What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-26 · 481 added, 669 removed, 1358 unchanged (46% of the section changed)

19 unchanged sentences

Other Information.

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.

During the quarter ended December 31, 2024, no director or officer of the Company adopted, modified, 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.

5 unchanged sentences

You may also obtain a copy of the Code of Ethics by writing to our secretary at:

Franklin BSP Realty Trust, Inc., 1345 Avenue of the Americas, Suite 32A, New York, New York 10105, Attention:

Franklin BSP Realty Trust, Inc., 1 Madison Avenue, Suite 1600, New York, New York 10010, Attention:

Micah Goodman, Secretary.

37 unchanged sentences

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)

3.7 Amendment No.

3 to Articles Supplementary of Franklin BSP Realty Trust, Inc., effective January 16, 2025, 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 17, 2025).

Amended and Restated Bylaws of Franklin BSP Realty Trust, Inc.

29 unchanged sentences

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)

10.12 Indenture, dated as of September 2 6 , 202 4 , by and among BSPRT 202 4 -FL1 1 Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, U.S.

Bank Trust Company, National Association, as trustee and note administrator, and U.S.

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 September 27 , 202 4 )

19.1* Insider Trading Policy

21* Subsidiaries of the Registrant

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1†* Compensation Recovery Policy

97.1† Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 26, 2024).

101* XBRL (eXtensible Business Reporting Language).

16 unchanged sentences

/s/ Jerome S.

Baglien Chief Financial Officer, Chief Operating Officer and Treasurer (Principal Financial and Accounting Officer) February 26, 2024

Baglien Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) February 26, 2025

/s/ Elizabeth K.

25 unchanged sentences

We have audited the accompanying consolidated balance sheet of Franklin BSP Realty Trust, Inc.

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”).

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes and financial statement schedule listed in the accompanying index as of December 31, 2024 (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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.

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, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

1 unchanged sentence

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.

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.

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 audits.

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.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

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.

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.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits 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.

Our audits 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.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

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.

Our audits 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.

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.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

9 unchanged sentences

Allowance for Credit Losses - Commercial Mortgage Loans Held for Investment

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.

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 $78.1 million as of December 31, 2024, inclusive of the general and specific allowances for credit losses of $46.9 million and $31.2 million, respectively.

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.

18 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Franklin BSP Realty Trust, Inc.

(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”).

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.

We have audited the statements of operations, comprehensive income, stockholders’ equity and cash flows of Franklin BSP Realty Trust, Inc.

(the Company) for the year ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

14 unchanged sentences

March 16, 2023

Except for Note 16, as to which the date is

February 26, 2025

FRANKLIN BSP REALTY TRUST, INC.

7 unchanged sentences

Commercial mortgage loans, held for sale, measured at fair value (2)

Real estate securities, trading, measured at fair value (includes pledged assets of $ 227,610 as of December 31, 2022)

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)

Real estate securities, available for sale, measured at fair value, amortized cost of $ 202,894 and $ 243,272 as of December 31, 2024 and 2023, respectively (3)

202,973 242,569

Derivative instruments, measured at fair value — 415

Receivable for loan repayment (4)

5 unchanged sentences

Real estate owned, held for sale 222,890 103,657

Equity method investment 13,395 —

Total assets $ 6,002,386 $ 5,955,180

12 unchanged sentences

Intangible lease liability, held for sale 1,291 12,297

Intangible lease liability, net of amortization — 6,428

Total liabilities $ 4,392,581 $ 4,279,223

3 unchanged sentences

$ 89,748 $ 89,748

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 $ 89,748

Preferred stock, $ 0.01 par value;

100,000,000 shares authorized, 7.5 % Cumulative Redeemable Preferred Stock, Series E, 10,329,039 shares issued and outstanding as of December 31, 2023 and 2022

100,000,000 shares authorized, 7.5 % Cumulative Redeemable Preferred Stock, Series E, 10,329,039 shares issued and outstanding as of December 31, 2024 and 2023, respectively

$ 258,742 $ 258,742

8 unchanged sentences

________________________

(1) Includes pledged assets of $ 268.7 million and $ 299.7 million as of December 31, 2024 and 2023, respectively.

(2) Includes pledged assets of $ 61.1 million and zero as of December 31, 2024 and 2023, respectively.

(3) Includes pledged assets of $ 180.7 million and $ 167.9 million as of December 31, 2024 and 2023, respectively.

(4) Includes $ 157.0 million and $ 55.1 million of cash held by the servicer related to the CLOs as of December 31, 2024 and 2023, respectively.

The Company no longer holds a residential mortgage backed securities principal paydown receivable as of December 31, 2023.

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.

12 unchanged sentences

Administrative services expenses 9,707 14,440 12,928

Impairment of acquired assets — — 88,282

Professional fees 14,508 15,270 22,566

6 unchanged sentences

Realized gain/(loss) on extinguishment of debt — 2,201 ( 5,167 )

Realized gain/(loss) on sale of available for sale trading securities 80 — —

Realized gain/(loss) on real estate securities, available for sale 143 80 —

Realized gain/(loss) on sale of commercial mortgage loans, held for sale — — ( 354 )

Realized gain/(loss) on sale of commercial mortgage loans, held for investment 138 — —

Realized gain/(loss) on sale of commercial mortgage loans, held for sale, measured at fair value 13,125 3,873 2,358

31 unchanged sentences

Reclassification adjustment for amounts included in net income/(loss) — — 282

$ — $ 62 $ ( 62 )

Comprehensive (income)/loss attributable to non-controlling interest 3,475 706 216

8 unchanged sentences

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

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

Common stock repurchases ( 1,416,369 ) ( 14 ) ( 16,565 ) — — — — ( 16,579 ) — ( 16,579 )

1 unchanged sentence

Share-based compensation 516,887 — 2,519 — — — — 2,519 — 2,519

Common stock exchanged for Series F Preferred Stock ( 39,733,299 ) ( 397 ) ( 710,034 ) — — — — ( 710,431 ) — ( 710,431 )

Series A Preferred stock converted into common stock 7,649,632 76 127,527 — — — — 127,603 — 127,603

Offering costs — — — — ( 91 ) — — ( 91 ) — ( 91 )

Series F Preferred stock converted into common stock 39,733,299 397 710,034 — — — ( 710,431 ) — — —

Series C Preferred stock converted into common stock 119,538 1 1,996 — — — — 1,997 — 1,997

Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.

— — — — 14,431 — — 14,431 — 14,431

Net (income)/loss attributable to non-controlling interest — — — — — — — — 216 216

Distributions declared — — — — ( 146,386 ) — — ( 146,386 ) — ( 146,386 )

5 unchanged sentences

Share-based compensation 481,189 — 4,761 — — — — 4,761 — 4,761

Shares canceled for tax withholding on vested equity rewards ( 57,021 ) — ( 812 ) — — — — ( 812 ) — ( 812 )

Series I Preferred stock converted into common stock 299,200 3 4,997 — — — — 5,000 — 5,000

Offering costs — — ( 269 ) — — — — ( 269 ) — ( 269 )

Series F Preferred stock converted into common stock 39,733,299 397 710,034 — — — ( 710,431 ) — — —

Series C Preferred stock converted into common stock 119,538 1 1,996 — — — — 1,997 — 1,997

Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.

6 unchanged sentences

Common stock repurchases ( 391,863 ) ( 4 ) ( 4,863 ) — — — — ( 4,867 ) — ( 4,867 )

Common stock issued through distribution reinvestment plan 61,866 1 768 — — — — 769 — 769

Share-based compensation 819,710 2 8,171 — — — — 8,173 — 8,173

Shares canceled for tax withholding on vested equity rewards ( 112,971 ) — ( 1,508 ) — — — — ( 1,508 ) — ( 1,508 )

Series I Preferred stock converted into common stock 299,200 3 4,997 — — — — 5,000 — 5,000

Offering costs — — ( 269 ) — — — — ( 269 ) — ( 269 )

Net income/(loss) attributable to Franklin BSP Realty Trust, Inc.

18 unchanged sentences

Share-based compensation 8,173 4,761 2,519

Realized (gain)/loss from sale of available for sale trading securities ( 80 ) — —

(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

Realized (gain)/loss on extinguishment of debt — ( 2,201 ) 5,167

Realized (gain)/loss on swap terminations — — ( 55,301 )

Realized (gain)/loss on sale of commercial mortgage loans, held for sale ( 3,873 ) 354 —

Trading (gain)/loss 605 119,220 36,128

Realized (gain)/loss on sale of available for sale securities, measured at fair value ( 143 ) ( 80 ) —

Realized (gain)/loss on sale of commercial mortgage loans, held for sale, measured at fair value ( 13,125 ) ( 3,873 ) 354

Realized (gain)/loss on sale of commercial mortgage loans, held for investment ( 138 ) — —

Unrealized (gain)/loss on commercial mortgage loans, held for sale, measured at fair value — ( 44 ) 511

Unrealized (gain)/losses on derivative instruments ( 1,050 ) 140 15,840

(Gain)/loss on other real estate investments 7,983 7,089 692

Trading (gain)/loss — 605 119,220

Depreciation and amortization 5,630 8,412 5,329

Straight line rental income ( 3,518 ) ( 3,785 ) ( 1,359 )

Provision/(benefit) for credit losses 35,699 33,738 36,115

Origination of commercial mortgage loans, held for sale, measured at fair value ( 358,445 ) ( 102,500 ) ( 366,692 )

Proceeds from sale of commercial mortgage loans, held for sale, measured at fair value 121,976 384,808 454,073

Severance and deferred compensation — — ( 22,168 )

Proceeds from sale or repayment of commercial mortgage loans, held for sale, measured at fair value 284,300 121,976 384,808

Changes in assets and liabilities:

4 unchanged sentences

Interest payable ( 2,539 ) 2,910 10,023

Net cash (used in)/provided by operating activities $ 197,387 $ 152,515 $ 146,497

Net cash provided by operating activities $ 57,233 $ 197,387 $ 152,515

Cash flows from investing activities:

Cash acquired through merger $ — $ — $ 174,083

Origination and purchase of commercial mortgage loans, held for investment $ ( 1,759,291 ) $ ( 936,271 ) $ ( 2,227,723 )

1 unchanged sentence

Principal repayments received on commercial mortgage loans, held for sale, measured at fair value — — 532

Proceeds from sale of other real estate investments 39,755 2,045 30,338

Purchase of equity method investments ( 13,395 ) — —

Proceeds from sale of real estate owned, held for sale 34,375 39,755 2,045

Purchase of real estate owned and capital expenditures ( 324 ) ( 1,151 ) ( 663 )

Proceeds from sale of commercial mortgage loans, held for sale — — 9,344

Proceeds from sale of commercial mortgage loans, held for investment 33,420 — —

Purchase of real estate securities ( 79,503 ) ( 223,768 ) ( 220,630 )

Proceeds from sale of real estate securities 418,791 3,731,716 2,059,418

Proceeds from sale or paydown of real estate securities 120,042 418,791 3,731,716

Principal collateral on mortgage investments — 17,702 545,416

7 unchanged sentences

Cash flows from financing activities:

Cash consideration paid in merger $ — $ — $ ( 20,485 )

Proceeds from issuances of redeemable convertible preferred stock — — 15,000

Payments for common stock repurchases $ ( 4,867 ) $ ( 12,505 ) $ ( 16,579 )

Shares cancelled for tax withholding on vested equity awards ( 812 ) — —

Shares canceled for tax withholding on vested equity awards ( 1,508 ) ( 812 ) —

Payments of offering costs — ( 269 ) —

7 unchanged sentences

Repayments on other financings ( 23,669 ) ( 99,474 ) ( 139 )

Borrowings on unsecured debt — — 210,000

Repayments of unsecured debt — ( 13,367 ) ( 50,000 )

Borrowing on mortgage note payable — — 23,940

Payments of deferred financing costs ( 9,309 ) ( 12,905 ) ( 15,232 )

3 unchanged sentences

Contributions from non-controlling interest 64 — 125

Distributions paid to common and preferred stockholders ( 144,347 ) ( 139,415 ) ( 67,955 )

Net cash (used in)/provided by financing activities:

Distributions paid to common and preferred shareholders ( 144,906 ) ( 144,347 ) ( 139,415 )

Net cash used in financing activities:

$ ( 48,581 ) $ ( 424,994 ) $ ( 3,227,492 )

14 unchanged sentences

Common stock issued through distribution reinvestment plan $ — $ 769 $ 1,963

Distribution payable 36,237 36,133 36,317

Commercial mortgage loans transferred from held for sale to held for investment — — 9,296

Loans transferred to real estate owned 307,546 77,305 115,978

Modification accounted for as repayment and new loan 42,235 — —

FRANKLIN BSP REALTY TRUST, INC.

