Good day. Welcome to the Franklin BSP Realty Trust second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal to the 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, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference call over to Ms. Lindsey Crabbe. Ms. Crabbe, the floor is yours, ma'am. Hello. Good morning, everyone. Welcome to FBRT's second quarter earnings call. Thank you for joining us. As the operator mentioned, I'm Lindsey Crabbe. With me on the call today are Michael Comparato, Chief Executive Officer of FBRT; Jerry Baglien, Chief Financial Officer and Chief Operating Officer of FBRT; and Brian Buffone, 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, July 30th, 2026. 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 is available on our website at www.fbrtreit.com. We will refer to the supplementary slide deck on today's call. With that, I'll turn the call over to Mike Comparato. Thank you, Lindsey. Good morning, everyone. Thank you for joining us today. I will begin with a few thoughts on the current market environment and our second quarter performance. I'll hand it over to Jerry, who will review our financial results, and Brian will provide an update on the portfolio and overall credit trends. The commercial real estate market remained unsettled during the second quarter. Ongoing geopolitical concerns and conflict continued to put uncertainty in the minds of investors. Higher oil prices have led to inflation concerns, which have in turn led to higher interest rates. At the moment, the higher-for-longer interest rate environment appears to be fairly sticky. The buy-sell transactional volume in the multifamily sector slowed as the bid-ask spread between buyers and sellers is very wide in the current rate environment. We have remained selective in deploying capital, focusing on our opportunities where our structuring expertise, long-standing relationships, and ability to navigate more complex transactions allow us to generate attractive risk-adjusted returns. At the same time, we've maintained discipline in our underwriting, made further progress resolving legacy assets, repurchased shares at a meaningful discount to book value, and maintained a strong liquidity position. We've continued to position the portfolio into newer vintage investments, with more than three-quarters of our loan book now originated following the interest rate hiking cycle. Against that backdrop, we were pleased with our second quarter results. We generated distributable earnings that covered our dividend for the second quarter in a row, and we've increased our book value per share. Our stock continues to trade at what we believe is a meaningful discount to the underlying value of the company. As Brian will discuss later, we have just 1% office exposure and approximately 77% of our portfolio has been originated since interest rates began moving higher. We have zero exposure to data centers, life sciences, or lab space. We are still under-earning on our watchlist and REO positions; we are committed to resolving those as timely and efficiently as possible. With the repositioning of our dividend, we think we have the proper earnings level to work through the balance of legacy loans and work-out assets. We continue to believe repurchasing our stock at these levels is one of the most attractive uses of capital available to us. Overall, we believe the company remains well-positioned with a high-quality, multi-family focused portfolio, significant liquidity, and a balance sheet that provides flexibility as opportunities emerge. We remain confident in the quality of the portfolio, the progress we've made through legacy assets, and our ability to continue creating long-term value for shareholders. With that, I'll turn the call over to Jerry. Great. Thanks, Mike, thanks everyone for joining. I'm going to walk through the financial results for the quarter. FBRT reported GAAP net income of $16.3 million or $0.13 per fully converted common share. Distributable earnings totaled $28.3 million or $0.25 per fully converted share. Excluding approximately $1.9 million of realized losses, distributable earnings before realized losses were $30.2 million or $0.28 per fully converted share. Results this quarter benefited from improved core net interest income, an outsized contribution from our conduit business, and significantly lower realized losses compared to the first quarter. This quarter also demonstrated the benefit of our diversified platform. While NewPoint experienced lower origination volumes as rates remained higher for longer, our diversified earnings streams helped support overall results. That said, we continue to have approximately $250 million of equity invested in underperforming assets, and resolving those positions remains a key priority as we move forward. During the quarter, we recorded a $5.2 million CECL provision on our core portfolio. This was mainly due to an increase in the general reserve