Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM 10-Q __________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39210 __________________________________ ...

Financial Data and Key Metrics Changes - In Q2 2023, the company reported net income of $0.36 per diluted share, an increase from $0.26 per diluted share in Q2 2022, attributed to improved performance of CMBS investments [3] - Earnings available for distribution was $0.46 per diluted share in Q2 2023, down from $0.49 per diluted share in the same period in 2022 [3][73] - Cash available for distribution was $0.49 per diluted share in Q2 2023, compared to $0.56 per diluted share in Q2 2022, with the decrease driven by higher share counts and losses on common stock investments [73] - Book value per share decreased by 1.6% quarter-over-quarter to $19.28 per diluted share, primarily due to special dividends and mark-to-market adjustments [54] Business Line Data and Key Metrics Changes - The loan portfolio is composed of 94% residential investments, with 44% in single-family rental loans and 50% in multifamily, while 4% is in life sciences and 1% in self-storage [56] - The company originated three new investments totaling $27.1 million in outstanding principal with a blended yield of 16.7% [54][38] - The two full redemptions in the quarter consisted of $10.5 million of single-family rental loans, achieving an average IRR of 11.1% [57][78] Market Data and Key Metrics Changes - The portfolio is geographically diverse, with Texas, Georgia, and Florida accounting for approximately 53% of exposure [38] - The company maintains a cautious approach to repo financing, with a leverage standing at approximately 53% LTV [9] Company Strategy and Development Direction - The company continues to find attractive investment opportunities across target markets and asset classes, focusing on life sciences and multifamily sectors as key growth areas [7][85] - The company expects to be active in the multifamily bridge loan sector as many loans mature over the next two years, requiring capital financing [39][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the residential sector, particularly in multifamily and single-family properties, despite potential challenges in the market [59] - The company anticipates a stable pipeline of originations, particularly for private preferred business to multifamily operators [61] Other Important Information - The company paid a dividend of $0.50 per share in Q2 2023 and declared a special dividend of $0.185 per share for Q3 and Q4 2023 [45] - A stress test indicated that a 60% increase in implied yields would result in a 12% decrease in the CMBS portfolio's overall value [46][77] Q&A Session Summary Question: Can you provide more details on the losses from common stock investments? - Management clarified that the losses were due to expenses associated with development deals and not true losses [47][83] Question: What are the key drivers for the life sciences sector? - Management highlighted the attractiveness of life sciences investments, particularly in CGMP facilities, as a significant growth area [12][65] Question: Are short-duration investments becoming more common? - Management indicated that short-duration investments may become the new normal, but the multifamily sector remains healthy [67][68] Question: Is there an increase in deal flow for multifamily bridge loans? - Management confirmed that there is a pickup in deal flow for multifamily bridge loans, particularly as debt service coverage and LTV become critical [69]

[Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements concerning liquidity, capital resources, and operational results, which are based on current management beliefs and are subject to risks and uncertainties. The company cautions investors against relying on these statements as they are not guarantees of future performance[13](index=13&type=chunk)[14](index=14&type=chunk)[17](index=17&type=chunk) - Key risks that could cause actual results to differ materially from forward-looking statements include, but are not limited to: risks associated with debt-oriented real estate investments, interest rate fluctuations, substantial indebtedness, limited operating history, dependence on the external Manager, failure to qualify as a REIT, and a previously identified material weakness in internal controls[15](index=15&type=chunk)[18](index=18&type=chunk) [PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents NexPoint Real