3 unchanged sentences

2024 2023 2022

Distribution payable 36,133 36,317 30,346

Commercial mortgage loans transferred from held for sale to held for investment — 9,296 52,615

Loans transferred to real estate owned 77,305 115,978 —

Seller-based financing on sales of real estate owned, held for sale 94,917 — —

Reclassification of assets held for investment to held for sale — 114,512 —

1 unchanged sentence

Conversion of preferred stock to common stock — 5,000 712,428

Issuances of common stock due to merger — — 579,526

Issuances of Series E preferred stock due to merger — — 258,742

Unsecured debt assumed due to merger — — 98,574

Exchange of preferred stock — — 94,748

22 unchanged sentences

The advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton.”

The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans.

The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") securitization transactions.

Historically this business has focused primarily on CMBS, commercial real estate collateralized loan obligation bonds ("CRE CLO bonds"), collateralized debt obligations ("CDOs") and other securities.

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.

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.

The Company primarily focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans.

Secondarily, the Company's real estate securities business focuses on investing in and asset managing real estate securities.

Historically this business has focused primarily on commercial mortgage-backed securities ("CMBS"), commercial real estate collateralized loan obligation bonds and single asset single borrower bonds (collectively "CMBS bonds"), collateralized debt obligations ("CDOs") and other securities.

The Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions.

The Company also owns real estate that was either acquired by the Company through foreclosure, deed-in-lieu of foreclosure or that was purchased for investment.

Note 2 - Summary of Significant Accounting Policies

1 unchanged sentence

The Company's consolidated financial statements and related footnotes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the requirements for reporting on Form 10-K and Regulation S-X, as appropriate.

Reclassifications

Certain prior year balances have been reclassified in order to conform to the current period presentation.

For the twelve months ended December 31, 2023 and 2022, $ 3.8 million and $ 1.4 million, respectively, related to rental income was reclassified from Prepaid expenses and other assets to Straight line rental income in the consolidated statement of cash flows.

Use of Estimates

1 unchanged sentence

Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Reclassifications

Certain prior year balances have been reclassified in order to conform to the current period presentation.

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.

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.

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

12 unchanged sentences

The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Commercial Mortgage Loans

Held for Investment - Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments.

Commercial mortgage loans, held for investment purposes, are carried at amortized cost less a allowance for credit losses.

Commercial mortgage loans, held for investment purposes, are carried at amortized cost less an allowance for credit losses.

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.

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.

Guaranteed loan commitment fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest rate method.

The accretion of guaranteed loan commitment fees is recognized in Interest income in the consolidated statements of operations.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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.

9 unchanged sentences

Held for investment assets are stated at cost, as adjusted for any impairment loss, less accumulated depreciation.

Real estate owned, held for investment - Amounts capitalized to real estate owned, held for investment consist of the cost of acquisition or construction, any tenant improvements or major improvements, betterments that extend the useful life of the related asset, and transaction costs associated with the acquisition of an individual asset that does not qualify as a business combination.

Held for sale assets are stated at fair value, less costs to sell.

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets may not be recoverable.

When indicators of potential impairment are present, management assesses whether the respective carrying values will be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition for assets held for use, or from the estimated fair values, less costs to sell, for assets held for sale.

In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts such assets to the respective estimated fair values and recognizes an impairment loss.

Estimated fair values are calculated based on the following information, depending upon availability, in order of preference:

(i) recent market prices from third-party purchasers (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.

All repairs and maintenance are expensed as incurred.

Additionally, the Company capitalizes interest while the development, or redevelopment, of a real estate owned asset is in progress.

No development or redevelopments of real estate owned assets are in progress as of December 31, 2023.

No developments or redevelopments of real estate owned assets are in progress as of December 31, 2024.

The Company’s real estate owned, held for investment assets are depreciated or amortized using the straight-line method over the following useful lives:

2 unchanged sentences

Site Improvements 5 - 25 years

Intangible Lease Assets Lease Term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of either operating properties or properties under construction in which the Company has an ownership interest, either directly or through investments in joint ventures, may not be recoverable.

Estimated fair values are calculated based on the following information, depending upon availability, in order of preference:

(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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

Intangible Lease Assets and Liabilities Lease Term

Real estate owned, held for sale - Real estate owned is classified as held for sale in the period in which the following six criteria under ASC Topic 360, "Property, Plant, and Equipment" are met:

(i) we commit to a plan and have the authority to sell the asset;

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Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.

Fair Value of Assets and Liabilities of Acquired Properties

Upon the acquisition of real properties, the Company records the fair value of properties (plus any related acquisition costs) allocated based on relative fair value as tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based on their estimated fair values.

Substantially all of the Company’s property acquisitions qualify as asset acquisitions under ASC 805, Business Combinations.

The estimated fair values of the tangible assets of an acquired property are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on management’s determination of the estimated fair value of these assets.

Management relies on a sales comparison approach using closed land sales and listings in determining the land value, and determines the as-if-vacant estimated fair value of a property using methods similar to those used by independent appraisers.

Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.

In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand.

Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Intangible Lease Assets and Liabilities of Acquired Properties

The estimated fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases, taking into consideration the probability of renewals for any below-market leases.

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The amount capitalized as direct costs associated with obtaining a tenant include commissions, tenant improvements, and other direct costs and are estimated based on management’s consideration of current market costs to execute a similar lease.

These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized over the remaining terms of the respective leases.

The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease.

These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized over the remaining terms of the respective leases.

Credit Losses

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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

The allowance for credit losses, required under ASU 2016-13, is deducted from the amortized cost basis of loans that are held-to-maturity in the consolidated balance sheets.

General allowance for credit losses

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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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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.

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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:

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected.

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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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Non-performing status

The Company designates loans as non-performing when (i) full payment of principal and coupon interest components become 90-days past due ("non-accrual status");

or (ii) the Company has reasonable doubt as to whether the collection of contractual components can be satisfied ("cost recovery status").

The Company designates loans as non-performing when (i) full payment of principal and coupon interest components become 90-days past due ("non-accrual status") or (ii) the Company has reasonable doubt as to whether the collection of contractual components can be satisfied ("cost recovery status").

When a loan is designated as non-performing and placed on non-accrual status, interest is only recognized as income when payment has been received.

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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.

The Company analyzes the AFS real estate securities portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an provision for credit losses including but not limited to;

The Company analyzes the AFS real estate securities portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to a provision for credit losses including, but not limited to:

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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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.

Equity Method Investments

The Company's investments are accounted for under the equity method when (i) requirements for consolidation are not met, and (ii) we have significant influence over the operations of the investee.

Under this method, the investments are initially recorded at cost and subsequently adjusted for the Company's share of net income or loss and cash contributions or distributions made during the reporting period.

Net income or loss is allocated based on the ownership interest that is controlled by the Company.

The agreements may designate different percentage allocations among investors for profits and losses;

however, our recognition generally follows the entity’s distribution priorities, which may change upon the achievement of certain investment return thresholds.

Repurchase Agreements

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Interest paid in accordance with repurchase agreements is recorded in Interest expense in the consolidated statements of operations.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Deferred Financing Costs

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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.

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.

Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest rate method and included in Interest expense in the consolidated statements of operations.

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

Since 2018, the Company has from time to time offered, shares of the Company’s common stock or one or more series of its preferred stock, including its former Series C convertible preferred stock (the “Series C Preferred Stock,”), former Series D convertible preferred stock (the “Series D Preferred Stock”), Series H convertible preferred stock (the “Series H Preferred Stock”) and former Series I convertible preferred stock (the “Series I Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended.

The Company has from time to time offered, shares of the Company’s common stock or one or more series of its preferred stock, in private placements exempt from the registration requirements of the Securities Act of 1933, as amended.

In connection with these offerings, the Company incurred various offering costs.

These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers.

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.

Offering costs for the Series H Preferred Stock and Series I Preferred Stock were expensed in the consolidated statement of operations.

Offering costs for the common stock are recorded in the Company’s stockholders’ equity.

Offering costs for the preferred stock were expensed in the consolidated statement of operations.

Equity Incentive Plan

The Company maintains the Franklin BSP Realty Trust, Inc.

2021 Equity Incentive Plan (the “2021 Incentive Plan”), pursuant to which the Company has granted and may in the future, from time to time, grant equity awards to the Company’s directors, officers and employees (if it ever has employees), employees of the Advisor and its affiliates, or certain of the Company’s consultants, advisors or other service providers to the Company or an affiliate of the Company.

2021 Equity Incentive Plan (the “2021 Incentive Plan”), pursuant to which the Company has granted and may grant in the future, from time to time, equity awards to the Company’s directors, officers and employees (if it ever has employees), employees of the Advisor and its affiliates, or certain of the Company’s consultants, advisors or other service providers to the Company or an affiliate of the Company.

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.

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.

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.

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.

The RSP expired on February 7, 2023.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Since 2022, the Company has been issuing annual awards of restricted stock units ("RSUs") under the 2021 Incentive Plan 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 for RSUs.

One share of the Company’s common stock is issued for each RSU that vests.

In addition, the Company issues annual awards of restricted stock under the 2021 Incentive Plan to its directors, which vest in full on the earlier of the first anniversary of the grant date and the date immediately prior to the Annual Meeting of Stockholders in the subsequent year, subject to continuing service.

The RSUs 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, while holders of restricted stock receive cash dividends in the ordinary course in the same manner as other common shares.

Upon termination for any reason, all unvested RSUs and restricted stock will be forfeited by the grantee, who will be given no further rights to such awards.

The fair value of the RSUs and restricted stock are expensed over the vesting period and included in Share-based compensation in the consolidated statements of operations.

Distribution Reinvestment Plan

The Company maintains a dividend reinvestment plan ("DRIP") pursuant to which stockholders may reinvest dividends into shares of common stock.

The Company maintains a dividend reinvestment plan ("DRIP") pursuant to which stockholders may reinvest dividends into shares of the Company's common stock.

Shares of common stock purchased through the DRIP for dividend reinvestments are supplied either directly by the Company as newly issued shares or via purchases by the DRIP administrator of shares of common stock on the open market, at the Company’s option.

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The Company may suspend, modify or terminate the DRIP at any time in its sole discretion.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The Company has conducted its operations to qualify as a REIT for U.S.

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Per Share Data

The Company’s Series H Preferred Stock and Series I Preferred Stock are each considered a participating security and the Company calculates basic earnings per share using the two-class method.

The Company’s Series H convertible preferred stock (the "Series H Preferred Stock") and Series I convertible preferred stock (the "Series I Preferred Stock") (when it was outstanding) are each considered a participating security and the Company calculates basic earnings per share using the two-class method.

The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted.

The Company calculates basic earnings per share by dividing net income applicable to common stock for the period by the weighted-average number of shares of common stock outstanding for that period.

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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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 2021 Incentive Plan or upon conversion of the outstanding shares of the Company’s Series H Preferred Stock and Series I Preferred Stock (when it was outstanding), except when doing so would be anti-dilutive.

Reportable Segments

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• 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.

As a result of the October 2021 acquisition of Capstead, the Company acquired a portfolio of ARM Agency Securities.

The portfolio was completely divested by the third quarter of 2023.

Historically this business has focused primarily on CMBS, CMBS bonds, CDO notes, and other securities.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

• 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.

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Series H Preferred Stock

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.

The Series H Preferred Stock ranks senior to our 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.

Dividends on the Series H Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0 % of the liquidation preference per share and (ii) the dividends that would have been paid had such share of Series H Preferred Stock been converted into a share of common stock on the first day of such quarter, subject to proration in the event the share of Series H preferred stock is not outstanding for the full quarter.

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Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.

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.

On January 16, 2025, the Articles Supplementary relating to the Series H Preferred Stock was amended such that the mandatory conversion date was extended by one year, to January 21, 2026.

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, 2026.

