Second Quarter 2026
Filed Jul 29, 2026FBRT reported GAAP net income of $16.3 million and Distributable Earnings of $28.3 million, repurchased $16.0 million of common stock, and increased fully converted book value per share by $0.06 from the prior quarter.
Distributable Earnings exceeded the quarterly common dividend, fully converted book value increased, portfolio risk rating improved, and the Company continued repurchases. These developments were offset by a $7.2 million net provision for credit losses and 12 watch-list loans at quarter end.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| GAAP net incomeGAAP | $16.3 million | – | – |
| GAAP net income per diluted common shareGAAP | $0.12 per diluted common share | – | – |
| Distributable Earningsnon-GAAP | $28.3 million | – | – |
| Distributable Earnings per diluted common share on a fully converted basisnon-GAAP | $0.25 per diluted common share on a fully converted basis | – | – |
| Distributable Earnings before realized lossesnon-GAAP | $30.2 million | – | – |
| Distributable Earnings before realized losses per diluted common share on a fully converted basisnon-GAAP | $0.28 per diluted common share on a fully converted basis | – | – |
| Book value per diluted common share on a fully converted basisGAAP | $14.24 per diluted common share on a fully converted basis | an increase of $0.06 from the prior quarter | – |
| Adjusted fully converted book value per sharenon-GAAP | $14.74 | an increase of $0.16 from the prior quarter | – |
| Core portfolio principal balanceother | $4.3 billion | – | – |
| Core portfolio loan countother | 172 loans | – | – |
| Average core portfolio loan sizeother | $25.3 million each | – | – |
| Core portfolio multifamily collateral mixother | 80% | – | – |
| New core loan commitments closedother | $166.7 million | – | – |
| Weighted average spread on new core loan commitmentsother | 238 basis points | – | – |
| Core portfolio principal balance fundedother | $248.4 million | – | – |
| Core portfolio loan repaymentsother | $457.7 million | – | – |
| Average portfolio risk ratingother | 2.4 | improved to 2.4 from 2.5 in the prior quarter | – |
| Conduit loans originatedother | $78.3 million | – | – |
| Conduit loans soldother | $249.5 million | – | – |
| Gain on conduit loan sales, gross of related derivativesother | $6.0 million | – | – |
| Agency Business new loan commitments originatedother | $398.8 million | – | – |
| Agency Business servicing portfolioother | $59.8 billion | grew by $1.7 billion | – |
| Mortgage Servicing Rights valueother | $205.5 million | – | – |
| Net provision for credit lossesGAAP | $7.2 million | – | – |
| Core portfolio provision for credit lossesGAAP | $5.2 million | – | – |
| Agency Business provision for credit lossesGAAP | $2.0 million | – | – |
| Foreclosure real estate owned positionsother | $198.7 million | – | – |
| Investment real estate owned positionother | $115.2 million | – | – |
| Equity method investment positionsother | $89.2 million | – | – |
| Total liquidityother | $796.7 million | – | – |
| Cash and cash equivalentsother | $136.3 million | – | – |
| FL13 CRE CLO financingother | $778.1 million | – | – |
| FL13 CRE CLO advance rateother | 88.4% | – | – |
| FL13 CRE CLO weighted average interest rateother | 1M Term SOFR+176 before accounting for discount and transaction costs | – | – |
Capital returns
- Repurchased 1,838,855 shares of common stock at an average price of $8.70 per share for an aggregate of $16.0 million.
- The repurchases provided an $0.11 increase in book value per diluted common share on a fully converted basis.
- Declared a second quarter common stock cash dividend of $0.20.
- The dividend represented an annualized 5.6% yield on book value, or 10.2% yield on current trading price.
- On July 28, 2026, the Board of Directors reauthorized the share repurchase program, making $50.0 million available for repurchases through December 31, 2026.
- Subsequent to quarter end, holders of OP Units redeemed 7,918,314 OP Units for an equal number of shares of the Company’s common stock.
What drove it
- The core portfolio closed $166.7 million of new loan commitments at a weighted average spread of 238 basis points.
- The Company funded $248.4 million of principal balance on new and existing loans and received loan repayments of $457.7 million.