Estate Finance, Inc.'s unaudited consolidated financial statements for Q1 2023, detailing its financial position and performance [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The company reported net income of **$9.4 million** for Q1 2023, with total assets decreasing to **$8.04 billion** and cash increasing to **$38.8 million** Consolidated Balance Sheet Highlights | Account | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$8,042,566** | **$8,154,136** | | Cash and cash equivalents | $38,830 | $20,048 | | Mortgage loans held in VIEs, at fair value | $6,747,377 | $6,720,246 | | **Total Liabilities** | **$7,569,590** | **$7,609,122** | | Bonds payable held in VIEs, at fair value | $6,278,734 | $6,249,804 | | **Total Stockholders' Equity** | **$377,264** | **$448,513** | Consolidated Statement of Operations Highlights | Account | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total net interest income | $3,949 | $22,315 | | Total other income (loss) | $10,949 | $1,814 | | Total operating expenses | $5,520 | $6,060 | | **Net income** | **$9,378** | **$18,069** | | **Net income attributable to common stockholders** | **$6,567** | **$12,406** | | **Earnings per share - basic** | **$0.38** | **$0.90** | | **Earnings per share - diluted** | **$0.37** | **$0.78** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's organization, accounting policies, and investment portfolio, including the CECL standard adoption - The company is a commercial mortgage REIT focused on originating and investing in first-lien mortgage loans, mezzanine loans, preferred equity, and various mortgage-backed securities, primarily in the multifamily, SFR, and self-storage sectors[30](index=30&type=chunk)[34](index=34&type=chunk) - Effective January 1, 2023, the company adopted the CECL standard (ASU 2016-13), resulting in a **$1.6 million** reduction in retained earnings due to an increased allowance for credit losses[65](index=65&type=chunk)[66](index=66&type=chunk) Loans Held-for-Investment Summary | Loan Type | Carrying Value (Mar 31, 2023) (in thousands) | Carrying Value (Dec 31, 2022) (in thousands) | | :--- | :--- | :--- | | Mortgage loans | $723,343 | $726,531 | | Mezzanine loans | $135,336 | $165,182 | | Preferred equity | $149,212 | $90,965 | | **Total** | **$1,007,891** | **$982,678** | - As of March 31, 2023, all 50 loans held-for-investment in the portfolio were internally rated as "3 - Satisfactory," indicating collateral performance is meeting or on track to meet underwriting expectations[104](index=104&type=chunk) - Effective January 1, 2023, the company deconsolidated its investment in the Elysian at Hughes Center multifamily property following a restructuring, recognizing a gain on deconsolidation of **$1.5 million**[130](index=130&type=chunk)[204](index=204&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2023 financial performance, highlighting decreased net interest income and key non-GAAP metrics [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Net income attributable to common stockholders decreased to **$6.6 million** in Q1 2023, primarily due to lower net interest income Comparison of Operating Results | Account | Q1 2023 (in thousands) | Q1 2022 (in thousands) | $ Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $3,949 | $22,315 | $(18,366) | (82.3)% | | Other income (loss) | $10,949 | $1,814 | $9,135 | 503.6% | | Operating expenses | $(5,520) | $(6,060) | $540 | (8.9)% | | Net income | $9,378 | $18,069 | $(8,691) | (48.1)% | | Net income attributable to common stockholders | $6,567 | $12,406 | $(5,839) | (47.1)% | [Key Financial Measures and Indicators](index=53&type=section&id=Key%20Financial%20Measures%20and%20Indicators) Key financial metrics for Q1 2023 include diluted EPS, dividends, EAD, CAD, and book value per share EAD and CAD Reconciliation | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Net income attributable to common stockholders | $6,567 | $12,406 | | **EAD attributable to common stockholders** | **$9,524** | **$19,591** | | EAD per Diluted Weighted-Average Share | $0.54 | $1.36 | | **CAD attributable to common stockholders** | **$9,956** | **$25,555** | | CAD per Diluted Weighted-Average Share | $0.56 | $1.78 | Book Value Per Share / Unit | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Book value per share of common stock | $19.77 | $20.29 | | Combined book value per share / unit | $19.59 | $20.03 | [Our Portfolio](index=57&type=section&id=Our%20Portfolio) As of March 31, 2023, the