Executive Summary

Q1 2025 GAAP EPS was $0.20 ($0.22 fully converted) on net income of $23.7M; Distributable EPS (fully converted) was -$0.12 due to running previously reserved office losses through DE, while DE before realized losses was $0.31 (86% dividend coverage) . Versus S&P Global consensus, DE/EPS missed materially (-$0.12 vs +$0.26); “revenue” (see note on definition) also missed ($52.0M actual vs $55.3M est.)*.
Book value per share (fully converted) declined to $14.95 from $15.19 in Q4 2024, driven by dividend in excess of earnings, NewPoint transaction costs, and LTIP grants; liquidity was strong at $913M (incl. $215M cash), with total net leverage 2.35x and recourse leverage 0.33x .
Portfolio rotation continued: $341M of new commitments (WAS +325 bps), $353M of payoffs (mostly 2021–2022 vintages); multifamily remains 71% of exposure, office ~2.9% .
Management flagged near‑term dividend coverage risk if REO sales slow or volatility persists; however, reiterated longer‑term earnings power as REO is liquidated and capital redeployed; NewPoint acquisition remains on track for early Q3 close, expected to enhance earnings quality over time .

Note: S&P Global estimates/actuals may classify “revenue” differently than GAAP “Total income.” See Estimates Context section for definitions.

What Went Well and What Went Wrong

What Went Well

Continued portfolio recycling into current‑vintage loans: $341M new commitments (WAS +325 bps), $353M of repayments, taking 56% of the book to post‑rate‑hike vintages (per CEO); multifamily stayed 71% and office low at ~2.9% .
Strong liquidity and conservative financing: $913M total liquidity; 85% non‑mark‑to‑market financing on core book; average debt cost fell to 6.9% from 7.4% in Q4 .
Strategic progress: definitive agreement to acquire NewPoint (agency lending/servicing) with expected early Q3 close; management sees meaningful synergies and potential multiple re‑rating longer term .

“Periods of enhanced market volatility often present unique opportunities. We have consistently been open for business and continue to make steady progress on recycling our legacy portfolio.” — President Michael Comparato .

What Went Wrong

Distributable earnings swung negative (-$6.2M; -$0.12/share fully converted) due to $38.2M realized losses flowing through DE for previously GAAP‑recognized office losses; GAAP EPS/NI held positive .
Expense pressure: OpEx elevated by REO carrying costs and several million of NewPoint transaction expenses; management called out a “double whammy” on earnings from REO under‑earning and integration costs .
Dividend coverage risk near‑term: management may revisit dividend if REO liquidation timing extends and volatility persists, to avoid ongoing book value erosion from under‑coverage .

Financial Results

Income and EPS (GAAP and Distributable)

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Total Income ($M)	$54.0	$49.7	—	$50.1
Net Interest Income ($M)	$49.2	$44.3	—	$43.3
GAAP Net Income ($M)	$35.8	$30.2	$30.2	$23.7
GAAP EPS – Diluted ($)	$0.35	$0.30	$0.29	$0.20
GAAP EPS – Fully Converted ($)	$0.35	$0.30	$0.29	$0.22
Distributable EPS – Fully Converted ($)	$0.41	-$0.10	$0.30	-$0.12
Distributable EPS before Realized Loss – Fully Converted ($)	$0.41	$0.31	$0.30	$0.31
Dividend per Share ($)	—	$0.355	$0.355	$0.355

Notes: Where dashes (—) appear, that datapoint was not disclosed in the referenced document.

