distributions) in non-controlling interest, net — — — — — — — — 12,393 12,393
Balance, December 31, 2023 82,751,913 $ 820 $ 1,599,197 $ ( 703 ) $ ( 298,942 ) $ 258,742 $ — $ 1,559,114 $ 27,095 $ 1,586,209
12 unchanged sentences
Share-based compensation 4,761 2,519 211
−Removed: Realized (gain)/loss from sale of real estate owned, held for sale — ( 9,809 ) ( 1,851 )
−Removed: Realized (gain)/loss from sale of other real estate investments, measured at fair value 33 — —
+Added: Realized (gain)/loss from sale of available for sale trading securities ( 80 ) — —
+Added: (Gain)/loss on other real estate investments 7,089 692 ( 9,790 )
Realized (gain)/loss from extinguishment of debt ( 2,201 ) 5,167 4,642
4 unchanged sentences
Unrealized (gain)/losses on derivative instruments 140 15,840 ( 7,402 )
−Removed: Unrealized loss on other real estate investments, measured at fair value 659 19 32
Depreciation and amortization 8,412 5,329 2,107
−Removed: Recognition of deferred rent revenue — — ( 150 )
Provision/(benefit) for credit losses 33,738 36,115 ( 5,192 )
−Removed: Impairment losses on real estate owned assets — — 398
Origination of commercial mortgage loans, held for sale, measured at fair value ( 102,500 ) ( 366,692 ) ( 420,673 )
13 unchanged sentences
Principal repayments received on commercial mortgage loans, held for sale, measured at fair value — 532 —
−Removed: Proceeds from (purchase)/sale of other real estate investments 2,045 426 —
+Added: Proceeds from sale of other real estate investments 39,755 2,045 30,338
Purchase of real estate owned and capital expenditures ( 1,151 ) ( 663 ) ( 134,052 )
−Removed: Proceeds from sale of real estate owned, held for sale — 29,912 22,472
Proceeds from sale of commercial mortgage loans, held for sale — 9,344 52,615
Purchase of real estate securities ( 223,768 ) ( 220,630 ) —
−Removed: Proceeds from sale/(repayment) of real estate securities 3,731,716 2,059,418 346,201
+Added: Proceeds from sale of real estate securities 418,791 3,731,716 2,059,418
Principal collateral on mortgage investments 17,702 545,416 541,313
1 unchanged sentence
Net cash (used in)/provided by investing activities $ 380,807 $ 3,097,265 $ 1,068,747
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: CONSOLIDATED STATEMENTS OF CASH FLOWS
+Added: (In thousands)
+Added: For the Years Ended December 31,
+Added: 2023 2022 2021
Cash flows from financing activities:
Cash consideration paid in merger $ — $ — $ ( 20,485 )
−Removed: Proceeds from issuance of common stock — — 10,672
Proceeds from issuances of redeemable convertible preferred stock — — 15,000
Payments for common stock repurchases ( 12,505 ) ( 16,579 ) ( 11,417 )
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: (In thousands)
+Added: Shares cancelled for tax withholding on vested equity awards ( 812 ) — —
+Added: Payments of offering costs ( 269 ) — —
Borrowings on collateralized loan obligations 689,294 1,630,639 1,410,173
Repayments of collateralized loan obligations ( 241,223 ) ( 662,410 ) ( 869,887 )
−Removed: Borrowings on repurchase agreements - commercial mortgage loans 1,918,631 1,874,694 682,970
−Removed: Repayments of repurchase agreements - commercial mortgage loans ( 2,257,372 ) ( 1,131,434 ) ( 659,173 )
+Added: Borrowings on repurchase agreements and revolving credit facilities - commercial mortgage loans 600,164 1,918,631 1,874,694
+Added: Repayments of repurchase agreements and revolving credit facilities - commercial mortgage loans ( 981,317 ) ( 2,257,372 ) ( 1,131,434 )
Borrowings on repurchase agreements - real estate securities 870,014 18,457,406 13,553,886
Repayments of repurchase agreements - real estate securities ( 1,135,967 ) ( 22,196,183 ) ( 15,983,193 )
−Removed: Proceeds from other financing and loan participation - commercial mortgage loans 38,537 6,524 31,379
−Removed: Repayments on other financing and loan participation - commercial mortgage loans ( 139 ) — —
+Added: Borrowings on other financings 59,707 38,537 6,524
+Added: Repayments on other financings ( 99,474 ) ( 139 ) —
Borrowings on unsecured debt — — 210,000
4 unchanged sentences
Proceeds from interest rate swap settlements — 8,478 9,115
−Removed: Distributions to noncontrolling interest ( 745 ) — —
−Removed: Contributions from noncontrolling interest 125 — —
−Removed: Distributions paid ( 139,415 ) ( 67,955 ) ( 49,790 )
+Added: Distributions to non-controlling interest ( 1,987 ) ( 745 ) —
+Added: Contributions from non-controlling interest — 125 —
+Added: Distributions paid to common and preferred stockholders ( 144,347 ) ( 139,415 ) ( 67,955 )
Net cash (used in)/provided by financing activities:
15 unchanged sentences
Common stock issued through distribution reinvestment plan $ 769 $ 1,963 $ 5,110
−Removed: Commercial mortgage loans transferred from held for investment to held for sale 9,296 52,615 76,979
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: CONSOLIDATED STATEMENTS OF CASH FLOWS
+Added: (In thousands)
+Added: For the Years Ended December 31,
+Added: 2023 2022 2021
Distribution payable 36,133 36,317 30,346
−Removed: Net assets acquired through foreclosure 79,481 — 35,411
−Removed: Transfer of net assets to real estate owned, held for sale 36,497 — —
−Removed: Conversion of Series F preferred stock to common stock 710,431 —
−Removed: Conversion of Series D preferred stock to Series H preferred stock 89,748 — —
−Removed: Partial conversion of Series C preferred stock to Series I preferred stock 5,000 — —
−Removed: Partial conversion of Series C preferred stock to common stock 1,997 — —
+Added: Commercial mortgage loans transferred from held for sale to held for investment — 9,296 52,615
+Added: Loans transferred to real estate owned 77,305 115,978 —
+Added: Reclassification of assets held for investment to held for sale 114,512 — —
+Added: Reclassification of liabilities held for investment to held for sale 13,664 — —
+Added: Conversion of preferred stock to common stock 5,000 712,428 ( 127,603 )
Issuances of common stock due to merger — — 579,526
1 unchanged sentence
Unsecured debt assumed due to merger — — 98,574
−Removed: Exchanged for Series F preferred stock — 710,431 —
−Removed: Conversion of Series A preferred stock to common stock — ( 127,603 ) —
+Added: Exchange of preferred stock — 94,748 710,431
The accompanying notes are an integral part of these consolidated financial statements.
25 unchanged sentences
As a result of the October 2021 acquisition of Capstead Mortgage Corporation ("Capstead"), the Company acquired a portfolio of residential mortgage backed securities (“RMBS”) in the form of residential adjustable-rate mortgage pass-through securities ("ARM Agency Securities" or "ARMs") issued and guaranteed by government-sponsored enterprises or by an agency of the federal government.
−Removed: Although the Company continues to hold a small portion of this portfolio it does not intend to do so long-term and intends to reinvest proceeds from this portfolio in its other businesses.
+Added: As of December 31, 2023, the Company has fully disposed of all of its ARM Agency Securities and is continuing to reinvest the proceeds from the sale of these securities in its other businesses.
The Company also owns real estate that was either acquired by the Company through foreclosure or deed in lieu of foreclosure, or that was purchased for investment, primarily subject to triple net leases.
−Removed: On October 19, 2021, the Company completed a merger with Capstead pursuant to which Capstead merged into a wholly-owned subsidiary of the Company, and the Company’s common stock commenced trading on the NYSE under the ticker “FBRT”.
−Removed: The Capstead assets acquired in the merger consisted primarily of cash and ARM Agency Securities issued and guaranteed by government-sponsored enterprises or by an agency of the federal government.
−Removed: Although the Company continues to hold a small portion of this portfolio it does not intend to do so long-term and intends to reinvest proceeds from this portfolio in its other businesses.
Note 2 - Summary of Significant Accounting Policies
4 unchanged sentences
Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
Principles of Consolidation
2 unchanged sentences
In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members, as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
The Company has determined the OP is a VIE of which the Company is the primary beneficiary.
8 unchanged sentences
The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.
+Added: Reclassifications
Certain prior year balances have been reclassified in order to conform to the current period presentation.
−Removed: For the years ended December 31, 2021 and 2020, Realized (gain)/loss on sale of real estate securities of $ 1.4 million and $ 10.1 million respectively, was reclassified to Trading (gain)/loss in our consolidated statements of operations.
+Added: For the twelve months ended December 31, 2022 and 2021, $ 5.2 million and $ 4.6 million, respectively, related to the remaining unamortized deferred financing costs on the redemption of BSPRT 2018-FL4 and BSPRT 2018-FL3, respectively, were reclassified from Interest Expense to Realized gain/(loss) on extinguishment of debt in the consolidated statements of operations and the consolidated statement of cash flows.
+Added: For the twelve months ended December 31, 2022, $ 33 thousand of Realized loss on sale of other real estate investments, measured at fair value and $ 0.7 million of Unrealized loss on other real estate investments, measured at fair value were combined to be presented as a net result in Gain/(loss) on other real estate investments in the consolidated statements of operations.
+Added: For the twelve months ended December 31, 2021, $ 9.8 million of Realized gain on sale of real estate owned assets, held for sale and $ 19 thousand of Unrealized loss on other real estate investments, measured at fair value were combined to be presented as a net result in Gain/(loss) on other real estate investments in the consolidated statements of operations.
Acquisition Expenses
−Removed: The Company capitalizes certain direct costs relating to loan origination activities.
−Removed: The cost is amortized over the life of the loan and recognized in interest income in the Company's consolidated statements of operations.
−Removed: Acquisition expenses paid on future funding amounts are expensed within the acquisition expenses line in the Company's consolidated statements of operations.
+Added: For commercial mortgage loans, held for investment the Company capitalizes certain direct costs relating to loan origination activities.
+Added: The cost is amortized over the life of the loan and recognized in Interest income in the consolidated statements of operations.
+Added: Acquisition expenses paid on future funding amounts are expensed within the Acquisition expenses in the consolidated statements of operations.
Cash and Cash Equivalents
2 unchanged sentences
Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased.
+Added: Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts.
+Added: The Company believes it mitigates risk by investing in or through major financial institutions and primarily in funds that are currently U.S.
+Added: federal government insured up to applicable account limits.
Restricted Cash
1 unchanged sentence
The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Commercial Mortgage Loans
2 unchanged sentences
Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method.
−Removed: Amortization or accretion is reflected as an adjustment to interest income in the Company’s consolidated statements of operations.
+Added: Amortization or accretion is reflected as an adjustment to interest income in the consolidated statements of operations.
Guaranteed loan commitment fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method.
−Removed: The accretion of guaranteed loan commitment fees is recognized in interest income in the Company's consolidated statements of operations.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
+Added: The accretion of guaranteed loan commitment fees is recognized in Interest income in the consolidated statements of operations.
Held for Sale - Commercial mortgage loans that are intended to be sold in the foreseeable future are reported as held for sale and are recorded at the lower of cost or fair value with changes recorded through the statements of operations.
23 unchanged sentences
(i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated sales value (which is based on key assumptions such as estimated market rents, lease-up periods, estimated lease terms, and capitalization and discount rates) less estimated selling costs.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Real estate owned, held for sale - Real estate owned is classified as held for sale in the period in which the six criteria under ASC Topic 360, "Property, Plant, and Equipment" are met:
−Removed: (1) we commit to a plan and have the authority to sell the asset;
−Removed: (2) the asset is available for sale in its current condition;
−Removed: (3) we have initiated an active marketing plan to locate a buyer for the asset;
−Removed: (4) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months;
−Removed: (5) the asset is being actively marketed for sale at a price that is reflective of its current fair value;
−Removed: and (6) we do not anticipate changes to our plan to sell the asset.
+Added: (i) we commit to a plan and have the authority to sell the asset;
+Added: (ii) the asset is available for sale in its current condition;
+Added: (iii) we have initiated an active marketing plan to locate a buyer for the asset;
+Added: (iv) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months;
+Added: (v) the asset is being actively marketed for sale at a price that is reflective of its current fair value;
+Added: and (vi) we do not anticipate changes to our plan to sell the asset.
Held for sale assets are carried at the lower of depreciated cost or estimated fair value, less estimated costs to sell.
3 unchanged sentences
Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
Fair Value of Assets and Liabilities of Acquired Properties
14 unchanged sentences
Credit Losses
−Removed: The allowance for credit losses required under ASU 2016-13 is deducted from the respective loan's amortized cost basis on the Company’s consolidated balance sheets.
+Added: The allowance for credit losses required under ASU 2016-13 is deducted from the respective loan's amortized cost basis in the consolidated balance sheets.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
General allowance for credit losses
The general allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses.
−Removed: Factors considered by the Company when determining the general provision for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.
+Added: Factors considered by the Company when determining the general provision for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts.
The general allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments.
2 unchanged sentences
If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: In measuring the general allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the provision for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”).
−Removed: The Company’s model principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 1998 to 2018 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses.
+Added: In measuring the general allowance for credit losses for financial instruments such as loans held for investment and unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the provision for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”).
+Added: The Company’s model to determine the general allowance for credit losses principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 2002 to 2021 provided by a reputable third party, forecasting the loss parameters based on a projected macroeconomic scenario using a probability-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses.
Specific allowance for credit losses
For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the provision for credit losses.
−Removed: For financial instruments which the Company identifies reasonable doubt as to whether the collection of contractual components can be satisfied, a loan specific allowance for credit losses analysis is performed.
+Added: For loans held for investment which the Company identifies reasonable doubt as to whether the collection of contractual components can be satisfied, a loan specific allowance for credit losses analysis is performed.
Determining whether a specific allowance for credit losses for a loan is required entails significant judgment from management and is based on several factors including (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan.
1 unchanged sentence
The CECL reserve is assessed on an individual basis for such loans by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
−Removed: These valuations require judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plans, loan sponsorship, actions of other lenders, and other factors deemed relevant by the Company.
+Added: The estimated fair value of the underlying collateral requires judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plans, loan sponsorship, actions of other lenders, and other factors deemed relevant by the Company.
Actual losses, if any, could ultimately differ materially from these estimates.
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At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected.
8 unchanged sentences
The Company also considers qualitative and environmental factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the provision for credit losses.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: Changes in the provision for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.
+Added: Changes in the provision for credit losses for the Company’s financial instruments are recorded in (Provision)/benefit for credit losses in the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded in the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.
The Company has elected to not measure a provision for credit losses for accrued interest receivable as balances are written off in a timely manner when loans, real estate securities or preferred equity investments are designated as non-performing and placed on non-accrual or cost recovery status within 90 days of becoming past due.
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When a loan is designated as non-performing and placed on cost recovery status, the cost-recovery method is applied to which receipt of principal or coupon interest is recorded as a reduction to the amortized cost until collection of all contractual components are reasonably assured.
−Removed: Troubled Debt Restructuring (“TDR”)
−Removed: The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concession to the borrower who is experiencing financial difficulty.
−Removed: Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument.
−Removed: The Company determines the provision for credit losses for financial instruments that are TDRs individually.
Real Estate Securities
Available For Sale
−Removed: On the acquisition date, all of the Company’s real estate securities were classified as available for sale ("AFS") and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss.
−Removed: The Company elected the fair value option for its real estate securities, available for sale, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statements of comprehensive income.
+Added: The Company’s real estate securities are classified as available for sale ("AFS") and carried at fair value.
+Added: Changes in fair value of available for sale real estate securities are recognized in the consolidated statements of comprehensive income.
Related discounts, premiums and acquisition expenses on investments are amortized or accreted over the life of the investment using the effective interest method.
−Removed: Amortization and accretion is reflected as an adjustment to interest income in the Company’s consolidated statements of operations.
+Added: Amortization and accretion are reflected as an adjustment to interest income in the consolidated statements of operations.
The Company uses the specific identification method in determining the cost relief for real estate securities sold.
−Removed: Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.
+Added: Realized gains and losses from the sale of available for sale securities are included in the consolidated statements of operations.
AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors.
−Removed: Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations.
+Added: Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance in the consolidated balance sheets with a corresponding adjustment in the consolidated statements of operations.
If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.
1 unchanged sentence
performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.
−Removed: The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to accumulated other comprehensive income in the consolidated balance sheets.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: In the merger with Capstead, the Company acquired a portfolio of residential mortgage pass-through securities consisting primarily of ARM Agency Securities issued and guaranteed by government-sponsored enterprises, either Fannie Mae, Freddie Mac, or by an agency of the federal government, Ginnie Mae.
−Removed: ARM Agency Securities and are classified as "trading".
−Removed: ARM Agency Securities are recorded at fair value on the balance sheets with trading gains and losses due to fair value changes and sales of these securities recorded in the Company's consolidated statements of operations.
−Removed: The Company calculates trading gains and losses on the sales of ARM Agency Securities based on the specific identification method.
−Removed: Fair values fluctuate with current and projected changes in interest rates, prepayment expectations and other factors such as market liquidity conditions and the perceived credit quality of agency securities.
−Removed: Judgment is required to interpret market data and develop estimated fair values, particularly in circumstances of deteriorating credit quality and market liquidity.
+Added: The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to Accumulated other comprehensive income/(loss) in the consolidated balance sheets.
Repurchase Agreements
Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities.
−Removed: Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability.
−Removed: Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.
+Added: Commercial mortgage loans and real estate securities financed through repurchase agreements remain in the consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability.
+Added: Interest paid in accordance with repurchase agreements is recorded in Interest expense in the consolidated statements of operations.
Deferred Financing Costs
−Removed: The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets.
−Removed: Deferred financing cost on the Company's CLO are netted against the Company's CLO payable in the Collateralized loan obligations on the consolidated balance sheets.
−Removed: Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations.
−Removed: Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.
+Added: The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets in the consolidated balance sheets.
+Added: Deferred financing cost on the Company's CLO are netted against the Company's CLO payable in Collateralized loan obligations in the consolidated balance sheets.
+Added: Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in Interest expense in the consolidated statements of operations.
+Added: Unamortized deferred financing costs are generally realized in Realized gain/(loss) on extinguishment of debt in the consolidated statements of operations when the associated debt is refinanced or repaid before maturity.
Offering and Related Costs
2 unchanged sentences
These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers.
−Removed: Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Series C Preferred Stock and Series D Preferred Stock are included within Series C Preferred Stock and Series D Preferred Stock, respectively, on the Company’s consolidated balance sheets.
−Removed: Offering costs for the Series H Preferred Stock and Series I Preferred Stock were expensed to the Company's consolidated statement of operations.
+Added: Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Series C Preferred Stock and Series D Preferred Stock are included within Series C Preferred Stock and Series D Preferred Stock, respectively, in the consolidated balance sheets.
+Added: Offering costs for the Series H Preferred Stock and Series I Preferred Stock were expensed in the consolidated statement of operations.
Equity Incentive Plan
2 unchanged sentences
The 2021 Incentive Plan, which is administered by the Compensation Committee of the board of directors, provides for the grant of awards of share options, share appreciation rights, restricted shares, restricted share units, deferred share units, unrestricted shares, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards, long-term incentive plan units and cash bonus awards.
−Removed: In January 2022, the Company issued for the first time under the 2021 Incentive Plan awards of restricted stock units ("RSUs") to its officers and certain other personnel of the Advisor who provide services to the Company.
+Added: Since 2022, the Company has been issuing under the 2021 Incentive Plan annual awards of restricted stock units ("RSUs") to its officers and certain other personnel of the Advisor who provide services to the Company.
These awards are service-based and vest in equal annual installments beginning on the anniversary of the date of grant over a period of three years , subject to continuing service.
−Removed: One share of the Company’s common stock will be issued for each unit that vests.
+Added: One share of the Company’s common stock is issued for each unit that vests.
These awards also grant non-forfeitable dividend equivalent rights equal to the cash dividend paid in the ordinary course on a common share to the Company's common shareholders.
Upon termination for any reason, all unvested RSUs will be forfeited by the grantee, who will be given no further rights to such RSUs.
−Removed: The fair value of the RSUs are expensed over the vesting period, which are included in share-based compensation expense on the consolidated statements of operations.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
+Added: The fair value of the RSUs is expensed over the vesting period, which are included in Share-based compensation in the consolidated statements of operations.
Restricted Share Plan
The Company also had an Amended and Restated Employee and Director Incentive Restricted Share Plan (the "RSP"), which provided the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, the Advisor and its affiliates.
−Removed: The total number of common shares granted under the RSP shall not exceed 5 % of the Company’s authorized common shares, and in any event, will not exceed 4.0 million shares (as such number may be adjusted for stock splits, stock distributions, combinations and similar events).
The RSP expired on February 7, 2023.
−Removed: Restricted share awards entitle the recipient to receive common shares from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives.
−Removed: Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company.
−Removed: Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested.
−Removed: Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the shares have lapsed.
−Removed: Any distributions payable in common shares shall be subject to the same restrictions as the underlying restricted shares.
−Removed: The fair value of the restricted share awards are expensed over the vesting period, which are included in share-based compensation expense on the consolidated statements of operations.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Distribution Reinvestment Plan
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federal income tax purposes, but are instead taxed as C corporations.
−Removed: For financial reporting purposes, the TRSs are consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRSs.
−Removed: Total income tax provision/(benefit) for the years ended December 31, 2022, December 31, 2021 and December 31, 2020 were $( 0.4 ) million, $ 3.6 million and $( 2.1 ) million, respectively.
+Added: For financial reporting purposes, the TRSs are consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS.
+Added: Total income tax (provision)/benefit for the years ended December 31, 2023, 2022, and 2021 were $ 2.8 million, $ 0.4 million, and $( 3.6 ) million, respectively.
The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return.
8 unchanged sentences
Treasury note futures and credit derivatives on various indices including CMBX and CDX.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
The Company recognizes all derivatives on the consolidated balance sheets at fair value.
The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in Unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations.
−Removed: The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets.
+Added: The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash in the consolidated balance sheets.
Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.
4 unchanged sentences
Diluted earnings per share reflects the potential dilution that could occur from shares outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Series H Preferred Stock and Series I Preferred Stock , except when doing so would be anti-dilutive.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Reportable Segments
1 unchanged sentence
The four reporting segments are as follows:
−Removed: • The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.
+Added: • The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgages, subordinate mortgages, mezzanine loans and participations in such loans.
• The real estate securities business focuses on investing in and asset managing real estate securities.
Historically this business has focused primarily on CMBS, CRE CLO bonds, CDO notes, and other securities.
−Removed: As a result of the October 2021 acquisition of Capstead, the Company acquired and continues to hold a portfolio of RMBS in the form of the ARM Agency Securities.
−Removed: The Company has, and intends to reinvest the cash and proceeds from dividends, interest, repayments and sales of these assets into its other segments and does not intend to continue to invest in ARM Agency Securities or RMBS in general.
−Removed: • The commercial conduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.
+Added: As a result of the October 2021 acquisition of Capstead, the Company acquired a portfolio of ARM Agency Securities.
+Added: The portfolio was completely divested by the third quarter of 2023.
+Added: • The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.
+Added: The TRS may also hold certain mezzanine loans that don't qualify as good REIT assets due to any potential loss from foreclosure.
• The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.
2 unchanged sentences
The Company’s outstanding classes of redeemable convertible preferred stock are classified outside of permanent equity in the consolidated balance sheets.
−Removed: Series C Preferred Stock
−Removed: Pursuant to the terms of the Series C Preferred Stock, 400 outstanding shares of Series C Preferred Stock each converted into 299.2 shares of common stock on October 19, 2022, while 1,000 shares of Series C Preferred Stock were exchanged for an equal number of shares of the Company’s newly created Series I Preferred Stock, $ 0.01 par value per share, on October 20, 2022.
−Removed: Series D Preferred Stock
−Removed: All of the shares of the Series D Preferred Stock were exchanged for an equivalent number of shares of Series H Preferred Stock on June 24, 2022.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
Series H Preferred Stock
−Removed: The Series H Preferred Stock ranks senior to the Common Stock and on parity with the Series I Preferred Stock and the Company’s 7.50 % Series E Preferred Stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company.
+Added: The Series H Preferred Stock ranks senior to the Common Stock and on parity with the Company’s 7.50 % Series E Cumulative Redeemable Preferred Stock ("Series E Preferred Stock") with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company.
The liquidation preference of each share of Series H Preferred Stock is the greater of (i) $ 5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series H Preferred Stock into the Common Stock.
2 unchanged sentences
Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.
−Removed: On June 24, 2022, the Company issued 17,950 shares of Series H Preferred Stock to the holder of the Series D Preferred Stock in exchange for an equal amount of shares of Series D Preferred Stock.
−Removed: The exchange was undertaken to accommodate the holder’s request to extend the mandatory conversion date set forth in the terms of the Series D Preferred Stock, which was set to occur on October 19, 2022, to January 19, 2023.
−Removed: The Company received no consideration for the exchange.
On January 10, 2024, the Series H Preferred Stock was amended such that the mandatory conversion date was extended by one year, to January 21, 2025.
−Removed: The Series H Preferred Stock is on parity with the Series I Preferred Stock and Series E Preferred Stock with respect to preference on liquidation and dividend rights.
Unless earlier converted, the Series H Preferred Stock will automatically convert into common stock at a rate of 299.2 shares of common stock per share of Series H Preferred Stock (subject to adjustments as described in the Articles Supplementary for the Series H Preferred Stock) on January 21, 2025.