company's portfolio consisted of 87 investments with a total principal balance of **$1.66 billion** and a carrying value of **$1.71 billion** Portfolio Overview as of March 31, 2023 | Metric | Total Portfolio | Floating Rate | Fixed Rate | | :--- | :--- | :--- | :--- | | Number of investments | 87 | 24 | 58 | | Principal balance (in thousands) | $1,655,145 | $368,748 | $1,286,397 | | Carrying value (in thousands) | $1,707,201 | $365,100 | $1,205,031 | | Weighted-average cash coupon | 5.67% | 9.13% | 4.68% | | Weighted-average all-in yield | 6.71% | 11.17% | 5.35% | [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, including **$40.3 million** in cash and equivalents, is deemed sufficient for the next twelve months - Cash and cash equivalents (including restricted cash) ended the quarter at **$40.3 million**, up from **$20.3 million** at the beginning of the period[279](index=279&type=chunk) - The company utilizes a Freddie Mac credit facility with a **$628.2 million** outstanding balance and master repurchase agreements with a **$350.4 million** outstanding balance as of March 31, 2023[270](index=270&type=chunk)[272](index=272&type=chunk) - The company is transitioning its LIBOR-indexed loans to SOFR, with the change expected to occur after June 30, 2023, and management anticipates an immaterial effect on interest rates[277](index=277&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, NexPoint Real Estate Finance, Inc. is not required to provide disclosures about market risk - Disclosure under this item is not required as the company qualifies as a smaller reporting company[309](index=309&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2023, due to a material weakness, with remediation ongoing - Management, including the President and CFO, concluded that disclosure controls and procedures were not effective as of March 31, 2023, due to a previously identified material weakness[310](index=310&type=chunk) - A remediation plan is underway, which includes implementing pre- and post-close acquisition checklists to ensure proper accounting analysis of investment contracts and structures, but the material weakness will not be considered remediated until these controls are fully implemented and tested over a sufficient period[313](index=313&type=chunk)[315](index=315&type=chunk) [PART II—OTHER INFORMATION](index=70&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings that would adversely affect its financial condition or operations - The company reports no material legal proceedings[319](index=319&type=chunk) [Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K are reported - No material changes to risk factors from the most recent Form 10-K are reported[320](index=320&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including required certifications and Inline XBRL documents - The exhibit index lists required certifications and XBRL data files submitted with the report[327](index=327&type=chunk)

NexPoint Real Estate Finance, Inc. (NYSE:NREF) Q1 2023 Earnings Conference Call April 27, 2023 11:00 AM ET Company Participants Kristen Thomas - Investor Relations Brian Mitts - Executive Vice President and Chief Financial Officer Matt McGraner - Executive Vice President and Chief Investment Officer Matt Goetz - Senior Vice President, Investment and Asset Management Paul Richards - Vice President, Originations and investments Conference Call Participants Crispin Love - Piper Sandler Stephen Laws - Raymond J ...

PART I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) NREF is a commercial mortgage REIT investing in debt and equity across multifamily, SFR, and self-storage, managing a $2.0 billion portfolio with a 3-to-1 leverage target - NREF is a commercial mortgage REIT focusing on first-lien mortgage loans, mezzanine loans, preferred equity, and CMBS, primarily in the multifamily, SFR, and self-storage sectors within the top **50 MSAs**[24](index=24&type=chunk)[28](index=28&type=chunk) - The company is externally managed by NexPoint Real Estate Advisors VII, L.P., an affiliate of NexPoint Advisors, L.P., with the manager handling all investment decisions and operations[27](index=27&type=chunk) Portfolio Composition by Net Equity (December 31, 2022) | Asset Class | Percentage of Net Equity (%) | | :--- | :--- | | Multifamily CMBS B-Pieces | 28.0% | | Mezzanine Loans | 15.9% | | SFR Loans | 14.8% | | Preferred Equity Investments | 13.7% | | Common Stock Investments | 11.8% | | Multifamily Property Real Estate | 9.5% | | CMBS I/O Strips | 3.1% | | Mortgage-Backed Securities | 2.5% | | MSCR Notes | 0.7% | Key Portfolio Metrics (as of December 31, 2022) | Metric | Value | | :--- | :--- | | Stabilized Properties | 92.9% | | Weighted Average Occupancy | 89.5% | | Portfolio-wide Weighted Average DSCR | 1.78x | | Weighted Average LTV | 68.6% | | Weighted Average Maturity | 5.9 years | - The company's financing strategy targets a leverage ratio not to exceed **3-to-1**, with the manager having discretion over specific asset leverage[56](index=56&type=chunk) [2022 Highlights](index=7&type=section&id=2022%20Highlights) In 2022, the company made $380.4 million in new investments and $197.2 million in dispositions, issuing $35.0 million in notes and $12.6 million in stock 2022 Purchases and Investments Summary | Metric | Value ($) | | :--- | :--- | | Total Principal Amount | $380,401,247 | 2022 Property Acquisition | Property Name | Location | Purchase Price ($) | Mortgage Debt ($) | Units | Effective Ownership (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Elysian at Hughes | Las Vegas, NV | $184,100,000 | $89,634,000 | 368 | 36.0% | 2022 Dispositions and Loan Payoffs Summary | Metric | Value ($) | | :--- | :--- | | Total Amortized Cost Basis | $205,774,441 | | Total Disposition Proceeds | $197,234,265 | | Total Prepayment Penalties | $25,773,254 | | Total Net Gain on Prepayment | $17,233,078 | - The company issued **$35.0 million** of **5.75%** Senior Unsecured Notes due 2026 and repurchased **$5.0 million** of these notes during the year, leaving **$165.0 million** outstanding[36](index=36&type=chunk) - Under its 2022 At-the-Market (ATM) Program, the company sold **531,728 shares** of common stock for gross proceeds of **$12.6 million**[38](index=38&type=chunk) [Item 1A. Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from real estate market downturns, credit and interest rate fluctuations, portfolio concentration, external manager dependence, and internal control weaknesses - The company's loans and investments are exposed to risks associated with debt-oriented real estate, including delinquency, foreclosure, and loss, which are heightened by macroeconomic trends like inflation and rising interest rates[84](index=84&type=chunk)[88](index=88&type=chunk)[95](index=95&type=chunk) - The portfolio has significant concentration risk: one fixed-rate loan represents approximately **25.2%** of the total portfolio's unpaid principal balance, and about **53.4%** of the portfolio is located in Florida and Georgia[100](index=100&type=chunk) - A single **material weakness** was identified in the company's internal control over financial reporting related to the Elysian at Hughes Center investment, leading to the conclusion that internal controls were **not effective** as of December 31, 2022[82](index=82&type=chunk)[169](index=169&type=chunk) - The company is dependent on its external Manager and its affiliates, and faces significant conflicts of interest, including those arising from the Manager's compensation structure and competition for investment opportunities with other affiliated entities[198](index=198&type=chunk)[209](index=209&type=chunk)[217](index=217&type=chunk) - Failure to qualify as a REIT would result in significant adverse tax consequences, including being subject to corporate income tax and being unable to deduct dividends paid to stockholders[232](index=232&type=chunk)[233](index=233&type=chunk) - The bankruptcy of Highland Capital Management, L.P. (a former affiliate) and related litigation involving key personnel could expose the company to negative publicity and divert management's attention, potentially impacting operations[212](index=212&type=chunk) [Item 1B. Unresolved Staff Comments](index=60&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - **None**[304](index=304&type=chunk) [Item 2. Properties](index=60&type=section&id=Item%202.%20Properties) As of December 31, 2022, the company directly owns one multifamily property and consolidates another Owned Properties | Property Name | Location | Units | Mortgage Debt (as of 12/31/22) ($) | | :--- | :--- | :--- | :--- | | Hudson Montford | Charlotte, NC | 204 | ~$32.5 million | | Elysian at Hughes Center | Las Vegas, NV | 368 | ~$89.6 million | [Item 3. Legal Proceedings](index=61&type=section&id=Item%203.