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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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Series I Preferred Stock

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Dividends on the Series E Preferred Stock will accumulate whether or not the Company has earnings, whether or not there are funds legally available for the payment of those dividends and whether or not those dividends are declared.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series E Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $ 25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption.

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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.

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.

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.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London interbank offered rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

The guidance is effective upon issuance and generally can be elected over time through December 31, 2024, as extended under ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

During the third quarter of 2023, the Company adopted ASU 2020-04.

The adoption of ASU 2020-04 did not have a material impact on the Company's consolidated financial statements as of December 31, 2023.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

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ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis.

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.

We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update, or ASU, 2023-09 “Income Taxes (Topic 740):

The amendments require expanded disclosures around significant segment expenses and identification of the Company's chief operating decision maker.

For the year ended December 31, 2024, the Company adopted and implemented the amendments and related disclosure requirements.

Refer to Note 16 - Segment Reporting for details.

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” or ASU 2023-09.

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We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU, 2024-01 “Compensation — Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards,” or ASU 2024-01.

ASU 2024-01 improves clarity and operability without changing the guidance.

ASU 2024-01 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.

We do not expect the adoption of ASU 2024-01 to have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02 “Codification Improvements — Amendments to Remove References to the Concepts Statements,” or ASU 2024-02.

ASU 2024-02 amended certain definitions in the FASB guidance.

ASU 2024-02 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.

We do not expect the adoption of ASU 2024-02 to have a material impact on our consolidated financial statements.

FRANKLIN BSP REALTY TRUST, INC.

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Note 3 - Commercial Mortgage Loans

The following table is a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (dollars in thousands):

The following table presents a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (dollars in thousands):

December 31, 2024 December 31, 2023

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Total commercial mortgage loans, held for investment, net $ 4,908,667 $ 4,989,767

________________________

(1) As of December 31, 2022, the Company recorded a specific reserve with respect to a retail loan designated as non-performing.

For the years ended December 31, 2024 and 2023, the activity in the Company's commercial mortgage loans, held for investment carrying values, was as follows (dollars in thousands):

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Principal repayments ( 1,607,977 ) ( 1,076,532 )

Net fees capitalized into carrying value of loans ( 5,242 ) ( 13,775 )

Discount accretion/premium amortization 13,016 12,614

Loans transferred from/(to) commercial real estate loans, held for sale — ( 9,296 )

Dispositions ( 33,203 ) —

Principal charge-off ( 4,801 ) —

Deferred fees and other items (1)

( 13,326 ) ( 5,242 )

Amortization/accretion of fees and other items (1)

Transfer to real estate owned (2)(3)

( 307,546 ) ( 103,863 )

Cost recovery ( 1,870 ) ( 1,726 )

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Total commercial mortgage loans, held for investment, net $ 4,908,667 $ 4,989,767

________________________

(1) Other items primarily consist of purchase discounts or premiums and deferred origination expenses.

(2) In February 2024, the Company, through deed-in-lieu of foreclosure, acquired a multifamily property located in San Antonio, TX, and assumed the senior mortgage note which the Company originated in November 2021.

At the time of the deed-in-lieu of foreclosure, the amortized cost of the loan was $ 42.2 million and contractual interest was satisfied.

Subsequently thereafter, the property was sold to a third party.

In connection with the sale, the senior mortgage note was assumed by the buyer and immediately modified, resulting in a $ 5.9 million principal paydown.

As a result, the modification was accounted for as a new loan for GAAP purposes and the sale of the real estate owned transaction resulted in a net gain of $ 6.0 thousand recorded in Gain/(loss) on other real estate investments in the consolidated statement of operations.

(3) For additional details on properties obtained through foreclosure or deed-in-lieu of foreclosure see Note 5 - Real Estate Owned.

As of December 31, 2024 and 2023, the Company's total commercial mortgage loan, held for investment, portfolio was comprised of 155 and 144 loans, respectively.

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Loan Portfolio by Collateral Type and Geographic Region

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):

The following tables presents the composition by loan collateral type and region of the Company's commercial mortgage loans, held for investment, portfolio (dollars in thousands):

December 31, 2024 December 31, 2023

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Hospitality 730,590 14.6 % 670,274 13.3 %

Office 269,924 5.4 % 405,705 7.7 %

Industrial 340,195 6.8 % 73,724 1.5 %

Office 185,303 3.7 % 269,924 5.4 %

Retail 45,613 0.9 % 34,000 0.7 %

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Mideast 304,522 6.1 % 455,739 9.0 %

Great Lakes 161,059 3.2 % 162,162 3.1 %

New England 177,417 3.5 % 63,274 1.3 %

Far West 171,775 3.4 % 113,554 2.3 %

Other 405,018 8.0 % 192,481 3.6 %

Great Lakes 118,882 2.4 % 161,059 3.2 %

Rocky Mountain 114,425 2.3 % 74,934 1.5 %

289,664 5.8 % 266,810 5.2 %

Total $ 4,999,854 100.0 % $ 5,045,036 100.0 %

________________________

(1) Represents loans secured by a portfolio of properties located in various regions of the United States.

Allowance for Credit Losses

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December 31, 2024 $ 31,218 $ 46,865 $ 1,123 $ 47,988 $ 79,206

Specific Allowance for Credit Losses

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.

The loan was evaluated in accordance with ASC 310 - Receivables and was determined to be a TDR.

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.

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.

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.

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.

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December 31, 2024

In February 2020, the Company originated a first mortgage loan secured by an office property in Portland, OR.

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.

In connection with the restructuring, the Company committed a $ 10.1 million mezzanine note.

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.

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.

Specific Allowance for Credit Losses

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.

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.

During the third quarter of 2023, the Company foreclosed upon the mortgage notes through deed-in-lieu of foreclosure.

The carrying value of the loan at the time of repossession was $ 20.3 million, net of cost recoveries totaling $ 1.1 million.

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.

The transfer was evaluated to be an asset acquisition in accordance with ASC 805.

See Note 5 - Real Estate Owned.

As such, these loans receivable are measured at fair value on a nonrecurring basis using significant unobservable inputs and are classified as Level 3 assets in the fair value hierarchy.

The fair value of the underlying collateral is determined using the market approach, the income approach, or a combination thereof.

The significant unobservable input used for the income approach is the exit capitalization rate assumptions, which ranged from 5.00 % to 9.50 %.

The significant unobservable input used for the market approach is the estimated fair value less cost to sell based on a negotiated price from an anticipated buyer.

In June 2022, the Company originated a first mortgage loan with a commitment of $ 60.8 million secured by two multifamily properties in North Carolina.

The loan was identified by management as non-performing and placed on non-accrual status, with an amortized cost of $ 58.0 million as of March 31, 2024.

The Company recorded a specific allowance for credit losses of $ 0.7 million on this loan for the quarter ended March 31, 2024.

In May 2024, the Company, through deed-in-lieu of foreclosure, acquired the properties which are recorded in Real estate owned, held for sale in the consolidated balance sheets.

See Note 5 - Real Estate Owned for additional details.

In March 2021, the Company originated a first mortgage loan with a commitment of $ 48.5 million secured by an office property in Colorado.

The loan was identified by management as non-performing and placed on cost recovery status, with an amortized cost of $ 43.7 million as of December 31, 2024.

The Company recorded a specific allowance for credit losses of $ 26.7 million on this loan for the year ended December 31, 2024.

In December 2019, the Company originated a first mortgage loan with a commitment of $ 33.0 million secured by an office property in Georgia.

The loan was identified by management as non-performing and placed on cost recovery status, with an amortized cost of $ 22.8 million as of December 31, 2024.

The Company recorded a specific allowance for credit losses of $ 1.3 million on this loan for the year ended December 31, 2024.

In July 2019, the Company originated a first mortgage loan with a commitment of $ 20.9 million secured by a hospitality property in Texas.

During the third quarter of 2024, the loan was paid off resulting in a loss of $ 0.4 million.

The Company recorded a specific allowance for credit losses of $ 0.4 million during the third quarter of 2024, and subsequently wrote off this specific allowance for credit losses in the same quarter.

In November 2021, the Company originated a first mortgage loan with a commitment of $ 66.7 million secured by a multifamily property in Texas.

The loan was identified by management as non-performing and placed on cost recovery status, with an amortized cost of $ 66.7 million as of December 31, 2024.

The Company recorded a specific allowance for credit losses of $ 3.2 million on this loan for the year ended December 31, 2024.

General Allowance for Credit Losses

The Company recorded a decrease in its general allowance for credit losses during the year ended December 31, 2024 of $ 0.3 million.

The primary driver for the lower reserve balance is due to a more favorable macro-economic outlook since the end of the prior year.

The Company recorded an increase in its general allowance for credit losses during the year ended December 31, 2023 of $ 21.4 million.

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.

The Company recorded an increase in its general allowance for credit losses during the year ended December 31, 2022 of $ 10.8 million.

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.

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 sheet, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

Past Due Status

4 unchanged sentences

________________________

(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.

(1) Comprised of four mortgage loans, two of which were collateralized by office properties and the other two by multifamily properties.

Both office properties have been designated as non-performing and placed on cost recovery status.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Non-performing Status

4 unchanged sentences

Removal of non-performing loan amortized cost 506,099 157,841

Non-performing loan amortized cost end of period (1)

Non-performing loan amortized cost at end of period (1)

$ 133,230 $ 78,185

________________________

(1) As of December 31, 2023 and 2022, the Company had two and two loans, respectively, designated as non-performing.

No specific allowances for credit losses were determined for the 2 loans on non-performing status as of December 31, 2023.

As of December 31, 2023, the two designated non-performing loans were both collateralized by multifamily properties.

(1) As of December 31, 2024 and 2023, the Company had three and two loans, respectively, designated as non-performing.

As of December 31, 2024, the three non-performing loans were placed on cost recovery status, two of which were collateralized by office properties with a specific allowance for credit losses of $ 26.7 million and $ 1.3 million, and the other by a multifamily property with a specific allowance for credit losses of $ 3.2 million.

As of December 31, 2023, the two non-performing loans were placed on non-accrual status and were collateralized by multifamily properties.

No specific allowances for credit losses were determined for the two loans designated as non-performing as of December 31, 2023.

Loan Credit Characteristics, Quality and Vintage

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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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Commercial mortgage loans, held for investment in the consolidated balance sheets, are assigned an initial risk rating of 2 .

23 unchanged sentences

Total carrying value, net $ 4,989,767

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Commercial Mortgage Loans, Held for Sale, Measured at Fair Value

As of December 31, 2023 the Company did no t hold any commercial mortgage loans, held for sale.

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.

As of December 31, 2024, the contractual principal balance outstanding of commercial mortgage loans, held for sale, measured at fair value was $ 87.3 million which was comprised of three loans.

As of December 31, 2024, 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.

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):

December 31, 2023 December 31, 2022

Loan Collateral Type Par Value Percentage Par Value Percentage

Retail — — % $ 12,000 76.8 %

Office — — % 3,625 23.2 %

As of December 31, 2023 the Company did not hold any commercial mortgage loans, held for sale, measured at fair value.

The following tables present 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):

December 31, 2024

Loan Collateral Type Par Value Percentage

Multifamily $ 17,270 19.8 %

Mixed Use 70,000 80.2 %

Total $ 87,270 100.0 %

December 31, 2023 December 31, 2022

Loan Region Par Value Percentage Par Value Percentage

Southeast $ — — % $ 15,625 100.0 %

December 31, 2024

Loan Region Par Value Percentage

Mideast $ 75,000 85.9 %

Southwest 12,270 14.1 %

Total $ 87,270 100.0 %

FRANKLIN BSP REALTY TRUST, INC.

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December 31, 2024

Note 4 - Real Estate Securities

Real Estate Securities Classified As Trading

As of December 31, 2023, the Company did no t hold any real estate securities classified as trading.

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)

December 31, 2022

Agency Securities:

Fannie Mae/Freddie Mac ARMs $ 235,728 2.42 %

________________________

(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”).

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.

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.

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

Note 4 - Investment Securities

Real Estate Securities, Available For Sale, Measured at Fair Value

The following is a summary of the Company's real estate securities, available for sale, measured at fair value as of December 31, 2024 and 2023 (dollars in thousands):

CRE CLO Bonds

Number of Bonds Benchmark Interest Rate Weighted Average Interest Rate Weighted Average Contractual Maturity (years) Par Value Fair Value

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December 31, 2023 7 1 Month SOFR 8.12 % 12.2 $ 243,340 $ 242,569

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.