3 unchanged sentences
In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series H Preferred Stock, voting as a single class with other shares of parity preferred stock, is required to approve the issuance of any equity securities senior to the Series H Preferred Stock and to take certain actions materially adverse to the holders of the Series H Preferred Stock.
−Removed: Series I Preferred Stock
−Removed: On October 20, 2022, 1,000 shares of Series C Preferred Stock were exchanged for an equal number of shares of the Company’s newly created Series I Preferred Stock.
−Removed: The exchange was undertaken to accommodate the holder’s request to extend the mandatory conversion date set forth in the terms of the Series C Preferred Stock, which was set to occur on October 19, 2022, to January 19, 2023.
−Removed: There were no other material differences between the terms of the Series C Preferred Stock and Series I Preferred Stock.
−Removed: The Company received no consideration for the exchange.
−Removed: The Series I Preferred Stock was parity with the Series H Preferred Stock and Series E Preferred Stock with respect to preference on liquidation and dividend rights.
−Removed: The terms of the Series I Preferred Stock were substantially the same as the Series H Preferred Stock, except that the holders of the Series I Preferred Stock have the option to accelerate the mandatory conversion date, which is January 19, 2023, upon at least 10 days' written notice.
−Removed: On January 19, 2023, all of the 1,000 outstanding shares of the Series I Preferred Stock converted by their terms into 299.2 shares of common stock per share of Series I Preferred Stock.
−Removed: Automatically Convertible Preferred Stock - Series F Preferred Stock
−Removed: On April 19, 2022, all of the 39,733,299 outstanding shares of the Company’s Series F Preferred Stock, $ 0.01 par value, automatically converted on a one -for-one basis into an equal amount of shares of Common Stock, pursuant to the terms of the Articles Supplementary of the Series F Preferred Stock.
−Removed: There are no shares of Series F Preferred Stock outstanding.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
+Added: Series I Preferred Stock
+Added: On January 19, 2023, all of the 1,000 outstanding shares of the Series I Preferred Stock converted by their terms into 299.2 shares of common stock per share of Series I Preferred Stock.
Perpetual Preferred Stock—Series E Preferred Stock
The Series E Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption.
−Removed: The Series E Preferred Stock ranks, with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up, senior to the common stock and on a parity with the Series I Preferred Stock and Series H Preferred Stock.
+Added: The Series E Preferred Stock ranks, with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up, senior to the common stock and on a parity with the Series H Preferred Stock.
The liquidation preference is $ 25.00 per share, plus an amount equal to any accumulated and unpaid dividends.
5 unchanged sentences
The Series E Preferred Stock is listed on the New York Stock Exchange under the symbol “FBRT PRE”.
−Removed: Accounting Pronouncements Not Yet Adopted
+Added: Recently Issued Accounting Pronouncements
In March 2022, the FASB issued ASU 2022-02 "Financial Instruments-Credit Losses (Topic 326):
Troubled Debt Restructurings and Vintage Disclosures," or ASU 2022-02.
−Removed: ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings and requires disclosure of current-period gross write-offs by year of loan origination.
+Added: ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings ("TDR") and requires disclosure of current-period gross write-offs by year of loan origination.
Additionally, ASU 2022-02 updates the accounting for credit losses under ASC 326 and adds enhanced disclosures with respect to loan refinancing and restructuring in the form of principal forgiveness, interest rate concessions, other-than-insignificant payment delays, or term extensions when the borrower is experiencing financial difficulties.
−Removed: ASU 2022-02 is effective for fiscal years beginning after December 15, 2022.
−Removed: The amendments should be applied prospectively, however for the recognition and measurement of troubled debt restructurings, the entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption.
−Removed: We are currently evaluating what impact, if any ASU 2022-02 will have on our consolidated financial statements.
+Added: On January 1, 2023, the Company adopted ASU 2022-02 on a prospective basis and the adoption had no significant or material impact to the Company's consolidated financial statements.
In March 2020, the FASB issued ASU No.
4 unchanged sentences
Deferral of the Sunset Date of Topic 848 .
−Removed: The Company has not adopted any of the optional expedients or exceptions through December 31, 2022, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.
+Added: During the third quarter of 2023, the Company adopted ASU 2020-04.
+Added: The adoption of ASU 2020-04 did not have a material impact on the Company's consolidated financial statements as of December 31, 2023.
+Added: In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures,” or ASU 2023-07.
+Added: ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis.
+Added: ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.
+Added: We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.
+Added: In December 2023, the FASB issued Accounting Standards Update, or ASU, 2023-09 “Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures,” or ASU 2023-09.
+Added: ASU 2023-09 requires additional disaggregated disclosures on the entity’s effective tax rate reconciliation and additional details on income taxes paid.
+Added: ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted.
+Added: We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements.
FRANKLIN BSP REALTY TRUST, INC.
13 unchanged sentences
(1) As of December 31, 2022, the Company recorded a specific reserve with respect to a retail loan designated as non-performing.
−Removed: As of December 31, 2022 and 2021, the Company's total commercial mortgage loan portfolio, held for investment, was composed of 161 and 165 loans, respectively.
−Removed: Allowance for Credit Losses
−Removed: The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of December 31, 2022 and 2021 (dollars in thousands):
−Removed: Year Ended December 31, 2022
−Removed: MultiFamily Retail Office Industrial Mixed Use Hospitality Self Storage Manufactured Housing Total
−Removed: Beginning Balance $ 9,681 $ 288 $ 776 $ 86 $ 169 $ 4,597 $ 152 $ 78 $ 15,827
−Removed: General allowance/(benefit) for credit losses 11,485 89 ( 106 ) 173 ( 122 ) ( 533 ) ( 142 ) ( 47 ) 10,797
−Removed: Specific allowance/(benefit) for credit losses — 25,281 — — — — — — 25,281
+Added: For the years ended December 31, 2023 and 2022, the activity in the Company's commercial mortgage loans, held for investment carrying values, was as follows (dollars in thousands):
+Added: For the Years Ended
+Added: December 31, 2023 December 31, 2022
+Added: Amortized cost, beginning of period $ 5,269,776 $ 4,226,888
+Added: Acquisitions and originations 941,513 2,247,613
+Added: Principal repayments ( 1,076,532 ) ( 1,109,769 )
+Added: Net fees capitalized into carrying value of loans ( 5,242 ) ( 13,775 )
+Added: Discount accretion/premium amortization 13,016 12,614
+Added: Loans transferred from/(to) commercial real estate loans, held for sale — ( 9,296 )
+Added: Transfer to real estate owned ( 103,863 ) ( 80,460 )
+Added: Cost recovery ( 1,726 ) ( 4,039 )
+Added: Amortized cost, end of period 5,036,942 5,269,776
+Added: Allowance for credit losses, beginning of period ( 40,848 ) ( 15,827 )
+Added: General (provision)/benefit for credit losses ( 20,551 ) ( 10,797 )
+Added: Specific (provision)/benefit for credit losses ( 12,334 ) ( 25,281 )
Write offs from specific allowance for credit losses 26,558 11,057
−Removed: Ending Balance $ 21,166 $ 14,601 $ 670 $ 259 $ 47 $ 4,064 $ 10 $ 31 $ 40,848
−Removed: Year Ended December 31, 2021
−Removed: MultiFamily Retail Office Industrial Mixed Use Hospitality Self Storage Manufactured Housing Total
−Removed: Beginning Balance $ 3,095 $ 404 $ 1,575 $ 3,795 $ 132 $ 11,646 $ 117 $ 122 20,886
−Removed: General allowance/(benefit) for credit losses 6,875 ( 116 ) ( 799 ) ( 3,709 ) 37 ( 7,049 ) 35 ( 44 ) ( 4,770 )
−Removed: Write offs from general allowance for credit losses ( 289 ) — — — — — — — ( 289 )
−Removed: Ending Balance $ 9,681 $ 288 $ 776 $ 86 $ 169 $ 4,597 $ 152 $ 78 $ 15,827
−Removed: The Company recorded an increase in its general allowance for credit losses during the year ended December 31, 2022 of $ 10.8 million.
−Removed: The primary driver for the higher reserve balance is the change in economic outlook since the end of the prior year coupled with the increase in overall portfolio of commercial mortgage loans, held for investment as of December 31, 2022.
+Added: Allowance for credit losses, end of period ( 47,175 ) ( 40,848 )
+Added: Total commercial mortgage loans, held for investment, net $ 4,989,767 $ 5,228,928
+Added: As of December 31, 2023 and 2022, the Company's total commercial mortgage loan, held for investment portfolio, was comprised of 144 and 161 loans, respectively.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: As of December 31, 2022, the Company identified a commercial mortgage loan, held for investment secured by a portfolio of retail properties, that was assigned a risk rating of “5” due to certain conditions that negatively impacted the underlying collateral property’s cash flows.
−Removed: Since the loan was considered a collateral-dependent asset under GAAP, as of December 31, 2022, a specific provision for credit losses of $ 14.2 million was recorded based on the difference between the Company’s estimation of the fair value of the underlying collateral property, less costs to sell, and the loan’s amortized cost basis.
−Removed: As of December 31, 2022, the loan has a fully funded outstanding principal balance of $ 63.6 million, and carrying value of $ 46.1 million.
−Removed: The significant unobservable inputs to the discounted cash flow model used to estimate the fair value of the retail properties collateralizing the loan included a capitalization rate, which ranged from 4.75 %- 6.50 %.
−Removed: The following table presents the activity in the Company' s allowance for credit losses for the unfunded loan commitments, which is included in accounts payable and accrued expenses in the consolidated balance sheets as of December 31, 2022 and 2021 (dollars in thousands):
−Removed: Year Ended December 31, 2022
−Removed: MultiFamily Retail Office Industrial Mixed Use Hospitality Self Storage Manufactured Housing Total
−Removed: Beginning Balance $ 137 $ 1 $ 13 $ 3 $ 10 $ 79 $ — $ — $ 243
−Removed: General allowance/(benefit) for credit losses 28 ( 37 ) 73 — ( 10 ) ( 18 ) — 1 37
−Removed: Ending Balance $ 165 $ ( 36 ) $ 86 $ 3 $ — $ 61 $ — $ 1 $ 280
−Removed: Year Ended December 31, 2021
−Removed: MultiFamily Retail Office Industrial Mixed Use Hospitality Self Storage Manufactured Housing Total
−Removed: Beginning Balance $ 85 $ — $ 47 $ 418 $ 14 $ 101 $ — $ — $ 665
−Removed: General allowance/(benefit) for credit losses 52 1 ( 34 ) ( 415 ) ( 4 ) ( 22 ) — — ( 422 )
−Removed: Ending Balance $ 137 $ 1 $ 13 $ 3 $ 10 $ 79 $ — $ — $ 243
−Removed: The following table represents the composition by loan collateral type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):
+Added: Loan Portfolio by Collateral Type and Geographic Region
+Added: The following tables represent the composition by loan collateral type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):
December 31, 2023 December 31, 2022
3 unchanged sentences
Office 269,924 5.4 % 405,705 7.7 %
−Removed: Retail 120,017 2.3 % 104,990 2.5 %
Industrial 73,724 1.5 % 93,035 1.8 %
+Added: Retail 34,000 0.7 % 120,017 2.3 %
Other 121,006 2.3 % 128,676 2.4 %
5 unchanged sentences
Mideast 455,739 9.0 % 706,192 13.4 %
−Removed: Far West 234,891 4.4 % 301,040 7.1 %
Great Lakes 161,059 3.2 % 162,162 3.1 %
−Removed: Various 192,481 3.6 % 240,523 5.6 %
−Removed: Total $ 5,288,974 100.0 % $ 4,242,962 100.0 %
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: As of December 31, 2022 and 2021, the Company's total commercial mortgage loans, held for sale, measured at fair value was composed of two loans and one loan, respectively.
−Removed: As of December 31, 2022 and 2021, the contractual principal outstanding of commercial mortgage loans, held for sale, measured at fair value was $ 15.6 million and $ 34.3 million, respectively.
−Removed: As of December 31, 2022 and 2021, none of the Company's commercial mortgage loans, held for sale, measured at fair value were in default or greater than ninety days past due.
−Removed: The following table represents the composition by loan collateral type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):
−Removed: December 31, 2022 December 31, 2021
−Removed: Loan Collateral Type Par Value Percentage Par Value Percentage
−Removed: Retail $ 12,000 76.8 % $ — — %
−Removed: Office 3,625 23.2 % 34,250 100.0 %
+Added: Far West 113,554 2.3 % 234,891 4.4 %
+Added: Other 405,018 8.0 % 192,481 3.6 %
Total $ 5,045,036 100.0 % $ 5,288,974 100.0 %
−Removed: December 31, 2022 December 31, 2021
−Removed: Loan Region Par Value Percentage Par Value Percentage
−Removed: Southeast $ 15,625 100.0 % $ 34,250 100.0 %
−Removed: Loan Credit Quality and Vintage
−Removed: The following tables present the amortized cost of our commercial mortgage loans, held for investment as of December 31, 2022 and 2021, by loan collateral type, the Company’s internal risk rating and year of origination.
−Removed: The risk ratings are updated as of December 31, 2022.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Allowance for Credit Losses
+Added: The following table presents the changes in the Company's allowance for credit losses for the years ended December 31, 2023 and 2022 (dollars in thousands):
+Added: General Allowance for Credit Losses
+Added: Specific Allowance for Credit Losses Funded Unfunded Total Total Allowance for Credit Losses
December 31, 2021 $ — $ 15,827 $ 243 $ 16,070 $ 16,070
−Removed: As of December 31, 2022
−Removed: 2022 2021 2020 2019 2018 2017 Total
−Removed: 1-2 internal grade $ 1,511,181 $ 2,184,362 $ 74,372 $ — $ 34,668 $ — $ 3,804,583
−Removed: 3-4 internal grade — 167,707 10,807 — 34,731 — 213,245
−Removed: Total Multifamily Loans $ 1,511,181 $ 2,352,069 $ 85,179 $ — $ 69,399 $ — $ 4,017,828
−Removed: 1-2 internal grade $ 22,275 $ 33,884 $ — $ — $ — $ — $ 56,159
−Removed: 3-4 internal grade — — — — — — —
−Removed: 5 internal grade 60,304 — — — — — 60,304
−Removed: Total Retail Loans $ 82,579 $ 33,884 $ — $ — $ — $ — $ 116,463
−Removed: 1-2 internal grade $ — $ 50,351 $ 189,740 $ 66,110 $ 18,683 $ — $ 324,884
−Removed: 3-4 internal grade — — 54,533 25,748 — 80,281
−Removed: Total Office Loans $ — $ 50,351 $ 244,273 $ 91,858 $ 18,683 $ — $ 405,165
−Removed: 1-2 internal grade $ 77,762 $ — $ 14,955 $ — $ — $ — $ 92,717
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Industrial Loans $ 77,762 $ — $ 14,955 $ — $ — $ — $ 92,717
−Removed: 1-2 internal grade $ 19,939 $ 32,463 $ — $ — $ — $ — $ 52,402
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Mixed Use Loans $ 19,939 $ 32,463 $ — $ — $ — $ — $ 52,402
−Removed: 1-2 internal grade $ 137,055 $ 160,397 $ — $ 49,564 $ 22,116 $ — $ 369,132
−Removed: 3-4 internal grade 32,305 — — 28,882 — 78,867 140,054
−Removed: Total Hospitality Loans $ 169,360 $ 160,397 $ — $ 78,446 $ 22,116 $ 78,867 $ 509,186
−Removed: Self Storage:
−Removed: 1-2 internal grade $ — $ 14,986 $ 29,858 $ — $ — $ — $ 44,844
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Self Storage Loans $ — $ 14,986 $ 29,858 $ — $ — $ — $ 44,844
−Removed: Manufactured Housing:
−Removed: 1-2 internal grade $ 10,479 $ 6,677 $ 6,344 $ — $ — $ — $ 23,500
−Removed: 3-4 internal grade — — 7,671 — — — 7,671
−Removed: Total Manufactured Housing Loans $ 10,479 $ 6,677 $ 14,015 $ — $ — $ — $ 31,171
−Removed: Total $ 1,871,300 $ 2,650,827 $ 388,280 $ 170,304 $ 110,198 $ 78,867 $ 5,269,776
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Provision/(Benefit) 25,281 10,797 37 10,834 36,115
+Added: Write offs ( 11,057 ) — — — ( 11,057 )
December 31, 2022 $ 14,224 $ 26,624 $ 280 $ 26,904 $ 41,128
+Added: Provision/(Benefit) 12,334 20,551 853 21,404 33,738
+Added: Write offs ( 26,558 ) — — — ( 26,558 )
December 31, 2023 $ — $ 47,175 $ 1,133 $ 48,308 $ 48,308
−Removed: 2021 2020 2019 2018 2017 2016 Total
−Removed: 1-2 internal grade $ 2,438,376 $ 270,953 $ 103,989 $ 90,877 $ — $ — $ 2,904,195
−Removed: 3-4 internal grade — — — 37,025 — — 37,025
−Removed: Total Multifamily Loans $ 2,438,376 $ 270,953 $ 103,989 $ 127,902 $ — $ — $ 2,941,220
−Removed: 1-2 internal grade $ 33,830 $ 11,928 $ 29,515 $ 29,452 $ — $ — $ 104,725
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Retail Loans $ 33,830 $ 11,928 $ 29,515 $ 29,452 $ — $ — $ 104,725
−Removed: 1-2 internal grade $ 50,291 $ 253,759 $ 136,800 $ 43,308 $ — $ — $ 484,158
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Office Loans $ 50,291 $ 253,759 $ 136,800 $ 43,308 $ — $ — $ 484,158
−Removed: 1-2 internal grade $ — $ 31,906 $ — $ — $ — $ — $ 31,906
−Removed: 3-4 internal grade — — 56,933 — — — 56,933
−Removed: Total Industrial Loans $ — $ 31,906 $ 56,933 $ — $ — $ — $ 88,839
−Removed: 1-2 internal grade $ 32,395 $ 30,325 $ — $ — $ — $ — $ 62,720
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Mixed Use Loans $ 32,395 $ 30,325 $ — $ — $ — $ — $ 62,720
−Removed: 1-2 internal grade $ 153,032 $ 26,920 $ 34,054 $ — $ — $ — $ 214,006
−Removed: 3-4 internal grade — — 113,961 52,790 79,102 — 245,853
−Removed: Total Hospitality Loans $ 153,032 $ 26,920 $ 148,015 $ 52,790 $ 79,102 $ — $ 459,859
−Removed: Self Storage:
−Removed: 1-2 internal grade $ 14,948 $ 41,382 $ — $ — $ — $ — $ 56,330
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Self Storage Loans $ 14,948 $ 41,382 $ — $ — $ — $ — $ 56,330
−Removed: Manufactured Housing:
−Removed: 1-2 internal grade $ 6,665 $ 22,372 $ — $ — $ — $ — $ 29,037
−Removed: 3-4 internal grade — — — — — — —
−Removed: Total Manufactured Housing Loans $ 6,665 $ 22,372 $ — $ — $ — $ — $ 29,037
−Removed: Total $ 2,729,537 $ 689,545 $ 475,252 $ 253,452 $ 79,102 $ — $ 4,226,888
+Added: Specific Allowance for Credit Losses
+Added: As of December 31, 2022, the Company identified a commercial mortgage loan, held for investment secured by a portfolio of retail properties (the “Walgreens Portfolio”), that was assigned a risk rating of “5” due to certain conditions that negatively impacted the underlying collateral property’s cash flows.
+Added: The loan was evaluated in accordance with ASC 310 - Receivables and was determined to be a TDR.
+Added: The Company elected the practical expedient collateral-dependent asset to measure the fair value of the underlying collateral, as of December 31, 2022, and recorded a specific provision for credit losses of $ 14.2 million based on the difference between the Company’s estimation of the fair value of the underlying collateral property, less costs to sell, and the loan’s amortized cost basis.
+Added: As of December 31, 2022, the loan had a fully funded outstanding principal balance of $ 63.6 million, and carrying value of $ 46.1 million.
+Added: During the first quarter of 2023, the Company recorded an additional $ 0.8 million specific allowance for credit losses on the loan and wrote off the remaining $ 15.1 million specific allowance for credit losses for the Walgreens Portfolio, net of $ 0.7 million recoveries recorded.
+Added: All properties collateralized by the senior mortgage notes were assumed by the Company through foreclosures and deeds-in-lieu of foreclosure and correspondingly were transferred to Real estate owned, net of depreciation in the consolidated balance sheets.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
+Added: In February 2020, the Company originated a first mortgage loan secured by an office property in Portland, OR.
+Added: In February 2023, the fully committed $ 37.3 million senior loan was restructured as a result of financial difficulty to a $ 25.0 million committed senior loan.
+Added: In connection with the restructuring, the Company committed a $ 10.1 million mezzanine note.
+Added: In accordance with the adoption of ASU 2022-02, the restructuring was classified as a continuation of an existing loan on the senior loan and new loan for the mezzanine note.
+Added: During the second quarter of 2023, the Company assigned the senior and mezzanine notes a risk rating of "5" and placed the loan on cost recovery status.
+Added: The Company elected to apply a practical expedient for collateral dependent assets in which the allowance for credit losses is calculated as the difference between the estimated fair value of the underlying collateral, less estimated cost to sell, and the amortized cost basis of the loan.
+Added: As a result, the Company recorded a specific allowance for credit losses of $ 11.9 million on this loan in the second quarter of 2023 and subsequently wrote off this specific allowance for credit losses in the same quarter.
+Added: During the third quarter of 2023, the Company foreclosed upon the mortgage notes through deed-in-lieu of foreclosure.
+Added: The carrying value of the loan at the time of repossession was $ 20.3 million, net of cost recoveries totaling $ 1.1 million.
+Added: In connection therewith, the underlying collateral assets were reclassified to Real estate owned, net of depreciation in the consolidated balance sheets as a result of deed-in-lieu.
+Added: The transfer was evaluated to be an asset acquisition in accordance with ASC 805.
+Added: See Note 5 - Real Estate Owned.
+Added: General Allowance for Credit Losses
+Added: The Company recorded an increase in its general allowance for credit losses during the year ended December 31, 2023 of $ 21.4 million.
+Added: The primary driver for the higher reserve balance is due to a more pessimistic and conservative macro-economic outlook since the end of the prior year slightly offset by a decrease in the overall portfolio of commercial mortgage loans, held for investment as of December 31, 2023.
+Added: The Company recorded an increase in its general allowance for credit losses during the year ended December 31, 2022 of $ 10.8 million.
+Added: The primary driver for the higher reserve balance is the change in economic outlook since the end of the prior year coupled with the increase in overall portfolio of commercial mortgage loans, held for investment as of December 31, 2022.
Past Due Status
−Removed: The following table presents an aging summary of the loans amortized cost basis at December 31, 2022 (dollars in thousands):
−Removed: Multifamily Retail Office Industrial Mixed Use Hospitality Self Storage Manufactured Housing Total
−Removed: Current $ 4,017,828 $ 56,159 $ 405,165 $ 92,717 $ 52,402 $ 452,111 $ 44,844 $ 31,171 $ 5,152,397
−Removed: 1-29 days past due — — — — — — — — —
−Removed: 30-59 days past due — — — — — — — — —
−Removed: 60-89 days past due — — — — — — — — —
−Removed: 90-119 days past due — — — — — — — — —
−Removed: 120+ days past due (1)
+Added: The following table presents a summary of the loans amortized cost basis as of December 31, 2023 (dollars in thousands):
+Added: Current Less than 90 days past due 90 or more days past due (1)
+Added: As of December 31, 2023
$ 4,837,414 $ 136,139 $ 63,389 $ 5,036,942
−Removed: Total $ 4,017,828 $ 116,463 $ 405,165 $ 92,717 $ 52,402 $ 509,186 $ 44,844 $ 31,171 $ 5,269,776
________________________
−Removed: (1) For the year ended December 31, 2022, there was no interest income recognized on these loans.
+Added: (1) This is comprised of (i) $ 27.4 million of outstanding principal amount of a mortgage loan collateralized by self storage properties which was paid down subsequent to December 31, 2023 and (ii) $ 35.9 million outstanding principal amount of a mortgage loan collateralized by multifamily properties which was designated as non-performing and, subsequent to December 31, 2023, all past due accrued interest was collected.
Non-performing Status
−Removed: The following table presents the amortized cost basis of the loans on nonaccrual status as of December 31, 2022 and December 31, 2021 (dollars in thousands):
+Added: The following table presents the amortized cost basis of our non-performing loans as of December 31, 2023 and 2022 (dollars in thousands):
December 31, 2023 December 31, 2022
2 unchanged sentences
Removal of non-performing loan amortized cost 157,841 —
−Removed: Non-performing loan amortized cost at end of period $ 117,379 $ 57,075
−Removed: As of December 31, 2022, the Company had two loans with a total amortized cost basis of $ 117.4 million designated as non-performing status.
−Removed: One loan is for a hotel property located in New York, NY, which was placed on non-accrual status in 2019 and had an amortized cost basis of $ 57.1 million as of December 31, 2022.
−Removed: No specific allowance for credit losses has been recorded on the loan.
−Removed: The Company did no t recognize any interest income on the non-accrual loan during the year ended December 31, 2022.
−Removed: The second loan relates to a commercial mortgage loan with a fully funded outstanding principal balance of $ 63.6 million collateralized by a portfolio of retail properties in various locations throughout the United States.
−Removed: The loan has been assigned a risk rating of “5” and concurrently, the Company elected to apply a practical expedient for collateral dependent assets in which the allowance for credit losses is calculated as the difference between the estimated fair value of the underlying collateral, less estimated cost to sell, and the amortized cost basis of the individual loan.
−Removed: The loan was evaluated in accordance with ASC 310 - Receivables and was determined to be a TDR.