%20Legal%20Proceedings) The company is not aware of any legal proceedings likely to have a material adverse effect on its financial condition or operations - Management is **not aware** of any legal proceedings likely to have a material adverse effect on the company's results or financial condition[307](index=307&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[308](index=308&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "NREF", with **17,471,218 shares** outstanding as of March 31, 2023 - The company's common stock trades on the NYSE under the symbol "**NREF**"[312](index=312&type=chunk) - As of March 31, 2023, there were **17,471,218 shares** of common stock outstanding[311](index=311&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income for 2022 decreased to **$3.2 million** due to unrealized losses, with portfolio growth to **$2.0 billion** and EAD at **$2.50** and CAD at **$2.97** per share [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Net income attributable to common stockholders decreased to **$3.2 million** in 2022, primarily due to unrealized losses on CMBS VIEs, despite increased net interest income Summary of Operating Results (in thousands) | | For the Year Ended Dec 31, 2022 | For the Year Ended Dec 31, 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $37,733 | $26,055 | $11,678 | 44.8% | | Other income (loss) | $2,661 | $71,263 | ($68,602) | (96.3)% | | Operating expenses | ($26,180) | ($13,846) | ($12,334) | 89.1% | | **Net income attributable to common stockholders** | **$3,234** | **$39,577** | **($36,343)** | **(91.8)%** | - The increase in net interest income for 2022 was primarily due to an increase in investments (from **74** to **83** discrete investments) and prepayment penalties related to early paydowns[336](index=336&type=chunk) - The decrease in other income for 2022 was primarily due to an increase in unrealized losses related to **consolidated** CMBS VIEs and a decrease in fair value marks between periods[337](index=337&type=chunk) [Key Financial Measures and Indicators](index=68&type=section&id=Key%20Financial%20Measures%20and%20Indicators) For FY 2022, basic EPS was **$0.22**, dividends increased to **$2.00**, EAD was **$2.50**, and CAD was **$2.97** per diluted share, with book value at **$20.29** Per Share Data Comparison | Metric | 2022 ($) | 2021 ($) | 2020 ($) | | :--- | :--- | :--- | :--- | | Net income per share, basic | $0.22 | $6.00 | $2.13 | | Dividends declared per share | $2.0000 | $1.9000 | $1.4198 | EAD and CAD Reconciliation Summary (per diluted share, including NCI) | Metric | 2022 ($) | 2021 ($) | | :--- | :--- | :--- | | EAD per Diluted Share | $2.50 | $1.89 | | CAD per Diluted Share | $2.97 | $2.21 | Book Value Per Share / Unit | Metric | Dec 31, 2022 ($) | Dec 31, 2021 ($) | | :--- | :--- | :--- | | Book value per share of common stock | $20.29 | $21.88 | | Combined book value per share / unit | $20.03 | $21.51 | [Our Portfolio](index=71&type=section&id=Our%20Portfolio) As of December 31, 2022, the portfolio comprised **83** investments with a **$1.63 billion** principal balance, primarily fixed-rate, yielding **6.41%** Portfolio Summary (as of December 31, 2022) | Metric | Floating Rate | Fixed Rate | Common Stock | Real Estate | Total Portfolio | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of investments | 22 | 57 | 2 | 2 | 83 | | Principal balance ($ thousands) | $368,021 | $1,260,751 | N/A | N/A | $1,628,772 | | Weighted-average all-in yield | 10.31% | 5.21% | N/A | N/A | 6.41% | [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is sourced from operating cash flows, debt facilities, and equity issuances, including a **$628.6 million** Freddie Mac facility and **$331.0 million** in repurchase agreements - Primary sources of liquidity include cash from operations, debt facilities like the Freddie Mac Credit Facility and master repurchase agreements, and equity/debt issuances[365](index=365&type=chunk)[366](index=366&type=chunk) Key Financing Balances (as of December 31, 2022) | Facility | Outstanding Balance ($ thousands) | | :--- | :--- | | Freddie Mac Credit Facility (SFR Loans) | $628,633 | | Master Repurchase Agreements | $331,020 | | Unsecured Notes, net | $204,960 | | Mortgages Payable, net | $121,236 | - The company is actively managing the transition from LIBOR to SOFR: as of year-end 2022, **3.7%** of the portfolio was tied to LIBOR and **13.3%** was tied to SOFR[381](index=381&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is **not required** for smaller reporting companies, thus no disclosure is provided - **Not required** for smaller reporting companies[409](index=409&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the **consolidated** financial statements and related notes, beginning on page F-1 - The required information is included in the **consolidated** financial statements and notes beginning on page F-1[410](index=410&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports **no** changes or disagreements with its accountants on accounting and financial disclosure - **None**[411](index=411&type=chunk) [Item 9A. Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were **not effective** as of December 31, 2022, due to a **material weakness** in internal control over financial reporting, with remediation underway - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2022[412](index=412&type=chunk) - A **material weakness** was identified in internal controls relating to missing controls over obtaining and reviewing final executed documents for new investments due to inadequate risk assessment[418](index=418&type=chunk) - The remediation plan involves implementing pre-close and post-close acquisition checklists to ensure formal accounting analysis and review of final transaction documents[420](index=420&type=chunk) PART III [Items 10-14](index=84&type=section&id=Items%2010-14) Information for Items 10-14, covering governance, compensation, and ownership, is **incorporated by reference** from the company's definitive proxy statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the company's definitive proxy statement for its 2023 Annual Meeting of stockholders[427](index=427&type=chunk)[428](index=428&type=chunk)[429](index=429&type=chunk)[430](index=430&type=chunk)[431](index=431&type=chunk) PART IV [Item 15. Exhibit and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including financial statements and an index of all exhibits - This item provides an index to the **Consolidated** Financial Statements, which begin on page F-1, and lists all exhibits filed with the report[434](index=434&type=chunk)[435](index=435&type=chunk) Financial Statements and Supplementary Data [Consolidated Financial Statements](index=91&type=section&id=Consolidated%20Financial%20Statements) **Consolidated** financial statements for 2022 show total assets of **$8.15 billion**, liabilities of **$7.61 billion**, and net income of **$14.2 million**, reflecting CMBS trust **consolidation** Consolidated Balance Sheet Summary (in thousands) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $8,154,136 | $8,513,917 | | Total Liabilities | $7,609,122 | $8,007,211 | | Total Stockholders' Equity | $448,513 | $245,283 | Consolidated Statement of Operations Summary (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total net interest income | $37,733 | $26,055 | $11,678 | 44.8% | | Total other income (loss) | $2,661 | $71,313 | ($68,602) | (96.3)% | | Total operating expenses | $26,180 | $13,896 | ($12,334) | 89.1% | | **Net income** | **$14,214** | **$83,472** | **($69,258)** | **(83.0)%** | Consolidated Statement of Cash Flows Summary (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $65,801 | $49,298 | | Net cash provided by investing activities | $950,578 | $517,878 | | Net cash used in financing activities | ($1,029,264) | ($567,415) | [Notes to Consolidated Financial Statements](index=100&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed financial information on VIE **consolidation**, loan portfolio, debt facilities, fair value, related-party transactions, and subsequent events, including an **immaterial error correction** - The company **consolidates** CMBS trusts where it is the **primary beneficiary**, reporting the assets and liabilities of these trusts at fair value, which significantly impacts the scale of the **consolidated** balance sheet[479](index=479&type=chunk)[480](index=480&type=chunk) - As of December 31, 2022, all **48** loans held-for-investment were rated "**3**" (**Satisfactory**), indicating that collateral performance is meeting or on track to meet underwriting expectations[542](index=542&type=chunk) - Note 16 discloses an **immaterial error correction** for the Elysian at Hughes Center investment: it was previously accounted for as an unconsolidated preferred equity investment but was revised to be **consolidated** as a real estate investment owned by the company, effective Q1 2022[652](index=652&type=chunk) - Subsequent to year-end, in Q1 2023, the company made new preferred and common equity investments, authorized a new **$20.0 million** share repurchase program, declared common