driven by the change in the economic environment, as well as a modest addition to specific reserves on a small number of watch list assets. Book value per fully converted share increased to $14.24 from $14.18 last quarter. Continued share repurchase activity remained an important driver of book value accretion during the quarter. We repurchased over $16 million of common stock during the quarter at an average price of $8.70 per share. Continuing what we believe is an attractive use of capital while our shares trade at a substantial discount to book value. Our balance sheet remains in a strong position. Net leverage finished the quarter at 2.6 x, with recourse leverage of just 0.7 x. While approximately 79% of our core financing remains non-mark-to-market. We ended the quarter with nearly $800 million of available liquidity, including cash, CLO reinvestment capacity, and available financing. A few notes on NewPoint. NewPoint generated distributable earnings of $7.4 million during the quarter. Agency originations totaled approximately $399 million, reflecting the slower transaction environment we saw broadly across commercial real estate markets. The servicing platform remains a significant strategic asset for the company. The servicing portfolio increased to nearly $60 billion, providing a recurring earnings stream that continues to complement our lending platform. While quarterly production can fluctuate with market activity, we continue to believe NewPoint represents an important long-term value driver for FBRT. Servicing fees and float income were up $1.2 million in the quarter and provided a stable cash contribution. With that, I'll turn it over to Brian to give you an update on our portfolio. Thanks, Jerry, and good morning, everyone. I'll start on slide 14. Our core loan portfolio finished the quarter at approximately $4.3 billion. As Mike mentioned, transaction activity remained relatively subdued across the industry during the quarter, with borrowers continuing to delay refinancings and acquisitions in the current interest rate environment. As a result, our new originations were limited and were outpaced by repayments during the quarter. We originated approximately $167 million of new loan commitments while receiving roughly $458 million of repayments, resulting in a net decline in the portfolio. Against that backdrop, we remain disciplined in our underwriting standards and continue to focus on opportunities where we believe we can achieve attractive risk-adjusted returns rather than simply prioritizing volume. We also closed on the purchase of our first B-piece CMBS investment in a number of years as a supplement to our normal balance sheet investments. Our portfolio remains highly concentrated in multifamily at approximately 80% of outstanding balances, with office exposure remaining at just 1% of the portfolio. Approximately 77% of our investments have now been originated following the interest rate hiking cycle as we continue the transition toward newer vintages. During the quarter, we closed nine new loans totaling $167 million of commitments. The market for high-quality multifamily loans remains competitive, although we continue to see selective opportunities where our relationships, structuring expertise, and ability to execute help differentiate us. While spreads remain tighter than they have been over the past two years, we continue to maintain our underwriting discipline with an emphasis on lower-leverage loans and experienced sponsors. That being said, total levered returns on assets, particularly with CLO execution, are still quite attractive. Turning to our credit performance, the overall portfolio performance remained stable during the quarter. Our average risk rating improved to 2.4 from 2.5 last quarter. We ended the quarter with 12 watch list loans compared to 11 last quarter, reflecting two additions and one successful resolution. One asset was removed from the watch list during the quarter, while two smaller multifamily loans were added as we continue to proactively identify and address emerging issues. The legacy portion of our portfolio is now down to approximately 23% of our total loan book and is predominantly secured by multifamily assets. We are actively working to address and wind down these older exposures as we move the book fully into newer vintage. Slide 17 covers our foreclosure REO portfolio. We finished the quarter with six foreclosure REO assets unchanged from last quarter as we sold one asset and added another. The addition, Point at Caldwell, was appraised by a third-party vendor above our basis, and that resulted in a write-up in carrying value of approximately $9.7 million. More broadly, our objective remains to monetize these assets efficiently and redeploy capital into accretive opportunities. With that, I'll turn it back to the operator for our Q&A session. Thank you, sir. 