−Removed: As of December 31, 2022, the Company has recorded a specific allowance for credit losses of $ 14.2 million on this loan.
−Removed: Further, the Company has designated the loan as non-performing and placed the loan on cost recovery status by ceasing the recognition of interest income.
−Removed: Any contractual amounts received are accounted for under the cost-recovery method, until the loan qualifies for return to accrual status.
−Removed: As of December 31, 2022, the Company has received $ 8.0 million in cost recovery proceeds, which reduced the amortized cost of the loan.
−Removed: As of December 31, 2021, the Company had one loan, the hotel property in New York, NY, with a carrying value of $ 57.1 million, designated as non-performing, which had no specific allowance for credit losses.
+Added: Non-performing loan amortized cost end of period (1)
+Added: $ 78,185 $ 117,379
+Added: ________________________
+Added: (1) As of December 31, 2023 and 2022, the Company had two and two loans, respectively, designated as non-performing.
+Added: No specific allowances for credit losses were determined for the 2 loans on non-performing status as of December 31, 2023.
+Added: As of December 31, 2023, the two designated non-performing loans were both collateralized by multifamily properties.
+Added: Loan Credit Characteristics, Quality and Vintage
+Added: As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans.
+Added: The loans are scored on a scale of 1 to 5 as described in Note 2 - Summary of Significant Accounting Policies.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: Credit Characteristics
−Removed: As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans.
−Removed: The loans are scored on a scale of 1 to 5 as follows:
−Removed: Investment Rating
−Removed: Summary Description
−Removed: 1 Very Low Risk - Investment exceeding fundamental performance expectations and/or capital gain expected.
−Removed: Trends and risk factors since time of investment are favorable.
−Removed: 2 Low Risk - Performing consistent with expectations and a full return of principal and interest expected.
−Removed: Trends and risk factors are neutral to favorable.
−Removed: 3 Average Risk - Performing investments requiring closer monitoring.
−Removed: Trends and risk factors show some deterioration.
−Removed: 4 High Risk/Defaulted/Potential For Loss - Underperforming investment with the potential of some interest loss but still expecting a positive return on investment.
−Removed: Trends and risk factors are negative.
−Removed: 5 Impaired/Loss Likely - Underperforming investment with expected loss of interest and some principal.
−Removed: All commercial mortgage loans, excluding loans classified as commercial mortgage loans, held for sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2 .
−Removed: As of December 31, 2022 and 2021, the weighted average risk ratings of loans were 2.2 and 2.1 , respectively.
−Removed: The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment, (dollars in thousands):
−Removed: December 31, 2022 December 31, 2021
−Removed: Risk Rating Number of Loans Par Value Risk Rating Number of Loans Par Value
−Removed: 1 — $ — 1 — $ —
+Added: Commercial mortgage loans, held for investment in the consolidated balance sheets, are assigned an initial risk rating of 2 .
+Added: As of December 31, 2023 and 2022, the weighted average risk rating of loans was 2.3 and 2.2 , respectively.
+Added: The following tables present the par value and amortized cost of our commercial mortgage loans, held for investment as of December 31, 2023 and 2022, by the Company’s internal risk rating and year of origination (dollars in thousands):
+Added: December 31, 2023
+Added: Amortized Cost by Year of Origination
+Added: Risk Rating Number of Loans Total Par Value 2023 2022 2021 2020 2019 Prior Total Amortized Cost % of Portfolio
1 — $ — $ — $ — $ — $ — $ — $ — $ — — %
3 unchanged sentences
5 — — — — — — — — — — %
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Total 144 $ 5,045,036 $ 696,607 $ 1,671,346 $ 2,280,104 $ 180,206 $ 116,583 $ 92,096 $ 5,036,942 100.0 %
+Added: Allowance for credit losses ( 47,175 )
+Added: Total carrying value, net $ 4,989,767
December 31, 2022
−Removed: For the years ended December 31, 2022 and December 31, 2021, the activity in the Company's commercial mortgage loans, held for investment portfolio, net of provision for credit losses, was as follows (dollars in thousands):
−Removed: Year Ended December 31,
−Removed: Amortized cost, Beginning of Year $ 4,226,888 $ 2,714,734
−Removed: Acquisitions and originations 2,247,613 2,897,002
−Removed: Principal repayments ( 1,109,769 ) ( 1,286,598 )
−Removed: Discount accretion/premium amortization 12,614 7,038
−Removed: Loans transferred from/(to) commercial real estate loans, held for sale ( 9,296 ) ( 52,615 )
−Removed: Net fees capitalized into carrying value of loans ( 13,775 ) ( 15,150 )
−Removed: Transfer to real estate owned ( 80,460 ) ' (1)
−Removed: Cost recovery ( 4,039 ) —
−Removed: Amortized cost, End of Year $ 5,269,776 $ 4,226,888
−Removed: Allowance for credit losses, Beginning of Year $ ( 15,827 ) $ ( 20,886 )
−Removed: General (provision)/benefit for credit losses ( 10,797 ) 4,770
−Removed: Specific (provision)/benefit for credit losses ( 25,281 ) —
−Removed: Write offs from specific allowance for credit losses 11,057 ' (1)
−Removed: Write offs from general allowance for credit losses — 289
−Removed: Allowance for credit losses, End of Year $ ( 40,848 ) $ ( 15,827 )
−Removed: Balance at End of Year $ 5,228,928 $ 4,211,061
+Added: Amortized Cost by Year of Origination
+Added: Risk Rating Number of Loans Total Par Value 2022 2021 2020 2019 2018 Prior Total Amortized Cost % of Portfolio
1 — $ — $ — $ — $ — $ — $ — $ — $ — — %
−Removed: (1) See Note 5 - Real Estate Owned for details.
+Added: 2 141 4,783,568 1,778,691 2,483,120 315,269 115,673 75,467 — 4,768,220 90.6 %
+Added: 3 15 281,071 — 167,707 36,655 54,631 — 21,792 280,785 5.3 %
+Added: 4 4 160,695 32,305 — 36,356 — 34,731 57,075 160,467 3.0 %
+Added: 5 1 63,640 60,304 — — — — — 60,304 1.1 %
+Added: Total 161 $ 5,288,974 $ 1,871,300 $ 2,650,827 $ 388,280 $ 170,304 $ 110,198 $ 78,867 $ 5,269,776 100.0 %
+Added: Allowance for credit losses ( 40,848 )
+Added: Total carrying value, net $ 5,228,928
+Added: Commercial Mortgage Loans, Held for Sale, Measured at Fair Value
+Added: As of December 31, 2023 the Company did no t hold any commercial mortgage loans, held for sale.
+Added: As of December 31, 2022, the contractual principal balance outstanding of commercial mortgage loans, held for sale, measured at fair value was $ 15.6 million which was comprised of two loans.
+Added: As of December 31, 2022, none of the Company's commercial mortgage loans, held for sale, measured at fair value were in default or greater than ninety days past due.
+Added: The following tables represent the composition by loan collateral type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):
+Added: December 31, 2023 December 31, 2022
+Added: Loan Collateral Type Par Value Percentage Par Value Percentage
+Added: Retail — — % $ 12,000 76.8 %
+Added: Office — — % 3,625 23.2 %
+Added: Total $ — — % $ 15,625 100.0 %
+Added: December 31, 2023 December 31, 2022
+Added: Loan Region Par Value Percentage Par Value Percentage
+Added: Southeast $ — — % $ 15,625 100.0 %
FRANKLIN BSP REALTY TRUST, INC.
3 unchanged sentences
Real Estate Securities Classified As Trading
−Removed: The following is a summary of the Company's RMBS classified by collateral type and interest rate characteristics as of December 31, 2022 (dollars in thousands):
+Added: As of December 31, 2023, the Company did no t hold any real estate securities classified as trading.
+Added: The following is a summary of the Company's ARMs classified by collateral type and interest rate characteristics as of December 31, 2022 (dollars in thousands):
Carrying Amount Average Yield (1)
2 unchanged sentences
Fannie Mae/Freddie Mac ARMs $ 235,728 2.42 %
−Removed: December 31, 2021
−Removed: Agency Securities:
−Removed: Fannie Mae/Freddie Mac ARMs $ 4,246,803 2.23 %
−Removed: Ginnie Mae ARMs 320,068 2.72 %
________________________
−Removed: ________________________
(1) Average yield is presented for the year then ended, and is based on the cash component of interest income expressed as a percentage on average cost basis (the “cash yield”).
−Removed: The maturity of ARM Agency Securities is directly affected by prepayments of principal on the underlying mortgage loans.
−Removed: Consequently, actual maturities may be significantly shorter than the portfolio’s weighted average contractual maturity of 182 months.
−Removed: The Company's ARM Agency Securities are backed by residential mortgage loans that have coupon interest rates that adjust at least annually to more current interest rates or begin doing so after an initial fixed-rate period.
−Removed: After the initial fixed-rate period, if applicable, mortgage loans underlying ARM securities typically either (i) adjust annually based on specified margins over the one-year LIBOR or the one-year Constant Maturity U.S.
−Removed: Treasury Note Rate (“CMT”), (ii) adjust semiannually based on specified margins over six-month LIBOR or the six-month Secured Overnight Financing Rate (“SOFR”), or (iii) adjust monthly based on specified margins over indices such as one-month LIBOR, the Eleventh District Federal Reserve Bank Cost of Funds Index, or over a rolling twelve month average of the one-year CMT index, usually subject to periodic and lifetime limits, or caps, on the amount of such adjustments during any single interest rate adjustment period and over the contractual term of the underlying loans.
−Removed: For the year ended December 31, 2022 and 2021, the Company sold trading securities totaling $ 3.8 billion and $ 1.9 billion.
−Removed: For the year ended December 31, 2022 and 2021, the Company recognized trading losses on ARM Agency Securities of $ 119.2 million and $ 34.8 million, respectively, due to principal paydowns, changes in market values, and sales of these securities, and were included in Trading (gain)/loss in the Company's consolidated statements of operations.
−Removed: The Company did not own any trading securities during 2020.
+Added: During the year ended December 31, 2023, the carrying amount of the Company's ARMs portfolio declined due to (i) $ 17.6 million of principal paydowns, (ii) $ 218.2 million of sales, and (iii) $ 0.6 million of net trading losses, related to principal paydowns, changes in market values and sales of these securities.
+Added: During the year ended December 31, 2022, the carrying amount of the Company's ARMs portfolio declined due to (i) $ 480.2 million of principal paydowns, (ii) $ 3.8 billion of sales, and (iii) $ 119.2 million of net trading losses related to principal paydowns, changes in market values and sales of these securities.
+Added: The net trading gains/losses on ARM Agency Securities were included in Trading gain/(loss) in the consolidated statements of operations.
Real Estate Securities Classified As Available For Sale
−Removed: The following is a summary of the Company's real estate securities, available for sale, measured at fair value as of December 31, 2022 (dollars in thousands):
+Added: The following is a summary of the Company's real estate securities, available for sale, measured at fair value as of December 31, 2023 and 2022 (dollars in thousands):
+Added: CRE CLO Bonds
+Added: Number of Bonds Benchmark Interest Rate Weighted Average Interest Rate Weighted Average Contractual Maturity (years) Par Value Fair Value
+Added: December 31, 2023 7 1 Month SOFR 8.12 % 12.2 $ 243,340 $ 242,569
+Added: December 31, 2022 7 1 Month SOFR 7.55 % 15.4 $ 221,000 $ 221,025
+Added: The Company classified its CRE CLO bonds as available for sale and reports them at fair value in the consolidated balance sheets with changes in fair value recorded in Accumulated other comprehensive income/(loss) in the consolidated balance sheets.
+Added: The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CRE CLO bonds by investment type as of December 31, 2023 and 2022 (dollars in thousands):
+Added: Amortized Cost Credit Loss Allowance Unrealized Gain Unrealized (Loss) Fair Value
December 31, 2023 $ 243,272 $ — 74 ( 777 ) $ 242,569
−Removed: Type Interest Rate Maturity Par Value Fair Value
−Removed: CRE CLO bond 1 7.1 % 8/19/2035 $ 40,000 $ 39,795
−Removed: CRE CLO bond 2 7.6 % 8/19/2035 25,000 25,010
−Removed: CRE CLO bond 3 8.4 % 8/19/2035 10,000 10,056
−Removed: CRE CLO bond 4 7.4 % 10/25/2039 36,700 36,990
−Removed: CRE CLO bond 5 8.0 % 10/25/2039 35,000 35,298
−Removed: CRE CLO bond 6 8.6 % 10/25/2039 14,300 14,221
−Removed: CRE CLO bond 7 7.3 % 10/19/2039 60,000 59,655
−Removed: $ 221,000 $ 221,025
+Added: December 31, 2022 $ 220,635 $ — $ 833 ( 443 ) $ 221,025
+Added: As of December 31, 2023, the Company held seven CRE CLO bonds with an amortized cost basis of $ 243.3 million and a net unrealized loss of $ 0.7 million, five of which were held in a gross unrealized loss position of $ 0.8 million.
+Added: As of December 31, 2022, the Company held seven CRE CLO bonds with an amortized cost basis of $ 220.6 million and a net unrealized gain of $ 0.39 million, three of which were held in a gross unrealized loss position of $ 0.44 million.
+Added: As of December 31, 2023 and 2022, zero positions had an unrealized loss for a period greater than twelve months.
+Added: As of December 31, 2023 and 2022, the fair value of the Company's CRE CLO bonds that were in an unrealized loss position for less than twelve months, and for which an allowance for credit loss has not been recorded was $ 184.2 million and $ 113.7 million, respectively.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: The Company classified its CRE CLO bonds as available for sale and reported them at fair value in the consolidated balance sheets with changes in fair value recorded in accumulated other comprehensive income/(loss) as of December 31, 2022.
−Removed: The weighted average contractual maturity for CRE CLO investments included within the CRE CLO bond portfolio as of December 31, 2022 was 15.4 years.
−Removed: As of December 31, 2021, the Company did not hold any Real Estate Securities classified as Available for Sale.
−Removed: The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CRE CLO bonds by investment type as of December 31, 2022 (dollars in thousands):
−Removed: Amortized Cost Credit Loss Allowance Unrealized Gain Unrealized (Loss) Fair Value
−Removed: December 31, 2022
−Removed: CLO $ 220,635 $ — $ 833 ( 443 ) $ 221,025
−Removed: As of December 31, 2022, the Company held seven CRE CLO bonds with an amortized cost basis of $ 220.6 million and a net unrealized gain of $ 0.39 million, three of which were held in an unrealized loss position of $ 0.4 million.
−Removed: As of December 31, 2022, zero positions had an unrealized loss for a period greater than twelve months.
−Removed: As of December 31, 2022, the fair value of the Company's CRE CLO bonds that were in an unrealized loss position for less than twelve months, and for which an allowance for credit loss has not been recorded was $ 113.7 million.
Note 5 - Real Estate Owned
Real Estate Owned, Held for Investment
−Removed: The following table summarizes the Company's real estate owned, held for investment assets as of December 31, 2022 (dollars in thousands):
+Added: The following table summarizes the Company's real estate owned, held for investment assets as of December 31, 2023 and 2022 (dollars in thousands):
As of December 31, 2023
1 unchanged sentence
Property Type Primary Location(s) Land Building and Improvements Furniture, Fixtures and Equipment Accumulated Depreciation Real Estate Owned, net
−Removed: September 2021 Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 2,877 ) $ 87,746
−Removed: Retail Various 9,105 31,036 — ( 115 ) 40,026
+Added: September 2021 (1)
+Added: Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 5,179 ) $ 85,444
+Added: August 2023 (2)
+Added: Office Portland, OR 16,479 2,065 — ( 13 ) 18,531
+Added: October 2023 (3)
+Added: Multifamily Lubbock, TX 1,618 10,076 185 ( 24 ) 11,855
$ 21,533 $ 96,400 $ 3,113 $ ( 5,216 ) $ 115,830
________________________
−Removed: (1) Refer to Note 2 for the useful life of the above assets.
−Removed: (2) As discussed below, ten retail properties associated with a loan secured by the Walgreen's Portfolio (defined below) were foreclosed upon during the quarter ended December 31, 2022.
−Removed: The properties are located throughout the country.
−Removed: The following table summarizes the Company's real estate owned assets as of December 31, 2021 (dollars in thousands):
+Added: See notes below.
As of December 31, 2022
1 unchanged sentence
Property Type Primary Location(s) Land Building and Improvements Furniture, Fixtures and Equipment Accumulated Depreciation Real Estate Owned, net
−Removed: September 2021 Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 575 ) $ 90,048
+Added: September 2021 (1)
+Added: Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 2,877 ) $ 87,746
+Added: Retail Various 9,105 31,036 — ( 115 ) 40,026
$ 12,541 $ 115,295 $ 2,928 $ ( 2,992 ) $ 127,772
−Removed: (1) Refer to Note 2 for the useful life of the above asset.
+Added: ________________________
+Added: (1 ) In the third quarter of 2021, the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the “Jeffersonville JV”) to acquire a triple net lease property in Jeffersonville, GA.
+Added: Refer to Note 11 - Related Party Transactions and Arrangements for details.
+Added: (2) In August 2023, the Company obtained, through deed-in-lieu of foreclosure, an office property located in Portland, OR in lieu of repayment of the associated loan.
+Added: (3) In October 2023, the Company obtained, through deed-in-lieu of foreclosure, a multifamily property located in Lubbock, TX in lieu of repayment of the associated loan.
+Added: (4) As of December 31, 2023 and 2022, the Company foreclosed upon 24 and ten retail properties respectively, located throughout the United States of America.
+Added: During the year ended December 31, 2023, the Company classified the entire portfolio consisting of the 24 retail properties as Real estate owned, held for sale in the consolidated balance sheets as discussed in the paragraphs below.
+Added: Refer to Note 11 - Related Party Transactions and Arrangements for details.
Depreciation expense for the years ended December 31, 2023 and 2022 totaled $ 3.3 million and $ 2.4 million, respectively.
−Removed: In August 2021 the Company and an investment fund managed by the Advisor entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $ 139.5 million triple net lease property in Jeffersonville, GA.
−Removed: The Company has a 79 % interest in the Jeffersonville JV, while the affiliated fund has a 21 % interest.
−Removed: The Company invested a total of $ 109.8 million, made up of $ 88.7 million in debt and $ 21.1 million in equity, representing 79 % of the ownership interest in the Jeffersonville JV.
−Removed: The affiliated fund made up the remaining $ 29.8 million composed of a $ 24.0 million mortgage note payable and $ 5.7 million in non-controlling interest.
−Removed: The Company has control of Jeffersonville JV with 79 % ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet.
−Removed: The Company's $ 88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).
+Added: Real Estate Owned, Held for Sale
+Added: The following table summarizes the Company's Real estate owned, held for sale assets and liabilities as of December 31, 2023 and 2022 (dollars in thousands):
+Added: As of December 31, 2023
+Added: Property Type Primary Location(s) Assets, Net Liabilities, Net
+Added: Retail Various $ 103,657 $ 12,297
+Added: As of December 31, 2022
+Added: Property Type Primary Location(s) Assets, Net Liabilities, Net
+Added: Multifamily New Rochelle, NY $ 23,520 $ —
+Added: Louis, MO 12,977 —
+Added: During the year ended December 31, 2022, the Company entered into agreements with two borrowers to voluntarily transfer their assets in exchange for the removal of the borrowers' obligation to repay all of the associated commercial mortgage
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: As disclosed in Note 3 - Commercial Mortgage Loans in April 2022, the Company fully funded a $ 113.2 million first mortgage loan, collateralized by 24 retail properties with various locations throughout the United States (the "Walgreens Portfolio").
−Removed: During the quarter ended December 31, 2022, through foreclosures, the Company acquired ten of the 24 properties and as a result recorded at fair value $ 40.1 million of real estate owned, held for investment.
−Removed: These properties are held through a joint venture entity, BSPRT Walgreens Portfolio, LLC (the "Walgreens JV"), formed by the Company and an affiliate of the Company.
−Removed: The Company has 75.618 % ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242 % interest.
−Removed: The Company has control of the Walgreens Portfolio as the majority owner in the joint venture and, therefore, consolidates the Walgreens Portfolio on its consolidated balance sheet.
−Removed: As of December 31, 2022, the Company recorded $ 10.5 million in non-controlling interest related to the Walgreens Portfolio on its consolidated balance sheets as of December 31, 2022.
−Removed: Subsequent to year ended December 31, 2022, the Walgreens JV obtained legal ownership of four additional properties.
−Removed: We are engaged in ongoing litigation relating to a loan secured by the retail properties located throughout the United States, as more fully described in "Part I, Item 3.
−Removed: Legal Proceedings".
−Removed: Real Estate Owned, Held for Sale
−Removed: During the year ended December 31, 2022, the Company entered into agreements with two borrowers to voluntarily transfer their assets in exchange for the removal of the borrowers' obligation to repay all of the associated commercial mortgage loans receivable with an amortized cost of $ 36.9 million, in aggregate, provided by the Company.
+Added: loans receivable with an amortized cost of $ 36.9 million, in aggregate, provided by the Company.
One of the voluntary transfers collateralized by a multifamily portfolio was the result of the borrower experiencing financial difficulty and the recorded investment in the receivable was more than the fair value, less estimated costs to sell, for the collateral collected.
2 unchanged sentences
The voluntary transfers resulted in a total realized loss of $ 0.4 million, in aggregate, and was recognized in Realized (gain)/loss on sale of commercial mortgage loan, held for sale in the consolidated statements of operations for the year ended December 31, 2022.
−Removed: As of December 31, 2022, the Company has designated the properties included within the real estate owned business segment as held for sale in accordance with ASC 360.
−Removed: The properties are currently being marketed and sales are probable to occur within one year.
+Added: As of December 31, 2022, the Company designated the properties included within the real estate owned business segment as held for sale in accordance with ASC 360.
As of December 31, 2022, the Company recognized an unrealized loss of $ 0.7 million on real estate owned, held for sale assets resulting in a carrying value of $ 36.5 million, in aggregate.
−Removed: There was no real estate owned, held for sale on the Company's consolidated balance sheets as of December 31, 2021.
+Added: During the year ended December 31, 2023, the Company sold the two properties for an aggregate amount of $ 34.8 million resulting in a total loss of $ 3.3 million included in Gain/(loss) on other real estate investments in the consolidated statements of operations.
+Added: In November 2022, the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, BSPRT Walgreens Portfolio, LLC (the "Walgreens JV") to assume the retail Walgreens Portfolio consisting of 24 retail properties with various locations throughout the United States.
+Added: Refer to Note 11 - Related Party Transactions and Arrangements.
+Added: As of December 31, 2022, through foreclosures, the Company had acquired ten of the 24 properties, and subsequently acquired the remaining 14 properties during the year ended December 31, 2023.
+Added: During the third quarter of 2023, the Company classified the real estate owned assets and liabilities as held for sale in accordance with ASC 360 - Property, Plant, and Equipment and recognized an impairment loss of $ 4.0 million included in Gain/(loss) on other real estate investments in the consolidated statements of operations.
+Added: Refer to Note 12 - Fair Value of Financial Instruments for discussion on the properties fair value measurement.
+Added: In addition, the Company sold one of the retail properties in the portfolio in September 2023, resulting in a loss of $ 22 thousand included in Gain/(loss) on other real estate investments in the consolidated statements of operations.
+Added: As of December 31, 2023, the Company's real estate owned held for sale assets consisted of the remaining 23 retail properties in the Walgreens Portfolio.
FRANKLIN BSP REALTY TRUST, INC.
2 unchanged sentences
Note 6 - Leases
−Removed: Intangible Lease Asset
−Removed: The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2022 and 2021 (dollars in thousands):
+Added: Intangible Lease Assets and Liabilities, Held for Investment
+Added: The following table summarizes the Company's identified intangible lease assets (primarily in-place leases) and liabilities (primarily below-market leases) recognized in the consolidated balance sheets as of December 31, 2023 and 2022 (dollars in thousands):
Identified intangible assets:
8 unchanged sentences
Rental Income
−Removed: On September 17, 2021, the Company purchased an industrial facility that is subject to an existing triple net lease.
−Removed: The minimum rental amount due under the lease is subject to annual increases of 2.0 %.
−Removed: The initial term of the lease expires in 2038 and contains renewal options for four consecutive five-year terms.
−Removed: The remaining lease term is 15.8 years.
−Removed: Rental income for this operating lease for the year ended December 31, 2022 and 2021 totaled $ 9.2 million and $ 2.6 million.
+Added: Rental income for the years ended December 31, 2023 and 2022 totaled $ 17.9 million and $ 9.6 million, respectively.
Rental income is included in Revenue from real estate owned in the consolidated statements of operations.
−Removed: During the quarter ended December 31, 2022, the Company acquired ten retail properties through foreclosures that were each subject to triple net leases.
−Removed: The initial terms of the leases expire in March 2034 and contain renewal options for eleven consecutive five-year terms.
−Removed: The remaining lease term is 11.3 years.
−Removed: Rental income for these operating leases for the year ended December 31, 2022 totaled $ 0.4 million.
−Removed: The following table summarizes the Company's schedule of future minimum rents to be received under the lease (dollars in thousands):
+Added: The following table summarizes the Company's schedule of future minimum rents on its real estate owned, held for investment properties, to be received under the lease (dollars in thousands):
Future Minimum Rents December 31, 2023
−Removed: 2023 $ 10,494
2029 and beyond 97,388
−Removed: Total minimum rent $ 175,481
+Added: Total future minimum rent $ 140,511
Amortization Expense
−Removed: Intangible lease assets are amortized using the straight-line method over the contractual life of the lease, of a period up to 20 years.
−Removed: The weighted average life of the intangible asset as of December 31, 2022 is approximately 15.1 years.