Portfolio Mix and Activity

Metric	Q3 2024	Q4 2024	Q1 2025
Core Portfolio Principal ($B)	$5.2	$5.0	$4.8
Senior Loans (%)	99%	99%	99.0%
Floating‑Rate (%)	~95%	~93%	~89.3%
Multifamily (%)	74%	71%	71.3%
Office (%)	4%	3.7%	~2.9%
New Loan Commitments ($M)	$380	$441	$341
Repayments ($M)	$510	$641	$353
Watchlist Loans (count)	3	4	6

Balance Sheet, Liquidity, Leverage

Metric	Q4 2024	Q1 2025
Book Value/Share – Fully Converted ($)	$15.19	$14.95
Total Liquidity ($M)	$535	$913
Cash & Equivalents ($M)	$184	$215
Total Debt ($B)	$4.24 (CLO+repos+other)	$3.98
Total Equity ($B)	$1.52	$1.505
Net Leverage (x)	—	2.35x
Recourse Net Leverage (x)	—	0.33x
Avg Debt Cost incl. Financing (%)	7.4 (Q4)	6.9

Credit and REO

Metric	Q3 2024	Q4 2024	Q1 2025
CECL Provision/(Benefit) ($M)	+0.3 benefit	+0.9 provision	+1.9 benefit
REO Positions (count)	—	Foreclosures continued	12 foreclosure REO; 1 investment REO; 1 equity position
Realized Losses in DE ($M)	$(36.4)	$(0.5)	$(38.2)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Quarterly (ongoing)	$0.355 (Q3–Q4 2024)	$0.355 declared for Q1 2025	Maintained
NewPoint acquisition timing	Close timing	Early Q3 2025 (communicated)	On track; approvals (HUD done; Fannie/Freddie expected early Q3)	Maintained timeline
Quantitative revenue/EPS guidance	—	None provided	None provided	N/A
Share repurchase authorization	Through 12/31/25	$31.1M remaining as of Feb 10, 2025	$31.1M remaining as of Apr 23, 2025	Maintained

Management cautioned they may revisit the dividend in the short term if REO resolution timing slips and market volatility persists, to avoid book value erosion from under‑coverage .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Portfolio recycling/legacy resolution	Continued payoffs ($510M) and REO sales; multifamily‑heavy book	$353M payoffs; continued REO sales, 6 watchlist loans; proactive workouts continue	Continuing; nearing end of modification cycle per management
REO/office exposure	Walgreens portfolio resolution; office low single‑digits	Ran previously reserved office losses through DE; prefer to hold office REO for better recovery; multifamily REO sales ongoing	Drag near‑term; foundation for future earnings on redeployment
Liquidity/leverage	$1.1B liquidity in Q3; $535M in Q4	$913M liquidity; net leverage 2.35x; recourse 0.33x	Solid; cost of debt improving
NewPoint acquisition (agency)	Announced in Q4 commentary; strategic rationale	On schedule for early Q3; expected synergies, earnings quality uplift; could shift comp set	Positive strategic catalyst
Macro (rates/tariffs)	CLO (FL11) executed in Sept.; rate backdrop volatile	Brief market shock; spreads tightened; pipeline intact; minimal tariff impact; rate move caused a pause then normalized	Stabilizing post‑blip
Dividend coverage	GAAP/DE coverage mixed in 2024	DE before realized losses covered 86%; management may revisit dividend if REO drag persists	Watch risk near‑term

Management Commentary

“We originated $341 million in new loan commitments… We view market volatility as an important catalyst for generating opportunities… Our REO has created a near term drag on our earnings… foreclosure can be a prudent strategy… This quarter we determined that the reserve we had on 2 office loans that are now held as REO should be charged off through distributable earnings…” — CEO Rich Byrne .
“If REO sales slow or volatile market conditions persist, it could be prudent to revisit our dividend in the short‑term… Book value per fully converted common share… $14.95… decrease primarily reflects dividend payout exceeding earnings, costs associated with NewPoint, and LTIP grants.” — CFO/COO Jerry Baglien .
“We originated 11 loans at a weighted average spread of 325 basis points… We saw very strong spread tightening and decided not to chase originations… We have maintained our commitment to our borrowers by consistently closing loans on schedule.” — President Michael Comparato .
On strategic rationale: “This acquisition [NewPoint] is highly synergistic… adds a scaled CRE agency loan origination and servicing platform… should create book value growth and enhanced earning powers over time.” — President Michael Comparato .

