NexPoint Real Estate Finance(NREF) - 2024 Q3 - Quarterly Results

Third Quarter 2024 Financial Results and Highlights NexPoint Real Estate Finance reported strong Q3 2024 financial results, driven by active capital deployment and a diversified $1.1 billion portfolio Third Quarter 2024 Financial Summary NREF reported strong Q3 2024 net income and Cash Available for Distribution, driven by active capital deployment | Metric | Value ($ millions) | Per Diluted Share ($) | | :--- | :--- | :--- | | Net Income Attributable to Common Stockholders | $16.1 million | $0.75 | | Cash Available for Distribution (CAD) | $15.8 million | $0.67 | - Management commented on the strong quarter, emphasizing their readiness to deploy capital and capitalize on market dislocations while traditional lenders are sidelined[3] Third Quarter 2024 Portfolio and Operational Highlights NREF's Q3 2024 portfolio totaled $1.1 billion across 83 investments, primarily in multifamily and life sciences, with conservative LTV and DSCR - The total investment portfolio is valued at $1.1 billion, comprising 83 investments[4] - Portfolio composition is dominated by multifamily, life sciences, and single-family rental properties: - Multifamily: 52.3% - Life Sciences & Specialty Manufacturing: 26.7% - Single-Family Rental (SFR): 17.0% - Self-Storage: 1.5% - Marinas: 0.6%[4] | Metric | Value | | :--- | :--- | | Weighted-Average Loan to Value (LTV) | 60.2% | | Debt Service Coverage Ratio (DSCR) | 1.36x | - Key Q3 2024 transactions include: - Sold a CMBS B-Piece with a $82.0 million principal balance and a 9.20% bond equivalent yield - Funded $28.8 million on a new loan with a coupon of SOFR + 900 bps - As of October 31, 2024, no loans in the portfolio were in forbearance[4] Fourth Quarter 2024 Guidance The company provides Q4 2024 guidance for Earnings Available for Distribution and Cash Available for Distribution per diluted common share Earnings Available for Distribution (EAD) Guidance NREF projects Q4 2024 Earnings Available for Distribution (EAD) per diluted common share at $0.79 midpoint, based on $17.15 million net income | Metric (Midpoint Guidance) | Q4 2024E | | :--- | :--- | | Net Income Attributable to Common Stockholders | $17.15 million | | EAD | $18.56 million | | EAD per Diluted Common Share | $0.79 | | EAD Dividend Coverage Ratio | 1.58x | Cash Available for Distribution (CAD) Guidance The company guides Q4 2024 Cash Available for Distribution (CAD) per diluted common share at $0.50 midpoint, with projected CAD of $11.67 million | Metric (Midpoint Guidance) | Q4 2024E | | :--- | :--- | | CAD | $11.67 million | | CAD per Diluted Common Share | $0.50 | | CAD Dividend Coverage Ratio | 1.00x | Reconciliations of Non-GAAP Financial Measures This section reconciles GAAP net income to non-GAAP metrics, Earnings Available for Distribution and Cash Available for Distribution Reconciliation of Net Income to EAD and CAD This section reconciles Q3 2024 GAAP net income of $16.1 million to non-GAAP EAD of $17.6 million and CAD of $15.7 million | (in thousands, except per share) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net income (loss) attributable to common stockholders | $16,116 | $(15,550) | | Adjustments (Unrealized gains/losses, etc.) | $(1,744) | $26,458 | | EAD | $17,614 | $9,820 | | EAD per diluted common share | $0.75 | $0.43 | | Adjustments (Amortization, Depreciation, etc.) | $(1,867) | $942 | | CAD | $15,747 | $10,762 | | CAD per diluted common share | $0.67 | $0.47 | Supplementary Information This section provides conference call details, company overview, and definitions of non-GAAP financial measures Conference Call Details NREF will host a conference call on October 31, 2024, at 11:00 a.m. ET to discuss its Q3 2024 financial results - A conference call to discuss Q3 2024 results is scheduled for October 31, 2024, at 11:00 a.m. ET[8] - Dial-in and webcast details are provided for live participation, and a replay will be available until November 14, 2024[9][10] About NexPoint Real Estate Finance, Inc. NREF is a publicly traded REIT (NYSE: NREF) focused on originating and investing in diverse real estate debt and equity instruments - NREF is a publicly traded REIT (NYSE: NREF) focused on originating and investing in first-lien mortgages, mezzanine loans, preferred equity, and other real estate securities[12] Non-GAAP Financial Measures and Forward-Looking Statements This section defines non-GAAP financial measures like EAD and CAD, and includes a standard disclaimer for forward-looking statements - The report contains forward-looking statements, including Q4 2024 guidance, which are not guarantees of future results and are subject to risks[13] - EAD is defined as GAAP net income adjusted for non-cash items like unrealized gains/losses and stock-based compensation to assess long-term distribution ability[15] - CAD is calculated by adjusting EAD for items like amortization of premiums/discounts and depreciation to evaluate the current ability to pay distributions[17] - Adjusted weighted average common shares outstanding excludes the potential dilutive effect of Series B Preferred share redemptions, as the company intends to settle these in cash when the stock price is below book value[18]