+Added: Intangible lease assets are amortized using the straight-line method over the remaining term of the lease.
+Added: The weighted average life of the intangible assets as of December 31, 2023 is approximately 14.8 years.
Amortization expense for the years ended December 31, 2023 and 2022 totaled $ 3.8 million and $ 3.0 million, respectively.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental revenues of $ 0.1 million for the year ended December 31, 2022.
−Removed: The following table summarizes the Company's expected acquired below (above) market leases, net amortization over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):
−Removed: Amortization Expense - Acquired below (above) market leases, net December 31, 2022
−Removed: 2023 $ ( 576 )
−Removed: The following table summarizes the Company's expected other identified intangible assets, net amortization over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):
+Added: Amortization of acquired below (above) market leases, net of acquired above-market leases, resulted in a decrease to rental revenues of $ 0.9 million for the year ended December 31, 2023 and an increase to rental revenues of $ 0.1 million for the year ended December 31, 2022, respectively.
+Added: The following table summarizes the Company's expected amortization of other identified intangible assets, net over the next five years, exclusive of intangible assets that are held for sale, assuming no further acquisitions or dispositions (dollars in thousands):
Amortization Expense - Other identified intangible assets December 31, 2023
−Removed: Note 7 - Debt
−Removed: Repurchase Agreements - Commercial Mortgage Loans
−Removed: The Company has entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, collectively, the "Repo Facilities").
−Removed: The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65 % to 75 % of the principal amount of the mortgage loan being pledged.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: The details of the Company's Repo Facilities at December 31, 2022 and 2021 are as follows (dollars in thousands):
+Added: Note 7 - Debt
+Added: Below is a summary of the Company's Repurchase facilities and revolving credit facilities - commercial mortgage loans ("Repo and Revolving Credit Facilities"), Mortgage note payable, Other financing and Unsecured debt as of December 31, 2023 and 2022 (dollars in thousands):
As of December 31, 2023
−Removed: Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1)
+Added: Repo and revolving credit facilities - commercial mortgage loans (2) :
+Added: Capacity Amount Outstanding Interest Expense (1)
Ending Weighted Average Interest Rate Term Maturity
1 unchanged sentence
$ 500,000 $ 108,574 $ 22,401 7.90 % 07/2026
−Removed: CS Repo Facility (3)
+Added: Atlas Repo Facility (4)
600,000 52,864 6,603 7.68 % 03/2024
5 unchanged sentences
500,000 66,539 11,616 7.22 % 03/2025
+Added: Churchill Repo Facility (8)
+Added: 225,000 — 30 N/A N/A
Total $ 2,475,000 $ 299,707 $ 51,170 7.70 %
+Added: Mortgage note payable:
+Added: Debt related to our REO (9)
+Added: N/A $ 23,998 $ 1,982 8.48 % 10/2024
+Added: Other Financing
+Added: Other Financings (10)
+Added: N/A $ 36,534 $ 5,330 7.36 % Various (9)
+Added: Unsecured Debt (11)
+Added: Junior subordinated notes maturing in:
+Added: October 2035 (12)
+Added: N/A $ 17,047 $ 1,940 9.15 % 10/2035
+Added: December 2035 N/A $ 39,550 $ 3,519 8.95 % 12/2035
+Added: September 2036 N/A $ 24,698 $ 2,199 8.95 % 09/2036
+Added: Total/Weighted average N/A $ 81,295 $ 7,658 8.99 %
________________________
−Removed: (1) For the year ended December 31, 2022.
−Removed: Includes amortization of deferred financing costs.
−Removed: (2) With one-year extension option available at the Company's discretion.
−Removed: On July 7, 2022, the committed financing was increased from $ 400 million to $ 500 million.
−Removed: Additionally, on December 12, 2022, the Company extended the maturity date to October 6, 2024.
−Removed: (3) On July 12, 2022, the committed financing was increased from $ 300 million to $ 600 million.
−Removed: Additionally, on November 1, 2022 the maturity date was extended to October 31, 2023.
−Removed: (4) On May 12, 2022, the committed financing amount was increased from $ 450 million to $ 500 million.
−Removed: There are three more one-year extension options available at the Company's discretion.
−Removed: (5) The Company may increase the total commitment amount by an amount between $ 100 million and $ 150 million for three month intervals, on an unlimited basis prior to maturity.
−Removed: (6) There are two one-year extension options available at the Company's discretion.
+Added: See notes below.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
As of December 31, 2022
−Removed: Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1)
+Added: Repo and revolving credit facilities - commercial mortgage loans (2) :
+Added: Capacity Amount Outstanding Interest Expense (1)
Ending Weighted Average Interest Rate Term Maturity
JPM Repo Facility (3)
−Removed: CS Repo Facility 300,000 137,364 3,446 2.43 % 9/30/2022
+Added: $ 500,000 $ 275,423 $ 11,773 7.42 % 10/2024
+Added: Atlas Repo Facility (4)
+Added: 600,000 168,046 8,676 7.12 % 10/2023
WF Repo Facility (5)
+Added: 500,000 79,807 7,492 7.11 % 11/2023
Barclays Revolver Facility (6)
+Added: 250,000 — 1,267 N/A 09/2023
Barclays Repo Facility (7)
−Removed: Total $ 1,900,000 $ 1,019,600 $ 16,747
500,000 157,583 8,997 6.75 % 03/2025
−Removed: (1) For the year ended December 31, 2021.
−Removed: Includes amortization of deferred financing costs.
−Removed: The Repo Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral.
−Removed: As of December 31, 2022 and 2021, the Company is in compliance with all debt covenants.
−Removed: Other financing and loan participation - Commercial Mortgage Loans
−Removed: On March 23, 2020, the Company transferred $ 15.2 million of its interest in a term loan to a regional bank via a participation agreement.
−Removed: Since inception, the Company's outstanding loan increased resultant of future fundings, leading to an increase in amount outstanding via the participation agreement.
−Removed: The Company incurred $ 1.7 million and $ 0.9 million of interest expense on the regional bank term loan for the year ended December 31, 2022 and 2021, respectively.
−Removed: As of December 31, 2022 and 2021 the outstanding participation balance was $ 59.2 million and $ 37.9 million, respectively.
−Removed: The loan accrued interest at an annual rate of one-month LIBOR + 2.20 % and matures on June 9, 2023.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: On February 10, 2022, the Company transferred $ 38.0 million of its interest in a term loan to a regional bank via a participation agreement.
−Removed: Since inception, the Company's outstanding loan could increase as a result of future fundings, which could lead to an increase in amount outstanding via the participation agreement.
−Removed: The Company incurred $ 0.5 million of interest expense on the regional bank term loan for the year ended December 31, 2022.
−Removed: As of December 31, 2022, the outstanding participation balance was $ 17.1 million.
−Removed: The loan accrued interest at an annual rate of one-month SOFR + 4.01 % and matures on May 1, 2025.
+Added: Total $ 2,350,000 $ 680,859 $ 38,205 7.16 %
Mortgage note payable:
−Removed: On September 17, 2021, the Company, in connection with the consolidated joint venture (as discussed in Note 5 - Real Estate Owned), originated a $ 112.7 million mortgage note payable, of which $ 88.7 million is eliminated in our consolidated financial statements (see Note 5 - Real Estate Owned).
−Removed: As of December 31, 2022 and 2021, t he remaining outstanding mortgage note payable of $ 24.0 million is included in the consolidated balance sheet.
−Removed: As of December 31, 2022 , the loan accrued interest at an annual rate of Libor + 3.0 %, which is eliminated in our consolidated financial statements, and matures on October 9, 2024.
+Added: Debt related to our REO (9)
+Added: N/A $ 23,998 $ 1,185 7.32 % 10/2024
+Added: Other Financing
+Added: Other Financings (10)
+Added: N/A $ 76,301 $ 3,069 6.17 % Various
Unsecured Debt (11)
−Removed: As of December 31, 2022, the Company had outstanding 30-year junior subordinated notes issued in 2005 and 2006 and maturing in 2035 and 2036, respectively, with a total face amount of $ 100.0 million.
−Removed: Note balances net of deferred issuance costs, and related weighted average interest rates as of the indicated dates (calculated including issuance cost amortization and adjusted for the effects of related derivatives held as cash flow hedges prior to termination) were as follows (dollars in thousands):
−Removed: December 31, 2022 December 31, 2021
−Removed: Outstanding Weighted Average Borrowings
−Removed: Outstanding Weighted Average
Junior subordinated notes maturing in:
−Removed: October 2035 ($ 35,000 face amount)
−Removed: $ 34,508 8.25 % $ 34,470 7.86 %
−Removed: December 2035 ($ 40,000 face amount)
−Removed: 39,513 8.39 % 39,474 7.63 %
−Removed: September 2036 ($ 25,000 face amount)
−Removed: 24,674 8.39 % 24,650 7.67 %
+Added: October 2035 N/A $ 34,508 $ 2,046 8.25 % 10/2035
+Added: December 2035 N/A 39,513 2,202 8.39 % 12/2035
+Added: September 2036 N/A 24,674 1,375 8.39 % 09/2036
+Added: Total/Weighted average N/A $ 98,695 $ 5,623 8.34 %
________________________
+Added: (1) Represents year to date expense and includes amortization of deferred financing costs.
+Added: (2) The Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 60 % to 75 % of the principal amount of the mortgage loan being pledged.
+Added: These loans are all floating rate at the Secured Overnight Financing Rate ("SOFR") plus an applicable spread.
+Added: Additionally, the Repo and Revolving Credit Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral.
+Added: As of December 31, 2023 and December 31, 2022, the Company is in compliance with all debt covenants.
+Added: (3) On July 27, 2023, the Company extended the maturity date from October 6, 2023 to July 26, 2026 with a one-year extension option.
+Added: (4) During the first quarter of 2023, this repurchase facility was transferred from Credit Suisse to Atlas SP partners.
+Added: On January 4, 2024, the Company extended the maturity date to January 5, 2026 with a one-year extension option.
+Added: Additionally, the committed financing was decreased from $ 600 million to $ 350 million.
+Added: (5) On October 25, 2023, the committed financing was decreased from $ 500 million to $ 400 million.
+Added: Additionally, the maturity date was extended to November 21, 2025.
+Added: There are two more one-year extension options.
+Added: (6) The Company may increase the total commitment amount by an amount between $ 100 million and $ 150 million for three month intervals, on an unlimited basis prior to maturity.
+Added: Additionally, on April 24, 2023, the Company extended the maturity date to September 20, 2024.
+Added: (7) There are two one-year extension options.
+Added: (8) On October 12, 2023, the Company entered into a master repurchase agreement ("MRA") with Churchill MRA Funding, with a maximum facility amount of $ 225 million.
+Added: (9) Relates to a mortgage note payable in Jeffersonville JV, a consolidated joint venture.
+Added: The loan has a principal amount of $ 112.7 million of which $ 88.7 million of the loan is owned by the Company and was eliminated in our consolidated financial statements (see Note 5 - Real Estate Owned).
+Added: (10) Comprised of three note-on-note financings via participation agreements.
+Added: From inception of the loan, the Company's outstanding loans could increase as a result of future fundings, leading to an increase in amount outstanding via the participation agreement.
+Added: The weighted average contractual maturity date of these loans is August 2025.
(11) The notes are currently redeemable, in whole or in part, without penalty, at the Company’s option.
−Removed: Interest paid on unsecured debt, including related derivative cash flows, totaled $ 5.7 million and $ 0.6 million for the twelve months ended December 31, 2022 and 2021, respectively.
−Removed: The Company entered into a $ 100.0 million lending and security agreement with Security Benefit Life Insurance Company ("SBL") in February 2020, which was amended in March and August 2020.
−Removed: The Company incurred $ 1.0 million and $ 2.0 million of interest expense on the lending agreement with SBL for the twelve months ended December 31, 2022 and 2021 respectively.
−Removed: In November 2022, the lending and security agreement with SBL was terminated by the Company.
−Removed: As of December 31, 2021 the outstanding balance was $ 50.0 million.
−Removed: Repurchase Agreements - Real Estate Securities
−Removed: The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future.
−Removed: The repurchase contracts on each security under an MRA generally mature in 30 - 90 days and terms are adjusted for current market rates as necessary.
+Added: Interest paid on unsecured debt, including related derivative cash flows, totaled $ 7.7 million for the year ended December 31, 2023, compared to $ 5.7 million for the year ended December 31, 2022, respectively.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
+Added: (12) During the year ended December 31, 2023, the Company had a realized a gain on extinguishment for debt in the amount of $ 4.4 million as a result of the repurchase of $ 17.5 million par value of the Company's unsecured debt during the first quarter of 2023 at a price equal to 75 % of par value.
+Added: Repurchase Agreements - Real Estate Securities
+Added: The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future.
+Added: The repurchase contracts on each security under an MRA generally mature in 30 - 90 days and terms are adjusted for current market rates as necessary.
Below is a summary of the Company's MRAs as of December 31, 2023 and 2022 (dollars in thousands):
−Removed: Weighted Average
−Removed: Counterparty Amount Outstanding Accrued Interest Collateral Pledged (1)
−Removed: Interest Rate Days to Maturity
As of December 31, 2023
+Added: Counterparty Amount Outstanding Interest Expense Collateral Pledged (1)
+Added: Weighted Average Interest Rate Weighted Average Days to Maturity
JP Morgan Securities LLC $ 113,111 $ 6,717 $ 127,602 6.29 % 15
+Added: Wells Fargo Securities, LLC 8,994 235 9,975 6.14 % 5
Barclays Capital Inc.
2 unchanged sentences
As of December 31, 2022
+Added: Counterparty Amount Outstanding Interest Expense Collateral Pledged (1)
+Added: Weighted Average Interest Rate Weighted Average Days to Maturity
JP Morgan Securities LLC $ 103,513 $ 1,281 $ 120,751 5.34 % 22
−Removed: Goldman Sachs International — 37 — N/A N/A
Barclays Capital Inc.
119,351 1,646 144,778 5.18 % 50
−Removed: Citigroup Global Markets, Inc.
−Removed: — 81 — N/A N/A
Total/Weighted Average $ 222,864 $ 2,927 $ 265,529 5.25 % 37
________________________
−Removed: (1) Includes $ 67.1 million and $ 43.2 million of CLO notes, held by the Company, which is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
−Removed: Repurchase Agreements - Real Estate Securities Classified As Trading
−Removed: The Company pledges its real estate securities classified as trading as collateral for repurchase agreements with commercial banks and other financial institutions.
−Removed: Repurchase arrangements entered into by the Company involve the sale and a simultaneous agreement to repurchase the transferred assets at a future date and are accounted for as financings.
−Removed: The Company maintains the beneficial interest in the specific securities pledged during the term of each repurchase arrangement and receives the related principal and interest payments.
−Removed: The terms and conditions of repurchase agreements are negotiated on a transaction-by-transaction basis when each such agreement is initiated or renewed.
−Removed: The amount borrowed is generally equal to the fair value of the securities pledged, as determined by the lending counterparty, less an agreed-upon discount, referred to as a “haircut.” Interest rates are generally fixed based on prevailing rates corresponding to the terms of the borrowings.
−Removed: Interest may be paid monthly or at the termination of an agreement at which time the Company may enter into a new agreement at prevailing haircuts and rates with the same lending counterparty or repay that counterparty and negotiate financing with a different lending counterparty.
−Removed: None of the Company’s lending counterparties are obligated to renew or otherwise enter into new agreements at the conclusion of existing agreements.
−Removed: In response to declines in fair value of pledged securities due to changes in market conditions or the publishing of monthly security pay-down factors, lending counterparties typically require the Company to post additional securities as collateral, pay down borrowings or fund cash margin accounts with the counterparties in order to re-establish the agreed-upon collateral requirements.
−Removed: These actions are referred to as margin calls.
−Removed: Conversely, in response to increases in fair value of pledged securities, the Company routinely margin calls its lending counterparties in order to have previously pledged collateral returned.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: Repurchase agreements (and related pledged collateral, including accrued interest receivable), classified by remaining maturities, and related weighted average borrowing rates as of the indicated dates were as follows (dollars in thousands):
−Removed: Outstanding Accrued
−Removed: Interest Collateral
−Removed: Pledged Weighted Average
+Added: (1) Includes $ 27.9 million and $ 67.1 million of CLO notes, held by the Company, which is eliminated in Real estate securities, available for sale, measured at fair value in the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
+Added: The Company did no t have any outstanding repurchase agreements collateralized by real estate securities classified as trading as of December 31, 2023.
+Added: Below is a summary of the Company's repurchase agreements collateralized by real estate securities classified as trading included in Repurchase agreements - real estate securities in the consolidated balance sheet as of December 31, 2022 (dollars in thousands):
December 31, 2022
−Removed: Repurchase arrangements secured by Agency securities with maturities of 30 days or less $ 172,144 $ 544 $ 180,400 4.25 %
+Added: Amount Outstanding Accrued
+Added: Interest Receivable Collateral Carrying Amount Weighted Average
+Added: Repurchase arrangements secured by trading securities with maturities of 30 days or less $ 172,144 $ 544 $ 180,400 4.25 %
Repurchase arrangements secured by Agency securities with maturities of 31 to 90 days 45,000 114 47,210 4.51 %
−Removed: $ 217,144 $ 658 $ 227,610 4.30 %
−Removed: December 31, 2021
−Removed: Repurchase arrangements secured by Agency securities with maturities of 30 days or less $ 4,144,473 $ 8,908 $ 4,327,020 0.13 %
−Removed: Average repurchase agreements outstanding were $ 1.0 billion and $ 4.0 billion during the year ended December 31, 2022 and 2021, respectively.
+Added: Total/Weighted Average $ 217,144 $ 658 $ 227,610 4.30 %
+Added: Average repurchase agreements outstanding were $ 1.0 billion during the year ended December 31, 2022.
Average repurchase agreements outstanding differed from respective year-end balances during the indicated periods primarily due to changes in portfolio levels and differences in the timing of portfolio acquisitions relative to portfolio runoff and asset sales.
Interest paid on repurchase agreements, including related derivative payments, totaled $ 4.6 million and $ 8.5 million during the twelve months ended December 31, 2023 and 2022, respectively.
−Removed: Collateralized Loan Obligation
−Removed: On May 13, 2022, the Company called all of the outstanding notes issued by BSPRT 2018-FL4 Issuer, Ltd., a wholly owned indirect subsidiary of the Company.
−Removed: The outstanding principal of the notes on the date of the call was $ 69.5 million.
−Removed: The Company recognized all the remaining unamortized deferred financing costs of $ 5.2 million recorded within the Interest expense line of the consolidated statements of operations, which was a non-cash charge.
−Removed: As of December 31, 2022 and 2021, the notes issued by BSPRT 2019-FL5 Issuer, Ltd.
−Removed: and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 25 and 48 mortgage assets having a principal balance of $ 378.8 million and $ 589.0 million, respectively, (the "2019-FL5 Mortgage Assets").
−Removed: The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer, Ltd.
−Removed: is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer, Ltd.
−Removed: As of December 31, 2022 and 2021 , the notes issued by BSPRT 2021-FL6 Issuer, Ltd.
−Removed: and BSPRT 2021-FL6 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company , are collateralized by interests in a pool of 58 and 44 mortgage assets having a principal balance of $ 691.1 million and $ 682.3 million, respectively, (the "2021-FL6 Mortgage Assets").
−Removed: The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd.
−Removed: is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.
−Removed: As of December 31, 2022 and 2021 , the notes issued by BSPRT 2021-FL7 Issuer, Ltd.
−Removed: and BSPRT 2021-FL7 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company , are collateralized by interests in a pool of 39 and 47 mortgage assets having a principal balance of $ 899.7 million and $ 871.4 million, respectively, (the "2021-FL7 Mortgage Assets").
−Removed: The sale of the 2021-FL7 Mortgage Assets to BSPRT 2021-FL7 Issuer, Ltd.
−Removed: is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL7 Issuer, Ltd.
−Removed: On February 15, 2022, BSPRT 2022-FL8 Issuer, Ltd.
−Removed: and BSPRT 2022-FL8 Co-Issuer, LLC, both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S.
−Removed: Bank National Association, as note administrator and trustee, which governs the issuance of approximately $ 1.1 billion principal balance secured floating rate notes, of which $ 960.0 million were purchased by third party investors and $ 132.0 million were purchased by a wholly owned subsidiary of the OP.
−Removed: In addition, concurrently with the issuance of the notes, BSPRT 2022-FL8 Issuer, Ltd.
−Removed: also issued 108,000 preferred shares, par value of $ 0.001 per share and with an aggregate liquidation preference and notional amount equal to $ 1,000 per share, which were not offered as part of closing the indenture.
−Removed: federal income tax purposes, BSPRT 2022-FL8 Issuer, Ltd.
−Removed: and BSPRT 2022-FL8 Co-Issuer, LLC are disregarded entities.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: As of December 31, 2022, the notes issued by BSPRT 2022-FL8 Issuer, Ltd.
−Removed: and BSPRT 2022-FL8 Co-Issuer, LLC, are collateralized by interests in a pool of 39 mortgage assets having a principal balance of $ 1.2 billion, respectively, (the "2022-FL8 Mortgage Assets").
−Removed: The sale of the 2022-FL8 Mortgage Assets to BSPRT 2022-FL8 Issuer, Ltd.
−Removed: is governed by a Collateral Interest Purchase Agreement dated as of December 21, 2021, between the Company and BSPRT 2022-FL8 Issuer, Ltd.
−Removed: On June 29, 2022, BSPRT 2022-FL9 Issuer, LLC, a wholly-owned indirect subsidiary of the Company, entered into an indenture with the OP, as advancing agent, U.S.
−Removed: Bank Trust Company, National Association, as trustee and note administrator, and U.S.
−Removed: Bank National Association, as custodian and in other capacities, which governs the issuance of approximately $ 740.9 million principal balance secured floating rate notes, of which $ 670.6 million were purchased by third party investors and $ 70.3 million were purchased by a wholly-owned subsidiary of the OP.
−Removed: In addition, concurrently with the issuance of the notes, BSPRT 2022-FL9 Issuer, LLC also issued 62,246 preferred shares, par value of $ 0.001 per share and with an aggregate liquidation preference and notional amount equal to $ 1,000 per share, which were not offered as part of closing the indenture.
−Removed: federal income tax purposes, BSPRT 2022-FL9 Issuer, LLC is a disregarded entity.
−Removed: As of December 31, 2022, the notes issued by BSPRT 2022-FL9 Issuer, LLC are collateralized by interests in a pool of 50 mortgage assets having a principal balance of $ 797.5 million, respectively, (the "2022-FL9 Mortgage Assets").
−Removed: The sale of the 2022-FL9 Mortgage Assets to BSPRT 2022-FL9 Issuer, LLC is governed by a Collateral Interest Purchase Agreement, dated as of June 29, 2022, by and among FBRT Sub REIT, BSPRT 2022-FL9 Issuer, LLC, the OP, and BSPRT 2022-FL9 Seller, LLC.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Collateralized Loan Obligation
+Added: The following table represents the terms of the notes issued by 2019-FL5 Issuer, 2021-FL6 Issuer, 2021-FL7 Issuer, 2022-FL8 Issuer, 2022-FL9 Issuer and 2023-FL10 Issuer (collectively the "CLOs"), as of December 31, 2023 and December 31, 2022:
December 31, 2023
−Removed: The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of the above CLOs of approximately $ 401.8 million and $ 329.2 million as of December 31, 2022 and 2021, respectively.