- The average portfolio risk rating improved to 2.4 from 2.5 in the prior quarter.
- The Agency Business originated $398.8 million of new commitments and managed a servicing portfolio of $59.8 billion.
- The servicing portfolio grew by $1.7 billion.
- The Company originated $78.3 million of fixed rate conduit loans and sold $249.5 million of conduit loans for a gain of $6.0 million, gross of related derivatives.
Concerns
- The Company recognized a net provision for credit losses of $7.2 million.
- Core portfolio provision for credit losses was $5.2 million, including a $1.5 million specific allowance provision and a $3.7 million general provision.
- Agency Business provision for credit losses was $2.0 million, including a $2.1 million general provision partially offset by a benefit in the specific allowance of $0.1 million.
- At quarter end, the Company had 12 loans on its watch list, including seven risk rated a four and five risk rated a five.
- The Company states that GAAP loan loss reserves and property impairment losses are excluded from Distributable Earnings until amounts are deemed nonrecoverable upon a realization event.
What to watch
- Further resolution of the 12 watch-list loans and the timing of any realized credit or property losses.
- Core portfolio deployment, funding activity and loan repayments following $457.7 million of repayments in the quarter.
- The trajectory of credit-loss provisions, including the specific and general allowance components.
- Use of the $50.0 million share repurchase authorization through December 31, 2026.
- Agency Business commitment originations, servicing portfolio growth and Mortgage Servicing Rights valuation.
Balance sheet and cash flow
- Total liquidity was $796.7 million, including $136.3 million in cash and cash equivalents.
- The Company closed BSPRT 2026-FL13, an $880.4 million managed Commercial Real Estate Collateralized Loan Obligation, resulting in financing of $778.1 million.
- The FL13 CRE CLO has a 30 month re-investment period, an advance rate of 88.4% and a weighted average interest rate of 1M Term SOFR+176 before accounting for discount and transaction costs.
- The Company had six foreclosure real estate owned positions totaling $198.7 million, one investment real estate owned position of $115.2 million, and five equity method investment positions of $89.2 million.
Analysis
FBRT reported GAAP net income of $16.3 million, or $0.12 per diluted common share, for the quarter ended June 30, 2026. Distributable Earnings were $28.3 million, or $0.25 per diluted common share on a fully converted basis, while Distributable Earnings before realized losses were $30.2 million, or $0.28 per diluted common share on a fully converted basis. The Company stated that Distributable Earnings exceeded its quarterly dividend of $0.20.
Book value per diluted common share on a fully converted basis was $14.24, an increase of $0.06 from the prior quarter. Adjusted fully converted book value per share was $14.74, an increase of $0.16 from the prior quarter. FBRT repurchased 1,838,855 common shares for $16.0 million at an average price of $8.70 per share, and stated that this activity added $0.11 per share to book value. The Board subsequently reauthorized $50.0 million of repurchases through December 31, 2026.
Core portfolio activity showed $166.7 million of new commitments at a weighted average spread of 238 basis points, $248.4 million of principal funding, and $457.7 million of repayments. The $4.3 billion core portfolio comprised 172 loans averaging $25.3 million each, with 80% collateralized by multifamily properties. Average portfolio risk rating improved to 2.4 from 2.5 in the prior quarter. The Agency Business originated $398.8 million of commitments and its servicing portfolio grew by $1.7 billion to $59.8 billion.
Credit remains the principal reported area of attention. FBRT recognized a $7.2 million net provision for credit losses, including $5.2 million for the core portfolio and $2.0 million for the Agency Business. The Company had 12 watch-list loans, with seven risk rated a four and five risk rated a five. It also reported six foreclosure real estate owned positions totaling $198.7 million, one investment real estate owned position of $115.2 million, and five equity method investment positions of $89.2 million.
Liquidity was $796.7 million, including $136.3 million of cash and cash equivalents. The Company closed the $880.4 million FL13 CRE CLO, which resulted in $778.1 million of financing and carries a 30 month re-investment period, an 88.4% advance rate, and a weighted average interest rate of 1M Term SOFR+176 before accounting for discount and transaction costs. No forward financial guidance was provided in the filing text.
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AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.