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'd like to withdraw your question, please press star then two. At this time, we will just pause momentarily to assemble our roster. The first question we have will come from Chris Muller of Citizens Capital Markets. Please go ahead. Hey guys, thanks for taking the questions this morning. I wanted to touch on NewPoint. You guys have previously given guidance for 2026 with origination volumes in a range of four and a half to five and a half billion. I guess halfway through the year you've done just over $1 billion. I assume those numbers will be hard to hit in the back half of the year. Kind of breaking that down to a quarterly average would be about $1 billion a quarter for NewPoint. Do you guys think those types of volumes are achievable in the back half of the year? Hey, Chris, it's Mike. Unfortunately, I don't. I don't think anybody had a 470 10-year on their bingo card to start the year. As I mentioned to start the call, just oil going up and past 100 got everybody spooked on inflation. Inflation has continued to run hotter than anybody would like. I think it's now five straight years above the Fed target. I think everybody's just dealing with a higher rate environment. In that environment, most borrowers, they always think that rates are going to go lower or the future is going to always be better. We're seeing the vast majority of them opt to go to the floating rate market in the current environment. I do think in a lower rate environment and something that's more what we saw a few years ago, that those volume numbers are certainly achievable. In the current environment, it is very much an uphill battle on the agency side of things. Got it. That's helpful. Say we do get oil prices to come down and we get some relief on rates. How fast can that business ramp back up? What's the lag from rates moving down to you guys starting to see stuff flow through the pipeline? Look, I think the pipeline is very strong. I think the last number that we discussed within the last few days was we've got $1.7 billion quoted or in underwriting. A lot of borrowers are just waiting. There could be a switch that flips, right? If you saw, I'm just arbitrarily picking a number, a meaningful drop in rates. Like rates come down 50 basis points and we're in the low 4s. I think you could see a $1 billion quarter with people that sprint to try to lock in some fixed-rate debt. It's not for a lack of effort. It's not for a lack of opportunity. It's really just a bunch of borrowers basically being bond traders and waiting to see when they want to lock in long-term rates. Got it. That makes a lot of sense. If I could just squeeze a quick housekeeping one in. Looking at your interest rate sensitivity slide, it looks like rates moving higher is a headwind to EPS going forward, which we typically don't see for the mortgage REIT. Can you just talk me through that dynamic? Jerry, you want to take that? Yeah, I can come back to you on some specifics there. I think it's just the overall balance of the portfolio today. Let me come back to you on exactly how that works. Okay. Appreciate that. Thanks for taking the questions today. No problem. The next question we have will come from John Nickodemus of BTIG. Hello, good morning, everyone. We were encouraged to see earnings come up from the $0.22-$0.23 range we'd seen in the prior few quarters. Jerry, I know you mentioned there was an impact there from Conduit, but based on some of the improvements that your team's made over the last few quarters, is this sort of a level we can expect to see sort of through the back half of the year? Maybe a little bit closer to the $0.22-$0.23 range? Just sort of curious how we should be thinking about earnings looking forward at this time after that bump up. Thanks. Yeah. Happy to comment on that. I did highlight the Conduit intentionally, and it was a big quarter in terms of what it contributed. That is probably the hardest thing to predict, or at least one of them in our business. I think this quarter benefited from, I would say, a couple of one-time things that probably made it a little higher than I would expect. I do think kind of what you mentioned is a reasonable kind of target range with the portfolio we have today. We always have some one-time items, so it's always tricky to predict exactly what they'll be. We set the level on the dividend intentionally, knowing that we do have some stuff to work through. There'll be some in and some out on these portfolios. Even if the core stuff is really steady, it'll ebb and flow a little bit, but we feel comfortable kind of staying above that. I do think if you look at the path we're on, ex- some of that one-time stuff, you're trending in the right direction, which is really ultimately what we're trying to do. Sorry there's not perfect specificity on that, but there is some stuff that's harder to give you exact nominal answers on. Yeah. John, I would zoom out a little bit on that. We've held for two years that the ultimate earning power or