−Removed: The following table represents the terms of the notes issued by 2019-FL5 Issuer, 2021-FL6 Issuer, 2021-FL7 Issuer, 2022-FL8 Issuer and 2022-FL9 Issuer (collectively the "CLOs"), respectively, as of December 31, 2022 (dollars in thousands):
−Removed: CLO Facility Tranche Par Value Issued Par Value Outstanding (1)
−Removed: Interest Rate Maturity Date
−Removed: 2019-FL5 Issuer Tranche A $ 407,025 $ — 1M LIBOR + 115
−Removed: 2019-FL5 Issuer Tranche A-S 76,950 73,715 1M LIBOR + 148
−Removed: 2019-FL5 Issuer Tranche B 50,000 50,000 1M LIBOR + 140
−Removed: 2019-FL5 Issuer Tranche C 61,374 61,374 1M LIBOR + 200
−Removed: 2019-FL5 Issuer Tranche D 48,600 5,000 1M LIBOR + 240
−Removed: 2019-FL5 Issuer Tranche E 20,250 20,250 1M LIBOR + 285
−Removed: 2021-FL6 Issuer Tranche A 367,500 367,500 1M LIBOR + 110
−Removed: 2021-FL6 Issuer Tranche A-S 86,625 86,625 1M LIBOR + 130
−Removed: 2021-FL6 Issuer Tranche B 33,250 33,250 1M LIBOR + 160
−Removed: 2021-FL6 Issuer Tranche C 41,125 41,125 1M LIBOR + 205
−Removed: 2021-FL6 Issuer Tranche D 44,625 44,625 1M LIBOR + 300
−Removed: 2021-FL6 Issuer Tranche E 11,375 11,375 1M LIBOR + 350
−Removed: 2021-FL7 Issuer Tranche A 508,500 508,500 1M LIBOR + 132
−Removed: 2021-FL7 Issuer Tranche A-S 13,500 13,500 1M LIBOR + 165
−Removed: 2021-FL7 Issuer Tranche B 52,875 52,875 1M LIBOR + 205
−Removed: 2021-FL7 Issuer Tranche C 66,375 66,375 1M LIBOR + 230
−Removed: 2021-FL7 Issuer Tranche D 67,500 67,500 1M LIBOR + 275
−Removed: 2021-FL7 Issuer Tranche E 13,500 13,500 1M LIBOR + 340
−Removed: 2022-FL8 Issuer Tranche A 690,000 690,000 1M SOFR + 150
−Removed: 2022-FL8 Issuer Tranche A-S 66,000 66,000 1M SOFR + 185
−Removed: 2022-FL8 Issuer Tranche B 55,500 55,500 1M SOFR + 205
−Removed: 2022-FL8 Issuer Tranche C 67,500 67,500 1M SOFR + 230
−Removed: 2022-FL8 Issuer Tranche D 81,000 81,000 1M SOFR + 280
−Removed: 2022-FL9 Issuer Tranche A 423,667 423,667 1M SOFR + 255
−Removed: 2022-FL9 Issuer Tranche A-S 96,380 96,380 1M SOFR + 310
−Removed: 2022-FL9 Issuer Tranche B 42,166 42,166 1M SOFR + 360
−Removed: 2022-FL9 Issuer Tranche C 48,189 48,189 1M SOFR + 415
−Removed: 2022-FL9 Issuer Tranche D 49,194 49,194 1M SOFR + 505
−Removed: 2022-FL9 Issuer Tranche E 11,041 11,043 1M SOFR + 565
−Removed: $ 3,601,586 — $ 3,147,728
+Added: CLO Facility Number of Loans in pool (1)
+Added: Benchmark Interest Rate (2)
+Added: Weighted Average Spread Par Value Par Value Outstanding (3)
+Added: Principal Balance of Collateralized Mortgage Assets Maturity Dates
+Added: 2021-FL6 Issuer
+Added: 54 Term SOFR 1.43 % $ 584,500 $ 558,040 $ 673,289 3/15/2036
+Added: 2021-FL7 Issuer
+Added: 40 Term SOFR 1.64 % 722,250 720,000 864,079 12/21/2038
+Added: 2022-FL8 Issuer
+Added: 46 AVG SOFR 1.72 % 960,000 960,000 1,184,931 2/15/2037
+Added: 2022-FL9 Issuer
+Added: 51 Term SOFR 2.80 % 670,637 670,639 800,638 5/15/2039
+Added: 2023-FL10 Issuer 27 Term SOFR 2.57 % 717,243 689,294 895,525 9/15/2035
$ 3,654,630 $ 3,597,973 $ 4,418,462
−Removed: (1) Excludes $ 453.4 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2022.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022
−Removed: The following table represents the terms of the notes issued by the 2018-FL4 Issuer, 2019-FL5 Issuer, 2021-FL6 Issuer and 2021-FL7 Issuer, as of December 31, 2021 (dollars in thousands):
−Removed: CLO Facility Tranche Par Value Issued Par Value Outstanding (1)
−Removed: Interest Rate Maturity Date
−Removed: 2018-FL4 Issuer Tranche A $ 416,827 $ 75,263 1M LIBOR + 105
−Removed: 2018-FL4 Issuer Tranche A-S 73,813 73,813 1M LIBOR + 130
−Removed: 2018-FL4 Issuer Tranche B 56,446 56,446 1M LIBOR + 160
−Removed: 2018-FL4 Issuer Tranche C 68,385 68,385 1M LIBOR + 210
−Removed: 2018-FL4 Issuer Tranche D 57,531 57,531 1M LIBOR + 275
−Removed: 2018-FL4 Issuer Tranche E 28,223 28,223 1M LIBOR + 305
−Removed: 2019-FL5 Issuer Tranche A 407,025 299,529 1M LIBOR + 115
−Removed: 2019-FL5 Issuer Tranche A-S 76,950 76,950 1M LIBOR + 148
−Removed: 2019-FL5 Issuer Tranche B 50,000 50,000 1M LIBOR + 140
−Removed: 2019-FL5 Issuer Tranche C 61,374 61,374 1M LIBOR + 200
−Removed: 2019-FL5 Issuer Tranche D 48,600 5,000 1M LIBOR + 240
−Removed: 2019-FL5 Issuer Tranche E 20,250 20,250 1M LIBOR + 285
−Removed: 2021-FL6 Issuer Tranche A 367,500 367,500 1M LIBOR + 110
−Removed: 2021-FL6 Issuer Tranche A-S 86,625 86,625 1M LIBOR + 130
−Removed: 2021-FL6 Issuer Tranche B 33,250 33,250 1M LIBOR + 160
−Removed: 2021-FL6 Issuer Tranche C 41,125 41,125 1M LIBOR + 205
−Removed: 2021-FL6 Issuer Tranche D 44,625 44,625 1M LIBOR + 300
−Removed: 2021-FL6 Issuer Tranche E 11,375 11,375 1M LIBOR + 350
−Removed: 2021-FL7 Issuer Tranche A 508,500 508,500 1M LIBOR + 132
−Removed: 2021-FL7 Issuer Tranche A-S 13,500 13,500 1M LIBOR + 165
−Removed: 2021-FL7 Issuer Tranche B 52,875 52,875 1M LIBOR + 205
−Removed: 2021-FL7 Issuer Tranche C 66,375 66,375 1M LIBOR + 230
−Removed: 2021-FL7 Issuer Tranche D 67,500 67,500 1M LIBOR + 275
−Removed: 2021-FL7 Issuer Tranche E 13,500 13,500 1M LIBOR + 340
+Added: CLO Facility Number of Loans in pool (1)
+Added: Benchmark interest rate (2)
+Added: Weighted Average Spread Par Value Par Value Outstanding (3)
+Added: Principal Balance of Collateralized Mortgage Assets Maturity Dates
+Added: 2019-FL5 Issuer
+Added: 25 LIBOR 1.77 % $ 664,199 $ 210,339 $ 378,786 5/15/2029
+Added: 2021-FL6 Issuer
+Added: 58 LIBOR 1.42 % 584,500 584,500 691,148 3/15/2036
+Added: 2021-FL7 Issuer
+Added: 39 LIBOR 1.64 % 722,250 722,250 899,729 12/21/2038
+Added: 2022-FL8 Issuer
+Added: 39 AVG SOFR 1.72 % 960,000 960,000 1,198,477 2/15/2037
+Added: 2022-FL9 Issuer
+Added: 50 Term SOFR 3.04 % 670,637 670,639 797,545 5/15/2039
$ 3,601,586 $ 3,147,728 $ 3,965,685
________________________
−Removed: (1) Excludes $ 320.6 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2021.
+Added: (1) Loan assets may be pledged towards one or multiple CLO pool.
+Added: (2) On March 5, 2021, the Financial Conduct Authority of the U.K.
+Added: (the “FCA”) announced that LIBOR tenors relevant to 2019-FL5 Issuer, 2021- FL6 Issuer, and 2021-FL7 Issuer would cease to be published or no longer be representative after June 30, 2023.
+Added: The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event.
+Added: The benchmark index of 1M LIBOR interest rate converted from LIBOR to compounded SOFR, plus a benchmark adjustment of 11.448 basis points with a lookback period equal to the number of calendar days in the applicable interest accrual period plus two SOFR business days, conforming with the indenture agreement and recommendations from the ARRC.
+Added: Compounded SOFR for any interest accrual period shall be the “30-Day Average SOFR” as published by the Federal Reserve Bank of New York on each benchmark determination date.
+Added: On July 13, 2023, the Company converted the indices for 2021-FL6 Issuer and 2021-FL7 Issuer to 1M Term SOFR + 11.448 basis points and the applicable spreads remain unchanged.
+Added: (3) Excludes $ 495.0 million and $ 453.4 million, respectively, of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheet as of December 31, 2023 and December 31, 2022, respectively.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
+Added: On July 17, 2023, the Company called all of the outstanding notes issued by BSPRT 2019-FL5 Issuer, Ltd., a wholly owned indirect subsidiary of the Company.
+Added: The outstanding principal of the notes on the date of the call was $ 122.0 million.
+Added: The Company recognized all the remaining unamortized deferred financing costs of $ 2.9 million recorded within the Realized gain/(loss) on extinguishment of debt in the consolidated statements of operations, which was a non-cash charge.
+Added: On September 28, 2023, BSPRT 2023-FL10 Issuer, LLC, a wholly-owned indirect subsidiary of the Company, entered into an indenture with the OP, as advancing agent, U.S.
+Added: Bank Trust Company, National Association, as trustee and note administrator, and U.S.
+Added: Bank National Association, as custodian and in other capacities, which governs the issuance of approximately $ 896.6 million principal balance secured floating rate notes, of which $ 573.8 million were purchased by third party investors and $ 322.8 million were purchased by a wholly-owned subsidiary of the OP.
+Added: During the three months ended December 31, 2023, an additional $ 115.5 million was sold by the wholly-owned subsidiary to third party investors.
+Added: As of December 31, 2023 $ 689.3 million was outstanding.
+Added: In addition, concurrently with the issuance of the notes, BSPRT 2023-FL10 Issuer, LLC also issued 75,086 preferred shares, par value of $ 0.001 per share and with an aggregate liquidation preference and notional amount equal to $ 1,000 per share, which were not offered as part of closing the indenture.
+Added: federal income tax purposes, BSPRT 2023-FL10 Issuer, LLC is a disregarded entity.
The below table reflects the total assets and liabilities of the Company's outstanding CLOs.
14 unchanged sentences
________________________
−Removed: (1) Includes $ 42.5 million and $ 187.0 million of cash held by the servicer related to CLO loan payoffs as of December 31, 2022 and 2021, respectively.
+Added: (1) Includes $ 55.1 million and $ 42.5 million of cash held by the servicer related to CLOs as of December 31, 2023 and 2022, respectively.
(2) The balance is presented net of allowance for credit losses of $ 32.6 million and $ 13.2 million as of December 31, 2023 and 2022, respectively.
−Removed: (3) Includes $ 453.4 million and $ 320.6 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
+Added: (3) Includes $ 495.0 million and $ 453.4 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligation in the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
(4) The balance is presented net of deferred financing cost and discount of $ 30.8 million and $ 19.2 million as of December 31, 2023 and 2022, respectively.
4 unchanged sentences
The Company uses the two-class method in calculating basic and diluted earnings per share.
−Removed: Net income is allocated between our common stock and other participating securities based on their participation rights.
+Added: Net income/(loss) is allocated between our common stock and other participating securities based on their participation rights.
Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities.
−Removed: The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the years ended December 31, 2022, 2021 and 2020, respectively (dollars in thousands, except share amounts):
+Added: The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands, except share and per share data):
Year Ended December 31,
1 unchanged sentence
Net income/(loss) $ 144,509 $ 14,215 $ 25,702
−Removed: Net (income)/loss from noncontrolling interest 216 — —
+Added: Net (income)/loss from non-controlling interest 706 216 —
Preferred stock dividends 26,993 41,741 33,587
−Removed: Undistributed earnings allocated to preferred stock — — —
+Added: Net income/(loss) attributable to common stock 118,222 ( 27,310 ) ( 7,885 )
+Added: Participating securities' share in earnings 1,162 — —
Net income/(loss) attributable to common shareholders (for basic and diluted earnings per share) $ 117,060 $ ( 27,310 ) $ ( 7,885 )
+Added: Year Ended December 31,
+Added: Denominator 2023 2022 2021
Weighted-average common shares outstanding for basic earnings per share 82,307,970 71,628,365 43,419,209
1 unchanged sentence
Unvested restricted shares and stock units — — 15,251
−Removed: — 15,521 14,066
Weighted-average common shares outstanding for diluted earnings per share 82,307,970 71,628,365 43,434,731
2 unchanged sentences
________________________
−Removed: (1) The effect of dilutive shares excluded an aggregate of 476,653 weighted average restricted shares and stock units for year ended December 31, 2022, as the effect was anti-dilutive.
−Removed: Additionally, the effect of dilutive shares excluded an aggregate of 17,521,845 weighted average common equivalent of convertible preferred shares for the year ended December 31, 2022, as the effect was anti-dilutive.
+Added: (1) The effect of the weighted average dilutive shares excluded restricted shares and restricted stock units for the years ended December 31, 2023 and 2022 of 191,324 and 476,653 , respectively, as the effect was anti-dilutive.
+Added: Additionally, the effect of the weighted average dilutive shares excluded the common equivalent of convertible preferred shares for the year-ended December 31, 2023 and 2022 of 5,385,254 and 17,521,845 , respectively, as the effect was anti-dilutive.
FRANKLIN BSP REALTY TRUST, INC.
2 unchanged sentences
Note 9 - Redeemable Convertible Preferred Stock and Equity Transactions
−Removed: The following table presents the summary of the Company's outstanding shares of Redeemable Convertible Preferred Stock, Perpetual Preferred Stock, Automatically Convertible Preferred Stock and Common Stock as of December 31, 2022 and December 31, 2021 (dollars in thousands, except share amounts):
−Removed: Balance as of Shares Outstanding as of Fourth Quarter 2022 Dividend/Distribution Per Share (6)
+Added: The following table presents the summary of the Company's outstanding shares of redeemable convertible preferred stock, perpetual preferred stock, and common stock as of December 31, 2023 and 2022 (in thousands, except share and per share amounts):
+Added: Balance as of Shares Outstanding as of Fourth Quarter 2023 Dividend Per Share (1)
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Redeemable Convertible Preferred Stock:
−Removed: Series C Preferred Stock (1)
−Removed: $ — $ 6,971 — 1,400 n/a
−Removed: Series D Preferred Stock (2)
−Removed: $ — $ 89,684 — 17,950 n/a
Series H Preferred Stock (2)
4 unchanged sentences
Series E Preferred Stock $ 258,742 $ 258,742 10,329,039 10,329,039 $ 0.46875
−Removed: Automatically Convertible Preferred Stock
−Removed: Series F Preferred Stock (3)
−Removed: $ — $ 710,431 — 39,733,299 n/a
+Added: Common Stock:
Common Stock - at par value (4)(5)
1 unchanged sentence
________________________
−Removed: (1) On October 19, 2022, 400 shares of the Company's Series C Preferred Stock each automatically converted into 299.2 shares of Common Stock, pursuant to the terms of the Series C Preferred Stock, resulting in the issuance of 119,538 shares of Common Stock.
−Removed: The remaining 1,000 outstanding shares of Series C Preferred Stock were exchanged by the holder for an equal number of the Company's newly created Series I Preferred Stock, all of which automatically converted into 299.2 shares of Common Stock on January 19, 2023, pursuant to the terms of the Series I Preferred Stock, resulting in the issuance of 299,200 shares of Common Stock.
−Removed: (2) 17,950 shares of Series D Preferred Stock were issued in March 2021, all of which were exchanged for an equal number of shares of Series H Preferred Stock in June 2022.
−Removed: Unless earlier converted by the holder, each share of the Series H Preferred Stock will automatically convert into 299.2 shares of Common Stock on January 19, 2024, pursuant to the terms of the Series H Preferred Stock.
−Removed: (3) On April 19, 2022, all of the 39,733,299 outstanding shares of the Company’s Series F Preferred Stock automatically converted on a one -for-one basis into an equal amount of shares of Common Stock, pursuant to the terms of the Articles Supplementary of the Series F Preferred Stock.
−Removed: (4) Common Stock include shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP") and unvested restricted shares.
−Removed: (5) During the year ended December 31, 2022, the Company repurchased 1,416,369 shares of Common Stock at an average price of $ 11.71 per share, for a total of $ 16.6 million.
+Added: (1) As declared by the Company's board of directors.
+Added: (2) On January 10, 2024, the Series H Preferred Stock was amended such that the mandatory conversion date was extended by one year , to January 21, 2025.
+Added: Unless earlier converted, the Series H Preferred Stock will automatically convert into common stock at a rate of 299.2 shares of common stock per share of Series H Preferred Stock (subject to adjustments as described in the Articles Supplementary for the Series H Preferred Stock) on January 21, 2025.
+Added: The holder of the Series H Preferred Stock has the right to convert up to 4,487 shares of Series H Preferred Stock one time in each calendar month through December 2024, upon 10 business days’ advance notice to the Company.
+Added: (3) On January 19, 2023, all 1,000 outstanding shares of the Company's Series I Preferred Stock each automatically converted into 299.2 shares of Common Stock, pursuant to the terms of the Series I Preferred Stock, resulting in the issuance of 299,200 shares of Common Stock.
+Added: (4) Common Stock includes shares issued pursuant to the Company's dividend reinvestment plan ("DRIP") and unvested restricted shares.
+Added: (5) During the year ended December 31, 2023, the Company repurchased 1,026,105 shares of Common Stock at a net average price of $ 12.19 per share, for a total of $ 12.5 million.
All of these shares were retired upon settlement, reducing the total outstanding shares as of December 31, 2023.
See discussion in the "Stock Repurchases" section below.
−Removed: (6) As declared by the Company's board of directors.
−Removed: Distributions
−Removed: In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90 % of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains.
−Removed: The Company must distribute 100 % of its taxable income (including net capital gains) to avoid paying corporate U.S.
−Removed: federal income taxes.
−Removed: Distribution payments are dependent on the availability of funds.
−Removed: The Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.
−Removed: Dividends on the Company’s outstanding shares of preferred stock, to the extent not declared by the board of directors quarterly, will accrue, and dividends may not be paid on the Company's common stock to the extent there are accrued and unpaid dividends on the preferred stock.
−Removed: The amount of dividends paid on the Company’s Series H Preferred Stock and Series I Preferred Stock are generally in an amount equal to the dividends a holder of such preferred stock would have received if the preferred stock had been converted into common stock in accordance with its terms, except when the amount of common stock dividends are below the threshold stated in the terms of such preferred stock.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: The Company distributed $ 87.8 million of common stock dividends during the year ended December 31, 2022, composed of $ 85.8 million in cash and $ 2.0 million in shares of common stock issued under the DRIP.
−Removed: The Company distributed $ 53.1 million of common stock dividends during the year ended December 31, 2021, composed of $ 48.0 million in cash and $ 5.1 million in shares of common stock issued under the DRIP.
−Removed: As of December 31, 2022 and December 31, 2021, the Company had declared but unpaid common stock distributions of $ 29.5 million and $ 12.5 million, respectively, and $ 4.8 million of declared but unpaid Series E Preferred Stock distributions.
−Removed: Additionally, as of December 31, 2022 the Company had declared but unpaid Series H Preferred stock distributions of $ 1.9 million and declared but unpaid Series I Preferred stock distributions of $ 0.1 million.
−Removed: As of December 31, 2021, the Company had declared but unpaid Series C Preferred Stock distributions of $ 0.1 million, $ 1.5 million of declared but unpaid Series D Preferred Stock distributions and $ 11.3 million of declared but unpaid Series F Preferred Stock distributions.
−Removed: These amounts are included in Distributions payable on the Company’s consolidated balance sheets.
−Removed: Preferred Stock
−Removed: The following tables present the activity in the Company's Series C Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period 1,400 $ 6,971 1,400 $ 6,962
−Removed: Converted into Common Stock ( 400 ) ( 1,997 ) — —
−Removed: Exchanged for Series I Preferred Stock ( 1,000 ) ( 5,000 ) — —
−Removed: Amortization of offering costs — 26 — 9
−Removed: Balance at End of Period — $ — 1,400 $ 6,971
−Removed: The following table presents the activity in the Company's Series D Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period 17,950 $ 89,684 — $ —
−Removed: Issuance of Preferred Stock — — 17,950 89,748
−Removed: Exchanged for Series H Preferred Stock ( 17,950 ) ( 89,748 ) — —
−Removed: Offering costs — — — ( 82 )
−Removed: Amortization of offering costs — 64 — 18
−Removed: Balance at End of Period — $ — 17,950 $ 89,684
−Removed: The following table presents the activity in the Company's Series E Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period 10,329,039 $ 258,742 — $ —
−Removed: Issuance of Preferred Stock — — 10,329,039 258,742
−Removed: Balance at End of Period 10,329,039 $ 258,742 10,329,039 $ 258,742
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: The following table presents the activity in the Company's Series F Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period 39,733,299 $ 710,431 — $ —
−Removed: Issuance of Preferred Stock — — 39,733,299 710,431
−Removed: Automatically converted into Common Stock ( 39,733,299 ) ( 710,431 ) — —
−Removed: Balance at End of Period — $ — 39,733,299 $ 710,431
−Removed: The following table presents the activity in the Company's Series H Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period — $ — — $ —
−Removed: Issuance of Series H Preferred Stock in exchange for Series D Preferred Stock 17,950 89,748 — —
−Removed: Balance at End of Period 17,950 $ 89,748 — $ —
−Removed: The following table presents the activity in the Company's Series I Preferred Stock for the years ended December 31, 2022 and 2021 (dollars in thousands, except share amounts):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021
−Removed: Shares Amount Shares Amount
−Removed: Balance at Beginning of Period — $ — — $ —
−Removed: Issuance of Series I Preferred Stock in exchange for Series C Preferred Stock 1,000 5,000 — —
−Removed: Balance at End of Period 1,000 $ 5,000 — $ —
+Added: During the year ended December 31, 2023 and 2022, the Company paid an aggregate of $ 118.0 million and $ 87.8 million, respectively, of common stock distributions comprised of quarterly common dividends of $ 0.355 per share.
Stock Repurchases
1 unchanged sentence
The Company’s share repurchase program authorizes share repurchases at prices below the most recently reported book value per share as determined in accordance with GAAP.
−Removed: Purchases made under the program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, as permitted by securities laws and other legal requirements.
+Added: Repurchases made under the program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, as permitted by securities laws and other legal requirements.
The timing, manner, price and amount of any purchases by the Company will be determined by the Company in its reasonable business judgment and consistent with the exercise of its legal duties and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors.
The share repurchase program does not obligate the Company to acquire any particular amount of common stock.
−Removed: The Company share repurchase program will remain open until at least December 31, 2023 or until the capital committed to the applicable repurchase program has been exhausted, whichever is sooner.
+Added: The Company's share repurchase program will remain open until at least December 31, 2024, or until the capital committed to the applicable repurchase program has been exhausted, whichever is sooner.
Repurchases under the Company’s share repurchase program may be suspended from time to time at the Company’s discretion without prior notice.
+Added: As of December 31, 2023, the Company had $ 35.9 million remaining under the share repurchase program.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: The following table is a summary of the Company’s repurchase activity of its common stock during the year ended December 31, 2022:
−Removed: For the Year Ended December 31, 2022
+Added: The following table is a summary of the Company’s repurchase activity of its common stock during the year ended December 31, 2023 (in thousands, except share amounts):
+Added: Year Ended December 31, 2023
Shares Amount (1)(2)
−Removed: Authorized repurchase amount — $ 65,000
+Added: Beginning of period, authorized repurchase amount $ 48,421
Repurchases paid 1,026,105 ( 12,504 )
−Removed: 1,416,369 ( 16,579 )
Remaining as of December 31, 2023 $ 35,917
________________________
+Added: (1) For the year ended December 31, 2023, the net average purchase price was 12.19 per share.
(2) Amount includes commissions paid associated with share repurchases.
−Removed: (2) For the year ended December 31, 2022, the average purchase price was $ 11.71 per share.
−Removed: As of December 31, 2022, the Company had $ 48.4 million remaining under the share repurchase program.
−Removed: Accumulated Other Comprehensive Income/(Loss)
−Removed: The following tables set forth the changes in accumulated other comprehensive income/(loss) by component (dollars in thousands):
−Removed: For the Years Ended
−Removed: December 31, 2022 December 31, 2021 December 31, 2020
−Removed: Total Available for Sale Securities Cash Flow Hedges Total Available for Sale Securities Cash Flow Hedges Total Available for sale securities Cash Flow Hedges
−Removed: Balance at Beginning of Period $ ( 62 ) $ — $ ( 62 ) $ ( 8,256 ) $ ( 8,256 ) $ — $ ( 978 ) $ ( 978 ) $ —
−Removed: Other comprehensive income/(loss) 170 390 ( 220 ) 7,404 8,256 ( 852 ) ( 7,278 ) ( 7,278 ) —
−Removed: Reclassification adjustment for amounts included in net income/(loss) 282 — 282 790 — 790 — — —
−Removed: Balance at End of Period $ 390 $ 390 $ — $ ( 62 ) $ — $ ( 62 ) $ ( 8,256 ) $ ( 8,256 ) $ —
+Added: Dividend Reinvestment and Direct Stock Purchase Plan
+Added: The Company has adopted a dividend reinvestment and direct stock purchase plan ("DRIP") under which we registered and reserved for issuance, in the aggregate, 63,000,000 shares of common stock.
+Added: Under the dividend reinvestment component of this plan, the Company's common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of common stock.
+Added: The direct stock purchase component allows stockholders, subject to the Company's approval, to purchase shares of common stock directly from us.
+Added: During the years ended December 31, 2023, 2022 and 2021, the Company issued 61,866 shares, 72,764 shares and zero shares, respectively, of common stock under the dividend reinvestment component of DRIP.
+Added: As of December 31, 2023, 62,865,370 shares remained available for issuance under the DRIP.
+Added: At-the-Market Sales Agreement
+Added: On April 14, 2023, the Company established a $ 200 million at-the-market offering program ("ATM program") by entering into a Sales Agreement (the "Sales Agreement") with a financial syndicate as sales agents (the "Agents"), pursuant to which the Company may sell, from time to time, and at various prices, through the Agents, shares of the Company's common stock.
+Added: Sales, if any, of the common stock made through the Agents, pursuant to the Sales Agreement, may be made in "at the market" offerings (as defined in Rule 415 under the Securities Act of 1933, as amended), by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise, at market prices prevailing at the time of sale, in block transactions, in negotiated transactions, in any manner permitted by applicable law or as otherwise as may be agreed by the Company and any Agent.
+Added: As of December 31, 2023, the Company has no t sold any shares of common stock under its ATM program, and sales of common stock with an aggregate sales price of $ 200 million remained available for issuance under the Sales Agreement.
