Q3 2025 Franklin BSP Realty Trust Inc Earnings Call

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I would now like to turn the conference over to Lindsey Crabbe director of Industrial Relations. Please go ahead.

Good morning, and welcome to <unk> third quarter earnings call. Thank you Cindy for hosting our call today as the operator mentioned island Z crab with me on the call today are Richard Burton Chairman and CEO of FBR T. Jerry badly and Chief Financial Officer, and Chief operating officer of FBR D and Michael <unk> President.

CRT.

Before we begin I want to mention that some of today's comments are forward looking statements and are based on certain assumptions those comments and assumptions are subject to inherent risks and uncertainties as described in our most recently filed SEC periodic reports and actual future results may differ materially the information conveyed on this call is current only as of the date.

Lindsey Crabb: S.A.

This call October 32025, the company assumes no obligation to update any statements made during this call, including any forward looking statements, whether as a result of new information future events or otherwise except as required by law. Additionally, we will refer to certain non-GAAP financial measures, which are reconciled to GAAP figures in our earnings release and supplementary.

The slide deck, each of which are available on our website at www Dot FBR T. REIT dotcom, we will refer to the supplementary slide deck on today's call with that I will turn the call over to rich Barton.

Great. Thanks, Lindsay and good morning, everyone.

To start on.

On slide four by reviewing our third quarter results and then as always we will open the call up for everyone's questions.

I'll begin with key developments from the third quarter Gerry is going to walk through our financial results, including new points strong contribution to its first full quarter with us at FBR.

Nick.

Going to provide updates on several more topics, including market conditions, our watch list and our Oreo activity.

But to start as we previously said the third quarter was a transitional period for FBR T. It was highlighted by the successful closing as I said of our acquisition of New point, which occurred on the first day of the quarter July one.

The new point integration, so far is going exceptionally well new point had a record volume quarter. It was actually the highest in its history with $2 2 billion of originations. This resulted in $1 8 billion increase in the agency servicing portfolio in total new point contributed $9 3 million.

Speaker #3: Good day and welcome to the Franklin BSP Realty Trust . Third quarter 2020 Earnings Conference Call . All participants will be in listen only mode .

Operator: Good day and welcome to the Franklin BSP Realty Trust third quarter 2025 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lindsey Crabb, Director of Investor Relations. Please go ahead.

Liam to distributable earnings in its first full quarter as part of our company.

Speaker #3: Should you need assistance , please signal a conference specialist by pressing the star key , followed by zero . After today's presentation , there will be an opportunity to ask questions , to ask a question , you may press star , then one on a touchtone phone to withdraw your question .

Overall, our distributable earnings were <unk> 22 cents per fully converted share Jerry is going to provide additional details on distributable earnings as well as new point.

As expected maintaining liquidity for the acquisition limited our new loan originations early in the quarter.

As such our core portfolio size declined slightly we originated approximately $304 million in new loan commitments in the quarter and funded.

Speaker #3: Please press star , then two . Please note this event is being recorded . I would now like to turn the conference over to Lindsey Crabbe , director of Industrial Relations .

$196 million of those <unk>.

Primarily in multifamily with the bulk of our origination activity occurring mid quarter or later.

Speaker #3: Please go ahead .

Speaker #4: Good morning and welcome to Sbt's third quarter earnings call . Thank you , hosting our Cindy , for call today . As the operator mentioned , I'm Lindsay Crabbe .

Lindsey Crabb: Good morning and welcome to FBRT's third quarter earnings call. Thank you, Cindy, for hosting our call today. As the operator mentioned, I'm Lindsey Crabb. With me on the call today are Richard Byrne, Chairman and CEO of Franklin BSP Realty Trust Inc., Jerome Baglien, Chief Financial Officer and Chief Operating Officer of FBRT, and Michael Comparato, President of FBRT. Before we begin, I want to mention that some of today's comments are forward-looking statements and are based on certain assumptions. Those comments and assumptions are subject to inherent risks and uncertainties as described in our most recently filed SEC periodic reports, and actual future results may differ materially. The information conveyed on this call is current only as of the date of this call, October 30, 2025.

And we received $275 million in loan repayments.

We expect our core portfolio to return to its target size.

Speaker #4: With me on the call today are Richard Byrne chairman and CEO of SBR Jerome Baglien chief Financial Officer and Chief Operating officer of SBR and Michael Comparato , president of the .

Of at least $5 billion over the next few quarters.

At quarter end, we had $522 million of available liquidity, but following quarter end, we closed our <unk> CRE CLO, which refinanced several older CLO past their reinvestment periods. While these CLO calls will result in some non cash extinguishing extinguishment of debt charges in the fourth.

Speaker #4: Before we begin , I want to mention that some of today's comments are forward looking statements and are based on certain assumptions . Those comments and assumptions are subject to inherent risks and uncertainties as described in our most recently filed SEC .

Speaker #4: Periodic reports and actual future results may differ materially . The information conveyed on this call is current only as of the date of this call .

Quarter the transaction.

Speaker #4: October 30th , 2025 . The company assumes no obligation to update any statements made during this call , including any forward looking statements , whether as a result of new information , future events or otherwise , except as required by law .

Lowers our interest expense and adds approximately $1 billion of origination capacity to our total loan portfolio.

Lindsey Crabb: The company assumes no obligation to update any statements made during this call, including any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, we will refer to certain non-GAAP financial measures which are reconciled to GAAP figures in our earnings release and supplementary slide deck, each of which are available on our website at www.fbrtreit.com. We will refer to the supplementary slide deck on today's call. With that, I will turn the call over to Richard Byrne.

Our average risk rating held steady at $2 three we continue to make progress on the legacy portfolio and actively manage our watch list and REO assets three new loans were added to the watch list. This quarter, while one was remove following full repayment.

We expect to remove several watch list loans in Q4 via loan modifications or asset sales.

On the Oreo front, we sold two properties this quarter and have a few more slated to close in Q4, you'll hear a lot more about that momentarily.

Richard Byrne: Great. Thanks, Lindsey, and good morning, everyone. I'm going to start on Slide 4 by reviewing our third quarter results, and then, as always, we will open the call up for everyone's questions. I'll begin with key developments from the third quarter. Jerry's going to walk through our financial results, including NewPoint's strong contribution to its first full quarter with us at FBRT. Mike is going to provide updates on several more topics, including market conditions, our watch list, and our REO activity. To start, as we previously said, the third quarter was a transitional period for FBRT. It was highlighted by the successful closing, as I said, of our acquisition of NewPoint, which occurred on the first day of the quarter, July 1. The NewPoint integration so far is going exceptionally well. NewPoint had a record volume quarter.

As these legacy issues are resolved additional capital will be available for us to deploy into our core portfolio.

Post interest rate hike originations now represent approximately 60% of our book.

Importantly, we have resumed share repurchases in Q4.

We view our stock is significantly discounted and believe it's an important activity supported at these levels through October 24, we have repurchased 540000 shares for approximately $6 million and have $25 6 million remaining on our buyback allocation.

Our board of directors expanded our buyback authorization through December of next year.