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):

Amortized Cost Credit Loss Allowance Unrealized Gain Unrealized (Loss) Fair Value

The Company classified its CMBS 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.

The following table shows the amortized cost, unrealized gain/(loss) and fair value of the Company's CMBS bonds by investment type as of December 31, 2024 and 2023 (dollars in thousands):

Amortized Cost Unrealized Gain Unrealized (Loss) Fair Value

December 31, 2024 $ 202,894 $ 295 $ ( 216 ) $ 202,973

December 31, 2023 $ 243,272 $ 74 $ ( 777 ) $ 242,569

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.

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.

As of December 31, 2024, the Company held 11 CMBS bonds with an amortized cost basis of $ 202.9 million and a net unrealized gain of $ 0.1 million, four of which were held in a gross unrealized loss position of $ 0.2 million.

As of December 31, 2023, the Company held seven CMBS 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.

As of December 31, 2024 and 2023, zero positions had an unrealized loss for a period greater than twelve months.

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.

As of December 31, 2024 and 2023, the fair value of the Company's CMBS bonds that were in an unrealized loss position for less than twelve months was $ 50.3 million and $ 184.2 million, respectively.

FRANKLIN BSP REALTY TRUST, INC.

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Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 7,481 ) $ 83,142

August 2023 (2)

Office Portland, OR 16,479 2,065 — ( 13 ) 18,531

October 2023 (3)

Multifamily Lubbock, TX 1,618 10,076 185 ( 24 ) 11,855

August 2023 Office Portland, OR 16,479 2,065 — ( 69 ) 18,475

October 2023 Multifamily Lubbock, TX 1,618 10,076 185 ( 336 ) 11,543

$ 21,533 $ 96,400 $ 3,113 $ ( 7,886 ) $ 113,160

6 unchanged sentences

Industrial Jeffersonville, GA $ 3,436 $ 84,259 $ 2,928 $ ( 5,179 ) $ 85,444

Retail Various 9,105 31,036 — ( 115 ) 40,026

August 2023 Office Portland, OR 16,479 2,065 — ( 13 ) 18,531

October 2023 Multifamily Lubbock, TX 1,618 10,076 185 ( 24 ) 11,855

$ 21,533 $ 96,400 $ 3,113 $ ( 5,216 ) $ 115,830

________________________

(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.

Refer to Note 11 - Related Party Transactions and Arrangements for details.

(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.

(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.

(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.

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.

(1) 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.

Refer to Note 11 - Related Party Transactions and Arrangements for details.

4 unchanged sentences

Property Type Primary Location(s) Assets, Net Liabilities, Net

Retail Various $ 103,657 $ 12,297

Various $ 14,472 $ 1,291

Multifamily (2)

Various 211,024 4,528

$ 225,496 $ 5,819

As of December 31, 2023

Property Type Primary Location(s) Assets, Net Liabilities, Net

Multifamily New Rochelle, NY $ 23,520 $ —

Louis, MO 12,977 —

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

Various $ 103,657 $ 12,297

FRANKLIN BSP REALTY TRUST, INC.

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December 31, 2024

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.

Therefore, the voluntary transfer qualified as a TDR.

The Company accounted for both voluntary transfers and the real estate owned acquired as asset acquisitions.

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.

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.

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.

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.

(1) 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 a group of 24 retail properties with various locations throughout the United States (the “Walgreens Portfolio”).

Refer to Note 11 - Related Party Transactions and Arrangements.

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.

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.

Refer to Note 12 - Fair Value of Financial Instruments for discussion on the properties fair value measurement.

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.

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.

During the year ended December 31, 2024, the Company recorded a loss of $ 10.7 million related to the portfolio, consisting of a $ 9.7 million write-down of assets and a $ 1.0 million loss on the sale of 19 properties.

As of December 31, 2024, the Company's real estate owned, held for sale assets include the remaining four retail properties in the Walgreens Portfolio.

The respective write-downs and losses on sale are recorded within Gain/(loss) on other real estate investments in the Company's consolidated financial statements of operations.

(2) During the year ended December 31, 2024, the Company obtained 11 multifamily properties, in various locations throughout the United States, through foreclosure or deed-in-lieu of foreclosure and subsequently sold three of the properties.

The Company recognized a net gain of $ 2.7 million included within Gain/(loss) on other real estate investments in the Company's consolidated financial statements of operations related to the foreclosure and sale of these properties.

As of December 31, 2024, the Company's real estate owned held for sale assets includes eight multifamily properties that previously collateralized five commercial mortgage loans.

As of December 31, 2024, the Company has designated certain properties included within the real estate owned business segment as held for sale in accordance with ASC 360.

The properties are currently being marketed and sales are probable to occur within one year.

FRANKLIN BSP REALTY TRUST, INC.

9 unchanged sentences

Total, net $ 39,834 $ 42,793

Identified intangible liabilities:

Gross amount $ — $ 6,507

Accumulated amortization — ( 79 )

Total, net $ — $ 6,428

Rental Income

Rental income for the years ended December 31, 2023 and 2022 totaled $ 17.9 million and $ 9.6 million, respectively.

Rental income for the years ended December 31, 2024 and 2023 totaled $ 22.8 million and $ 17.9 m illion, respectively.

Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

1 unchanged sentence

Future Minimum Rents December 31, 2024

2025 $ 10,425

2030 and beyond 81,691

4 unchanged sentences

Amortization expense for the years ended December 31, 2024 and 2023 totaled $ 3.0 million and $ 3.8 million, respectively.

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.

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.

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):

14 unchanged sentences

WF Repo Facility (3)

400,000 71,730 9,580 7.85 % 10/2025

Barclays Revolver Facility (6)

400,000 — 6,246 N/A 10/2025

Barclays Revolver Facility (8)

100,000 75,805 965 9.25 % 09/2026

Barclays Repo Facility (9)

500,000 76,073 13,642 6.28 % 03/2025

Churchill Repo Facility (8)

225,000 — 30 N/A N/A

Total $ 2,475,000 $ 299,707 $ 51,170 7.70 %

Churchill Repo Facility 225,000 — 139 N/A N/A

Total/Weighted average $ 2,075,000 $ 329,811 $ 38,169 7.27 %

Mortgage note payable:

3 unchanged sentences

Other Financings (6)

N/A $ 36,534 $ 5,330 7.36 % Various (9)

Unsecured Debt (11)

Junior subordinated notes maturing in:

October 2035 (12)

N/A $ 12,865 $ 1,070 6.00 % 07/2028

December 2035 N/A $ 39,550 $ 3,519 8.95 % 12/2035

September 2036 N/A $ 24,698 $ 2,199 8.95 % 09/2036

Unsecured Debt (7)

Junior Note I N/A $ 17,085 $ 1,630 8.35 % 10/2035

Junior Note II N/A 39,588 3,602 7.92 % 12/2035

Junior Note III N/A 24,722 2,251 7.92 % 09/2036

Total/Weighted average N/A $ 81,395 $ 7,483 8.01 %

18 unchanged sentences

500,000 66,539 11,616 7.22 % 03/2025

Total $ 2,350,000 $ 680,859 $ 38,205 7.16 %

Churchill Repo Facility 225,000 — 30 N/A N/A

Total/Weighted average $ 2,475,000 $ 299,707 $ 51,170 7.70 %

Mortgage note payable:

5 unchanged sentences

Unsecured Debt (7)

Junior subordinated notes maturing in:

October 2035 N/A $ 34,508 $ 2,046 8.25 % 10/2035

December 2035 N/A 39,513 2,202 8.39 % 12/2035

September 2036 N/A 24,674 1,375 8.39 % 09/2036

Junior Note I N/A $ 17,047 $ 1,940 9.15 % 10/2035

Junior Note II N/A 39,550 3,519 8.95 % 12/2035

Junior Note III N/A 24,698 2,199 8.95 % 09/2036

Total/Weighted average N/A $ 81,295 $ 7,658 8.99 %

4 unchanged sentences

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.

As of December 31, 2023 and December 31, 2022, the Company is in compliance with all debt covenants.

(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.

(4) During the first quarter of 2023, this repurchase facility was transferred from Credit Suisse to Atlas SP partners.

As of December 31, 2024 and 2023, the Company is in compliance with all debt covenants.

(3) There are two one-year extension options.

(4) On January 4, 2024, the Company extended the maturity date to January 5, 2026, with a one-year extension option.

Additionally, the committed financing was decreased from $ 600 million to $ 350 million.

(5) On October 25, 2023, the committed financing was decreased from $ 500 million to $ 400 million.

Additionally, the maturity date was extended to November 21, 2025.

There are two more one-year extension options.

(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.

Additionally, on April 24, 2023, the Company extended the maturity date to September 20, 2024.

(7) There are two one-year extension options.

(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.

(5) Relates to a mortgage note payable in Jeffersonville JV, a consolidated joint venture.

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).

(10) Comprised of three note-on-note financings via participation agreements.

On October 1, 2024, the Company extended the maturity date to October 25, 2025, with a one-year extension option remaining.

(6) Comprised of one and two note-on-note financings via participation agreements for the year ended December 31, 2024 and 2023, respectively.

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.

The weighted average contractual maturity date of these loans is August 2025.

The weighted average contractual maturity date of these loans for the year ended December 31, 2023 was August 2025.

(7) The notes are currently redeemable, in whole or in part, without penalty, at the Company’s option.

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.

Interest paid on unsecured debt totaled $ 7.5 million for the year ended December 31, 2024, compared to $ 7.7 million for the year ended December 31, 2023, respectively.

(8) On September 19, 2024, the Company extended the maturity date to September 19, 2026, with a one-year extension option.

Additionally, the committed financing was decreased from $ 250 million to $ 100 million.

(9) As of December 31, 2024, there are two one-year extension options.

On February 21, 2025, the Company extended the maturity date to March 14, 2028, with a one-year extension option remaining.

FRANKLIN BSP REALTY TRUST, INC.

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December 31, 2024

(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.

Repurchase Agreements - Real Estate Securities

9 unchanged sentences

66,057 4,452 74,042 5.10 % 21

Lucid Prime Fund 26,965 1,209 30,865 5.24 % 16

Total/Weighted Average $ 236,608 $ 13,230 $ 256,052 5.30 % 15

3 unchanged sentences

JP Morgan Securities LLC $ 113,111 $ 6,717 $ 127,602 6.29 % 15

Wells Fargo Securities, LLC 8,994 235 9,975 6.14 % 5

Barclays Capital Inc.

2 unchanged sentences

________________________

(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.

The Company did no t have any outstanding repurchase agreements collateralized by real estate securities classified as trading as of December 31, 2023.

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

Amount Outstanding Accrued

Interest Receivable Collateral Carrying Amount Weighted Average

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 %

Total/Weighted Average $ 217,144 $ 658 $ 227,610 4.30 %

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.

(1) Includes $ 75.4 million and $ 27.9 million of CMBS notes, held by the Company, which is eliminated through consolidation of the related CLOs on the Company's consolidated balance sheets as of December 31, 2024 and 2023, respectively.

FRANKLIN BSP REALTY TRUST, INC.

2 unchanged sentences

Collateralized Loan Obligation

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:

The following tables represent the terms of the notes issued by 2021-FL6 Issuer, 2021-FL7 Issuer, 2022-FL8 Issuer, 2022-FL9 Issuer, 2023-FL10 Issuer and 2024-FL11 Issuer (collectively the “CLOs”), as of December 31, 2024 and 2023, respectively:

December 31, 2024

11 unchanged sentences

38 Term SOFR 2.94 % 670,637 519,537 647,683 5/15/2039

2023-FL10 Issuer (3)

41 Term SOFR 2.59 % 717,243 717,243 892,536 9/15/2035

2024-FL11 Issuer 27 Term SOFR 1.99 % 886,176 886,176 1,016,286 7/15/2039

6 unchanged sentences

2021-FL6 Issuer

25 LIBOR 1.77 % $ 664,199 $ 210,339 $ 378,786 5/15/2029

2021-FL6 Issuer

58 LIBOR 1.42 % 584,500 584,500 691,148 3/15/2036

54 Term SOFR 1.43 % $ 584,500 $ 558,040 $ 673,289 3/15/2036

2021-FL7 Issuer

39 LIBOR 1.64 % 722,250 722,250 899,729 12/21/2038

40 Term SOFR 1.64 % 722,250 720,000 864,079 12/21/2038

2022-FL8 Issuer

2 unchanged sentences

51 Term SOFR 2.80 % 670,637 670,639 800,638 5/15/2039

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

1 unchanged sentence

(1) Loan assets may be pledged towards one or multiple CLO pool.