Note 10 - Commitments and Contingencies
8 unchanged sentences
$ 287,893 $ 465,988
+Added: ________________________
+Added: (1) The balance relates to four loans that are subject to modification as of December 31, 2023.
The borrowers are generally required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.
−Removed: Litigation and Regulatory Matters
−Removed: The Company is not presently named as a defendant in any material litigation arising outside the ordinary course of business.
−Removed: However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
+Added: Litigation and Regulatory Matters
+Added: The Company is not presently named as a defendant in any material litigation arising outside the ordinary course of business.
+Added: However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.
Note 11 - Related Party Transactions and Arrangements
17 unchanged sentences
________________________
−Removed: (1) Total acquisition fees and expenses paid during the years ended December 31, 2022, 2021 and 2020 were $ 11.7 million, $ 15.0 million and $ 7.1 million respectively, of which $ 10.3 million, $ 13.8 million and $ 6.4 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets for the years ended December 31, 2022, 2021 and 2020.
−Removed: (2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.
+Added: (1) Total acquisition fees and expenses paid during the years ended December 31, 2023, 2022 and 2021 were $ 5.8 million, $ 11.7 million and $ 15.0 million respectively, of which $ 4.6 million, $ 10.3 million and $ 13.8 million were capitalized in Commercial mortgage loans, held for investment and Real estate securities, available for sale, measured at fair value in the consolidated balance sheets for the years ended December 31, 2023, 2022 and 2021.
+Added: (2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the consolidated statements of operations.
(3) As of December 31, 2023 and December 31, 2022, the related party payables include $ 0.7 million and $ 2.9 million of payments made by the Advisor to third party vendors on behalf of the Company.
−Removed: The payables as of December 31, 2022 and 2021 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.
−Removed: Other Transactions
−Removed: The Company entered into a $ 100.0 million lending and security agreement with Security Benefit Life Insurance Company ("SBL") in February 2020, which was amended in March and August 2020.
−Removed: The Company incurred $ 1.0 million and $ 2.0 million of interest expense on the lending agreement with SBL for the twelve months ended December 31, 2022 and 2021 respectively.
−Removed: In November 2022, the lending and security agreement with SBL was terminated by the Company.
−Removed: As of December 31, 2021 the outstanding balance was $ 50.0 million.
−Removed: As of the beginning of 2022, SBL held 17,950 shares of the Company's outstanding shares of Series D Preferred Stock.
−Removed: On June 24, 2022, all 17,950 outstanding shares of Series D Preferred Stock were exchanged for an equal amount of shares of Series H Preferred Stock for no consideration (see Note 2 - Summary of Significant Accounting Policies).
+Added: The payables as of December 31, 2023 and 2022 in the table above are included in Due to affiliates in the consolidated balance sheets.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: In August 2021 the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $ 139.5 million triple net lease property in Jeffersonville, GA.
+Added: Other Transactions
+Added: In the third quarter of 2021, the Company and an affiliate of the Company entered into the Jeffersonville JV to acquire a $ 139.5 million triple net lease property in Jeffersonville, GA.
The Company has a 79 % interest in the Jeffersonville JV, while the affiliated fund has a 21 % interest.
The Company invested a total of $ 109.8 million, made up of $ 88.7 million in debt and $ 21.1 million in equity, representing 79 % of the ownership interest in the Jeffersonville JV.
−Removed: The affiliate made up the remaining $ 29.8 million composed of a $ 24.0 million mortgage note payable and $ 5.7 million in equity.
−Removed: The Company has control of Jeffersonville JV with 79 % ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet.
+Added: The affiliated fund made up the remaining $ 29.8 million composed of a $ 24.0 million mortgage note payable and $ 5.8 million in non-controlling interest.
+Added: The Company has majority control of Jeffersonville JV and, therefore, consolidates the accounts of Jeffersonville JV in its consolidated financial statements.
The Company's $ 88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).
−Removed: As discussed below, in the first quarter of 2022, pursuant to the 2021 Incentive Plan, the Company issued awards of restricted stock units to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement (see Note 12 - Share-Based Compensation).
+Added: Pursuant to the Company's 2021 Incentive Plan, in the first quarter of 2023, the Company issued awards of restricted stock units to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement.
As of December 31, 2023, our commercial mortgage loans, held for investment, includes an aggregate of $ 124.1 million carrying value of loans to affiliates of our Advisor.
−Removed: The Company recognized $ 5.5 million interest income from these loans for the year ended December 31, 2022, in the Company’s consolidated statements of operations.
+Added: The Company recognized $ 10.0 million and $ 5.0 million in interest income from these loans for the year ended December 31, 2023 and 2022 respectively, in the consolidated statements of operations.
As disclosed in Note 3 - Commercial Mortgage Loans in April 2022, the Company fully funded a $ 113.2 million first mortgage consisting of 24 retail properties with various locations throughout the United States.
1 unchanged sentence
Note 12 - Share-Based Compensation
−Removed: The Company's equity incentive plans provide the Company with the ability to grant equity-based awards to its directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, or certain of the Company's consultants, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, the Advisor and its affiliates.
−Removed: Under the Company's RSP, the total number of common shares granted shall not exceed 5 % of the Company’s authorized common shares, and in any event, will not exceed 4.0 million shares (as such number may be adjusted for stock splits, stock distributions, combinations and similar events).
−Removed: The RSP expired on February 7, 2023.
−Removed: Under the Company's 2021 Incentive Plan, as of December 31, 2022 , there were 5,007,893 shares of common stock remaining available for issuance.
+Added: The Company's 2021 Incentive plan provides the Company with the ability to grant equity-based awards to its directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, or certain of the Company's consultants, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, the Advisor and its affiliates.
+Added: As of December 31, 2023, there w ere 4,526,704 sh ares of common stock remaining available for issuance under the Company's 2021 Incentive Plan.
The Board may amend, suspend or terminate the 2021 Incentive Plan at any time;
provided that no amendment, suspension or termination may impair rights or obligations under any outstanding award without the participant’s consent or violate the 2021 Incentive Plan’s prohibition on repricing.
+Added: The Company's previous plan, the RSP, expired on February 7, 2023.
Service-based Restricted Stock and Restricted Stock Units
−Removed: During the year ended December 31, 2022 , in accordance with the Company's RSP, the Company issued awards of restricted stock to its non-employee directors, and in accordance with the 2021 Incentive Plan, the Company issued awards of RSUs to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement.
+Added: In accordance with the 2021 Incentive Plan, the Company issued awards of RSUs to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: Restricted Stock and RSU activity issued under the RSP and 2021 Incentive Plan for the year ended December 31, 2022 is summarized below:
−Removed: Shares Outstanding
−Removed: RSP 2021 Incentive Plan Weighted Average Grant Date Fair Value
−Removed: Unvested equity awards outstanding as of December 31, 2021 11,184 — $ 17.88
+Added: Restricted Stock and RSU activity issued under the RSP and 2021 Incentive Plan for the years ended December 31, 2023 and 2022 are summarized below:
+Added: Shares Outstanding Fourth Quarter 2023 Weighted Average Grant Date Fair Value
+Added: For the Years Ended
+Added: December 31, 2023 December 31, 2022
+Added: RSP 2021 Incentive Plan RSP 2021 Incentive Plan
+Added: Unvested equity awards outstanding at beginning of period 20,934 492,107 11,184 — $ 14.11
Grants — 481,189 28,143 492,107 14.20
1 unchanged sentence
Vested ( 20,934 ) ( 164,039 ) ( 18,393 ) — 14.34
−Removed: Unvested equity awards outstanding as of December 31, 2022 20,934 492,107 $ 14.11
−Removed: During the year ended December 31, 2022, the Company recognized compensation expense associated with the equity awards of $ 2.5 million, which is included in share-based compensation expense on the consolidated statements of operations.
+Added: Unvested equity awards outstanding at end of period — 809,257 20,934 492,107 $ 14.11
+Added: T he Company recognized compensation expense associated with equity awards of $ 4.8 million and $ 2.5 million during the years ended December 31, 2023 and 2022, respectively, which is included in Share-based compensation in the consolidated statements of operations.
Unrecognized estimated compensation expense for these awards totaled $ 7.1 million as of December 31, 2023 to be expensed over a weighted average period of 1.3 years .
+Added: The fair value of equity awards that vested during the year ended December 31, 2023 was $ 2.7 million .
Note 13 - Fair Value of Financial Instruments
12 unchanged sentences
Financial Instruments Measured at Fair Value on a Recurring Basis
−Removed: CRE CLO bonds, recorded in real estate securities, available for sale, measured at fair value on the consolidated balance
+Added: CRE CLO bonds , recorded in Real estate securities, available for sale, measured at fair value in the consolidated balance
sheets are valued utilizing both observable and unobservable market inputs.
These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities.
−Removed: Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy.
−Removed: The Company obtains third party pricing for determining the fair value of each CRE CLO investment, resulting in a Level II classification.
+Added: Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: Real estate securities classified as trading, RMBS, are measured at fair value by utilizing a third party pricing service to obtain a current estimated price of the securities.
−Removed: The third party pricing service utilizes relevant market information and interest rate movements and applies its internal pricing application to the evaluation to test against internal tolerances and parameters.
−Removed: The RMBS are classified in Level III of the fair value hierarchy.
+Added: classified in either Level II or Level III of the fair value hierarchy.
+Added: The Company obtains third party pricing for determining the fair value of each CRE CLO investment, resulting in a Level II classification.
Commercial mortgage loans held for sale, measured at fair value in the Company's TRS are initially recorded at transaction price, which are considered to be the best initial estimate of fair value.
3 unchanged sentences
The Company classified the commercial mortgage loans held for sale, measured at fair value as Level III.
−Removed: Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs.
+Added: Other real estate investments, measured at fair value in the consolidated balance sheets are valued using unobservable inputs.
The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company.
16 unchanged sentences
The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.
−Removed: The fair value of exchange-traded swap agreements economically hedging RMBS repurchase agreements are calculated using the net discounted future fixed cash payments and the discounted future variable cash receipts which are based on expected future interest rates derived from observable market interest rate curves.
−Removed: The Company also incorporates both its own nonperformance risk and its counterparties’ nonperformance risk in determining fair value.
−Removed: In considering the effect of nonperformance risk, the Company considered the impact of netting and credit enhancements, such as collateral postings and guarantees, and has concluded that counterparty risk is not significant to the overall valuation.
−Removed: Interest rate swap agreements economically hedging the Company's RMBS repurchase agreements are measured at fair value on a recurring basis primarily using Level II inputs.
−Removed: The fair value of these derivatives are calculated including accrued interest and net of variation margin amounts received or paid through the exchange, resulting in a significantly reduced fair value amount representing the unsettled fair value of these derivatives on the consolidated balance sheets.
A review of the fair value hierarchy classification is conducted on a quarterly basis.
1 unchanged sentence
The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period.
−Removed: Material transfers between levels within the fair value hierarchy during the year ended December 31, 2022 were specifically related to the transfer of ARM Agency Securities from Level II to Level III.
There were no material transfers between levels within the fair value hierarchy during the year ended December 31, 2023.
+Added: Material transfers between levels within the fair value hierarchy during the year ended December 31, 2022 were specifically related to the transfer of ARM Agency Securities from Level II to Level III.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 2022 and December 31, 2021 (dollars in thousands):
−Removed: December 31, 2022 Total Level I Level II Level III
+Added: The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 2023 and 2022 (dollars in thousands).
+Added: The Company did not have any liabilities carried at fair value as of December 31, 2023.
+Added: December 31, 2023
+Added: Total Level I Level II Level III
Assets, at fair value
Real estate securities, available for sale, measured at fair value $ 242,569 $ — $ 242,569 $ —
−Removed: Real estate securities, trading, measured at fair value 235,728 — — 235,728
−Removed: Commercial mortgage loans, held for sale, measured at fair value 15,559 — — 15,559
−Removed: Other real estate investments, measured at fair value — — — —
−Removed: Treasury note futures 91 91 — —
−Removed: Interest rate swaps 90 — 90 —
−Removed: Credit default swaps 234 — 234 —
Total assets, at fair value $ 242,569 $ — $ 242,569 $ —
−Removed: Liabilities, at fair value
−Removed: Credit default swaps $ 64 $ — $ 64 $ —
−Removed: Total liabilities, at fair value $ 64 $ — $ 64 $ —
December 31, 2022
+Added: Total Level I Level II Level III
Assets, at fair value
−Removed: Real estate securities.
−Removed: trading, measured at fair value $ 4,566,871 $ — $ 4,566,871 $ —
+Added: Real estate securities, available for sale, measured at fair value $ 221,025 $ — $ 221,025 $ —
+Added: Real estate securities, trading, measured at fair value 235,728 — — 235,728
Commercial mortgage loans, held for sale, measured at fair value 15,559 — — 15,559
−Removed: Other real estate investments, measured at fair value 2,074 — — 2,074
+Added: Credit default swaps 234 — 234 —
Interest rate swaps 90 — 90 —
3 unchanged sentences
Credit default swaps $ 64 $ — $ 64 $ —
−Removed: Unsecured debt-related interest rate swap agreements 31,153 — 31,153 —
Total liabilities, at fair value $ 64 $ — $ 64 $ —
1 unchanged sentence
As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs.
−Removed: The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of December 31, 2022 and December 31, 2021 (dollars in thousands).
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
+Added: The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of December 31, 2023 and 2022 (dollars in thousands).
The following table contains the Level III inputs used to value assets and liabilities on a recurring and nonrecurring basis or where the Company discloses fair value as of December 31, 2022.
+Added: The Company did no t hold any applicable positions as of December 31, 2023.
+Added: December 31, 2022
Asset Category Fair Value Valuation Methodologies Unobservable Inputs (1)
Weighted Average (2)
−Removed: December 31, 2022
Commercial mortgage loans, held for sale, measured at fair value $ 15,559 Discounted Cash Flow Yield 7.2 % 6.3 % - 7.7 %
Real estate securities, trading, measured at fair value $ 235,728 Discounted Cash Flow Yield 3.3 % 2.0 % - 6.5 %
−Removed: Other real estate investments, measured at fair value — Discounted Cash Flow Yield N/A N/A
−Removed: December 31, 2021
−Removed: Commercial mortgage loans, held for sale, measured at fair value $ 34,718 Discounted Cash Flow Yield 3.4 % 3.2 % - 4.2 %
−Removed: Other real estate investments, measured at fair value 2,074 Discounted Cash Flow Yield 10.9 % 9.9 % - 11.9 %
________________________
2 unchanged sentences
(2) Inputs were weighted based on the fair value of the investments included in the range.
−Removed: There were no assets measured at fair value on a nonrecurring basis on our consolidated balance sheets as of December 31, 2022.
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.
−Removed: The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021 for which the Company has used Level III inputs to determine fair value (dollars in thousands):
+Added: The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of December 31, 2023 and 2022 for which the Company has used Level III inputs to determine fair value (dollars in thousands):
December 31, 2023
−Removed: Commercial mortgage loans, held for sale, measured at fair value Real estate securities, trading, measured at fair value Other real estate investments, measured at fair value
+Added: Commercial mortgage loans, held for sale, measured at fair value Real estate securities, trading, measured at fair value
Beginning balance, January 1, 2023 $ 15,559 $ 235,728
Transfers into Level III (1)
−Removed: — 4,566,871 —
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held for sale 3,873 —
−Removed: Realized gain/(loss) on sale of real estate securities — — ( 33 )
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments 44 —
Trading gain/(loss) — ( 605 )
−Removed: Net accretion — — —
−Removed: Purchases 366,692 — —
+Added: Originations 102,500 —
Sales / paydowns ( 121,976 ) ( 235,123 )
−Removed: Cash repayments/receipts — — —
Transfers out of Level III (1)
1 unchanged sentence
________________________
−Removed: (1) Transfers into Level III include transfers related to ARM Agency Securities transferred from Level II.
−Removed: There were no transfers out of Level III as of December 31, 2022.
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
+Added: (1) There were no transfers in or out of Level III as of December 31, 2023.
December 31, 2022
2 unchanged sentences
Transfers into Level III (1)
+Added: — 4,566,871 —
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held for sale 2,358 — —
+Added: Realized gain/(loss) on sale of available for sale trading securities — — ( 33 )
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments ( 511 ) — 4
−Removed: Net accretion — — ( 3 )
−Removed: Purchases 420,673 — —
+Added: Trading gain/(loss) — ( 119,220 ) —
+Added: Originations 366,692 — —
Sales / paydowns ( 387,698 ) ( 4,211,923 ) ( 2,045 )
−Removed: Cash repayments/receipts — — —
Transfers out of Level III (1)
1 unchanged sentence
________________________
−Removed: (1) There were no transfers in or out of Level III as of December 31, 2021.
+Added: (1) Transfers into Level III include transfers related to ARM Agency Securities transferred from Level II.
+Added: There were no transfers out of Level III as of December 31, 2022.
The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value.
−Removed: The fair value of repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs.
−Removed: Financial Instruments Not Measured at Fair Value
−Removed: The Company's financial assets and liabilities that are not reported at fair value on the consolidated balance sheets are reported below as of December 31, 2022 and 2021 (dollars in thousands):
−Removed: Level Carrying Amount Fair Value
−Removed: December 31, 2022
−Removed: Commercial mortgage loans, held for investment (1)
−Removed: Asset III $ 5,269,776 $ 5,278,495
−Removed: Collateralized loan obligations Liability III 3,121,983 3,055,810
−Removed: Mortgage note payable Liability III 23,998 23,998
−Removed: Other financing and loan participation - commercial mortgage loans Liability III 76,301 76,301
−Removed: Unsecured debt Liability III 98,695 66,300
−Removed: December 31, 2021
−Removed: Commercial mortgage loans, held for investment (1)
−Removed: Asset III $ 4,226,888 $ 4,249,118
−Removed: Collateralized loan obligation Liability III 2,162,190 2,181,571
−Removed: Mortgage Note Payable Liability III 23,998 23,998
−Removed: Other financing and loan participation - commercial mortgage loans Liability III 37,903 37,903
−Removed: Unsecured Debt Liability III 148,594 125,400
−Removed: ________________________
−Removed: (1) The carrying value is gross of $ 40.8 million and $ 15.8 million of allowance for credit losses as of December 31, 2022 and December 31, 2021, respectively.
+Added: The fair value of borrowings under repurchase agreements approximate their carrying value in the consolidated balance sheets due to their short-term nature and are measured using Level III inputs.
+Added: Financial Instruments Measured at Fair Value on a Nonrecurring Basis
+Added: Real Estate Owned, held for sale , recorded in Real estate owned, held for sale in the consolidated balance sheets are
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: Repurchase agreements - commercial mortgage loans of $ 680.9 million and $ 1.02 billion as of December 31, 2022 and 2021, respectively, and repurchase agreements - real estate securities of $ 440.0 million and $ 4.2 billion as of December 31, 2022 and 2021, respectively, are not carried at fair value and include accrued interest expense, which are presented in Note 7 – Debt.
+Added: valued at fair value on a non-recurring basis in accordance with ASC 820.
+Added: As of December 31, 2023 and 2022, there were no Real estate owned, held for sale assets measured at fair value on a nonrecurring basis in the consolidated balance sheets.
+Added: As of September 30, 2023, our Real estate owned, held for sale assets and liabilities, measured at fair value on a nonrecurring basis in the consolidated balance sheets, had an aggregate fair value of $ 91.4 million, net, that represented the remaining 23 retail properties in the Walgreens Portfolio and were written down to estimated fair value less cost to sell for impairment purposes and were classified as Level III investments.
+Added: The significant unobservable inputs utilized in the analysis were the exit capitalization rates, which ranged from 5.00 %- 5.75 %.
+Added: Financial Instruments Not Measured at Fair Value
+Added: The Company's financial assets and liabilities that are not reported at fair value in the consolidated balance sheets are reported below as of December 31, 2023 and 2022 (dollars in thousands):
+Added: December 31, 2023 December 31, 2022
+Added: Level Carrying Amount Fair Value Level Carrying Amount Fair Value
+Added: Commercial mortgage loans, held for investment (1)
+Added: Asset III $ 5,036,942 $ 5,010,580 III $ 5,269,776 $ 5,278,495
+Added: Collateralized loan obligation (2)
+Added: Liability II 3,567,166 3,521,274 III 3,121,983 3,055,810
+Added: Mortgage note payable Liability III 23,998 23,998 III 23,998 23,998
+Added: Other financings Liability III 36,534 36,534 III 76,301 76,301
+Added: Unsecured debt Liability III 81,295 64,900 III 98,695 66,300
+Added: ________________________
+Added: (1) The carrying value is gross of $ 47.2 million and $ 40.8 million of allowance for credit losses as of December 31, 2023 and 2022, respectively.
+Added: (2) Depending upon the significance of the fair value inputs utilized in determining these fair values, our collateralized loan obligations are classified in either Level II or Level III of the fair value hierarchy.
+Added: Beginning in the third quarter of 2023, the transfers from Level III to Level II were a result of the availability of current and reliable market data provided by third party pricing services or other valuation techniques which utilized observable inputs.
+Added: Repurchase agreements - commercial mortgage loans of $ 299.7 million and $ 680.9 million as of December 31, 2023 and 2022, respectively, and repurchase agreements - real estate securities of $ 174.1 million and $ 440.0 million as of December 31, 2023 and 2022, respectively, are not carried at fair value and do not include accrued interest, which are presented in Note 7 – Debt.
For these instruments, carrying value generally approximates fair value and are classified as Level III.
1 unchanged sentence
The Company estimates the fair value of the collateralized loan obligations using external broker quotes.
−Removed: The fair value of the other financing and loan participation-commercial mortgage loans is generally estimated using a discounted cash flow analysis.
−Removed: At December 31, 2022, the Mortgage note payable was initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.
−Removed: The fair value of the unsecured borrowings is based on discounted cash flows using Company estimates for market yields on similarly structured debt instruments.
+Added: The Mortgage note payable was recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.
+Added: The fair value of the Other financings is generally estimated using a discounted cash flow analysis.
+Added: The fair value of the Unsecured debt is based on discounted cash flows using Company estimates for market yields on similarly structured debt instruments.
Note 14 - Derivative Instruments
The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.
−Removed: The following derivative instruments were outstanding as of December 31, 2022 and December 31, 2021 (dollars in thousands):
+Added: FRANKLIN BSP REALTY TRUST, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: December 31, 2023
+Added: As of December 31, 2023, there were no derivative instruments outstanding.
+Added: The following derivative instruments were outstanding as of December 31, 2022 (dollars in thousands):
Contract type Notional Assets
4 unchanged sentences
Total $ 31,300 $ 415 $ 64
−Removed: As of December 31, 2021
−Removed: Credit default swaps $ 47,000 $ — $ 1,142
−Removed: Interest rate swaps 3,649,500 312 —
−Removed: Interest rate swaps on unsecured debt 100,000 — 31,153
−Removed: Treasury note futures 360 124 —
−Removed: Total $ 3,796,860 $ 436 $ 32,295
−Removed: The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the year ended December 31, 2022 and December 31, 2021:
−Removed: Year Ended December 31, 2022 Year Ended December 31, 2021
+Added: The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in the consolidated statements of operations for the year ended December 31, 2023, 2022 and 2021:
+Added: December 31, 2023 Year Ended
+Added: December 31, 2022 Year Ended
+Added: December 31, 2021
Contract type Unrealized
2 unchanged sentences
gain/(loss) Realized
+Added: gain/(loss) Unrealized
+Added: gain/(loss) Realized
Credit default swaps $ 41 $ ( 36 ) $ 147 $ ( 405 ) $ 101 $ ( 650 )
3 unchanged sentences
Total $ ( 140 ) $ 998 $ ( 15,840 ) $ 60,033 $ 7,402 $ 484
−Removed: FRANKLIN BSP REALTY TRUST, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: December 31, 2022
−Removed: The Company may engage in residential mortgage investment-related derivative agreements that economically hedge the variability of the underlying benchmark interest rate of current and forecasted 30- to 90-day repurchase agreements.
−Removed: The Company may attempt to mitigate exposure to higher interest rates primarily by entering into pay-fixed, receive-variable, interest rate swap agreements for terms between eighteen months and three years .
−Removed: From an economic perspective, this hedge relationship establishes a relatively stable fixed rate on related debt because the variable-rate payments received on the swap agreements offset a significant portion of the interest accruing on the debt, leaving the fixed-rate swap payments as the Company’s effective borrowing rate.
−Removed: Additionally, changes in fair value of these derivatives tend to offset opposing changes in fair value of the Company’s residential mortgage investments that can occur in response to changes in market interest rates.
−Removed: During the year ended December 31, 2022, the Company paired out of the entirety of its ARM portfolio-related swap agreements and does not hold any derivative positions related to the trading securities as of December 31, 2022.
+Added: The Company paired out of the entirety of its ARM portfolio-related swap agreements and does no t hold any derivative positions related to the trading securities as of December 31, 2023 and 2022.
Interest rate swap agreements are measured at fair value on a recurring basis primarily using Level II Inputs in accordance with ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820).
2 unchanged sentences
In considering the effect of nonperformance risk, the Company considered the impact of netting and credit enhancements, such as collateral postings and guarantees, and has concluded that counterparty risk is not significant to the overall valuation.
−Removed: The fair value of exchange-traded swap agreements economically hedging repurchase agreements is calculated including accrued interest and net of variation margin amounts received or paid through the exchange.
FRANKLIN BSP REALTY TRUST, INC.