and preferred dividends, and acquired a new CMBS position[658](index=658&type=chunk)[659](index=659&type=chunk)[661](index=661&type=chunk)[662](index=662&type=chunk)[664](index=664&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net loss of $0.16 per diluted share for Q4 2022, compared to net income of $0.92 per diluted share for Q4 2021, indicating a significant decline in profitability [45] - Earnings available for distribution decreased to $0.49 per diluted share in Q4 2022 from $0.54 per diluted share in Q4 2021, while cash available for distribution fell to $0.52 per diluted share from $0.63 per diluted share in the same period [46] - Book value per share decreased by 6.5% year-over-year to $20.11 per diluted share, primarily due to mark-to-market adjustments [54] Business Line Data and Key Metrics Changes - The loan portfolio is composed of 85 individual assets with approximately $1.7 billion of total outstanding principal, with 96% of the portfolio being residential [66][70] - The portfolio's average remaining term is 5.9 years, with a weighted average loan-to-value of 68.6% and an average debt service coverage ratio of 1.78x [70] Market Data and Key Metrics Changes - Year-over-year market rent growth in the Sunbelt region is approximately 4% to 6%, with total rent growth for the year expected to be around 10% to 12% [21] - Single-family rents are experiencing a year-over-year growth of 6% to 8%, while multi-family rents finished the year in low single digits [22] Company Strategy and Development Direction - The company continues to focus on credit investments and stabilized assets, emphasizing conservative underwriting at low leverage [6] - The investment strategy includes targeting opportunities in the life sciences sector, with approximately $400 million of preferred equity and mezzanine opportunities being underwritten [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the transaction market is somewhat muted, with deal volume down 70% to 80% from a year ago, leading to lower demand for borrowings [38] - Despite the challenges, the company remains optimistic about the performance of the SFR and multi-family sectors, with high-single-digit same-store NOI growth being reported [34] Other Important Information - The company declared a special dividend of $0.185 per share for the first quarter, with intentions to continue this for the remainder of 2023 [53] - The company is guiding for earnings available for distribution of $0.47 per diluted share for Q1 2023, with a range of $0.42 to $0.52 [47] Q&A Session Summary Question: What were prepays in the quarter versus last quarter? - Management expects prepayments to be less prevalent in Q1 and Q2 of 2023 as rates stabilize [32] Question: Can you speak to your views on both multifamily and SFR right now? - Management remains bullish on SFR, noting strong performance despite rising debt costs and inflation pressures [34] Question: What are your thoughts about the market's ability to absorb the current supply? - Management indicated that there may be some softness in the market, particularly in higher-end products, but overall demand remains strong [18]

NEXE INVESTOR RELATIONS Kristen Thomas (p) 214.908.1854 (e) kthomas@nexpoint.com NYSE:NREF 4Q 2022 Financial Supplement February 23, 2023 CONTACT NEXPOINT REAL ESTATE FINANCE (NYSE:NREF) 300 Crescent Court, Suite 700 Dallas, Texas 75201 (w) nref.nexpoint.com Cautionary Statements FORWARD LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beli ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39210 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of ...

NexPoint Real Estate Finance, Inc. (NYSE:NREF) Q3 2022 Earnings Conference Call October 27, 2022 11:00 AM ET Company Participants Kristen Thomas - Investor Relations Matt McGraner - Executive Vice President and CIO Brian Mitts - Executive Vice President and CFO Matt Goetz - Senior Vice President, Investments and Asset Management Paul Richards - Vice President, Originations and Investments Conference Call Participants Stephen Laws - Raymond James Steve DeLaney - JMP Securities Jade Rahmani - KBW Operator Ple ...

NEX NYSE:NREF 3Q 2022 Financial Supplement October 27, 2022 CONTACT NEXPOINT REAL ESTATE FINANCE (NYSE:NREF) 300 Crescent Court, Suite 700 Dallas, Texas 75201 (w) nref.nexpoint.com INVESTOR RELATIONS Kristen Thomas (p) 214.908.1854 (e) kthomas@nexpoint.com Cautionary Statements FORWARD LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and belief ...