Richard Byrne: It was actually the highest in its history, with $2.2 billion of originations. This resulted in a $1.8 billion increase in the agency servicing portfolio. In total, NewPoint contributed $9.3 million to distributable earnings in its first full quarter as part of our company. Overall, our distributable earnings were $0.22 per fully converted share. Jerry's going to provide additional details on distributable earnings as well as NewPoint. As expected, maintaining liquidity for the acquisition limited our new loan originations early in the quarter. As such, our core portfolio size declined slightly. We originated approximately $304 million in new loan commitments in the quarter and funded $196 million of those, primarily in multifamily, with the bulk of our origination activity occurring mid quarter or later, and we received $275 million in loan repayments.

While this was a transitional quarter, we view it as one that sets the stage for stronger results ahead, we're focused on integrating new point redeploying liquidity and leveraging our expanded capabilities to grow earnings and book value as we move through the remainder of this year and well beyond.

With that I'll pass things over to Jerry.

Great. Thanks, Rich I appreciate everyone being on the call today.

Ill continue to walk through the third quarter financial results and I'm going to start on slide six.

<unk> reported GAAP net income of $17 6 million or <unk> 13 per fully converted common share.

Distributable earnings for the quarter were $26 7 million or 22 per fully converted share.

Distributable earnings for this quarter.

Include $1 7 million of realized losses related to a Oreo sale. Excluding this realized loss distributable earnings were <unk> 23 per fully converted share.

Book value at quarter end was $14 29 per fully converted share and the decrease in book value per share was caused by under coverage of the dividend.

Richard Byrne: We expect our core portfolio to return to its target size of at least $5 billion over the next few quarters. At quarter end, we had $522 million of available liquidity, but following quarter end, we closed our 12th CRE CLOs, which refinanced several older CLOs and their reinvestment periods. These CLOs calls will result in some non-cash extinguishment debt charges in the fourth quarter. The transaction lowers our interest expense and adds approximately $1 billion of origination capacity to our total loan portfolio. Our average risk rating held steady at 2.3. We continue to make progress on the legacy portfolio and actively manage our watch list and REO assets. Three new loans were added to the watch list this quarter, while one was removed following full repayment. We expect to remove several watch list loans in Q4 via loan modifications or asset sales.

And by the New point acquisition.

In regards to the dividend under coverage the key drivers, we outlined last quarter to move toward coverage remain intact.

I'll highlight some of the progress we've made on those fronts.

At the end of the third quarter, we issued approximately $1 $1 billion CRE CLO, which settled on October 15th.

The transaction carries an initial advance rate of 88% and a weighted average interest cost of silver plus $1 61.

At quarter end, we had 522 million of available liquidity but following quarter end. We closed our 12th CRA cllo which we financed several older Coos past their reinvestment periods. While these Co calls will result in some non-cash extinguishing is extinguishment. Debt charges in the fourth quarter, the transaction.

Before accounting for discount and transaction costs.

Lowers our interest expense and adds approximately 1 billion dollars of origination capacity to our total loan portfolio.

The CLO has a 30 month reinvestment period, I mean, it should be an accretive liability for us for three to five years.

In conjunction with the new CLO, we also financed approximately $500 million of assets with a money Center bank.

Together these financings allowed us to call several older Clo's generating roughly $250 million of cash and reduce our financing cost by about 65 basis points.

Our average risk rating held steady at 2.3. We continue to make progress on the Legacy portfolio and actively manage our watch list and Aro assets 3, new loans were added to the watch list this quarter while 1 was removed following full repayment.

Richard Byrne: On the REO front, we sold two properties this quarter and have a few more slated to close in Q4. You'll hear a lot more about that momentarily. As these legacy issues are resolved, additional capital will be available for us to deploy into our core loan portfolio. Post interest rate hike originations now represent approximately 60% of our book. Importantly, we have resumed share repurchases in Q4. We view our stock as significantly discounted and believe it's an important activity supported at these levels. Through October 24, we have repurchased 540,000 shares for approximately $6 million and have $25.6 million remaining on our buyback allocation. Our Board of Directors expanded our buyback authorization through December of next year. While this was a transitional quarter, we view it as one that sets the stage for stronger results ahead.

We expect to remove several watch lists loans in Q4 via loan modifications or asset sales.

Combined these transactions are expected to add an incremental $5 to seven cents per share or quarterly earnings. Once this cash is deployed into new assets we.

On the Aro front. We sold 2 properties this quarter and have a few more slated to close in Q4, you'll hear a lot more about that momentarily.

We expect to begin realizing this benefit in early 2026.

As these Legacy issues are resolved, additional Capital will be available for us to deploy into our core portfolio.

Mike will provide more details on our Oreo portfolio, but we did reduce our Oreo balance this quarter through an additional asset sale, we continue to sell Oreo and redeploy that capital into new originations. We estimate this activity can contribute approximately eight to 12 cents per share per quarter to distributable earnings over time.

post interest rate hike origination now represent approximately 60% of our book

Importantly, we have resumed share repurchases in Q4.

We also saw a strong contribution from new point in its first full quarter as part of F. BRT generating $9 3 million of distributable earnings or <unk> per fully converted share.

Beyond the immediate earnings contribution viewpoint is already driving meaningful intangible benefits, including increased deal flow for balance sheet lending.

We view our stock as significantly discounted and believe it's an important activity supported at these levels. Through October 24th, we have repurchased 540,000 shares for approximately $6 million and have $25.6 million remaining on our buyback. Additionally, our board of directors expanded our buyback authorization through December of next year.

Stronger customer relationships additional <unk> opportunities and access to a much larger real estate platform, we can leverage both operationally operationally and strategically across our business.

Richard Byrne: We're focused on integrating NewPoint, redeploying liquidity, and leveraging our expanded capabilities to grow earnings and book value as we move through the remainder of this year and well beyond. With that, I'll pass things over to Gerry.

While this was a transitional quarter, we view it as 1. That sets the stage for stronger results ahead.

Moving to slide eight our average cost of debt on our core portfolio was sofa plus $2 31.

We're focused on integrating new Point redeploying, liquidity and leveraging. Our expanded capabilities to grow earnings and Book value. As we move through the remainder of this year and will be out.

[Analyst]: Great.

Jerome Baglien: Thanks, Rich. I appreciate everyone being on the call today. I'll continue to walk through the third quarter financial results, and I'm going to start on slide 6. FBRT reported GAAP net income of $17.6 million, or $0.13 per fully converted common share. Distributable earnings for the quarter were $26.7 million or $0.22 per fully converted share. Distributable earnings for this quarter include $1.7 million of realized losses related to a REO sale. Excluding this realized loss, distributable earnings were $0.23 per fully converted share. Book value at quarter end was $14.29 per fully converted share, and the decrease in book value per share was caused by under coverage of the dividend and by the NewPoint Holdings JV LLC acquisition.

With that, I'll pass things over to Jerry.

As I mentioned F. L 12 closed shortly after quarter end on October 15th we have.

Great. Thanks Rich. Uh, appreciate everyone being on the call today.

Been a consistent leader in repeat issuer in the CRE CLO market and this transaction was met with very strong investor demand.

I'll uh continue to walk through the third quarter Financial results and I'm going to start on slide 6

With the addition of F. L 12, approximately 75% of our core book is now financed through nonrecourse non mark to market structures, and we have reinvestment capacity available on two of our CLO.

Fbrt reported, gaap, net income of 17.6 million or 13 cents per fully converted Comet. Share.