5 unchanged sentences
Gross Amounts Not Offset on the Balance Sheet
−Removed: Assets Gross Amounts of Recognized Assets
+Added: Gross Amounts of Recognized Assets
Gross Amounts Offset on the Balance Sheet
4 unchanged sentences
Derivative instruments, at fair value $ 415 $ — $ 415 $ — $ — $ 415
−Removed: December 31, 2021
−Removed: Derivative instruments, at fair value $ 436 $ — $ 436 $ — $ — $ 436
Gross Amounts Not Offset on the Balance Sheet
7 unchanged sentences
Repurchase agreements, real estate securities 174,055 — 174,055 174,055 — —
−Removed: Derivative instruments, at fair value 64 — 64 — 729 —
December 31, 2022
3 unchanged sentences
________________________
−Removed: (1) Included in Restricted cash in the Company's consolidated balance sheets.
+Added: (1) As of December 31, 2023, there were no assets which were presented gross within the scope of ASC 210-20, Balance Sheet—Offsetting .
+Added: (2) Included in Restricted cash in the consolidated balance sheets.
FRANKLIN BSP REALTY TRUST, INC.
7 unchanged sentences
As a result of the October 2021 acquisition of Capstead, the Company acquired a portfolio of ARM Agency Securities.
+Added: The portfolio was completely divested by the third quarter of 2023.
• The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.
+Added: The TRS may also hold certain mezzanine loans that don't qualify as good REIT assets due to any potential loss from foreclosure.
• The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.
+Added: Profit or loss on segment operations is measured by Net income/(loss) included in the consolidated statements of operations.
The following table represents the Company's operations by segment for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands):
−Removed: December 31, 2022 Total Real Estate Debt and Other Real Estate Real Estate Securities TRS Real Estate Owned
+Added: December 31, 2023 Total Real Estate Debt and Other Real Estate Investments Real Estate Securities TRS Real Estate Owned
Interest income $ 552,506 $ 530,116 $ 17,323 $ 2,244 $ 2,823
16 unchanged sentences
For the purposes of the table above, management fees have been allocated to the business segments using an agreed upon percentage of each respective segment's prior period equity.
−Removed: Administrative fees have been allocated to the business segments using a percentage derived from taking the respective business segment's prior period equity as a percent of consolidated equity and multiplying it by the Company's total administrative fee.
+Added: Administrative fees are derived from an agreed upon reimbursable amount based on employee time charged and allocated to the business segments.
FRANKLIN BSP REALTY TRUST, INC.
13 unchanged sentences
For financial reporting purposes, the TRSs are consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRSs.
−Removed: Total income tax expense/(benefit) for the years ended December 31, 2022, December 31, 2021 and December 31, 2020 were $( 0.4 ) million, $ 3.6 million and $( 2.1 ) million, respectively.
+Added: Total (provision)/benefit for income taxes for the years ended December 31, 2023, 2022 and 2021 were $ 2.8 million, $ 0.4 million and $( 3.6 ) million, respectively.
As of December 31, 2023, our taxable REIT subsidiaries have an estimated $ 13.1 million of federal net operating loss ("NOL") carryforwards and $ 5.7 million of state and local NOL carryforwards.
The NOL carryforwards are subject to certain limitations.
+Added: The Company has analyzed and determined that future earnings of the Company's TRS are sufficient to support a conclusion that valuation allowance is not necessary as of December 31, 2023.
The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return.
4 unchanged sentences
2023 2022 2021
−Removed: Current expense/(benefit)
+Added: Current (provision)/benefit for income taxes
Federal $ ( 12 ) $ 65 $ ( 3,093 )
State and local ( 1 ) 167 ( 349 )
−Removed: Total current expense/(benefit) $ ( 232 ) $ 3,442 $ ( 1,716 )
−Removed: Deferred expense/(benefit)
+Added: Total current (provision)/benefit for income taxes $ ( 13 ) $ 232 $ ( 3,442 )
+Added: Deferred (provision)/benefit for income taxes
Federal $ 2,670 $ 99 $ 1
State and local 100 68 ( 158 )
−Removed: Total deferred expense/(benefit) $ ( 167 ) $ 157 $ ( 346 )
−Removed: Provision for income tax expense/(benefit) $ ( 399 ) $ 3,599 $ ( 2,062 )
+Added: Total deferred (provision)/benefit for income taxes $ 2,770 $ 167 $ ( 157 )
+Added: Total (provision)/benefit for income taxes $ 2,757 $ 399 $ ( 3,599 )
+Added: The tax characteristics of $ 1.42 distributions per share of Common Stock declared during 2023 was $ 1.42 ordinary income.
+Added: The tax characteristics of the $ 1.88 per share of Series E Preferred Stock declared during 2023 was $ 1.88 ordinary income.
+Added: The tax characteristics of the $ 1.42 per as-converted share of Series H Preferred Stock declared during 2023 was $ 1.42 ordinary income.
+Added: The ordinary income per share of each stockholder represents the ordinary dividend that may be eligible for the 20% deduction applicable to qualified REIT dividends under Internal Revenue Code Section 199A.
The tax characteristics of the $ 1.42 distributions per common share declared during 2022 was $ 1.42 ordinary income.
5 unchanged sentences
The ordinary income per share of each stockholder represents the amount of ordinary dividends that may be eligible for the 20% deduction applicable to qualified REIT dividends under Section 199A.
−Removed: The tax characteristics of the $ 1.26 distributions per common share declared during 2021 was $ 1.22 ordinary income and $ 0.04 capital gain.
−Removed: The tax characteristics of the $ 353.08 distributions per share of Series A Preferred stock declared during 2021 was $ 343.03 ordinary income and $ 10.05 capital gain.
−Removed: The tax characteristics of the $ 377.02 per share of Series C Preferred Stock and Series D Preferred stock declared during 2021 was $ 366.29 ordinary income and $ 10.73 capital gain.
−Removed: The tax characteristics of the $ 0.35 distributions per share of Series F Preferred stock declared during 2021 was $ 0.34 ordinary income and $ 0.01 capital gain.
−Removed: The tax characteristics of the $ 0.47 distributions per share of Series E Preferred stock declared during 2021 was $ 0.46 ordinary income and $ 0.01 capital gain.
−Removed: The ordinary income per share of each stockholder represents the amount of ordinary dividends that may be eligible for the 20% deduction applicable to qualified REIT dividends under Section 199A.
+Added: The Company utilizes the TRSs to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests.
+Added: Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.
FRANKLIN BSP REALTY TRUST, INC.
1 unchanged sentence
December 31, 2023
−Removed: The Company utilizes the TRSs to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests.
−Removed: Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.
−Removed: The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.
−Removed: In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.
Note 18 - Subsequent Events
The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K.
+Added: The following activity took place subsequent to the year end:
+Added: Loan Activity :
+Added: On February 7, 2024, we obtained, through deed-in-lieu of foreclosure, a multifamily property located in San Antonio, Texas.
+Added: The loan had an amortized cost basis of $ 42.2 million as of December 31, 2023.
+Added: On February 14, 2024, we sold the property for $ 42.8 million and fully recovered our loan basis.
+Added: Stock Repurchases :
+Added: Subsequent to December 31, 2023, the Company repurchased 56,323 shares of common stock at a weighted average cost of $ 12.52 per share.
+Added: As of February 7, 2024, $ 35.2 million remains available under the Company’s share repurchase program (see Part II, Item 5, "Purchases of Equity Securities by the Issuer and Affiliated Purchasers" for additional details).
FRANKLIN BSP REALTY TRUST, INC.
2 unchanged sentences
(Dollars in thousands)
−Removed: Description Property Type Face Value Amortized Cost Index Spread Payment
+Added: Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)
+Added: Spread Payment
Terms Maturity Date
−Removed: Senior Debt 1 Hospitality $ 4,822 $ 4,822 1 month LIBOR 4.00 % Amortizing Balloon 12/9/2023
−Removed: Senior Debt 2 Hospitality 57,075 57,075 1 month LIBOR 5.19 % Interest Only 6/9/2019
−Removed: Senior Debt 3 Multifamily 34,668 34,668 1 month SOFR 3.03 % Interest Only 9/9/2023
−Removed: Senior Debt 4 Multifamily 34,731 34,731 1 month LIBOR 3.00 % Interest Only 2/9/2023
−Removed: Senior Debt 5 Hospitality 22,116 22,116 1 month LIBOR 3.50 % Interest Only 3/9/2023
−Removed: Senior Debt 6 Office 18,683 18,683 1 month SOFR 4.75 % Interest Only 9/9/2023
−Removed: Senior Debt 7 Office 7,035 7,035 1 month LIBOR 3.90 % Interest Only 2/9/2023
−Removed: Senior Debt 8 Office 43,886 43,886 1 month SOFR 3.56 % Interest Only 5/9/2023
−Removed: Senior Debt 9 Hospitality 9,531 9,531 1 month SOFR 5.57 % Interest Only 4/9/2023
−Removed: Senior Debt 10 Hospitality 19,352 19,352 1 month SOFR 3.84 % Interest Only 8/9/2023
−Removed: Senior Debt 11 Hospitality 12,980 12,980 1 month SOFR 3.02 % Interest Only 10/9/2023
−Removed: Senior Debt 12 Hospitality 4,988 4,988 1 month LIBOR 4.25 % Interest Only 7/9/2023
−Removed: Senior Debt 13 Hospitality 31,597 31,597 1 month SOFR 5.25 % Amortizing Balloon 11/9/2024
−Removed: Senior Debt 14 Office 15,188 15,188 1 month SOFR 4.00 % Interest Only 12/9/2023
−Removed: Senior Debt 15 Office 25,802 25,748 1 month LIBOR 4.35 % Interest Only 1/9/2024
−Removed: Senior Debt 16 Office 63,811 63,789 1 month LIBOR 3.70 % Interest Only 2/9/2023
−Removed: Senior Debt 17 Multifamily 10,807 10,807 1 month SOFR 4.25 % Interest Only 8/9/2023
−Removed: Senior Debt 18 Office 36,362 36,356 1 month LIBOR 2.70 % Interest Only 2/9/2023
−Removed: Senior Debt 19 Manufactured Housing 1,331 1,331 5.50 % Interest Only 5/9/2025
−Removed: Senior Debt 20 Manufactured Housing 7,680 7,671 1 month LIBOR 4.50 % Interest Only 8/9/2023
−Removed: Senior Debt 21 Self Storage 29,895 29,858 1 month LIBOR 5.00 % Interest Only 9/9/2023
−Removed: Senior Debt 22 Multifamily 14,550 14,550 1 month SOFR 4.83 % Interest Only 3/9/2023
−Removed: Senior Debt 23 Manufactured Housing 5,020 5,013 1 month LIBOR 5.25 % Interest Only 10/9/2023
−Removed: Senior Debt 24 Office 18,203 18,176 1 month LIBOR 4.50 % Interest Only 10/9/2023
−Removed: Senior Debt 25 Office 65,519 65,321 5.15 % Interest Only 10/9/2025
−Removed: Senior Debt 26 Office 35,000 34,932 1 month LIBOR 5.21 % Interest Only 10/9/2023
−Removed: Senior Debt 27 Office 12,750 12,729 1 month LIBOR 5.00 % Interest Only 11/9/2023
−Removed: Senior Debt 28 Multifamily 38,927 38,864 1 month LIBOR 4.45 % Interest Only 11/9/2023
−Removed: Senior Debt 29 Industrial 14,985 14,955 1 month LIBOR 4.50 % Interest Only 12/9/2023
−Removed: Senior Debt 30 Multifamily 12,280 12,253 1 month LIBOR 4.55 % Interest Only 2/9/2024
−Removed: Senior Debt 31 Multifamily 21,000 20,959 1 month LIBOR 4.60 % Interest Only 1/9/2024
−Removed: Senior Debt 32 Office 12,971 12,969 1 month LIBOR 5.00 % Interest Only 1/9/2023
−Removed: Senior Debt 33 Office 43,751 43,622 1 month LIBOR 3.94 % Interest Only 3/9/2024
−Removed: Senior Debt 34
−Removed: Multifamily 12,892 12,707 1 month LIBOR 7.25 % Interest Only 2/9/2024
−Removed: Senior Debt 35 Multifamily 5,400 5,398 1 month LIBOR 5.25 % Interest Only 2/9/2023
−Removed: Senior Debt 36 Hospitality 23,000 22,952 1 month LIBOR 5.79 % Interest Only 3/9/2024
−Removed: Senior Debt 37 Multifamily 34,750 34,732 1 month LIBOR 6.75 % Interest Only 3/9/2023
−Removed: Senior Debt 38 Multifamily 12,325 12,299 1 month LIBOR 4.50 % Interest Only 3/9/2024
−Removed: Senior Debt 39 Multifamily 5,575 5,571 1 month LIBOR 4.50 % Interest Only 4/9/2023
−Removed: Senior Debt 40 Multifamily 55,000 54,979 1 month LIBOR 3.00 % Interest Only 4/9/2023
−Removed: Senior Debt 41 Multifamily 14,465 14,446 1 month LIBOR 3.39 % Interest Only 4/9/2024
−Removed: Senior Debt 42 Multifamily 8,676 8,654 1 month LIBOR 3.80 % Interest Only 4/9/2024
−Removed: Senior Debt 43 Multifamily 13,582 13,560 1 month LIBOR 4.50 % Interest Only 10/9/2023
−Removed: Senior Debt 44 Multifamily 18,653 18,610 1 month LIBOR 6.25 % Interest Only 12/9/2023
−Removed: Senior Debt 45 Multifamily 19,536 19,510 1 month LIBOR 3.60 % Interest Only 4/9/2024
−Removed: Senior Debt 46 Multifamily 43,096 43,084 1 month LIBOR 2.95 % Interest Only 4/9/2026
−Removed: Senior Debt 47 Hospitality 25,785 25,759 1 month LIBOR 5.60 % Interest Only 5/9/2023
−Removed: Senior Debt 48 Mixed Use 32,500 32,463 1 month LIBOR 3.70 % Interest Only 7/9/2023
−Removed: Senior Debt 49 Multifamily 75,591 75,553 1 month LIBOR 2.95 % Interest Only 4/9/2026
−Removed: Senior Debt 50 Multifamily 20,960 20,871 1 month LIBOR 3.35 % Interest Only 5/9/2024
−Removed: Senior Debt 51 Multifamily 30,231 30,216 1 month LIBOR 2.95 % Interest Only 4/9/2026
−Removed: Senior Debt 52 Multifamily 35,466 35,455 1 month LIBOR 2.95 % Interest Only 4/9/2026
−Removed: Description Property Type Face Value Amortized Cost Index Spread Payment
+Added: Senior Debt 1 Hospitality $ 4,586 $ 4,586 $ — Adj.
+Added: 1 month SOFR Term 4.00 % Amortizing Balloon 3/9/2024
+Added: Senior Debt 2 Multifamily 35,212 35,212 — 1 month SOFR Term 4.50 % Interest Only 9/9/2024
+Added: Senior Debt 3 Hospitality 21,796 21,796 — 1 month SOFR Term 4.25 % Amortizing Balloon 3/9/2024
+Added: Senior Debt 4 Office 13,937 13,937 — 1 month SOFR Term 5.50 % Amortizing Balloon 9/9/2024
+Added: Senior Debt 5 Office 41,185 41,185 — 1 month SOFR Term 3.56 % Amortizing Balloon 5/9/2024
+Added: Senior Debt 6 Hospitality 18,398 18,398 — 1 month SOFR Term 3.84 % Amortizing Balloon 1/9/2024
+Added: Senior Debt 7 Hospitality 12,900 12,900 — 1 month SOFR Term 4.41 % Amortizing Balloon 10/9/2025
+Added: Senior Debt 8 Hospitality 4,805 4,805 — 1 month SOFR Term 5.25 % Amortizing Balloon 5/9/2024
+Added: Senior Debt 9 Office 14,852 14,852 — 1 month SOFR Term 4.00 % Amortizing Balloon 12/9/2024
+Added: Senior Debt 10 Office 24,444 24,442 — Adj.
+Added: 1 month SOFR Term 4.35 % Interest Only 1/9/2024
+Added: Senior Debt 11 Manufactured Housing 1,301 1,301 — 5.50 % Amortizing Balloon 5/9/2025
+Added: Senior Debt 12 Self Storage 27,440 27,440 27,440 Adj.
+Added: 1 month SOFR Term 5.00 % Interest Only 1/9/2024
+Added: Senior Debt 13 Office 17,103 17,103 — Adj.
+Added: 1 month SOFR Term 4.50 % Amortizing Balloon 10/9/2024
+Added: Senior Debt 14 Office 63,274 63,146 — 5.15 % Amortizing Balloon 10/9/2025
+Added: Senior Debt 15 Office 30,186 30,186 — 1 month SOFR Term 2.81 % Interest Only 10/9/2024
+Added: Senior Debt 16 Office 9,175 9,175 — Adj.
+Added: 1 month SOFR Term 5.00 % Interest Only 11/9/2024
+Added: Senior Debt 17 Multifamily 12,550 12,547 — Adj.
+Added: 1 month SOFR Term 4.55 % Interest Only 2/9/2024
+Added: Senior Debt 18 Multifamily 21,000 21,000 — Adj.
+Added: 1 month SOFR Term 4.60 % Interest Only 1/9/2024
+Added: Senior Debt 19 Office 10,855 10,855 — 1 month SOFR Term 5.56 % Amortizing Balloon 1/9/2024
+Added: Senior Debt 20 Office 44,913 44,892 — Adj.
+Added: 1 month SOFR Term 3.97 % Interest Only 3/9/2024
+Added: Senior Debt 21 Multifamily 34,476 34,457 — 1 month SOFR Term 8.00 % Interest Only 2/9/2024
+Added: Senior Debt 22 Hospitality 23,000 22,992 — Adj.
+Added: 1 month SOFR Term 5.79 % Interest Only 3/9/2024
+Added: Senior Debt 23 Multifamily 34,750 34,750 — 1 month SOFR Term 4.10 % Interest Only 3/9/2024
+Added: Senior Debt 24 Multifamily 55,000 55,000 — 1 month SOFR Term 4.00 % Interest Only 5/9/2024
+Added: Senior Debt 25 Multifamily 14,700 14,696 — Adj.
+Added: 1 month SOFR Term 3.39 % Interest Only 4/9/2024
+Added: Senior Debt 26 Multifamily 8,898 8,893 — Adj.
+Added: 1 month SOFR Term 3.80 % Interest Only 4/9/2024
+Added: Senior Debt 27 Multifamily 19,804 19,798 — Adj.
+Added: 1 month SOFR Term 3.60 % Interest Only 4/9/2024
+Added: Senior Debt 28 Multifamily 43,246 43,237 — Adj.
+Added: 1 month SOFR Term 2.95 % Interest Only 4/9/2026
+Added: Senior Debt 29 Hospitality 25,700 25,700 — Adj.
+Added: 1 month SOFR Term 5.60 % Interest Only 5/9/2024
+Added: Senior Debt 30 Mixed Use 32,500 32,500 — Adj.
+Added: 1 month SOFR Term 3.70 % Interest Only 7/9/2024
+Added: Senior Debt 31 Multifamily 75,927 75,901 — Adj.
+Added: 1 month SOFR Term 2.95 % Interest Only 4/9/2026
+Added: Senior Debt 32 Multifamily 20,450 20,426 — Adj.
+Added: 1 month SOFR Term 3.60 % Interest Only 5/9/2024
+Added: Senior Debt 33 Multifamily 30,320 30,310 — Adj.
+Added: 1 month SOFR Term 2.95 % Interest Only 4/9/2026
+Added: Senior Debt 34 Multifamily 35,466 35,459 — Adj.
+Added: 1 month SOFR Term 2.95 % Interest Only 4/9/2026
+Added: Senior Debt 35 Multifamily 33,588 33,582 — Adj.
+Added: 1 month SOFR Term 2.95 % Interest Only 4/9/2026
+Added: Senior Debt 36 Multifamily 152,112 151,644 — 1 month SOFR Term 4.55 % Interest Only 6/9/2024
+Added: Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)
+Added: Spread Payment
Terms Maturity Date
−Removed: Senior Debt 53 Multifamily 33,588 33,579 1 month LIBOR 2.95 % Interest Only 4/9/2026
−Removed: Senior Debt 54 Hospitality 25,771 25,645 1 month LIBOR 9.00 % Interest Only 5/9/2024
−Removed: Senior Debt 55 Self Storage 15,000 14,986 1 month LIBOR 4.26 % Interest Only 5/9/2023
−Removed: Senior Debt 56 Multifamily 25,198 25,165 1 month LIBOR 3.25 % Interest Only 6/9/2023
−Removed: Senior Debt 57 Office 6,742 6,730 1 month LIBOR 5.25 % Interest Only 11/9/2023
−Removed: Senior Debt 58
−Removed: Multifamily 111,226 110,462 1 month LIBOR 6.50 % Interest Only 6/9/2024
−Removed: Senior Debt 59 Multifamily 11,069 11,037 1 month LIBOR 3.15 % Interest Only 7/9/2024
−Removed: Senior Debt 60 Hospitality 19,640 19,608 1 month LIBOR 5.35 % Interest Only 6/9/2023
−Removed: Senior Debt 61 Hospitality 33,000 32,883 1 month LIBOR 6.25 % Interest Only 6/9/2024
−Removed: Senior Debt 62
−Removed: Multifamily 27,202 26,944 1 month LIBOR 8.00 % Interest Only 8/9/2024
−Removed: Senior Debt 63 Multifamily 15,874 15,833 1 month LIBOR 3.75 % Interest Only 10/9/2023
−Removed: Senior Debt 64 Multifamily 30,420 30,326 1 month LIBOR 3.00 % Interest Only 9/9/2024
−Removed: Senior Debt 65 Multifamily 40,046 39,859 1 month LIBOR 3.15 % Interest Only 10/9/2024
−Removed: Senior Debt 66 Multifamily 42,850 42,778 1 month LIBOR 3.40 % Interest Only 9/9/2023
−Removed: Senior Debt 67 Multifamily 36,760 36,655 1 month LIBOR 3.64 % Interest Only 10/9/2024
−Removed: Senior Debt 68 Multifamily 8,500 8,475 1 month LIBOR 3.75 % Interest Only 9/9/2024
−Removed: Senior Debt 69 Multifamily 14,200 14,171 1 month LIBOR 3.15 % Interest Only 9/9/2023
−Removed: Senior Debt 70 Multifamily 13,667 13,639 1 month LIBOR 3.75 % Interest Only 9/9/2023
−Removed: Senior Debt 71 Multifamily 67,138 66,715 1 month LIBOR 3.25 % Interest Only 10/9/2024
−Removed: Senior Debt 72 Multifamily 10,268 10,226 1 month LIBOR 3.75 % Interest Only 10/9/2024
−Removed: Senior Debt 73 Hospitality 32,527 32,305 1 month SOFR 6.73 % Interest Only 2/9/2024
−Removed: Senior Debt 74 Multifamily 26,698 26,610 1 month LIBOR 3.20 % Interest Only 10/9/2024
−Removed: Senior Debt 75 Hospitality 17,122 17,088 1 month LIBOR 5.25 % Interest Only 10/9/2023
−Removed: Senior Debt 76 Hospitality 16,500 16,463 1 month LIBOR 7.10 % Interest Only 11/9/2023
−Removed: Senior Debt 77 Multifamily 88,500 88,500 1 month LIBOR 2.75 % Interest Only 10/9/2024
−Removed: Senior Debt 78 Multifamily 56,150 55,974 1 month LIBOR 3.10 % Interest Only 10/9/2024
−Removed: Senior Debt 79 Multifamily 37,882 37,714 1 month LIBOR 2.90 % Interest Only 11/9/2026
−Removed: Senior Debt 80 Multifamily 54,151 53,994 1 month LIBOR 3.10 % Interest Only 12/9/2023
−Removed: Senior Debt 81 Multifamily 37,886 37,779 1 month LIBOR 2.90 % Interest Only 12/9/2024
−Removed: Senior Debt 82 Multifamily 65,741 65,619 1 month LIBOR 2.85 % Interest Only 11/9/2023
−Removed: Senior Debt 83 Multifamily 30,600 30,573 1 month LIBOR 2.65 % Interest Only 11/9/2023
−Removed: Senior Debt 84 Multifamily 31,662 31,545 1 month LIBOR 3.25 % Interest Only 12/9/2024
−Removed: Senior Debt 85 Multifamily 62,850 62,712 1 month LIBOR 3.35 % Interest Only 11/9/2023
−Removed: Senior Debt 86 Multifamily 43,745 43,626 1 month LIBOR 3.00 % Interest Only 12/9/2023
−Removed: Senior Debt 87 Multifamily 46,221 46,027 1 month LIBOR 2.75 % Interest Only 11/9/2025
−Removed: Senior Debt 88 Multifamily 86,000 85,745 1 month SOFR 3.24 % Interest Only 3/9/2024
−Removed: Senior Debt 89 Multifamily 29,821 29,730 1 month LIBOR 2.90 % Interest Only 12/9/2024
−Removed: Senior Debt 90 Manufactured Housing 6,700 6,677 1 month LIBOR 4.50 % Interest Only 12/9/2024
−Removed: Senior Debt 91 Multifamily 58,680 58,532 1 month LIBOR 3.45 % Interest Only 1/9/2024
−Removed: Senior Debt 92 Multifamily 26,966 26,896 1 month LIBOR 2.90 % Interest Only 12/9/2023
−Removed: Senior Debt 93 Multifamily 13,535 13,478 1 month LIBOR 3.20 % Interest Only 12/9/2024
−Removed: Senior Debt 94 Multifamily 37,133 37,002 1 month LIBOR 3.00 % Interest Only 12/9/2024
−Removed: Senior Debt 95 Multifamily 33,581 33,491 1 month LIBOR 3.20 % Interest Only 12/9/2023
−Removed: Senior Debt 96 Multifamily 40,231 40,115 1 month LIBOR 2.90 % Interest Only 12/9/2023
−Removed: Senior Debt 97 Multifamily 66,202 66,024 1 month LIBOR 2.88 % Interest Only 12/9/2023
−Removed: Senior Debt 98 Multifamily 63,722 63,549 1 month LIBOR 2.88 % Interest Only 12/9/2023
−Removed: Senior Debt 99 Multifamily 16,909 16,855 1 month SOFR 3.50 % Interest Only 1/9/2024
−Removed: Senior Debt 100 Multifamily 57,660 57,544 1 month LIBOR 2.75 % Interest Only 12/9/2024
−Removed: Senior Debt 101 Multifamily 65,953 65,810 1 month SOFR 6.03 % Interest Only 7/9/2023
−Removed: Senior Debt 102 Multifamily 22,240 22,179 1 month SOFR 2.96 % Interest Only 1/9/2024
−Removed: Senior Debt 103 Multifamily 25,746 25,656 1 month SOFR 2.96 % Interest Only 1/9/2025
−Removed: Senior Debt 104 Multifamily 31,678 31,526 1 month SOFR 3.20 % Interest Only 1/9/2024
−Removed: Senior Debt 105 Multifamily 78,050 77,724 1 month SOFR 3.45 % Interest Only 1/9/2027
−Removed: Senior Debt 106 Multifamily 80,714 80,552 1 month SOFR 3.21 % Interest Only 1/9/2025
−Removed: Senior Debt 107 Multifamily 24,000 23,939 1 month SOFR 3.10 % Interest Only 1/9/2024
−Removed: Senior Debt 108 Retail 31,000 30,894 1 month SOFR 3.29 % Interest Only 1/9/2025
−Removed: Senior Debt 109 Multifamily 37,793 37,531 1 month SOFR 3.55 % Interest Only 11/9/2023
−Removed: Description Property Type Face Value Amortized Cost Index Spread Payment
+Added: Senior Debt 37 Hospitality 36,750 36,713 — Adj.