Q&A Highlights

Originations and cash allocation: FBRT briefly paused originations to “cash gather” for NewPoint closing but expects to “flip the switch back on” shortly; incremental cash from REO sales will be redeployed proactively into new originations .
Expenses: Q1 OpEx elevated by REO carrying costs and a few million of NewPoint transaction expenses; REO disposal removes expense and frees capital for earning assets (“double whammy”) .
Dividend: Management monitoring REO turnover speed and market volatility; could adjust dividend to prevent book value erosion if under‑coverage persists over multiple quarters .
REO resolution approach: Case‑by‑case; prioritize swift liquidation and redeployment over small timing gains, hold longer only if it “meaningfully moves the needle” on recovery .
Macro/market: Brief volatility shock subsided; spreads re‑tightened; limited negative impact from tariffs; CLO/CMBS issuance improved .

Estimates Context

Metric	Q1 2025 Consensus	Q1 2025 Actual
Primary EPS (Distributable EPS proxy)	$0.26*	-$0.12
Revenue (see note)	$55.31M*	$52.01M* (S&P) / $50.11M GAAP Total Income

Result: Significant miss on EPS (DE/share) versus consensus; revenue also below consensus. DE was impacted by $38.2M realized losses flowing through DE tied to previously GAAP‑recognized office losses .
Target Price Consensus Mean: $14.38* (unchanged across periods returned) and limited analyst coverage (4 EPS/Revenue estimates in Q1) — context for sentiment and liquidity in coverage universe.*

Values retrieved from S&P Global.*

Note: S&P may classify “Revenue” differently than GAAP “Total income” for a mortgage REIT. Company‑reported GAAP Total income for Q1 2025 was $50.11M .

Key Takeaways for Investors

Near‑term earnings drag is transitory and mechanical: the DE miss stems from running previously GAAP‑recognized office losses through DE; GAAP earnings remained positive and operating DE before realized losses covered 86% of the dividend .
Dividend watch: Management could trim the dividend if REO sales slow or volatility returns; monitor REO dispositions and DE coverage progression over the next 1–2 quarters .
Liquidity and financing are strengths: $913M liquidity, 85% non‑mark‑to‑market financing, falling average debt cost (6.9% from 7.4%); ample capacity to redeploy proceeds and resume originations post‑NewPoint close .
Portfolio quality/mix: 71% multifamily, ~3% office, 99% senior loans; repayments are steadily converting the book to post‑hike vintages, which should support credit performance and spreads .
Strategic catalyst: NewPoint acquisition (agency lending/servicing) targeted for early Q3 close, expected to enhance earnings quality and potentially the valuation framework (closer to agency peers) over time .
Trading setup: Watch for updates on REO sales (realizing ~$0.25–$0.30 of earnings potential as capital redeploys per management), dividend decision, and NewPoint close milestones as stock catalysts .
Estimate revisions: Expect downward adjustments to near‑term DE/EPS until REO drag subsides; medium‑term 2H26 accretion from NewPoint remains the structural offset .

Appendix: Additional Data Points

Book value/share fully converted: $14.95 at 3/31/25 vs. $15.19 at 12/31/24; undepreciated fully‑converted book value/share $15.12 vs. $15.35 .
Loans outstanding down $199M QoQ to $4.80B due to net repayments and REO transfers; 11 new loans ($341M commitments; 7.57% all‑in coupon) .
Allowance for credit losses: total ACL $47.4M (1.0% of UPB), reflecting $1.9M benefit in Q1; prior quarter total ACL $79.2M .

All company results and commentary cited to primary documents: press release, 8‑K exhibits, supplemental presentation, and earnings call transcript.

Franklin BSP Realty Trust, Inc. (FBRT)·Q1 2025 Earnings Summary