Distributable earnings for the quarter were $26.7 million, or $0.22 per fully converted share.

Our net leverage position ended the quarter at 255 times with a recourse leverage standing at <unk> 84 times.

Distributable earnings for this quarter.

Include 1.7 million of realized losses related to a Aro sale.

Turning to slide 11 for updates on new point.

Excluding this realized loss, distributable earnings were 23 cents per fully converted share.

With the acquisition closing on July one we now have a full quarter of results to share along with progress on our integration efforts.

Agency volume came in at the high end of our range at $2 2 billion of new loan origination in the quarter you can see the breakdown of those volumes by agents to be on the slide.

Book value a quarter end was $14.29 per fully converted, share and the decrease in book, value per share was caused by undercover coverage of the dividend.

Jerome Baglien: In regards to the dividend under coverage, the key drivers we outlined last quarter to move toward coverage remain intact, and I'll highlight some of the progress we've made on those fronts. At the end of the third quarter, we issued an approximately $1.1 billion CRE CLO, which settled on October 15th. The transaction carries an initial advance rate of 88% and a weighted average interest cost of SOFR plus 161 basis points before accounting for discount and transaction costs. This CLO has a 30-month reinvestment period, meaning it should be an accretive liability for us for 3 to 5 years. In conjunction with the new CLO, we also financed approximately $500 million of assets with the Money Center Bank. Together, these financings allowed us to call several older closings, generating roughly $250 million of cash and reduce our financing cost by about 65 basis points.

And buy the new Point acquisition.

We now expect full year originations to come in toward the upper end of our initial guidance.

We recorded $19 $7 million in MSR income in the third quarter, representing an average MSR rate of approximately 91 basis points.

In regards to the dividend under coverage, the key drivers, we outlined last quarter to move toward coverage, remain intact, and I'll highlight some of the progress we've made on those fronts.

At September 30th our MSR portfolio was valued at approximately $221 million with an implied life of six six years.

At the end of the third quarter, we issued an approximately 1.1 billion, CRA CL which settled on October 15th.

The transaction carries an initial Advance rate of 88% and a weighted average interest cost of silver plus 161.

The change in value of the MSR portfolio provided a <unk> increase to book value this quarter.

Before accounting for Discount and transaction costs.

New point manage the servicing portfolio that was $47 3 billion at quarter end.

The C has a 30-month reinvestment period. Meaning, it should be an accretive liability for us for 3 to 5 years.

Integration work is well underway across our business.

Migration of BSP loan servicing began during the third quarter with full completion expected by the first quarter of 2026 once complete the full migration of <unk> loan servicing book is expected to generate four to six cents per fully converted share annually to earnings.

In conjunction with the new cllo, we also Finance, approximately 500 million of assets with the money center Bank.

Jerome Baglien: Combined, these transactions are expected to add an incremental $0.05 to $0.07 per share of quarterly earnings. Once this cash is deployed into new assets, we expect to begin realizing this benefit in early 2026. Mike will provide more details on our REO portfolio, but we did reduce our REO balance this quarter through an additional asset sale. We continue to sell REO and redeploy that capital into new originations. We estimate this activity can contribute approximately $0.08 to $0.12 per share per quarter to distributable earnings over time. We also saw a strong contribution from NewPoint Holdings JV LLC in its first full quarter as part of FBRT, generating $9.3 million of distributable earnings or $0.09 per fully converted share.

Together these financings allowed us to call several older cos generating roughly 250 million of cash and reduce our financing cost by about 65 basis points.

We expect new points, earning contribution F BRT to grow meaningful over time as income is directly linked to accumulate of agency and FHA origination volume and the expansion of the servicing portfolio.

Combined, these transactions are expected to add an incremental, 5 to 7 cents per share or quarterly earnings. Once this cache is deployed into new assets.

We expect to begin realizing this benefit in early 2026.

We continue to expect new point to be accretive to GAAP earnings and book value per share in the first half of 2026 and accretive to distributable earnings in the second half of 2026.

Michael provide more details on our REO portfolio. But we did reduce our REO balance this quarter through an additional asset sale. We continue to sell REO and redeploy that Capital into new originations.

With that I'll turn it over to Mike to give you an update on our portfolio.

Thanks, Gerry and good morning, everybody I'm going to start on slide 13.

We estimate this activity, can contribute approximately 8 to 12 cents per share per quarter to distribute a earnings over time?

Our core portfolio ended the quarter at $4 4 billion across 147 loans with multifamily assets, making up 75% of the portfolio.

Jerome Baglien: Beyond the immediate earnings contribution, NewPoint is already driving meaningful intangible benefits, including increased deal flow for balance sheet lending, stronger customer relationships, additional CMBS opportunities, and access to a much larger real estate platform we can leverage both operationally and strategically across our business. Moving to slide 8, our average cost of debt on our core portfolio was SOFR + 231. As I mentioned, FL12 closed shortly after quarter end on October 15. We've been a consistent leader and repeat issuer in the CRE CLO market, and this transaction was met with very strong investor demand. With the addition of FL12, approximately 75% of our core book is now financed through non-recourse, non-mark-to-market structures, and we have reinvestment capacity available on 2 of our CLOs. Our net leverage position ended the quarter at 2.55 times, with our recourse leverage standing at 0.84 times.

We also saw a strong contribution from new point in its first 4. Full quarter as part of fbrt generating 9.3 million of distributable earnings or 9 cents per fully converted share.

More broadly across the CRE market, we're seeing a continuation of the trend we noted last quarter.

After years of Poss borrowers and lenders are finally reset market marketing asset somewhat realistically with the exception of office and moving capital again.

Beyond the immediate earnings contribution. New point is already driving meaningful and tangible benefits, including increased deal flow for balance sheet, Lending.

It's a necessary step towards a healthier market.

Spreads on hold on origination had tightened to levels that are less than compelling at the moment.

Stronger customer relationships additional cmbs opportunities and access to a much larger real estate platform. We can leverage both operational operationally and strategically across our business.

Leverage returns are still in an acceptable range, but they are no longer the fourth levels, we enjoyed in 2023 and 2024.

Moving to slide 8. Our average cost of debt on our core portfolio was so far plus 231

As I mentioned, fl2 closed shortly after quarter end on October 15th.

While we have capital to deploy we are being thoughtful as the pacing given the spread environment.

We're confident in our ability to continue to underwrite attractive and differentiated deal flow. In addition, we are also considering additional investment opportunities outside of the whole loan space ranging from <unk> b pieces horizontal risk retention investments as well as SaaS <unk> and CRE CLO bond investments as.

We've been a consistent leader in repeat issuer in the CRA market and this transaction was met with very strong investor demand.

with the addition of fl2 approximately 75% of our core book is now financed through non-recourse non-market to Market structures and we have reinvestment capacity available on 2 of our cos

As long as we are trying to find the best risk adjusted returns for our capital.

Jerome Baglien: Turning to slide 11 for updates on NewPoint. With the acquisition closing on July 1, we now have a full quarter of results to share along with progress on our integration efforts. Agency volume came in at the high end of our range at $2.2 billion of new loan origination in the quarter. You can see the breakdown of those volumes by agency on the slide. We now expect full year originations to come in toward the upper end of our initial guidance. We recorded $19.7 million of MSR income in the third quarter, representing an average MSR rate of approximately 91 bps. At September 30, our MSR portfolio was valued at approximately $221 million, with an implied life of 6.6 years. The change in value of the MSR portfolio provided a $0.04 increase to book value this quarter.