+Added: 1 month SOFR Term 6.25 % Interest Only 6/9/2024
+Added: Senior Debt 38 Multifamily 35,116 34,990 — Adj.
+Added: 1 month SOFR Term 8.00 % Interest Only 3/9/2025
+Added: Senior Debt 39 Multifamily 16,453 16,453 — Adj.
+Added: 1 month SOFR Term 3.75 % Interest Only 10/9/2024
+Added: Senior Debt 40 Multifamily 47,984 47,901 — Adj.
+Added: 1 month SOFR Term 3.15 % Interest Only 10/9/2024
+Added: Senior Debt 41 Multifamily 41,650 41,650 — Adj.
+Added: 1 month SOFR Term 3.40 % Interest Only 9/9/2024
+Added: Senior Debt 42 Multifamily 34,760 34,713 — Adj.
+Added: 1 month SOFR Term 3.64 % Interest Only 10/9/2024
+Added: Senior Debt 43 Multifamily 8,500 8,489 — Adj.
+Added: 1 month SOFR Term 3.75 % Interest Only 9/9/2024
+Added: Senior Debt 44 Multifamily 14,890 14,890 — Adj.
+Added: 1 month SOFR Term 3.15 % Interest Only 9/9/2024
+Added: Senior Debt 45 Multifamily 69,500 69,312 — Adj.
+Added: 1 month SOFR Term 3.25 % Interest Only 10/9/2024
+Added: Senior Debt 46 Multifamily 11,325 11,306 — Adj.
+Added: 1 month SOFR Term 3.75 % Interest Only 10/9/2024
+Added: Senior Debt 47 Multifamily 27,199 27,160 — Adj.
+Added: 1 month SOFR Term 3.20 % Interest Only 10/9/2024
+Added: Senior Debt 48 Hospitality 17,122 17,122 — Adj.
+Added: 1 month SOFR Term 5.25 % Interest Only 10/9/2024
+Added: Senior Debt 49 Multifamily 56,150 56,071 — Adj.
+Added: 1 month SOFR Term 3.10 % Interest Only 10/9/2024
+Added: Senior Debt 50 Multifamily 38,242 38,116 — Adj.
+Added: 1 month SOFR Term 2.90 % Interest Only 11/9/2026
+Added: Senior Debt 51 Multifamily 55,394 55,394 — Adj.
+Added: 1 month SOFR Term 3.10 % Interest Only 1/9/2024
+Added: Senior Debt 52 Multifamily 38,153 38,101 — Adj.
+Added: 1 month SOFR Term 2.90 % Interest Only 12/9/2024
+Added: Senior Debt 53 Multifamily 68,165 68,165 — Adj.
+Added: 1 month SOFR Term 2.85 % Interest Only 11/9/2024
+Added: Senior Debt 54 Multifamily 32,567 32,510 — Adj.
+Added: 1 month SOFR Term 3.25 % Interest Only 12/9/2024
+Added: Senior Debt 55 Multifamily 61,600 61,600 — Adj.
+Added: 1 month SOFR Term 3.35 % Interest Only 11/9/2024
+Added: Senior Debt 56 Multifamily 44,987 44,987 — Adj.
+Added: 1 month SOFR Term 3.00 % Interest Only 12/9/2024
+Added: Senior Debt 57 Multifamily 47,147 47,019 — Adj.
+Added: 1 month SOFR Term 2.75 % Interest Only 11/9/2025
+Added: Senior Debt 58 Multifamily 86,000 85,959 — 1 month SOFR Term 3.24 % Interest Only 3/9/2024
+Added: Senior Debt 59 Manufactured Housing 6,700 6,688 — Adj.
+Added: 1 month SOFR Term 4.50 % Interest Only 12/9/2024
+Added: Senior Debt 60 Multifamily 58,680 58,677 — Adj.
+Added: 1 month SOFR Term 3.45 % Interest Only 1/9/2024
+Added: Senior Debt 61 Multifamily 26,068 26,068 — Adj.
+Added: 1 month SOFR Term 2.90 % Interest Only 3/9/2024
+Added: Senior Debt 62 Multifamily 14,933 14,905 — Adj.
+Added: 1 month SOFR Term 3.20 % Interest Only 12/9/2024
+Added: Senior Debt 63 Multifamily 38,283 38,219 — Adj.
+Added: 1 month SOFR Term 3.00 % Interest Only 12/9/2024
+Added: Senior Debt 64 Multifamily 42,235 42,234 — Adj.
+Added: 1 month SOFR Term 2.90 % Interest Only 1/9/2024
+Added: Senior Debt 65 Multifamily 69,415 69,415 — Adj.
+Added: 1 month SOFR Term 2.88 % Interest Only 12/9/2024
+Added: Senior Debt 66 Multifamily 66,742 66,742 — Adj.
+Added: 1 month SOFR Term 2.88 % Interest Only 12/9/2024
+Added: Senior Debt 67 Multifamily 17,145 17,144 — 1 month SOFR Term 3.50 % Interest Only 1/9/2025
+Added: Senior Debt 68 Multifamily 59,232 59,175 — Adj.
+Added: 1 month SOFR Term 2.75 % Interest Only 12/9/2024
+Added: Senior Debt 69 Multifamily 22,240 22,239 — 1 month SOFR Term 2.96 % Interest Only 7/9/2024
+Added: Senior Debt 70 Multifamily 25,241 25,195 — 1 month SOFR Term 2.96 % Interest Only 1/9/2025
+Added: Senior Debt 71 Multifamily 32,428 32,425 — 1 month SOFR Term 3.20 % Interest Only 1/9/2024
+Added: Senior Debt 72 Multifamily 78,416 78,167 — 1 month SOFR Term 3.45 % Interest Only 1/9/2027
+Added: Senior Debt 73 Multifamily 81,247 81,164 — 1 month SOFR Term 3.21 % Interest Only 1/9/2025
+Added: Senior Debt 74 Multifamily 24,000 23,999 — 1 month SOFR Term 3.10 % Interest Only 1/9/2024
+Added: Senior Debt 75 Retail 31,000 30,946 — 1 month SOFR Term 3.29 % Interest Only 1/9/2025
+Added: Senior Debt 76 Multifamily 38,511 38,511 — 1 month SOFR Term 3.55 % Interest Only 2/9/2024
+Added: Senior Debt 77 Multifamily 23,855 23,848 — 1 month SOFR Term 2.95 % Interest Only 2/9/2024
+Added: Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)
+Added: Spread Payment
Terms Maturity Date
−Removed: Senior Debt 110 Multifamily 22,965 22,891 1 month SOFR 2.95 % Interest Only 2/9/2024
−Removed: Senior Debt 111 Multifamily 10,669 10,637 1 month SOFR 3.30 % Interest Only 2/9/2024
−Removed: Senior Debt 112 Multifamily 47,444 47,323 1 month SOFR 2.86 % Interest Only 1/9/2024
−Removed: Senior Debt 113 Multifamily 36,824 36,729 1 month SOFR 2.86 % Interest Only 1/9/2024
−Removed: Senior Debt 114 Hospitality 10,493 10,452 1 month SOFR 5.30 % Interest Only 2/9/2025
−Removed: Senior Debt 115 Retail 22,377 22,268 1 month SOFR 4.95 % Interest Only 4/9/2024
−Removed: Senior Debt 116 Multifamily 82,000 81,884 1 month SOFR 3.20 % Interest Only 2/9/2024
−Removed: Senior Debt 117 Industrial 55,000 54,832 1 month SOFR 3.50 % Interest Only 3/9/2024
−Removed: Senior Debt 118 Multifamily 39,004 38,870 1 month SOFR 3.10 % Interest Only 3/9/2024
−Removed: Senior Debt 119 Multifamily 34,823 34,711 1 month SOFR 2.95 % Interest Only 3/9/2024
−Removed: Senior Debt 120 Mixed Use 19,000 18,942 1 month SOFR 3.42 % Interest Only 3/9/2024
−Removed: Senior Debt 121 Multifamily 85,500 85,373 1 month SOFR 3.15 % Interest Only 3/9/2024
−Removed: Senior Debt 122 Multifamily 31,282 31,228 1 month SOFR 3.30 % Interest Only 4/9/2024
−Removed: Senior Debt 123
−Removed: Hospitality — — 1 month SOFR 7.05 % Interest Only 6/9/2025
−Removed: Senior Debt 124
−Removed: Multifamily — — 1 month SOFR 6.75 % Interest Only 8/9/2024
−Removed: Senior Debt 125 Hospitality 43,344 43,265 1 month SOFR 4.90 % Interest Only 4/9/2023
−Removed: Senior Debt 126 Hospitality 11,250 11,152 1 month SOFR 5.22 % Interest Only 11/9/2025
−Removed: Senior Debt 127 Multifamily 5,132 4,699 1 month SOFR 7.02 % Interest Only 6/9/2024
−Removed: Senior Debt 128 Multifamily 27,722 27,595 1 month SOFR 6.05 % Interest Only 6/9/2023
−Removed: Senior Debt 129 Multifamily 56,616 56,384 1 month SOFR 3.95 % Interest Only 5/9/2025
−Removed: Senior Debt 130 Multifamily 28,650 28,465 1 month SOFR 4.00 % Interest Only 11/9/2024
−Removed: Senior Debt 131 Multifamily 50,137 49,812 1 month SOFR 6.70 % Interest Only 3/9/2024
−Removed: Senior Debt 132 Multifamily 12,242 12,192 1 month SOFR 3.55 % Interest Only 5/9/2024
−Removed: Senior Debt 133
−Removed: Retail 63,640 60,304 1 month SOFR 4.50 % Interest Only 5/9/2023
−Removed: Senior Debt 134 Industrial 23,050 22,930 1 month SOFR 4.90 % Interest Only 9/9/2024
−Removed: Senior Debt 135 Multifamily 19,441 19,366 1 month SOFR 3.50 % Interest Only 6/9/2024
−Removed: Senior Debt 136 Multifamily 17,600 17,569 1 month SOFR 4.55 % Interest Only 5/9/2023
−Removed: Senior Debt 137 Multifamily 28,640 28,503 1 month SOFR 3.65 % Interest Only 6/9/2024
−Removed: Senior Debt 138 Multifamily 16,843 16,756 1 month SOFR 3.65 % Interest Only 6/9/2024
−Removed: Senior Debt 139 Multifamily 70,750 70,503 1 month SOFR 3.80 % Interest Only 6/9/2024
−Removed: Senior Debt 140 Multifamily 81,271 80,939 1 month SOFR 3.95 % Interest Only 6/9/2024
−Removed: Senior Debt 141 Multifamily 43,651 43,475 1 month SOFR 3.95 % Interest Only 6/9/2024
−Removed: Senior Debt 142 Multifamily 56,547 56,311 1 month SOFR 3.95 % Interest Only 6/9/2024
−Removed: Senior Debt 143 Multifamily 20,325 20,237 1 month SOFR 3.95 % Interest Only 6/9/2024
−Removed: Senior Debt 144 Multifamily 128,324 127,678 1 month SOFR 3.95 % Interest Only 6/9/2024
−Removed: Senior Debt 145 Multifamily 56,000 55,800 1 month SOFR 3.80 % Interest Only 6/9/2024
−Removed: Senior Debt 146 Multifamily 11,675 11,647 1 month SOFR 4.45 % Interest Only 11/9/2024
−Removed: Senior Debt 147 Multifamily 69,200 68,622 1 month SOFR 3.45 % Interest Only 6/9/2024
−Removed: Senior Debt 148 Multifamily 173,389 172,791 1 month SOFR 6.52 % Interest Only 4/16/2023
−Removed: Senior Debt 149 Hospitality 29,644 29,366 1 month SOFR 6.94 % Interest Only 8/9/2025
−Removed: Senior Debt 150 Hospitality 13,410 13,314 1 month SOFR 5.75 % Interest Only 4/9/2024
−Removed: Senior Debt 151 Manufactured Housing 10,550 10,479 1 month SOFR 4.75 % Interest Only 9/9/2024
−Removed: Senior Debt 152 Multifamily 47,293 47,142 1 month SOFR 4.20 % Interest Only 1/9/2025
−Removed: Senior Debt 153 Multifamily 51,000 50,753 1 month SOFR 3.75 % Interest Only 12/9/2024
−Removed: Senior Debt 154 Multifamily 15,150 15,074 1 month SOFR 4.25 % Interest Only 1/9/2025
−Removed: Senior Debt 155 Hospitality 28,300 28,163 1 month SOFR 5.25 % Interest Only 1/9/2024
+Added: Senior Debt 78 Multifamily 11,100 11,097 — 1 month SOFR Term 3.30 % Interest Only 2/9/2024
+Added: Senior Debt 79 Multifamily 47,444 47,442 — 1 month SOFR Term 2.86 % Interest Only 1/9/2024
+Added: Senior Debt 80 Multifamily 36,824 36,821 — 1 month SOFR Term 2.86 % Interest Only 1/9/2024
+Added: Senior Debt 81 Hospitality 10,504 10,481 — 1 month SOFR Term 5.30 % Interest Only 2/9/2025
+Added: Senior Debt 82 Multifamily 82,000 81,989 — 1 month SOFR Term 3.20 % Interest Only 2/9/2024
+Added: Senior Debt 83 Industrial 55,000 54,973 — 1 month SOFR Term 3.50 % Interest Only 3/9/2024
+Added: Senior Debt 84 Multifamily 39,864 39,843 — 1 month SOFR Term 3.10 % Interest Only 3/9/2024
+Added: Senior Debt 85 Multifamily 35,220 35,202 — 1 month SOFR Term 2.95 % Interest Only 3/9/2024
+Added: Senior Debt 86 Mixed Use 19,000 18,991 — 1 month SOFR Term 3.42 % Interest Only 3/9/2024
+Added: Senior Debt 87 Multifamily 85,500 85,480 — 1 month SOFR Term 3.15 % Interest Only 3/9/2024
+Added: Senior Debt 88 Multifamily 31,900 31,888 — 1 month SOFR Term 3.30 % Interest Only 4/9/2024
+Added: Senior Debt 89 Hospitality 30,021 29,741 — 1 month SOFR Term 7.05 % Interest Only 6/9/2025
+Added: Senior Debt 90 Multifamily 13,558 12,691 — 1 month SOFR Term 6.75 % Interest Only 4/9/2025
+Added: Senior Debt 91 Hospitality 43,457 43,457 — 1 month SOFR Term 4.90 % Interest Only 4/9/2024
+Added: Senior Debt 92 Hospitality 15,634 15,568 — 1 month SOFR Term 5.34 % Interest Only 11/9/2025
+Added: Senior Debt 93 Multifamily 35,949 35,949 35,949 1 month SOFR Term 6.05 % Interest Only 6/9/2024
+Added: Senior Debt 94 Multifamily 56,616 56,479 — 1 month SOFR Term 3.95 % Interest Only 5/9/2025
+Added: Senior Debt 95 Multifamily 29,905 29,816 — 1 month SOFR Term 4.00 % Interest Only 11/9/2024
+Added: Senior Debt 96 Multifamily 56,859 56,806 — 1 month SOFR Term 6.70 % Interest Only 3/9/2024
+Added: Senior Debt 97 Multifamily 12,536 12,523 — 1 month SOFR Term 3.55 % Interest Only 5/9/2024
+Added: Senior Debt 98 Industrial 18,724 18,673 — 1 month SOFR Term 4.90 % Interest Only 9/9/2024
+Added: Senior Debt 99 Multifamily 19,899 19,875 — 1 month SOFR Term 3.50 % Interest Only 6/9/2024
+Added: Senior Debt 100 Multifamily 28,979 28,936 — 1 month SOFR Term 3.65 % Interest Only 6/9/2024
+Added: Senior Debt 101 Multifamily 17,330 17,303 — 1 month SOFR Term 3.65 % Interest Only 6/9/2024
+Added: Senior Debt 102 Multifamily 70,750 70,673 — 1 month SOFR Term 3.80 % Interest Only 6/9/2024
+Added: Senior Debt 103 Multifamily 83,914 83,810 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024
+Added: Senior Debt 104 Multifamily 45,469 45,414 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024
+Added: Senior Debt 105 Multifamily 58,003 57,930 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024
+Added: Senior Debt 106 Multifamily 20,716 20,688 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024
+Added: Senior Debt 107 Multifamily 146,810 146,608 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024
+Added: Senior Debt 108 Multifamily 56,000 55,938 — 1 month SOFR Term 3.80 % Interest Only 6/9/2024
+Added: Senior Debt 109 Multifamily 11,675 11,661 — 1 month SOFR Term 4.45 % Interest Only 11/9/2024
+Added: Senior Debt 110 Multifamily 70,750 70,569 — 1 month SOFR Term 3.45 % Interest Only 6/9/2024
+Added: Senior Debt 111 Hospitality 39,525 39,346 — 1 month SOFR Term 6.94 % Interest Only 8/9/2025
+Added: Senior Debt 112 Multifamily — — — 1 month SOFR Term 6.31 % Interest Only 9/9/2025
+Added: Senior Debt 113 Hospitality 16,270 16,249 — 1 month SOFR Term 5.75 % Interest Only 4/9/2024
+Added: Senior Debt 114 Manufactured Housing 11,617 11,587 — 1 month SOFR Term 4.75 % Interest Only 9/9/2024
+Added: Senior Debt 115 Hospitality — — — 1 month SOFR Term 7.50 % Interest Only 11/9/2024
+Added: Senior Debt 116 Multifamily 48,764 48,684 — 1 month SOFR Term 4.20 % Interest Only 1/9/2025
+Added: Senior Debt 117 Multifamily 51,000 50,875 — 1 month SOFR Term 3.75 % Interest Only 12/9/2024
+Added: Senior Debt 118 Multifamily 14,635 14,594 — 1 month SOFR Term 4.25 % Interest Only 1/9/2025
+Added: Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)
+Added: Spread Payment
+Added: Terms Maturity Date
+Added: Senior Debt 119 Hospitality 28,300 28,297 — 1 month SOFR Term 5.25 % Interest Only 1/9/2024
+Added: Senior Debt 120 Multifamily 55,500 55,353 — 1 month SOFR Term 3.85 % Interest Only 4/9/2025
+Added: Senior Debt 121 Hospitality 10,500 10,465 — 1 month SOFR Term 5.50 % Interest Only 4/9/2025
+Added: Senior Debt 122 Hospitality 120,000 119,559 — 1 month SOFR Term 4.90 % Interest Only 2/9/2026
+Added: Senior Debt 123 Multifamily 64,500 64,388 — 1 month SOFR Term 5.00 % Interest Only 5/9/2024
+Added: Senior Debt 124 Hospitality 39,549 39,661 — 1 month SOFR Term 3.75 % Interest Only 12/27/2024
+Added: Senior Debt 125 Multifamily 21,700 21,616 — 1 month SOFR Term 3.95 % Interest Only 7/9/2025
+Added: Senior Debt 126 Manufactured Housing 21,449 21,296 — 1 month SOFR Term 4.25 % Interest Only 8/9/2025
+Added: Senior Debt 127 Multifamily 19,793 19,881 — 4.75 % Interest Only 7/9/2028
+Added: Senior Debt 128 Multifamily 78,996 78,664 — 1 month SOFR Term 3.20 % Interest Only 8/9/2025
+Added: Senior Debt 129 Hospitality 23,000 22,861 — 1 month SOFR Term 5.45 % Interest Only 8/9/2026
+Added: Senior Debt 130 Hospitality 12,420 12,322 — 1 month SOFR Term 4.85 % Interest Only 9/9/2026
+Added: Senior Debt 131 Multifamily 38,750 38,572 — 1 month SOFR Term 4.50 % Interest Only 11/9/2025
+Added: Senior Debt 132 Hospitality 31,300 31,078 — 1 month SOFR Term 4.25 % Interest Only 11/9/2026
+Added: Senior Debt 133 Multifamily 42,750 42,555 — 1 month SOFR Term 3.85 % Interest Only 11/9/2025
+Added: Senior Debt 134 Multifamily 17,119 16,966 — 1 month SOFR Term 3.20 % Interest Only 10/9/2026
+Added: Senior Debt 135 Multifamily 21,000 20,887 — 1 month SOFR Term 3.75 % Interest Only 12/9/2024
+Added: Senior Debt 136 Hospitality 41,071 40,855 — 1 month SOFR Term 3.65 % Interest Only 12/9/2026
+Added: Senior Debt 137 Hospitality 25,750 25,595 — 1 month SOFR Term 3.95 % Interest Only 1/9/2026
Senior Debt 138 Hospitality 16,566 16,563 — 5.99 % Amortizing Balloon 10/6/2024
−Removed: Mezzanine Loan 1 Multifamily 3,000 3,000 1 month SOFR 9.23 % Interest Only 9/9/2023
−Removed: Mezzanine Loan 2 Multifamily 10,000 9,982 1 month SOFR 16.29 % Interest Only 7/9/2023
−Removed: Mezzanine Loan 3 Retail 3,000 2,989 1 month SOFR 12.00 % Interest Only 1/9/2025
−Removed: Mezzanine Loan 4 Mixed Use 1,000 997 1 month SOFR 11.00 % Interest Only 3/9/2024
−Removed: Mezzanine Loan 5 Hospitality 1,350 1,344 1 month SOFR 9.25 % Interest Only 11/9/2025
+Added: Mezzanine Loan 1 Retail 3,000 2,994 — 1 month SOFR Term 12.00 % Interest Only 1/9/2025
+Added: Mezzanine Loan 2 Mixed Use 1,000 1,000 — 1 month SOFR Term 11.00 % Interest Only 3/9/2024
+Added: Mezzanine Loan 3 Hospitality 1,350 1,346 — 1 month SOFR Term 9.25 % Interest Only 11/9/2025
+Added: Mezzanine Loan 4 Hospitality — — — 1 month SOFR Term 10.00 % Interest Only 11/9/2024
+Added: Mezzanine Loan 5 Multifamily 2,378 2,378 — 1 month SOFR Term 4.50 % Interest Only 9/9/2024
+Added: Mezzanine Loan 6 Multifamily 11,700 11,655 — 1 month SOFR Term 3.95 % Interest Only 7/9/2025
+Added: Commercial mortgage loans, held for investment (3)
$ 5,045,036 $ 5,036,942 $ 63,389
−Removed: For the activity within the Company's loan portfolio during the years ended December 31, 2022 and December 31, 2021, refer to Note 3 - Commercial Mortgage Loans on the consolidated financials of Form 10-K.
+Added: Allowance for credit losses $ ( 47,175 )
+Added: Commercial mortgage loans, held for investment, net of allowance for credit losses
+Added: ________________________
+Added: (1) Principal amount of loans subject to delinquent principal or interest is defined as loans in (a) maturity default or (b) receipt of interest outstanding for more than 90 days.
+Added: (2) On March 5, 2021, the Financial Conduct Authority of the U.K.
+Added: (the “FCA”) announced that LIBOR tenors would cease to be published or no longer be representative.
+Added: The Alternative Reference Rates Committee (the “ARRC”) interpreted this announcement to constitute a benchmark transition event.
+Added: The benchmark index of LIBOR interest rate will convert from LIBOR to compounded SOFR, plus a benchmark adjustment of 11.448 basis points.
+Added: As of December 31, 2023, all of our commercial mortgage loans, held for investment which had been indexed at LIBOR were converted to SOFR utilizing the 11.448 basis points adjustment and the applicable spreads remain unchanged.
+Added: The loans which have the SOFR adjustment are indicated with "Adj.
+Added: 1M SOFR Term." Effective yield is calculated as the spread of the loan plus the higher of any applicable index or index floor.
+Added: (3) The estimated aggregate cost for U.S.
+Added: federal income tax purposes is approximately $ 5.0 billion.
+Added: For the activity within the Company's loan portfolio during the years ended December 31, 2023 and 2022, refer to Note 3 - Commercial Mortgage Loans on the consolidated financials of Form 10-K.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.