Franklin BSP Realty Trust, Inc. reported a net income of $92.4 million for the fiscal year ending December 31, 2024, a decrease from $144.5 million in the previous year. The company's total revenue for 2024 was $210.5 million, down from $264 million in 2023. This decline in revenue was primarily attributed to a decrease in interest income, which fell to $526.1 million from $552.5 million, largely due to a non-recurring item of $20.4 million recognized in 2023 and an increase in non-performing loans. The company’s interest expense also rose to $338.5 million, compared to $305.6 million in the prior year, reflecting higher average borrowing costs.
In terms of operational developments, Franklin BSP Realty Trust's portfolio consisted of 155 commercial mortgage loans held for investment as of December 31, 2024, compared to 144 loans a year earlier. The total carrying value of these loans was approximately $4.9 billion, with a general allowance for credit losses of $78.1 million. The company designated three loans as non-performing, with a total amortized cost of $133.2 million, indicating a significant increase in credit risk compared to the previous year. The company also reported a specific allowance for credit losses of $31.2 million related to these non-performing loans.
Strategically, Franklin BSP Realty Trust has continued to focus on its core business of originating and managing commercial real estate debt investments. The company raised $1 billion through the issuance of collateralized loan obligations (CLOs) during 2024, which is a key component of its financing strategy. Additionally, the company has a share repurchase program authorized for up to $65 million, with $31.1 million remaining as of the end of 2024. The company’s board declared a quarterly dividend of $0.355 per share, consistent with its commitment to return capital to shareholders while maintaining its REIT status.
Looking ahead, Franklin BSP Realty Trust expressed cautious optimism regarding its ability to navigate the current economic environment, which includes rising interest rates and potential credit market disruptions. The company emphasized its focus on maintaining liquidity and managing its debt levels, with a target leverage ratio of one to three times book value of equity. The management remains committed to identifying attractive investment opportunities while managing risks associated with its commercial mortgage loan portfolio. The company’s ability to adapt to changing market conditions will be critical in sustaining its financial performance and delivering value to shareholders in the coming year.
About Franklin BSP Realty Trust, Inc.
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