Our net leverage position ended. The quarter at 2.55, times with our recourse leverage standing at 084 times.

Multifamily fundamentals continue to improve new supply is slowing concessions are generally burning off and rent growth is reappearing in some markets.

Turning to slide 11 for updates on new points.

Quality assets are leasing well deferred.

With the acquisition closing on July 1st. We now have a full quarter of results to share along with progress on our integration efforts.

Differentiation is back in higher quality assets in stronger markets are outperforming as nature.

Agency volume came in at the high end of our range. At 2.2 billion of new loan origination in the quarter.

Even with the increased competition and spray tenant buyer and tighter spread environment, we continue to find attractive opportunities for our PRT.

You can see the breakdown of those volumes by Agency on the slide.

We now expect fully your originations to come in toward the upper end of our initial guidance.

During the quarter, we originated 11 loans at a weighted average spread of 447 basis points and one mezzanine loan at a spread just over 3500 basis points, resulting in a combined weighted average spread of 511 basis points on all loans originated in this quarter. These.

We recorded 19.7 million MSR income in the third quarter representing an average MSR rate of approximately 91 basis points.

At September 30th, our MSR portfolio was valued at approximately 221 million with an implied life of 6.6 years.

These spreads were achieved due to our focus on construction financing given the tightening of spreads in the traditional bridge loan market.

Jerome Baglien: NewPoint managed a servicing portfolio that was $47.3 billion at quarter end. Integration work is well underway across our business. The migration of BSP loan servicing began during the third quarter, with full completion expected by the first quarter of 2026. Once complete, the full migration of FBRT's loan servicing book is expected to generate $0.04 to $0.06 per fully converted share annually to earnings. We expect NewPoint's earning contribution to FBRT to grow meaningfully over time as income is directly linked to cumulative agency and FHA origination volume and the expansion of the servicing portfolio. We continue to expect NewPoint Holdings JV LLC to be accretive to GAAP net income and book value per share in the first half of 2026 and accretive to distributable earnings in the second half of 2026. With that, I'll turn it over to Mike to give you an update on our portfolio.

The change in value of the MSR portfolio, provided a 4-cent increase to book value this quarter.

We're encouraged by the strength of our fourth quarter pipeline and we've already closed approximately $120 million of new loan commitments through today's call.

New Point managed to servicing portfolio, that was 47.3 billion at quarter end.

Integration work is well underway across our business.

Our conduit business had a very strong quarter, reflecting improved see MBS market liquidity and healthy investor demand.

The migration of bsp Loan Servicing began during the third quarter with full completion expected by the first quarter of 2026.

If market conditions hold our <unk> performance in the fourth quarter could be one of the strongest quarters in the history of the company.

Once complete, the full migration of fbrt Loan Servicing book is expected to generate 4 to 6 cents per fully converted share annually to earnings.

Loans originated prior to the interest rate interest rate hikes now represent approximately 40% of our total loan commitments.

The majority of this collateral is multifamily totaling $1 6 billion or approximately 80%.

We expect new points in earning contribution to FBRY to grow meaningfully over time, as income is directly linked to the accumulation of agency and FHA origination volume, and the expansion of the servicing portfolio.

Followed by hospitality at $178 million or approximately 10%.

We continue to expect new points to be, accretive to gaap earnings and book, value per share in the first half of 2026 and a creative to distributable earnings in the second half of 2026.

At quarter end, 82% of these legacy loans were risk rated a 2% or three largely consistent with last quarter.

With that, I'll turn it over to Mike to give you an update on our portfolio.

Michael Comparato: Thanks, Jerry, and good morning everybody. I'm going to start on Slide 13. Our core portfolio ended the quarter at $4.4 billion across 147 loans, with multifamily assets making up 75% of the portfolio. More broadly, across the CRE market, we are seeing a continuation of the trend we noted last quarter. After years of pause, borrowers and lenders are finally resetting, marking assets somewhat realistically with the exception of office and moving capital again. It's a necessary step towards a healthier market. Spreads on whole loan origination have tightened to levels that are less than compelling at the moment. Leverage returns are still in an acceptable range, but they are no longer the euphoric levels we enjoyed in 2023 and 2024. While we have capital to deploy, we are being thoughtful as to pacing.

The overall composition and performance of this group remains stable and we continue to make progress addressing these positions requiring additional attention which are reflected on our watch list.

Thanks Jerry and good morning everybody. Uh, I'm going to start on slide 13.

Notably post quarter end, our net lease headquarter office asset paid off in full.

The remaining office loan exposure is now only $70 million across four loans with an average loan size of $17 6 million.

Our portfolio ended the quarter at 4.4 billion across 147 loans with multi Family Assets making up, 75% of the portfolio. More broadly across the CRA Market. We are seeing a continuation of the trend we noted last quarter.

Office loan exposure is now only one 6% of our entire portfolio and we expect this figure to shrink again in the fourth quarter.

After years of pause, borrowers and lenders are finally resetting market, marking assets somewhat realistically, with the exception of office, and moving capital again.

It's a necessary step towards a healthier Market.

Slide 17 summarizes our watch list, we intend positions on our watch list at the end of the quarter and we continue to actively manage each and borrowing engagement remains high.

Spread on home loan, origination have tightened, the levels that are less than compelling at the moment.

Leverage returns are still in an acceptable range but they are no longer. The the euphoric levels we enjoyed in 2023 and 2024,

One multifamily loan originated in July 2021 paid off in full this quarter.

Michael Comparato: Given the spread environment, we're confident in our ability to continue to underwrite attractive and differentiated deal flow. In addition, we are also considering additional investment opportunities outside of the whole loan space, ranging from CMBS B-pieces, horizontal risk retention investments as well as SASB and CRE CLO bond investments. As always, we are trying to find the best risk-adjusted returns for our capital. Multifamily fundamentals continue to improve, new supply is slowing, concessions are generally burning off, and rent growth is reappearing. In some markets, quality assets are leasing well, differentiation is back, and higher quality assets in stronger markets are outperforming as they should. Even with the increased competition and tighter spread environment, we continue to find attractive opportunities for Franklin BSP Realty Trust Inc.

Within the remaining positions one of the Georgia Office building that was extended in January and has remained current on all payments.

The 307 units student housing property in Norfolk, Virginia has now been stabilized at approximately 92% occupancy and the sponsors looking to liquidate the asset in the coming quarters.

Environment. We're confident in our ability to continue to underwrite attractive and differentiated deal flow. In addition, we are also considering additional investment opportunities outside of the whole loan space ranging from cmbs. B pieces. Horizontal risk, retention Investments as well as sasb and CRA cllo Bond Investments.

The Phoenix office building is under contract with meaningful non refundable deposit and we expect to be repaid in full in early November.

As always, we are trying to find the best risk adjusted returns for our capital.

The remaining watch list loans are multifamily assets originated in 2021, and 2022 and we remain in active dialogue with the borrowers we expect two assets to be sold in Q4. Unfortunately, one appears that will be a short sale and we have accordingly markdown the position by $2 $3 million this quarter.