(2) Excludes $ 532.4 million and $ 495.0 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, 2024 and 2023.

(3) During the first quarter of 2024, the Company sold the BSPRT FL10 AS retained tranche with a principal balance of $ 27.9 million.

(4) On March 5, 2021, the Financial Conduct Authority of the U.K.

4 unchanged sentences

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.

(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, 2024

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.

The outstanding principal of the notes on the date of the call was $ 122.0 million.

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.

On September 26, 2024, BSPRT 2024-FL11 Issuer, LLC, a wholly-owned indirect subsidiary of the Company, entered into an indenture with the OP, as advancing agent, U.S.

Bank Trust Company, National Association, as trustee and note administrator, and U.S.

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.

During the three months ended December 31, 2023, an additional $ 115.5 million was sold by the wholly-owned subsidiary to third party investors.

As of December 31, 2023 $ 689.3 million was outstanding.

Bank National Association, as custodian and in other capacities, which governs the issuance of approximately $ 1.0 billion principal balance secured floating rate notes, of which $ 886.2 million were purchased by third party investors and $ 138.3 million were purchased by a wholly-owned subsidiary of the OP.

In addition, concurrently with the issuance of the notes, BSPRT 2024-FL11 Issuer, LLC also issued 72,995 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.

1 unchanged sentence

The below table reflects the total assets and liabilities of the Company's outstanding CLOs.

The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of December 31, 2023 and 2022 as the Company is the primary beneficiary of the VIE.

The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of December 31, 2024 and 2023, respectively, as the Company is the primary beneficiary of the VIE.

The Company is the primary beneficiary of the CLOs because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE.

16 unchanged sentences

(4) The balance is presented net of deferred financing cost and discount of $ 28.8 million and $ 30.8 million as of December 31, 2024 and 2023, respectively.

The deferred financing costs are amortized over the expected lifetime of each CLO.

FRANKLIN BSP REALTY TRUST, INC.

17 unchanged sentences

Weighted-average common shares outstanding for basic earnings per share 81,846,170 82,307,970 71,628,365

Effect of dilutive shares (1) :

Unvested restricted shares and stock units — — 15,251

Weighted-average common shares outstanding for diluted earnings per share (1)

81,846,170 82,307,970 71,628,365

Basic earnings per share $ 0.82 $ 1.42 $ ( 0.38 )

2 unchanged sentences

(1) The effect of the weighted average dilutive shares excluded restricted shares and restricted stock units for the years ended December 31, 2024, 2023 and 2022 of 253,436 , 191,324 , and 476,653 , respectively, as the effect was anti-dilutive.

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.

Additionally, the effect of the weighted average dilutive shares excluded the common equivalent of convertible preferred shares for the years ended December 31, 2024, 2023 and 2022 of 5,370,498 , 5,385,254 , and 17,521,845 shares respectively, as the effect was anti-dilutive.

FRANKLIN BSP REALTY TRUST, INC.

8 unchanged sentences

$ 89,748 $ 89,748 17,950 17,950 $ 106.22

Series I Preferred Stock (3)

$ — $ 5,000 — 1,000 $ —

Perpetual Preferred Stock:

8 unchanged sentences

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 2025, upon 10 business days’ advance notice to the Company.

(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.

(4) Common Stock includes shares issued pursuant to the Company's dividend reinvestment plan ("DRIP") and unvested restricted shares.

(3) Common stock includes shares issued pursuant to the Company's DRIP and unvested restricted shares.

(4) During the year ended December 31, 2024, the Company repurchased 391,863 shares of common stock at a net average price of $ 12.42 per share, for a total of $ 4.9 million.

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As of December 31, 2024 , the Company had $ 31.1 million remaining under the share repurchase program.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

The following table is a summary of the Company’s repurchase activity of its common stock during the year ended December 31, 2024 (in thousands, except share amounts):

5 unchanged sentences

________________________

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(1) For the year ended December 31, 2024, the net average purchase price was 12.42 per share.

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The direct stock purchase component allows stockholders, subject to the Company's approval, to purchase shares of common stock directly from us.

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.

As of December 31, 2023, 62,865,370 shares remained available for issuance under the DRIP.

For the year ended December 31, 2024, 0 and 163,952 shares of common stock were issued by the Company and purchased in the open market, respectively, by the DRIP administrator and allocated to DRIP participants.

under the dividend reinvestment component of DRIP.

At-the-Market Sales Agreement

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.

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.

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.

On November 8, 2024, the Company entered into an amendment to the sales agreement dated April 14, 2023 as amended the ("Sales Agreement") establishing its $ 200 million at-the-market offering program (the "ATM program") with a financial syndicate as sales agents (the "Agents").

Pursuant to the Sales Agreement, the Company may offer and sell shares of the Company's common stock, from time to time, and at various prices, through the Agents.

Sales of the common stock, if any, made through the Agents 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.

As of December 31, 2024, the Company has not sold any shares of common stock under the ATM program, and common stock with an aggregate sales price of $ 200 million remains available for issuance.

Note 10 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of December 31, 2023 and 2022, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

As of December 31, 2024, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

Funding Expiration December 31, 2024 December 31, 2023

6 unchanged sentences

________________________

(1) The balance relates to four loans that are subject to modification as of December 31, 2023.

(1) The balance relates to four loans that were 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.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Litigation and Regulatory Matters

1 unchanged sentence

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Note 11 - Related Party Transactions and Arrangements

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(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.

(3) As of December 31, 2024 and 2023, the related party payables include $ 2.3 million and $ 0.7 million, respectively, of payments made by the Advisor to third party vendors on behalf of the Company.

The payables as of December 31, 2024 and 2023 in the table above are included in Due to affiliates in the consolidated balance sheets.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Other Transactions

5 unchanged sentences

The Company's $ 88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Pursuant to the Company's 2021 Incentive Plan, in the first quarter of 2024, 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.

1 unchanged sentence

The Company recognized $ 7.5 million and $ 10.0 million in interest income from these loans for the year ended December 31, 2024 and 2023 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.

The Company entered into a joint venture agreement and formed a joint venture entity, BSPRT Walgreens Portfolio, LLC (the "Walgreens Portfolio") to acquire 75.618 % ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242 % interest (see Note 5 - Real Estate Owned).

In the second quarter of 2022, the Company fully funded a $ 149.7 million first mortgage consisting of the Walgreens Portfolio:

24 retail properties with various locations throughout the United States.

The Company entered into a joint venture agreement and formed the Walgreens JV to acquire 75.618 % ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242 % interest.

On December 20, 2024, the Company, three affiliates of the Company, and an unrelated third party entered into the 55 Riverwalk Aker/BSP Venture LLC (the "55 Riverwalk JV") to acquire a $ 158.5 million mixed use development property consisting of a multifamily apartment complex and retail shopping stores located in West New York, NJ.

The Company has a 21.01 % interest in the 55 Riverwalk JV while the affiliated funds and the unrelated third party have 73.99 % and 5.00 % interest, respectively.

Note 12 - Share-Based Compensation

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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.

The Company's previous plan, the RSP, expired on February 7, 2023.

Service-based Restricted Stock and Restricted Stock Units

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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:

Shares Outstanding Fourth Quarter 2023 Weighted Average Grant Date Fair Value

For the Years Ended

December 31, 2023 December 31, 2022

RSP 2021 Incentive Plan RSP 2021 Incentive Plan

Unvested equity awards outstanding at beginning of period 20,934 492,107 11,184 — $ 14.11

Restricted Stock and RSU activity issued under the 2021 Incentive Plan for the year ended December 31, 2024 is summarized below:

Shares Outstanding Weighted Average Grant Date Fair Value

2021 Incentive Plan

Unvested equity awards outstanding as of December 31, 2023 809,257 $ 14.11

Grants 819,710 13.20

Forfeitures — — — — —

Vested ( 350,269 ) 14.23

Unvested equity awards outstanding at end of period — 809,257 20,934 492,107 $ 14.11

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 .

The fair value of equity awards that vested during the year ended December 31, 2023 was $ 2.7 million .

Unvested equity awards outstanding as of December 31, 2024 1,278,698 $ 13.58

T he Company recognized compensation expense associated with equity awards of $ 8.2 million, $ 4.8 million, and $ 2.5 million during the years ended December 31, 2024, 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 $ 9.7 million as of December 31, 2024 that will be expensed over a weighted average period of 1.8 years.

Restricted Stock and RSUs granted in 2024 and 2023 had a weighted average grant date fair value of $ 13.20 and $ 14.20 , respectively.

The fair value of Restricted Stock and RSUs that vested during the years ended December 31, 2024 and 2023 was $ 5.0 million and $ 2.7 million, respectively.

Note 13 - Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values.

GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs.

GAAP establishes market-based or observable inputs as the preferred source of values, followed by

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

valuation models using management assumptions in the absence of market inputs.

The three levels of the hierarchy are described below:

9 unchanged sentences

Financial Instruments Measured at Fair Value on a Recurring Basis

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.

CMBS 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.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

classified in either Level II or Level III of the fair value hierarchy.

The Company obtains third party pricing for determining the fair value of each CRE CLO investment, resulting in a Level II classification.

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.

The Company obtains third party pricing for determining the fair value of each CMBS 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.

The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company.

The Company engages the services of a third party independent valuation firm to determine fair value of certain investments held by the Company.

Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral.

1 unchanged sentence

The Company classified the commercial mortgage loans held for sale, measured at fair value as Level III.

Other real estate investments, measured at fair value in the consolidated balance sheets are valued using unobservable inputs.

Other real estate investments, measured at fair value on 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.

The Company classified the other real estate investments, measured at fair value as Level III.

The fair value for Treasury note futures is derived using market prices.

Treasury note futures trade on the Chicago Mercantile Exchange (“CME”).

The instruments are a variety of recently issued 10-year U.S.

The Company generally classifies its other real estate investments, measured at fair value as Level III.

Derivative instruments, measured at fair value

Treasury note futures trade on the Chicago Board of Trade (“CBOT”) and are made up of contracts of a variety of recently issued 5-year and 10-year U.S.

Treasury notes.

The future contracts are liquid and are centrally cleared through the CME.

Treasury note futures are generally categorized in Level I of the fair value hierarchy.

The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants.

Credit default swaps and some interest rate swaps are traded in the over the counter ("OTC") market.

The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants.

The future contracts are liquid and are centrally cleared through the CBOT and are valued using market prices.

Treasury note futures are categorized as Level I.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Credit default swaps, interest rate swaps and options can be traded over the counter (“OTC”) or on the exchange.

Exchange-traded derivatives are generally valued using market prices while OTC derivative transaction valuations are derived using pricing models that are widely accepted by marketplace participants.

Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract.

Valuation is primarily determined by the difference between the contract spread and the current market spread.

The valuation is primarily determined by the difference between the contract spread and the current market spread.

The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity.

If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy.

If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy.

The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.

If the underlying indices are liquid and the OTC market for the current spread is active, the derivatives are categorized in Level II of the fair value hierarchy.

If the underlying indices are illiquid and the OTC market for the current spread is not active, the derivatives are categorized in Level III of the fair value hierarchy.

The Company's option contracts are exchange-traded, and therefore categorized as Level I.

The Company classified its credit default swaps as Level II.

A review of the fair value hierarchy classification is conducted on a quarterly basis.

2 unchanged sentences

There were no material transfers between levels within the fair value hierarchy during the year ended December 31, 2024.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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).

The Company did not have any liabilities carried at fair value as of December 31, 2023.

