Summary of FBRT-PE Q1 2026 Earnings Call

1Key Financial Results and Metrics

GAAP Net Income: $12.3 million, or $0.08 per fully converted common share.

Distributable Earnings: $13.5 million, or $0.09 per fully converted share; excluding realized losses from foreclosures, earnings were $0.22 per share.

Book Value per Share: Increased to $14.18, supported by share repurchase activities.

Share Repurchases: Nearly $40 million repurchased in Q1; Board approved an additional $50 million for buybacks through December 2026.

Net Leverage: Ended at 2.84x, with recourse leverage at 1.16x.

NewPoint Contribution: Distributable earnings of $5.6 million, reflecting a more normalized income level.

2Strategic Updates and Business Highlights

Portfolio Growth: Core loan portfolio grew by $173 million, driven by $468 million in new loan commitments.

Equity Investments: Significant appreciation in equity investments; plans to increase equity allocation throughout 2026 while strategically exiting positions when pricing is favorable.

Legacy Asset Resolution: Continued efforts to resolve legacy assets, reducing REO count to 6.

Integration of NewPoint: Successful transition of BSP real estate loans onto the NewPoint servicing platform, expected to enhance long-term value.

3Forward Guidance and Outlook

Earnings Expectations: Anticipate earnings to benefit from a larger core portfolio and a more stable contribution from NewPoint throughout 2026.

Market Conditions: Expect origination volumes to build if interest rates stabilize; currently, origination activity is affected by volatility in rates.

Portfolio Strategy: Continued focus on high-quality multifamily loans with lower loan-to-value profiles.

4Bad News, Challenges, or Points of Concern

CECL Provision: Recorded a $13.5 million provision, primarily due to a specific reserve related to a watch list loan.

Watch List Loans: Two loans downgraded, reflecting borrower behavior and defaults; ongoing challenges in predicting borrower actions.

Market Volatility: Geopolitical uncertainty and interest rate fluctuations have created a complex operating environment, impacting origination volumes.

Legacy Issues: While progress is being made, legacy asset resolution remains a priority and could affect future performance.

5Notable Q&A Insights

NewPoint Servicing Contribution: Full benefits from the integration of NewPoint are expected to materialize in the latter half of 2026.

Watch List Loan Details: Downgrades were primarily due to borrower defaults; one loan returned to current status after default.

Market Dynamics: There is a clear preference for newer vintage assets over older ones, with expectations for older assets to correct further in terms of cap rates.

Equity Investment Strategy: Ongoing discussions about potentially owning downgraded assets for the long term, considering market conditions and inflation hedging benefits. Overall, FBRT demonstrated solid financial performance in Q1 2026, with strategic initiatives focused on portfolio growth and asset resolution, while navigating challenges related to market volatility and legacy assets.