Multi family fundamentals. Continue to improve new Supply is slowing. Concessions are generally burning off and rent. Growth is reappearing in some markets.

Quality assets are leasing well.

Differentiation is back and higher quality assets and stronger. Markets are outperforming as they should.

Reiterating last quarter's call while the watch list count ticked up slightly requests for modifications continues to slow which is another sign that <unk> is in the later innings of this cycle. While we are not completely out of the woods, we get closer to the edge of the woods with every passing quarter.

Michael Comparato: During the quarter, we originated 11 loans at a weighted average spread of 447 basis points and one mezzanine loan at a spread just over 1,300 basis points, resulting in a combined weighted average spread of 511 basis points on all loans originated in this quarter. These spreads were achieved due to a focus on construction financing. Given the tightening of spreads in the traditional bridge loan market, we're encouraged by the strength of our fourth quarter pipeline, and we've already closed approximately $120 million of new loan commitments through today's call. Our conduit business had a very strong quarter, reflecting improved CMBS market liquidity and healthy investor demand. If market conditions hold, our CMBS performance in the fourth quarter could be one of the strongest quarters in the history of the company. Loans originated prior to the interest rate hikes now represent approximately 40% of our total loan commitments.

Even with the increased competition and spreader, tenant, Environ and Tighter spread environment. We continue to find attractive opportunities for fbt.

Slide 18 covers our foreclosure Oreo portfolio, which has nine foreclosure oreo positions at quarter end compared to 10 last quarter.

During the quarter, we originated 11 loans. At a weighted average spread of 447 basis points and 1 as an E Loan at a spread just over 1300 basis points, resulting in a combined weighted average, spread of 511 basis points on all loans originated in this quarter.

We sold one multifamily asset during the quarter at our debt basis and have four additional assets under Psa <unk>.

These spreads were achieved due to a focus on construction financing given the tightening of spreads in the traditional bridge on Market.

<unk> non refundable and we're expecting closing in the next two weeks.

We're encouraged by the strength of our fourth quarter Pipeline and we've already closed approximately 120 million of new loan commitments through today's call.

Our team continues to work diligently to enhance value and optimize execution before bringing properties to market.

Our conduit business had a very strong quarter, reflecting improved, cmds Market, liquidity and healthy, investor demand.

Our largest Oreo asset in Raleigh, North Carolina is now operating at 91% occupancy we will be exploring options for this asset in Q1 next year. This could be an outright sale, but we will also explore joint venture opportunities as we think this is a very unique asset.

If market conditions hold our cmds performance in the fourth quarter could be 1 of the strongest quarters in the history of the company.

Michael Comparato: The majority of this collateral is multifamily totaling $1.6 billion or approximately 80%, followed by hospitality at $178 million or approximately 10%. At quarter end, 82% of these legacy loans were risk rated at 2 or 3, largely consistent with last quarter. The overall composition and performance of this group remains stable, and we continue to make progress addressing these positions requiring additional attention, which are reflected on our watch list. Notably, post quarter end our net lease headquarter office asset paid off in full. The remaining office loan exposure is now only $70 million across four loans with an average loan size of $17.6 million. Office loan exposure is now only 1.6% of our entire portfolio, and we expect this figure to shrink again in the fourth quarter. Slide 17 summarizes our watch list.

Loans originated prior to the interest rate interest rate hikes. Now, represent approximately 40% of our total loan commitments.

Finally, I'll spend a minute on viewpoint.

The acquisition of New point has made us one of if not the largest middle market lenders in the country with over 300 employees.

The majority of this collateral is multi family totaling 1.6 billion or Approximately 80% followed by Hospitality at 178 million or approximately 10%.

We are extremely encouraged by the origination activity we saw in the third quarter, we are already seeing meaningful cross selling and collaboration between our platforms and my confidence and conviction in the acquisition continues to grow.

At quarter end, 82% of these Legacy, loans, were risk created to 2, or 3 largely consistent, with last quarter.

As we've spent more time with the company. It is clear that we have some of the most talented people in the industry, including but not limited to Jerry <unk>, Our president of agency lending, Rob <unk>, the president of Affordable and Eric Lin our head of healthcare in FHA lending.

The overall composition and performance of this group remain stable, and we continue to make progress addressing these positions, requiring additional attention, which are reflected on our watch list.

Notably post quarter end. Our net lease headquarter office asset paid off in full.

These leaders are bringing new products to our platform and give us yet another offering to our clients from what we've already believed to be a market leading product offering. This is truly just the beginning of a new point can bring the FBR team.

The remaining office loan exposure is now only 70 million across 4 loans, with an average loan size of 17.6 million.

Office loan. Exposure is now only 1.6% of our entire portfolio and we expect this figure to shrink again in the fourth quarter.

As rich mentioned in the third quarter was very much a construction zone for FERC. We are now highly focused on playing offense. Our integration plan with viewpoint is on track and we firmly believe FERC has more tailwind than headwind.

Michael Comparato: We had 10 positions on our watch list at the end of the quarter, and we continue to actively manage each, and borrower engagement remains high. One multifamily loan originated in July 2021 paid off in full this quarter. Within the remaining positions, one is a Georgia office building that was extended in January and has remained current on all payments. The 307-unit student housing property in Norfolk, Virginia has now been stabilized at approximately 92% occupancy, and the sponsor is looking to liquidate the asset in the coming quarters. The Phoenix office building is under contract with a meaningful non-refundable deposit, and we expect to be repaid in full in early November. The remaining watch list loans are multifamily assets originated in 2021 and 2022, and we remain in active dialogue with the borrowers. We expect two assets to be sold in Q4.

July 17th summarizes. Our watch list, we had 10 positions on our watch list at the end of the quarter. And we continue to actively manage each and borrowing engagement remains High.

We are excited to continue the path towards dividend coverage and with that I'd like to turn the call back to the operator to begin the Q&A session.

1 multi family loan originated in July 2021, paid off in full this quarter.

Within the remaining positions, 1 is a Georgia office building, that was extended in January and has remained current on all payments.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

If you were if you were using a speaker phone. Please pick up your handset before pressing the keys.

The 307 units student housing property in. Norfolk Virginia has now been stabilized at approximately, 92% occupancy, and the sponsor is locating to liquidate the asset in the coming quarters.

Is that any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

The Phoenix office building is under contract with a meaningful non-refundable deposit and we expect to be repaid, in full in early November.

At this time, we will pause momentarily to assemble our roster.

The remaining watch lists loans are multi Family Assets, originated in 2021 and 2022. And we remain an active dialogue with the borrowers.

Michael Comparato: Unfortunately, one appears it will be a short sale, and we have accordingly marked down the position by $2.3 million this quarter, reiterating last quarter's call. While the watch list count ticked up slightly, requests for modifications continue to slow, which is another sign that Franklin BSP Realty Trust Inc. is in the later innings of this cycle. While we are not completely out of the woods, we get closer to the edge of the woods with every passing quarter. Slide 18 covers our Foreclosure REO portfolio, which has nine Foreclosure REO positions at quarter end compared to 10 last quarter. We sold one multifamily asset during the quarter at our debt basis and have four additional assets under PSA. Two PSAs are non-refundable and we are expecting closing in the next two weeks.

Our first question comes from Matthew <unk> of Jones trading go ahead. Please.