3 unchanged sentences

Real estate securities, available for sale, measured at fair value $ 202,973 $ — $ 202,973 $ —

Commercial mortgage loans, held for sale, measured at fair value 87,270 — — 87,270

Options 183 183 — —

Treasury notes 891 891 — —

Total assets, at fair value $ 291,317 $ 1,074 $ 202,973 $ 87,270

Liabilities, at fair value

Credit default swaps $ 1,787 $ — $ 1,787 $ —

Total liabilities, at fair value $ 1,787 $ — $ 1,787 $ —

December 31, 2023

2 unchanged sentences

Real estate securities, available for sale, measured at fair value $ 242,569 $ — $ 242,569 $ —

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

Credit default swaps 234 — 234 —

Interest rate swaps 90 — 90 —

Treasury note futures 91 91 — —

Total assets, at fair value $ 242,569 $ — $ 242,569 $ —

Liabilities, at fair value

Credit default swaps $ 64 $ — $ 64 $ —

Total liabilities, at fair value $ 64 $ — $ 64 $ —

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category.

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.

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.

The Company did no t hold any applicable positions as of December 31, 2023.

1 unchanged sentence

Asset Category Fair Value Valuation Methodologies Unobservable Inputs (1)

Weighted Average (2)

Weighted Average Range

Commercial mortgage loans, held for sale, measured at fair value $ 87,270 Discounted Cash Flow Yield 7.02 % 6.96 % - 7.58 %

Real estate securities, trading, measured at fair value $ 235,728 Discounted Cash Flow Yield 3.3 % 2.0 % - 6.5 %

________________________

1 unchanged sentence

The Company has determined that market participants would take these inputs into account when valuing the investments.

(2) Inputs were weighted based on the fair value of the investments included in the range.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

December 31, 2024

Commercial mortgage loans, held for sale, measured at fair value Real estate securities, trading, measured at fair value

Commercial mortgage loans, held for sale, measured at fair value

Beginning balance, January 1, 2024 $ —

Transfers into Level III (1)

Originations 358,445

Sales / paydowns ( 284,300 )

Total realized and unrealized gain/(loss) included in earnings:

1 unchanged sentence

Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments —

Trading gain/(loss) — ( 605 )

Originations 102,500 —

Sales / paydowns ( 121,976 ) ( 235,123 )

Transfers out of Level III (1)

2 unchanged sentences

(1) There were no transfers in or out of Level III as of December 31, 2024.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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

December 31, 2023

Real estate securities, trading, measured at fair value Commercial mortgage loans, held for sale, measured at fair value

Beginning balance, January 1, 2023 $ 235,728 $ 15,559

Transfers into Level III (1)

— 4,566,871 —

Originations — 102,500

Sales / paydowns ( 235,123 ) ( 121,976 )

Total realized and unrealized gain/(loss) included in earnings:

Realized gain/(loss) on sale of commercial mortgage loan, held for sale — 3,873

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 — 44

Trading gain/(loss) ( 605 ) —

Originations 366,692 — —

Sales / paydowns ( 387,698 ) ( 4,211,923 ) ( 2,045 )

Transfers out of Level III (1)

1 unchanged sentence

________________________

(1) Transfers into Level III include transfers related to ARM Agency Securities transferred from Level II.

There were no transfers out of Level III as of December 31, 2022.

(1) There were no transfers in or out of Level III as of December 31, 2023.

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.

1 unchanged sentence

Financial Instruments Measured at Fair Value on a Nonrecurring Basis

Real Estate Owned, held for sale , recorded in Real estate owned, held for sale in the consolidated balance sheets are

Real Estate Owned, held for sale, on the consolidated balance sheets are valued at fair value on a non-recurring basis in accordance with ASC 820 and are classified as Level III investments.

At the time of acquisition, we determined the fair value of the net real estate assets, using either the market approach, the income approach, or a combination thereof.

As of December 31, 2024, the Walgreens Portfolio was written down to estimated fair value less cost to sell for impairment purposes using either the market approach or the income approach.

In addition, the Company determined the fair value of its eight multifamily properties, obtained through foreclosure or deed-in-lieu of foreclosure, based on a combination of the market approach and the income approach.

The significant unobservable input used for the income approach is the exit capitalization rate assumptions, which ranged from 5.00 % - 7.88 %.

The significant unobservable input used for the market approach is the estimated fair value less cost to sell based on a negotiated price from an anticipated buyer.

As of December 31, 2024, the Company's Real estate owned, held for sale assets and liabilities, had a fair value of $ 221.6 million, net, that represented the remaining four retail properties in the Walgreens Portfolio and eight multifamily properties.

As of December 31, 2023 the Company's real estate owned, held for sale assets and liabilities, had a fair value of $ 91.4 million, net, representing the remaining 23 retail properties in the Walgreens Portfolio and four multifamily properties.

FRANKLIN BSP REALTY TRUST, INC.

1 unchanged sentence

December 31, 2024

valued at fair value on a non-recurring basis in accordance with ASC 820.

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.

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.

The significant unobservable inputs utilized in the analysis were the exit capitalization rates, which ranged from 5.00 %- 5.75 %.

Financial Instruments Not Measured at Fair Value

4 unchanged sentences

Asset III $ 4,986,750 $ 4,935,380 III $ 5,036,942 $ 5,010,580

Collateralized loan obligation (2)

Liability II 3,567,166 3,521,274 III 3,121,983 3,055,810

Collateralized loan obligations (2)

Liability II 3,628,270 3,645,330 II 3,567,166 3,521,274

Mortgage note payable Liability III 23,998 23,998 III 23,998 23,998

12 unchanged sentences

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.

FRANKLIN BSP REALTY TRUST, INC.

1 unchanged sentence

December 31, 2024

As of December 31, 2023, there were no derivative instruments outstanding.

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.

The following derivative instruments were outstanding as of December 31, 2024 (dollars in thousands):

As of December 31, 2023, there were no derivative instruments outstanding.

Contract type Notional Assets

1 unchanged sentence

Credit default swaps $ 80,000 $ — $ 1,787

Interest rate swaps 9,800 90 —

Options — 295 112

Treasury note futures 68,300 891 —

12 unchanged sentences

Interest rate swaps — — ( 90 ) 672 ( 15,954 ) 59,499

Treasury note futures ( 91 ) 362 ( 33 ) 939 231 1,478

Options 83 ( 90 ) — — — —

Treasury note futures 892 ( 1,059 ) ( 91 ) 362 ( 33 ) 939

Total $ 1,050 $ ( 1,261 ) $ ( 140 ) $ 998 $ ( 15,840 ) $ 60,033

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).

7 unchanged sentences

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged.

The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of December 31, 2023 and 2022 (dollars in thousands):

The table below provides a gross presentation, the effects of offsetting, and a net presentation of the Company's derivative instruments and repurchase agreements as of December 31, 2024 and 2023 (dollars in thousands):

Gross Amounts Not Offset on the Balance Sheet

15 unchanged sentences

Repurchase agreements, real estate securities 236,608 — 236,608 236,608 — —

Derivative instruments, at fair value 1,899 1,186 713 — 713 —

December 31, 2023

1 unchanged sentence

Repurchase agreements, real estate securities 174,055 — 174,055 174,055 — —

Derivative instruments, at fair value 64 — 64 — 64 —

________________________

(1) As of December 31, 2023, there were no assets which were presented gross within the scope of ASC 210-20, Balance Sheet—Offsetting.

(2) Included in Restricted cash in the consolidated balance sheets.

(2) Included in Restricted cash in the Company's consolidated balance sheets.

FRANKLIN BSP REALTY TRUST, INC.

5 unchanged sentences

• 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.

As a result of the October 2021 acquisition of Capstead, the Company acquired a portfolio of ARM Agency Securities.

The portfolio was completely divested by the third quarter of 2023.

Historically this business has focused primarily on CMBS, CMBS bonds, CDO notes, and other securities.

1 unchanged sentence

• The real estate owned business represents real estate acquired by the Company through foreclosure, deed-in-lieu of foreclosure, or purchase.

The segments are based on financial information presented to the President of Commercial Real Estate, and the Chief Financial Officer / Chief Operating Officer of the Company, who are determined to jointly be the Chief Operating Decision Maker (“CODM”).

The CODM oversees activities and operations of the business, which includes assessing performance, liquidity, and profit or loss on each operating segment.

Profit or loss on segment operations is measured by net income/(loss) included in the consolidated statements of operations.

The CODM uses net income/(loss) to measure return on equity to assess the liquidity associated with equity that is allocated to each business based on the Company’s investment objectives and strategies.

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The following table represents the Company's operations by segment for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands):

3 unchanged sentences

Interest expense ( 338,471 ) ( 322,504 ) ( 13,214 ) ( 721 ) ( 2,032 )

Administrative services expenses ( 9,707 ) ( 4,582 ) — ( 5,125 ) —

Depreciation and amortization ( 5,630 ) — — — ( 5,630 )

Operating expenses ( 62,934 ) ( 40,190 ) ( 1,094 ) ( 4,930 ) ( 16,720 )

Other segment items (1)(2)

( 39,780 ) ( 43,246 ) ( 8 ) 11,605 ( 8,131 )

Net income/(loss) 92,403 91,692 2,812 6,382 ( 8,483 )

4 unchanged sentences

Interest expense ( 305,577 ) ( 288,327 ) ( 14,118 ) ( 1,150 ) ( 1,982 )

Administrative services expenses ( 14,440 ) ( 8,313 ) — ( 6,127 ) —

Depreciation and amortization ( 7,128 ) — — — ( 7,128 )

Operating expenses ( 61,493 ) ( 50,627 ) ( 1,488 ) ( 5,412 ) ( 3,966 )

Other segment items (1)(2)

( 36,380 ) ( 28,795 ) 146 ( 80 ) ( 7,651 )

Net income/(loss) 144,509 154,054 1,863 ( 10,525 ) ( 883 )

4 unchanged sentences

Interest expense ( 160,526 ) ( 146,493 ) ( 11,203 ) ( 1,643 ) ( 1,187 )

Administrative services expenses ( 12,928 ) ( 6,288 ) — ( 6,640 ) —

Depreciation and amortization ( 5,408 ) — — — ( 5,408 )

Operating expenses ( 56,655 ) ( 45,317 ) ( 6,842 ) ( 4,479 ) ( 17 )

Other segment items (1)(2)

( 117,628 ) ( 43,773 ) ( 81,623 ) 8,508 ( 740 )

Net income/(loss) 14,215 78,676 ( 69,465 ) 2,702 2,302

Total assets as of December 31, 2022 6,203,601 5,444,152 474,231 63,307 221,911

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.

Administrative fees are derived from an agreed upon reimbursable amount based on employee time charged and allocated to the business segments.

________________________

(1) For each reportable segment, other segment items category includes:

Real Estate Debt - specific and general allowance for credit losses, and gains/(losses) associated with debt extinguishment.

Real Estate Securities - gains/(losses) associated with sales of CMBS bonds and divestment of trading securities.

TRS - gains/(losses) associated with fair value measurements and securitizations or sales of held for sale loans, fair value measurements and terminations of derivative instruments, and (provisions)/benefits on taxable income.

Real Estate Owned - gains/(losses) associated with other real estate investments resulting from foreclosure or sale.

(2) Stock compensation expense is allocated to each segment based on total income per segment and included within other segment items.

FRANKLIN BSP REALTY TRUST, INC.

1 unchanged sentence

December 31, 2024

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.

Administrative fees are derived from an agreed upon reimbursable amount based on employee time charged and allocated to the business segments.

Note 17 - Income Taxes

31 unchanged sentences

The tax characteristics of the $ 1.88 per share of Series E Preferred Stock declared during 2024 was $ 1.88 ordinary income.

The tax characteristics of the $ 1.42 per as-converted share of Series H Preferred Stock declared during 2023 was $ 1.42 ordinary income.

The tax characteristics of the $ 424.86 per share of Series H Preferred Stock declared during 2024 was $ 424.86 ordinary income.

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.

The tax characteristics of the $ 318.66 distributions per share of Series C Preferred stock declared during 2022 was $ 318.66 ordinary income.

The tax characteristics of the $ 106.22 per share of Series I Preferred Stock declared during 2022 was $ 106.22 ordinary income.

The Series D Preferred Stock was exchanged for an equivalent number of shares of Series H Preferred Stock on June 24, 2022 and the tax characteristics of the $ 424.86 per share declared during 2022 was $ 424.86 ordinary income.

The tax characteristics of the $ 0.355 distributions per share of Series F Preferred stock declared during 2022, prior to converting on a one -for-one basis into shares of Common Stock, was $ 0.355 ordinary income.

The tax characteristics of the $ 1.875 distributions per share of Series E Preferred stock declared during 2022 was $ 1.875 ordinary income.

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.

The tax characteristics of $ 1.42 distributions per share of Common Stock declared during 2023 was $ 1.42 ordinary income.

The tax characteristics of the $ 1.88 per share of Series E Preferred Stock declared during 2023 was $ 1.88 ordinary income.

The tax characteristics of the $ 424.86 per share of Series H Preferred Stock declared during 2023 was $ 424.86 ordinary income.

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.

5 unchanged sentences

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K.

The following activity took place subsequent to the year end:

Loan Activity :

On February 7, 2024, we obtained, through deed-in-lieu of foreclosure, a multifamily property located in San Antonio, Texas.

The loan had an amortized cost basis of $ 42.2 million as of December 31, 2023.

On February 14, 2024, we sold the property for $ 42.8 million and fully recovered our loan basis.

Stock Repurchases :

Subsequent to December 31, 2023, the Company repurchased 56,323 shares of common stock at a weighted average cost of $ 12.52 per share.

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).

The following activity took place subsequent to the year ended December 31, 2024:

Investment Activity:

We obtained, through foreclosure, two multifamily properties, both located in Texas.

The loans had a combined amortized cost basis of $ 104.9 million as of December 31, 2024.

One of these two properties was subsequently sold on February 12, 2025 for a purchase price of $ 63.8 million and was financed with a loan originated by the Company.

We also sold a previously foreclosed multifamily property, located in North Carolina, for a purchase price of $ 12.9 million.

Conduit Activity :

We sold two of our commercial mortgage loans, held for sale into the CMBS securitization market.

The loans had a fair value of $ 82.3 million as of December 31, 2024.

FRANKLIN BSP REALTY TRUST, INC.

2 unchanged sentences

(Dollars in thousands)

Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)

Spread Payment

Terms Maturity Date

Senior Debt 1 Hospitality $ 4,586 $ 4,586 $ — Adj.

1 month SOFR Term 4.00 % Amortizing Balloon 3/9/2024

Senior Debt 2 Multifamily 35,212 35,212 — 1 month SOFR Term 4.50 % Interest Only 9/9/2024

Senior Debt 3 Hospitality 21,796 21,796 — 1 month SOFR Term 4.25 % Amortizing Balloon 3/9/2024

Senior Debt 4 Office 13,937 13,937 — 1 month SOFR Term 5.50 % Amortizing Balloon 9/9/2024

Senior Debt 5 Office 41,185 41,185 — 1 month SOFR Term 3.56 % Amortizing Balloon 5/9/2024

Senior Debt 6 Hospitality 18,398 18,398 — 1 month SOFR Term 3.84 % Amortizing Balloon 1/9/2024

Senior Debt 7 Hospitality 12,900 12,900 — 1 month SOFR Term 4.41 % Amortizing Balloon 10/9/2025

Senior Debt 8 Hospitality 4,805 4,805 — 1 month SOFR Term 5.25 % Amortizing Balloon 5/9/2024

Senior Debt 9 Office 14,852 14,852 — 1 month SOFR Term 4.00 % Amortizing Balloon 12/9/2024

Senior Debt 10 Office 24,444 24,442 — Adj.

1 month SOFR Term 4.35 % Interest Only 1/9/2024

Senior Debt 11 Manufactured Housing 1,301 1,301 — 5.50 % Amortizing Balloon 5/9/2025

Senior Debt 12 Self Storage 27,440 27,440 27,440 Adj.

1 month SOFR Term 5.00 % Interest Only 1/9/2024

Senior Debt 13 Office 17,103 17,103 — Adj.

1 month SOFR Term 4.50 % Amortizing Balloon 10/9/2024

Senior Debt 14 Office 63,274 63,146 — 5.15 % Amortizing Balloon 10/9/2025

Senior Debt 15 Office 30,186 30,186 — 1 month SOFR Term 2.81 % Interest Only 10/9/2024

Senior Debt 16 Office 9,175 9,175 — Adj.

1 month SOFR Term 5.00 % Interest Only 11/9/2024

Senior Debt 17 Multifamily 12,550 12,547 — Adj.

1 month SOFR Term 4.55 % Interest Only 2/9/2024

Senior Debt 18 Multifamily 21,000 21,000 — Adj.

1 month SOFR Term 4.60 % Interest Only 1/9/2024

Senior Debt 19 Office 10,855 10,855 — 1 month SOFR Term 5.56 % Amortizing Balloon 1/9/2024

Senior Debt 20 Office 44,913 44,892 — Adj.

1 month SOFR Term 3.97 % Interest Only 3/9/2024

Senior Debt 21 Multifamily 34,476 34,457 — 1 month SOFR Term 8.00 % Interest Only 2/9/2024

Senior Debt 22 Hospitality 23,000 22,992 — Adj.

1 month SOFR Term 5.79 % Interest Only 3/9/2024

Senior Debt 23 Multifamily 34,750 34,750 — 1 month SOFR Term 4.10 % Interest Only 3/9/2024

Senior Debt 24 Multifamily 55,000 55,000 — 1 month SOFR Term 4.00 % Interest Only 5/9/2024

Senior Debt 25 Multifamily 14,700 14,696 — Adj.

1 month SOFR Term 3.39 % Interest Only 4/9/2024

Senior Debt 26 Multifamily 8,898 8,893 — Adj.

1 month SOFR Term 3.80 % Interest Only 4/9/2024

Senior Debt 27 Multifamily 19,804 19,798 — Adj.

1 month SOFR Term 3.60 % Interest Only 4/9/2024

Senior Debt 28 Multifamily 43,246 43,237 — Adj.

1 month SOFR Term 2.95 % Interest Only 4/9/2026

Senior Debt 29 Hospitality 25,700 25,700 — Adj.

1 month SOFR Term 5.60 % Interest Only 5/9/2024

Senior Debt 30 Mixed Use 32,500 32,500 — Adj.

1 month SOFR Term 3.70 % Interest Only 7/9/2024

Senior Debt 31 Multifamily 75,927 75,901 — Adj.

1 month SOFR Term 2.95 % Interest Only 4/9/2026

Senior Debt 32 Multifamily 20,450 20,426 — Adj.

1 month SOFR Term 3.60 % Interest Only 5/9/2024

Senior Debt 33 Multifamily 30,320 30,310 — Adj.

1 month SOFR Term 2.95 % Interest Only 4/9/2026

Senior Debt 34 Multifamily 35,466 35,459 — Adj.

1 month SOFR Term 2.95 % Interest Only 4/9/2026

Senior Debt 35 Multifamily 33,588 33,582 — Adj.

1 month SOFR Term 2.95 % Interest Only 4/9/2026

Senior Debt 36 Multifamily 152,112 151,644 — 1 month SOFR Term 4.55 % Interest Only 6/9/2024

Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)

Spread Payment

Terms Maturity Date

Senior Debt 37 Hospitality 36,750 36,713 — Adj.

1 month SOFR Term 6.25 % Interest Only 6/9/2024

Senior Debt 38 Multifamily 35,116 34,990 — Adj.

1 month SOFR Term 8.00 % Interest Only 3/9/2025

Senior Debt 39 Multifamily 16,453 16,453 — Adj.

1 month SOFR Term 3.75 % Interest Only 10/9/2024

Senior Debt 40 Multifamily 47,984 47,901 — Adj.

1 month SOFR Term 3.15 % Interest Only 10/9/2024

Senior Debt 41 Multifamily 41,650 41,650 — Adj.

1 month SOFR Term 3.40 % Interest Only 9/9/2024

Senior Debt 42 Multifamily 34,760 34,713 — Adj.

1 month SOFR Term 3.64 % Interest Only 10/9/2024

Senior Debt 43 Multifamily 8,500 8,489 — Adj.

1 month SOFR Term 3.75 % Interest Only 9/9/2024

Senior Debt 44 Multifamily 14,890 14,890 — Adj.

1 month SOFR Term 3.15 % Interest Only 9/9/2024

Senior Debt 45 Multifamily 69,500 69,312 — Adj.

1 month SOFR Term 3.25 % Interest Only 10/9/2024

Senior Debt 46 Multifamily 11,325 11,306 — Adj.

1 month SOFR Term 3.75 % Interest Only 10/9/2024

Senior Debt 47 Multifamily 27,199 27,160 — Adj.

1 month SOFR Term 3.20 % Interest Only 10/9/2024

Senior Debt 48 Hospitality 17,122 17,122 — Adj.

1 month SOFR Term 5.25 % Interest Only 10/9/2024

Senior Debt 49 Multifamily 56,150 56,071 — Adj.

1 month SOFR Term 3.10 % Interest Only 10/9/2024

Senior Debt 50 Multifamily 38,242 38,116 — Adj.

1 month SOFR Term 2.90 % Interest Only 11/9/2026

Senior Debt 51 Multifamily 55,394 55,394 — Adj.

1 month SOFR Term 3.10 % Interest Only 1/9/2024

Senior Debt 52 Multifamily 38,153 38,101 — Adj.

1 month SOFR Term 2.90 % Interest Only 12/9/2024

Senior Debt 53 Multifamily 68,165 68,165 — Adj.

1 month SOFR Term 2.85 % Interest Only 11/9/2024

Senior Debt 54 Multifamily 32,567 32,510 — Adj.

1 month SOFR Term 3.25 % Interest Only 12/9/2024

Senior Debt 55 Multifamily 61,600 61,600 — Adj.

1 month SOFR Term 3.35 % Interest Only 11/9/2024

Senior Debt 56 Multifamily 44,987 44,987 — Adj.

1 month SOFR Term 3.00 % Interest Only 12/9/2024

Senior Debt 57 Multifamily 47,147 47,019 — Adj.

1 month SOFR Term 2.75 % Interest Only 11/9/2025

Senior Debt 58 Multifamily 86,000 85,959 — 1 month SOFR Term 3.24 % Interest Only 3/9/2024

Senior Debt 59 Manufactured Housing 6,700 6,688 — Adj.

1 month SOFR Term 4.50 % Interest Only 12/9/2024

Senior Debt 60 Multifamily 58,680 58,677 — Adj.

1 month SOFR Term 3.45 % Interest Only 1/9/2024

Senior Debt 61 Multifamily 26,068 26,068 — Adj.

1 month SOFR Term 2.90 % Interest Only 3/9/2024

Senior Debt 62 Multifamily 14,933 14,905 — Adj.

1 month SOFR Term 3.20 % Interest Only 12/9/2024

Senior Debt 63 Multifamily 38,283 38,219 — Adj.

1 month SOFR Term 3.00 % Interest Only 12/9/2024

Senior Debt 64 Multifamily 42,235 42,234 — Adj.

1 month SOFR Term 2.90 % Interest Only 1/9/2024

Senior Debt 65 Multifamily 69,415 69,415 — Adj.

1 month SOFR Term 2.88 % Interest Only 12/9/2024

Senior Debt 66 Multifamily 66,742 66,742 — Adj.

1 month SOFR Term 2.88 % Interest Only 12/9/2024

Senior Debt 67 Multifamily 17,145 17,144 — 1 month SOFR Term 3.50 % Interest Only 1/9/2025

Senior Debt 68 Multifamily 59,232 59,175 — Adj.