earnings power of the company is closer to where the dividend was prior to the cut. We just said we've got to get through our issues, get these underperforming assets back to performing loans. There is a fairly clear path to meaningfully higher earnings. That is without the benefit of the buyback, right? Now throw in our ability to buy back shares, which I don't think anybody on our side of the call would've thought we would be trading this large of a discount to book. We're going to take advantage of that. We're going to continue to buy back shares, and that will also drive earnings on a per-share basis as well. Great. Thank you so much, Jerry and Mike. That is perfect and great to hear that that's the overall direction things are going in. A little more specific one for me here. Just wanted to ask about one of the downgrades. Saw the Houston loan come into the watchlist. I know it's a smaller loan, but also didn't see it was originated in 2025. Wasn't sure if this was a sponsor issue, asset specific, but just a little more color there,, given the recent vintage of the loan would be great. Thank you. Brian, is that La Serena? Sorry, I was on mute. Yeah. That's La Serena. Okay. John, La Serena is an asset that we foreclosed on, I want to say 18 months ago. Apologies if I'm off by a few quarters there. We actually sold it to another sponsor fairly quickly after we foreclosed on it. We actually made a few million-dollar profit selling it, then they failed in their business plan, and it's come back around full circle to REO. I believe, Brian, correct me if I'm wrong, we have that under a letter of intent again already to be sold to someone else, correct? Correct. We're negotiating a purchase and sale agreement as we speak. Yeah. I would say it's accurate, of course, that it was a 2025 origination, but it's really a legacy asset origination that unfortunately has come in and out of the system twice now. Got it. Makes a ton of sense, and thanks for the time. As a reminder, if you'd like to participate in today's Q&A, please press star then one on a touch-tone phone. Again, that is star then one to ask a question. Next we have Jason Weaver of JonesTrading. Hey, good morning. This is Val Alvar filling in for Jason Weaver. Thanks for taking my question. I know you touched on it a little bit, but the new loans were coming in around 238 basis points over, which is inside your cost of debt. At the same time, you guys slowed the buyback. I know you mentioned that the stock's now trading around 0.59x book and liquidity up. How are you kind of ranking those two uses of capital, and is there like a spread level where you'd stop originating and lean into the authorization instead? Thanks. Clearly our cost of liabilities is not higher than where we're originating loans. It may be on a backward-looking basis for where our legacy liabilities are, but for new origination, we're still originating at a very positive spread. I would say generically, warehouse financing today for multifamily is priced in the SOFR 125-135 range. If you go the CRE CLO route on the liability side, that's probably a total cost of funds that's like 150, 160, but you're getting meaningfully higher advance rates. While the origination figure of SOFR 238 appears tight, as asset spreads are compressing and declining, so are liabilities. I just wouldn't mismatch legacy liabilities to current originations. Got it. Thank you. I appreciate that extra color there. I missed the second half of the question. Could you just ask that again? Yeah. I think it was on our inflection point, right, on buyback versus originate. Yep. You got it. Go ahead. Yeah. Let me give a little color on that. I think obviously it's very accretive to buy back at these levels. There's no question about that. There are multiple ways to calculate an IRR or return; either way, I think it's extremely compelling. You also have to balance that with the structure of the balance sheet we have, in that you've got reinvestment that opens up on the CLOs. You want to make sure you keep those things full at the same time to keep the effectiveness of that financing structure that you set up. I think you balance available liquidity depending on where it arrives versus keeping the effectiveness of the core portfolio at a high-returning ROE at the same time. It's a capital balance between those two points, I think in a lot of ways. Got it. Thank you. Well, at this time, we are showing no further questions. This will conclude our question -and -answer session. I would now like to turn the conference call back over to Ms. Lindsey Crabbe for any closing remarks. Ma'am? We appreciate you joining us today. Please reach out if you have any further questions. Thanks, and have a great day. All right. Thank you, ma'am. Thank you to the rest of the management team for your time also. The conference call is now concluded. We thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you, take care, and have a great day.