We expect 2 assets to be sold in Q4. Unfortunately 1 appears. It will be a short sale and we have a quarterly marked down the position by 2.3 million this quarter.

Hey, good morning, guys. Thanks for the question and I appreciate the comments as always.

I'd like to kind of touch on the origination volumes and what led to the higher end of your range.

Reiterating last quarter's call. While the watch list, count ticked up slightly requests for modifications continues to slow, which is another sign that fbrt is in the later Innings of this cycle.

And then also what's going to lead to the higher end of the range and <unk> is it just a matter of you guys kind of winning the deals and being more competitive there is the market.

While we are not completely out of the woods, we get closer to the edge of the woods with every passing quarter.

Starting to open up.

Hey, Matt good morning.

Slide, 18 covers our foreclosure Aro portfolio, which has 9 for your positions, a quarter end compared to 10 last quarter.

Yes, I think yes.

We've just been able to cultivate the balance sheet, we've been able to convert.

we sold 1, multi Family Assets, during the quarter at our debt basis and at 4 additional assets under PSA,

Full of loans from a floating rate basis into our see MBS product.

Michael Comparato: Our team continues to work diligently to enhance value and optimize execution before bringing properties to market. Our largest REO asset in Raleigh, North Carolina is now operating at 91% occupancy. We will be exploring options for this asset in Q1 next year. This could be an outright sale, but we will also explore joint venture opportunities as we think this is a very unique asset. Finally, I'll spend a minute on NewPoint. The acquisition of NewPoint has made us one of, if not the largest, middle market lenders in the country with over 300 employees. We are extremely encouraged by the origination activity we saw in the third quarter. We are already seeing meaningful cross-selling and collaboration between the platforms and my confidence and conviction in the acquisition continues to grow as we have spent more time with the company.

2 PSAs are non-refundable and we are expecting closing in the next 2 weeks.

And that usually has incurred.

Our team continues to work diligently to enhance value and optimize execution before bringing properties to market.

Incrementally less competition than a widely marketed deal so I think again subject to market conditions holding.

If we can execute where we stand today or close.

For this asset and Q1 next year.

Q4 will be a monster quarter for us in the <unk>.

This could be an outright sale, but we will also explore joint venture opportunities. As we think this is a very unique asset.

Got it that's good color there and then I'm guessing that kind of plays into.

Finally, I'll spend a minute on new point.

What you were saying about alternative investments and kind of I guess not necessarily going away from the core portfolio, but while spreads are tight explore those other options.

The acquisition of new Point has made us 1 of if not the largest Middle Market lenders in the country with over 300 employees.

Yeah, I don't want to.

Mislead we are actively actively originating in our core business, which is originating whole loans for the balance sheet.

We are extremely encouraged by the origination activity. We saw on the third quarter. We are already seeing meaningful processing and collaboration between the platforms and my confidence in conviction, in the acquisition continues to grow.

Michael Comparato: It is clear that we have some of the most talented people in the industry, including but not limited to Jerry Borger, our President of Agency Lending, Rob Roszak, the President of Affordable, and Eric Lindenauer, our Head of Healthcare and FHA Lending. These leaders are bringing new products to our platform and give us yet another offering to our clients from what we've already believed to be a market-leading product offering. This is truly just the beginning of what NewPoint can bring to FBRT. As Rich mentioned, the third quarter was very much a construction zone for FBRT. We are now highly focused on playing offense. Our integration plan with NewPoint is on track and we firmly believe FBRT has more tailwinds than headwinds.

I think we're seeing some opportunities in markets, where things haven't tightened.

As much as they have on the traditional bridge lending side of things. So if we can find better returns with the same or better overall credit and liquidity profile.

As we have spent more time with the company, it is clear that we have some of the most talented people in the industry including but not limited to Jerry. Borger, our president of agency lending, Rob razak, the president of affordable and Eric Linden, our our head of healthcare and FHA, Lending,

We're going to explore those things.

Again, that's always been kind of the the pitch of what differentiates BSP.

These leaders are bringing new products to our platform and give us yet another offering to our clients from what we've already believed to be a market-leading product offering. This is truly just the beginning of a new Point can bring the fbrt.

We're not a one hit wonder we literally can do anything and everything within the capital stack and along the lifecycle of an asset.

We're just waking up every day looking to find what we think are the best risk adjusted returns and focusing our efforts in those areas.

Michael Comparato: We are excited to continue the path toward dividend coverage and with that I'd like to turn the call back to the operator to begin the Q&A session.

As Rich mentioned, the third quarter was very much a construction zone. For fbrt. We are now highly focused on playing offense. Our integration plan with newpoint is on track and we firmly believe that brt has more Tailwinds than headwinds.

Great. That's helpful and then Jerry I have one quick one for you and then I'll step out as it relates to the comp and benefits expense line item, what should we expect there kind of going forward.

We are excited to continue the path toward dividend coverage. And with that, I'd like to turn the call back to the operator to begin the Q&A session.

Operator: We will now begin the Question and Answer session. To ask a question, you may press Star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Matthew Erdner of Jones. Go ahead please.

We will now begin the question and answer session.

And how should we think about that overall.

to ask a question, you may press star then 1 on your touchtone phone,

It's going to be variable for one so think of it trending with volume right a lot of our volume drives the comps since its directly tied to.

If you are speaking, if you are using a speaker-phone, please pick up your handset before pressing the keys.

Profit share on what we're originating so use you can to some extent flex off what you are seeing.

if at any time your question has been addressed and you would like to withdraw your question, please press star then 2

At this time, we will pause momentarily to assemble our roster.

I will say that Italy.

A little bit trickier than that because youll kind of scale throughout the year in terms of people hitting hurdles and stuff like that.

Uh huh.

Matthew Erdner: Hey, good morning guys. Thanks for the question and appreciate the comments as always. I'd like to kind of touch on the origination volumes and what led to the higher end of your range, and then also what's going to lead to the higher end of the range in Q4. Is it just a matter of you guys kind of winning the deals and being more competitive, or is the market really starting to open up?

In terms of volume targets and things like that so you might scale until greater share in the second half of the year than the first half.

Our first question comes from Matthew Ner of Jones Trading. Go ahead, please.

So it won't be it won't be easy to extrapolate just off what you see in Q3, I think youre going to need to see a few quarters to kind of get the normal range, but you can kind of back end this quarter to see that the general share on that in terms of how it is going to wait.

Hey, good morning guys. Thanks for the question and appreciate the comments as always. Um, you know, I'd like to kind of touch on the origination volumes and, you know what, led to the higher end of your range. Um, you know, and then also what's going to lead to the higher end of the range in 4 q? Is it just a matter of you guys can of winning the deals and being more competitive? There is the market, uh, you know, really starting to open up.

Michael Comparato: Hey Matt. Good morning. I think we've just been able to cultivate the balance sheet. We've been able to convert a handful of loans from a floating rate basis into our CMBS product, and that usually has incrementally less competition than a widely marketed deal. I think, again, subject to market conditions holding, if we can execute where we stand today or close, Q4 will be a monster quarter for us in the CMBS group.

Okay Awesome. Thank you guys appreciate it.

Okay.

The next question comes from Timothy <unk> of B Riley Securities go ahead. Please.

Hey, good morning, Thanks for taking the question.

The first one just on the repayments $275 million in the quarter.