1 month SOFR Term 2.75 % Interest Only 12/9/2024

Senior Debt 69 Multifamily 22,240 22,239 — 1 month SOFR Term 2.96 % Interest Only 7/9/2024

Senior Debt 70 Multifamily 25,241 25,195 — 1 month SOFR Term 2.96 % Interest Only 1/9/2025

Senior Debt 71 Multifamily 32,428 32,425 — 1 month SOFR Term 3.20 % Interest Only 1/9/2024

Senior Debt 72 Multifamily 78,416 78,167 — 1 month SOFR Term 3.45 % Interest Only 1/9/2027

Senior Debt 73 Multifamily 81,247 81,164 — 1 month SOFR Term 3.21 % Interest Only 1/9/2025

Senior Debt 74 Multifamily 24,000 23,999 — 1 month SOFR Term 3.10 % Interest Only 1/9/2024

Senior Debt 75 Retail 31,000 30,946 — 1 month SOFR Term 3.29 % Interest Only 1/9/2025

Senior Debt 76 Multifamily 38,511 38,511 — 1 month SOFR Term 3.55 % Interest Only 2/9/2024

Senior Debt 77 Multifamily 23,855 23,848 — 1 month SOFR Term 2.95 % Interest Only 2/9/2024

Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)

Spread Payment

Terms Maturity Date

Senior Debt 78 Multifamily 11,100 11,097 — 1 month SOFR Term 3.30 % Interest Only 2/9/2024

Senior Debt 79 Multifamily 47,444 47,442 — 1 month SOFR Term 2.86 % Interest Only 1/9/2024

Senior Debt 80 Multifamily 36,824 36,821 — 1 month SOFR Term 2.86 % Interest Only 1/9/2024

Senior Debt 81 Hospitality 10,504 10,481 — 1 month SOFR Term 5.30 % Interest Only 2/9/2025

Senior Debt 82 Multifamily 82,000 81,989 — 1 month SOFR Term 3.20 % Interest Only 2/9/2024

Senior Debt 83 Industrial 55,000 54,973 — 1 month SOFR Term 3.50 % Interest Only 3/9/2024

Senior Debt 84 Multifamily 39,864 39,843 — 1 month SOFR Term 3.10 % Interest Only 3/9/2024

Senior Debt 85 Multifamily 35,220 35,202 — 1 month SOFR Term 2.95 % Interest Only 3/9/2024

Senior Debt 86 Mixed Use 19,000 18,991 — 1 month SOFR Term 3.42 % Interest Only 3/9/2024

Senior Debt 87 Multifamily 85,500 85,480 — 1 month SOFR Term 3.15 % Interest Only 3/9/2024

Senior Debt 88 Multifamily 31,900 31,888 — 1 month SOFR Term 3.30 % Interest Only 4/9/2024

Senior Debt 89 Hospitality 30,021 29,741 — 1 month SOFR Term 7.05 % Interest Only 6/9/2025

Senior Debt 90 Multifamily 13,558 12,691 — 1 month SOFR Term 6.75 % Interest Only 4/9/2025

Senior Debt 91 Hospitality 43,457 43,457 — 1 month SOFR Term 4.90 % Interest Only 4/9/2024

Senior Debt 92 Hospitality 15,634 15,568 — 1 month SOFR Term 5.34 % Interest Only 11/9/2025

Senior Debt 93 Multifamily 35,949 35,949 35,949 1 month SOFR Term 6.05 % Interest Only 6/9/2024

Senior Debt 94 Multifamily 56,616 56,479 — 1 month SOFR Term 3.95 % Interest Only 5/9/2025

Senior Debt 95 Multifamily 29,905 29,816 — 1 month SOFR Term 4.00 % Interest Only 11/9/2024

Senior Debt 96 Multifamily 56,859 56,806 — 1 month SOFR Term 6.70 % Interest Only 3/9/2024

Senior Debt 97 Multifamily 12,536 12,523 — 1 month SOFR Term 3.55 % Interest Only 5/9/2024

Senior Debt 98 Industrial 18,724 18,673 — 1 month SOFR Term 4.90 % Interest Only 9/9/2024

Senior Debt 99 Multifamily 19,899 19,875 — 1 month SOFR Term 3.50 % Interest Only 6/9/2024

Senior Debt 100 Multifamily 28,979 28,936 — 1 month SOFR Term 3.65 % Interest Only 6/9/2024

Senior Debt 101 Multifamily 17,330 17,303 — 1 month SOFR Term 3.65 % Interest Only 6/9/2024

Senior Debt 102 Multifamily 70,750 70,673 — 1 month SOFR Term 3.80 % Interest Only 6/9/2024

Senior Debt 103 Multifamily 83,914 83,810 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024

Senior Debt 104 Multifamily 45,469 45,414 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024

Senior Debt 105 Multifamily 58,003 57,930 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024

Senior Debt 106 Multifamily 20,716 20,688 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024

Senior Debt 107 Multifamily 146,810 146,608 — 1 month SOFR Term 3.95 % Interest Only 6/9/2024

Senior Debt 108 Multifamily 56,000 55,938 — 1 month SOFR Term 3.80 % Interest Only 6/9/2024

Senior Debt 109 Multifamily 11,675 11,661 — 1 month SOFR Term 4.45 % Interest Only 11/9/2024

Senior Debt 110 Multifamily 70,750 70,569 — 1 month SOFR Term 3.45 % Interest Only 6/9/2024

Senior Debt 111 Hospitality 39,525 39,346 — 1 month SOFR Term 6.94 % Interest Only 8/9/2025

Senior Debt 112 Multifamily — — — 1 month SOFR Term 6.31 % Interest Only 9/9/2025

Senior Debt 113 Hospitality 16,270 16,249 — 1 month SOFR Term 5.75 % Interest Only 4/9/2024

Senior Debt 114 Manufactured Housing 11,617 11,587 — 1 month SOFR Term 4.75 % Interest Only 9/9/2024

Senior Debt 115 Hospitality — — — 1 month SOFR Term 7.50 % Interest Only 11/9/2024

Senior Debt 116 Multifamily 48,764 48,684 — 1 month SOFR Term 4.20 % Interest Only 1/9/2025

Senior Debt 117 Multifamily 51,000 50,875 — 1 month SOFR Term 3.75 % Interest Only 12/9/2024

Senior Debt 118 Multifamily 14,635 14,594 — 1 month SOFR Term 4.25 % Interest Only 1/9/2025

Description Property Type Face Value Amortized Cost Principal amount subject to delinquent principal or interest (1)

Spread Payment

Terms Maturity Date

Senior Debt 119 Hospitality 28,300 28,297 — 1 month SOFR Term 5.25 % Interest Only 1/9/2024

Senior Debt 120 Multifamily 55,500 55,353 — 1 month SOFR Term 3.85 % Interest Only 4/9/2025

Senior Debt 121 Hospitality 10,500 10,465 — 1 month SOFR Term 5.50 % Interest Only 4/9/2025

Senior Debt 122 Hospitality 120,000 119,559 — 1 month SOFR Term 4.90 % Interest Only 2/9/2026

Senior Debt 123 Multifamily 64,500 64,388 — 1 month SOFR Term 5.00 % Interest Only 5/9/2024

Senior Debt 124 Hospitality 39,549 39,661 — 1 month SOFR Term 3.75 % Interest Only 12/27/2024

Senior Debt 125 Multifamily 21,700 21,616 — 1 month SOFR Term 3.95 % Interest Only 7/9/2025

Senior Debt 126 Manufactured Housing 21,449 21,296 — 1 month SOFR Term 4.25 % Interest Only 8/9/2025

Senior Debt 127 Multifamily 19,793 19,881 — 4.75 % Interest Only 7/9/2028

Senior Debt 128 Multifamily 78,996 78,664 — 1 month SOFR Term 3.20 % Interest Only 8/9/2025

Senior Debt 129 Hospitality 23,000 22,861 — 1 month SOFR Term 5.45 % Interest Only 8/9/2026

Senior Debt 130 Hospitality 12,420 12,322 — 1 month SOFR Term 4.85 % Interest Only 9/9/2026

Senior Debt 131 Multifamily 38,750 38,572 — 1 month SOFR Term 4.50 % Interest Only 11/9/2025

Senior Debt 132 Hospitality 31,300 31,078 — 1 month SOFR Term 4.25 % Interest Only 11/9/2026

Senior Debt 133 Multifamily 42,750 42,555 — 1 month SOFR Term 3.85 % Interest Only 11/9/2025

Senior Debt 134 Multifamily 17,119 16,966 — 1 month SOFR Term 3.20 % Interest Only 10/9/2026

Senior Debt 135 Multifamily 21,000 20,887 — 1 month SOFR Term 3.75 % Interest Only 12/9/2024

Senior Debt 136 Hospitality 41,071 40,855 — 1 month SOFR Term 3.65 % Interest Only 12/9/2026

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

Mezzanine Loan 1 Retail 3,000 2,994 — 1 month SOFR Term 12.00 % Interest Only 1/9/2025

Mezzanine Loan 2 Mixed Use 1,000 1,000 — 1 month SOFR Term 11.00 % Interest Only 3/9/2024

Mezzanine Loan 3 Hospitality 1,350 1,346 — 1 month SOFR Term 9.25 % Interest Only 11/9/2025

Mezzanine Loan 4 Hospitality — — — 1 month SOFR Term 10.00 % Interest Only 11/9/2024

Mezzanine Loan 5 Multifamily 2,378 2,378 — 1 month SOFR Term 4.50 % Interest Only 9/9/2024

Mezzanine Loan 6 Multifamily 11,700 11,655 — 1 month SOFR Term 3.95 % Interest Only 7/9/2025

Commercial mortgage loans, held for investment (3)

Type of Loan Property Type / Location Interest Rates (1)

Maximum Maturity Date (2)

Periodic Payments Terms (3)

Face Amount Carrying Amount Principal Amount of Loans Subject to Delinquent Principal or Interest (4)

Senior loans less than 3% of the carrying amount of total loans

Senior loans Multifamily / Diversified + 2.00 % - 8.30 %

Fixed 4.25 % - 9.00 %

2025 - 2030 I/O $ 3,555,248 $ 3,547,417 $ 93,108

Senior loans Hospitality / Diversified + 3.25 % - 7.50 %

Fixed 5.99 % - 8.50 %

2025 - 2029 I/O & P/I 719,923 718,445 —

Senior loans Industrial / Diversified + 2.70 % - 4.90 %

Fixed 11.99 %

2026 - 2029 I/O 338,015 336,457 —

Senior loans Office / Diversified + 2.25 % - 4.50 %

Fixed 5.15 % - 5.50 %

2025 - 2026 I/O & P/I 185,303 183,378 66,488

Senior loans Mixed Use / Diversified + 3.70 % - 5.35 %

2025 - 2026 I/O 91,185 90,912 —

Senior loans Retail / Diversified Fixed 5.50 % - 6.00 %

2025 - 2026 I/O 45,613 45,739 —

Senior loans Manufactured Housing / Diversified + 4.25 %

2025 - 2028 I/O & P/I 25,175 25,114 —

Total senior loans $ 4,960,462 $ 4,947,462 $ 159,596

Mezzanine loans

Mezzanine loans less than 3% of the carrying amount of total loans

Mezzanine loans Multifamily / Diversified + 3.67 % - 12.75 %

2027 - 2029 I/O $ 19,018 $ 18,969 $ —

Mezzanine loans Hospitality / Diversified + 9.25 % - 10.51 %

2027 - 2028 I/O 10,667 10,657 —

Mezzanine loans Mixed Use / New York Fixed 16.00 %

2025 I/O 7,527 7,491 —

Mezzanine loans Industrial / California Fixed 15.00 %

2029 I/O 2,180 2,171 —

Total mezzanine loans $ 39,392 $ 39,288 $ —

Total commercial mortgage loans, held for investment (5)

$ 4,999,854 $ 4,986,750 $ 159,596

Allowance for credit losses ( 78,083 )

Commercial mortgage loans, held for investment, net of allowance for credit losses

Total commercial mortgage loans, held for investment, net of allowance for credit losses $ 4,908,667

________________________

(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.

(1) Expressed as a spread over 1M SOFR Term and Adj.

1M SOFR Term.

On March 5, 2021, the Financial Conduct Authority of the U.K.

3 unchanged sentences

As of December 31, 2024, 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.

The loans which have the SOFR adjustment are indicated with "Adj.

1M SOFR Term." Effective yield is calculated as the spread of the loan plus the higher of any applicable index or index floor.

The loans which have the SOFR adjustment are referred to as "Adj.

1M SOFR Term."

(2) Maximum maturity date assumes all extension options are exercised, if applicable.

(3) I/O = interest only, P/I = principal and interest.

(4) Principal amount of loans subject to delinquent principal or interest is defined as loans in (i) maturity default or (ii) receipt of interest outstanding for more than 90 days.

(5) The estimated aggregate cost for U.S.

federal income tax purposes is approximately $ 5.1 billion.

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.

For the activity within the Company's loan portfolio during the years ended December 31, 2024 and 2023, refer to Note 3 - Commercial Mortgage Loans on the consolidated financial statements 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.

What changed 10-K

Item 9A. Controls and Procedures