I was wondering if in the fourth quarter, you are still seeing elevated repayments as of October <unk>.

Gerry do we have a quarter to date repayment summary, I feel like we've not we do.

Matthew Erdner: Got it. That's good color there. I’m guessing that kind of plays into what you were saying about alternative investments and kind of, I guess not necessarily going away from the core loan portfolio, but while spreads are tight, explore those other options.

Hey Matt, good morning. Um, yeah I think you know we we've just been able to cultivate the balance sheet. Uh we've been able to convert a handful of loans, uh from a floating rate basis into our cnbs product, uh and that usually has, you know, incrementally less competition than a than a widely marketed deal. So, I think, you know, again, subject to market conditions holding, uh, if we can execute where we stand today or closed, uh, Q4 will be a a monster quarter for us uh, in the cmvs group.

I would expect.

Repayments are relatively in line with what we've seen throughout the year.

In terms of kind of pace I don't think we've been.

Got it that that's good color there. And then, you know, I'm guessing that kind of plays into uh, you know, what you were saying about alternative Investments and kind of, you know, I guess not necessarily going away from the core portfolio. But while spreads are tight, you know, explore those other options.

Michael Comparato: Yeah, I don't want to mislead. We are actively, actively originating in our core business, which is originating, you know, whole loans for the balance sheet. I think we're seeing some opportunities in markets where things haven't tightened as much as they have on the traditional bridge lending side of things. If we can find better returns with the same or better overall credit and liquidity profile, we're going to explore those things. I think again, that's always been kind of the pitch of what differentiates BSP. We're not a one hit wonder. We literally can do anything and everything within the capital stack and along the life cycle of an asset. We're just waking up every day looking to find what we think are the best risk adjusted returns and focusing our efforts in those areas.

Markedly off.

What we've seen throughout the earlier portion of the year.

I would say fourth quarter is also one of the tougher ones to predict because you get more variability and people trying to close things out before the end of the year. So.

It could certainly change because we still have two full months left but.

I would say if you're run rating it wouldn't be too far off.

Okay, great. Thank you and then just a quick follow up on the core portfolio is there like a target size that you are aiming for.

Yeah, I I I don't want to, you know, mislead. We are actively actively originating in our Core Business which is originating. You know, full loans for the balance sheet. Uh, I think we're seeing some opportunities in markets where things haven't tightened, uh, as much as they have on the traditional Bridge lending side of things. So if we can find better returns with the same or better you know overall credit and liquidity profile.

I think right now the portfolio is about 4.4 billion I was wondering you know if throughout 26 or later on as if Theres a level you would like to reach thank you.

We're going to explore those things. Um, and I think again, that's always been kind of the, the pitch of what differentiates bsp, you know, we're not a 1-hit Wonder. We literally can do anything and everything within the capital stack and along, you know, the, the life cycle of an asset. So, um, we're just

Yeah, I think overall, we are targeting a stabilized portfolio side on the whole on basis of between five and five 5 billion.

Matthew Erdner: Great, that's helpful. Jerry, I have one quick one for you and then I'll step out as it relates to the comp and benefits expense line item. What should we expect there going forward and how should we think about that overall?

Waking up every day, looking to find what we think are the best risk-adjusted returns, and focusing our efforts in those areas.

Okay, great. Thank you that's all for me.

The next question comes from Chris smaller of citizens capital markets go ahead. Please.

Great that's helpful and then Jerry I have 1 quick 1 for you and then I'll step out um as it relates to the comp and benefits expense line item you know what should we expect? Their kind of going forward.

Jerome Baglien: It's going to be variable for one, so think of it trending with volume. A lot of our volume drives the comp since it's directly tied to profit share on what we're originating. You can to some extent flex off what you're seeing. I will say that it'll be a little bit trickier than that because you'll kind of scale throughout the year in terms of people hitting hurdles and stuff like that, in terms of volume targets and things like that. You might scale into a greater share in the second half of the year than the first half. It won't be easy to extrapolate just off what you see in Q3.

And how should we think about that overall?

Hey, guys. Thanks for taking the question and congrats on a nice quarter here.

Great to hear the record quarter for new point, and I guess, even though it was a record quarter for them do you guys view. This as a good run rate going forward or could there be some further upside to volumes with the Newport acquisition.

Hey, Chris Thanks for the question look we had a very large transaction that closed in Q3.

Able for 1. So think of it trending with volume, right. A lot of our volume drives the the comp since it's directly tied to um you know profit share on what we're originating so you you can to some extent Flex off what you're seeing. Um I I will say that it'll be um

We're always out whale hunting for large transactions when we can find them.

I don't think it's.

<unk> every single quarter.

I think I wouldn't as Gerry just said I wouldn't use one quarter to extrapolate forward.

We do not have any expectation that new point is going to put up.

Jerome Baglien: I think you're going to need to see a few quarters to kind of get the normal range, but you can kind of back in this quarter to see the general share on that in terms of how it's going to weight.

$8 billion of origination in 2026.

So it was it was a great quarter.

Again, we're very excited about the cross selling that's going on there originating bridge loans for our balance sheet, we're originating any agency loans for their agency execution.

Matthew Erdner: Okay, awesome. Thank you, guys. Appreciate it.

A little bit trickier than that because you'll kind of scale throughout the year in terms of people hitting hurdles and stuff like that. Um uh it the in terms of volume targets and and things like that. So you might scale into a greater share in the second half of the year than the first half. Um, so it won't be, it won't be easy to extrapolate. Just off what you see in Q3. I think you're going to need to see a few quarters to kind of get the the normal range but you can kind of back in this quarter to see that the general share on that in in terms of of how it's going to wait.

Okay. Awesome. Thank you, guys appreciate it.

Operator: The next question comes from Timothy Agostino of B. Riley Securities. Go ahead, please.

In early days, it really could not be going better than how its gone but no. This is this is probably.

Timothy Agostino: Hey, good morning. Thanks for taking the question. The first one just on repayments. $275 million in the quarter. I was wondering if in the fourth quarter you are still seeing elevated repayments as of October end.

The next question comes from Timothy Agostino of B Riley Securities. Go ahead, please.

A bit of an outlier.

And I would look to the kind of the overall total knee annual guidance that Jerry shared historically.

Hey good morning, thanks for taking the question. Um the first 1 just on repayments uh 275 million in the quarter.

Got it and given the large transaction that was in there those usually have lower margins with them was that the case here. So we could see some margin improvement going forward.

I I was wondering if in the fourth quarter you are still seeing elevated repayments as of October end.

Michael Comparato: Jerry, do we have a quarter-to-date repayment summary? I feel like we've not had.

Yes, there is slight margin.

The margin tightening on that individual transaction.

Jerome Baglien: I would expect repayments are relatively in line with what we've seen throughout the year. In terms of kind of pace, I don't think we've been markedly off what we've seen throughout the earlier portion of the year. I would say fourth quarter is also one of the tougher ones to predict because you get more variability and people trying to close things out before the end of the year. It could certainly change because we still have two full months left. I would say if you're run rating, it wouldn't be too far off.

Uh, Jerry, do we have a a quarter to date repayment summary? I I feel like we've not had a lot, we do.

Got it and then I guess just the other one I have here is more of a broader question with all the talk of the GSE is coming out of Conservatorship and can you guys share your thoughts on that and if it does happen what type of impact to the market when do you expect.

I would expect.

Repayments are relatively in line with what we've seen throughout the year. Um, in terms of kind of pace, I don't think we've been

Yeah, I mean, we've been getting that question for a while.

It's obviously difficult to answer overall. So this is completely just personal speculation.

Several administrations have talked about doing this.

markedly off. Um what we've seen throughout the earlier portion of the year. Um, I would say fourth quarter is also 1 of the tougher ones to predict because you get more variability in people trying to close things out before the end of the year. So um, it could certainly change because we still have 2 full months left but um,

It is on tangling, a very complicated web.

Timothy Agostino: Okay, great. Thank you. Just a quick follow up on the core loan portfolio. Is there a target size that you are aiming for? I think right now the portfolio is about $4.4 billion. I was wondering if throughout 2026 or later on if there's a level you would like to reach. Thank you.

Where I do feel very confident is that this administration is not going to do something that is going to disrupt the mortgage market and mess with people's homes and less with the market overall.

You know, I I would say if you're run rating, it wouldn't be too far off.

My guess would be if this is figured out.

That the solution there could be an explicit guarantee rather than the implicit guarantee I think thats, the easiest way to solve any sort of volatility or concern.

Okay, great, thank you. And then just a quick follow-up on the core portfolio. Is there like a Target size that you are aiming for? Um, you know, I I think right now the portfolio is about 4.4 billion was wondering you know if if throughout 26 or later on is there's a level you would like to reach thank you.

Michael Comparato: Yeah, I think overall we're targeting a stabilized portfolio size on the whole loan basis of between $5 billion and $5.5 billion.

But again.

I'm still skeptical that this happens our happens quickly because I do think it's a.

A very very complicated.

Yeah, I think overall we're targeting a, a stabilized portfolio site on the whole loan basis of of between 5 and 5 and a half billion.

Timothy Agostino: Okay, great. Thank you. That's all from me.

Web to untangle.

Okay, great. Thank you. That's all for me.

Got it very helpful. Appreciate you guys, taking the questions today.

Operator: The next question comes from Chris Muller of Citizens JMP Securities. Go ahead, please.

[Analyst]: Hey guys, thanks for taking the question and congrats on a nice quarter here. Great to hear the record quarter for NewPoint and I guess even though it was a record quarter for them, do you guys view this as a good run rate going forward or could there be some further upside to volumes with the NewPoint Holdings JV LLC acquisition?

Again, if you have a question. Please press Star then one.

The next question comes from Chris Mueller of Citizens Capital markets. Go ahead, please.

Okay. This concludes our question and answer session I would like to turn the conference back over to Lindsey Crabbe for any closing remarks.

Hey guys, thanks for taking the question and congrats on a nice quarter here. Um, so great to hear the record quarter for new point and I guess even though there was a record quarter for them, do you guys view this as a good run rate, uh, going forward, or could there be some further upside to volumes, uh, with uh, the new Point acquisition?

Michael Comparato: Hey, Chris, thanks for the question. Look, we had a very large transaction that closed in Q3. We're always out whale hunting for large transactions when we can find them. I don't think it's repeatable every single quarter. I wouldn't, as Jerry just said, I wouldn't use 1/4 to extrapolate forward. We do not have any expectation that NewPoint's going to put up $8 billion of origination in 2026. It was a great quarter. We're very excited about the cross selling that's going on. They're originating bridge loans for our balance sheet. We're originating any agency loans for their agency execution. In early days, it really could not be going better than how it's gone. This is probably a bit of an outlier. I would look to the overall total annual guidance that Jerry shared historically.

We appreciate you joining our call today. Please reach out if you have any further questions. Thank you and have a great day.

The conference has now concluded.

You for attending today's presentation you may now disconnect.

Hey, Chris, thanks for the question. Um, look, we had a, a very large transaction that closed in Q3, uh, we're always out whale hunting for for large transactions when we can find them. Uh, I don't think it's, uh, repeatable, every single quarter. Uh, so I think I, I, I wouldn't as Jerry just said, I wouldn't use 1 quarter to extrapolate forward. Um, you know, we we do not have any expectation that new Point's going to put up, you know, 8 billion of origination in 2026. Um, so it was, it was a great quarter. Uh again we're we're very excited about the cross-selling that's going on. They're originating Bridge zones for our balance sheet. We're originating any agency loans for their agency execution.

Confusion.

[Analyst]: Given the large transaction that was in there, those usually have lower margins with them. Was that the case here? We could see some margin improvement going forward?

You know, in early days, it really could not be going better, uh, than how it's gone. Uh, but no, this is, this is probably, uh, a bit of an outlier, uh, and I would look to the kind of the overall totally annual guidance that Jerry shared historically.

Got it and given the the large transaction that was in there. Those usually have lower margins with them. Was that the case here? So we could see some uh, margin Improvement. Um, going forward.

Michael Comparato: Yes, there is slight margin tightening on that individual transaction.

[Analyst]: Got it. I guess just the other one I have here is more of a broader question. With all the talk of the GSEs coming out of conservatorship, can you guys share your thoughts on that? If it does happen, what type of impacts to the market would you expect?

Uh, yes, there was, there was slight margin, you know, uh, margin tightening on that individual transaction.

Bsc's coming out of conservatorship. Um can you guys share your thoughts on that? Uh and if it does happen what type of impacts to the market? Would you expect?

Michael Comparato: Yeah, I mean, we've been getting that question for a while. I think it's obviously difficult to answer overall. This is completely just personal speculation. Several administrations have talked about doing this. It is untangling a very complicated web. Where I do feel very confident is that this administration is not going to do something that is going to disrupt the mortgage market and mess with people's homes and mess with the market overall. My guess would be if this is figured out, the solution there could be an explicit guarantee rather than the implicit guarantee. I think that's the easiest way to solve any sort of volatility or concern. Again, I'm still skeptical that this happens or happens quickly because I do think it's a very, very complicated web to untangle.

Yeah. I mean we've been getting that question for a while. Um, I think it's obviously difficult to to answer overall. So this is completely just personal speculation. Um, several administrations have talked about doing this. Uh, it is untangling a very complicated web uh, where I do feel you know, very confident is that this Administration is not going to do something. That is going to disrupt the mortgage market and mess with people's homes and mess with the market overall. Uh, my guess would be if this is figured out, uh, that the solution there could be an explicit guarantee rather than the implicit guarantee. I think that's the easiest way, uh, to solve any sort of volatility or concern.

but again, I

[Analyst]: Got it. Very helpful. Appreciate you guys taking the questions today.

I'm still skeptical that that this happens or happens quickly because I do think it's a a very, very complicated uh, web to untangle.

Got it very helpful. Appreciate you guys taking the questions today.

Operator: Again, if you have a question, please press star then one. Okay, this concludes our question and answer session. I would like to turn the conference back over to Lindsey Crabb for any closing remarks.

Again, if you have a question, please press star, then 1.

Okay, this concludes our question-and-answer session. I would like to turn the conference back over to Lindsay KB for any closing remarks.

Lindsey Crabb: We appreciate you joining our call today. Please reach out if you have any further questions. Thank you and have a great day.

We appreciate you joining our call today. Please reach out if you have any further questions. Thank you and have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect