DALLAS, Aug. 1, 2024
/PRNewswire/ -- NexPoint Real Estate Finance, Inc. ("NREF" or the
"Company") (NYSE: NREF) today reported its financial results for
the quarter ended June 30, 2024.
NREF reported net income attributable to common stockholders of
$7.5 million, or $0.40 per diluted share1, for the
three months ended June 30, 2024.
NREF reported cash available for distribution2 of
$15.0 million, or $0.64 per diluted share2, for the
three months ended June 30, 2024.
"NREF is pleased to deliver another strong quarter with
consistent, resilient earnings in our core property types.
While banks and traditional lenders remain sidelined or distracted
with credit issues, we remain active, focused and ready to deploy
capital into this challenging credit market, capitalizing on market
dislocations and creating long-term value for our shareholders,"
commented Chief Investment Officer Matthew
McGraner.
Second Quarter 2024 Highlights
- Outstanding total portfolio of $1.2
billion, composed of 85 investments3
- Single-family rental ("SFR"), multifamily, life sciences and
specialty manufacturing, self-storage and marinas represent 18.8%,
56.9%, 22.2%, 1.5% and 0.6% of the Company's investment portfolio,
respectively
- Weighted-average loan to value ("LTV")4 and debt
service coverage ratio ("DSCR") on our SFR, CMBS, CMBS I/O strips,
preferred, mezzanine, credit risk transfer and mortgage-backed
security investments are 62.3% and 1.52x3,
respectively
- As of August 1, 2024, there are
no loans currently in forbearance in our portfolio
- During 2Q 2024, NREF purchased a K – Series B-Piece with an
outstanding principal balance of $31.9MM with bond equivalent yield of 9.50%
- During the quarter, the Company originated and funded
$67.5MM of $150.0 MM on a short-term bridge loan
collateralized by life science assets in gateway markets. The
loan is approximately 55% LTV and bears a fixed interest rate of
16.5% per annum.
|
1 Weighted-average diluted shares
outstanding assumes vesting of all outstanding unvested restricted
stock units and the conversion of all redeemable non-controlling
interests.
|
|
2 Earnings
available for distribution ("EAD"), cash available for distribution
("CAD") and earnings per adjusted diluted share ("EPS") are
non-GAAP measures. Beginning in the second quarter of 2024, EAD per
diluted share, CAD per diluted share and EPS per adjusted diluted
share are based on adjusted diluted weighted average shares
outstanding. Adjusted diluted weighted average shares outstanding
is a non-GAAP measure. For a discussion of why we consider these
non-GAAP measures useful and reconciliations of these non-GAAP
measures, see the "Reconciliations of Non-GAAP Financial Measures"
and "Non-GAAP Financial Measures" sections of this
release.
|
|
3 As of June
30, 2024; and excluding the common stock investments, preferred
stock investment, the Hudson Montford and Alexander at the District
multifamily properties, CMBS B-Pieces reflected on an
unconsolidated basis.
|
|
4 Loan to
value is generally based on the initial loan amount divided by the
as-is appraised value as of the date the loan was originated or by
the current principal amount as of the date of the most recent
as-is appraised value. For our CMBS B-Pieces, LTV is based on the
weighted-average LTV of the underlying loan pool.
|
|
5 Net income
attributable to common stockholders in 3Q 2024 is estimated to be
between $9.1MM and $11.5MM. See reconciliations below.
|
Looking Ahead: Third Quarter 2024 Guidance
Earnings Available for Distribution2
- 3Q 2024 EAD per diluted share guidance is $0.505 at the midpoint
|
|
Low
|
|
|
Mid
|
|
|
High
|
|
|
|
Sept. 30,
2024
|
|
|
Sept. 30,
2024
|
|
|
Sept. 30,
2024
|
|
|
Net
income
|
|
$
|
12,318
|
|
|
$
|
13,489
|
|
|
$
|
14,660
|
|
|
Net (income) loss
attributable to Series A Preferred stockholders
|
|
|
(874)
|
|
|
|
(874)
|
|
|
|
(874)
|
|
|
Net (income) loss
attributable to Series B Preferred stockholders
|
|
|
(2,316)
|
|
|
|
(2,316)
|
|
|
|
(2,316)
|
|
|
Net income
attributable to common stockholders
|
|
$
|
9,128
|
|
|
$
|
10,299
|
|
|
$
|
11,470
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
stock-based compensation
|
|
|
1,411
|
|
|
|
1,411
|
|
|
|
1,411
|
|
|
EAD
|
|
$
|
10,539
|
|
|
$
|
11,710
|
|
|
$
|
12,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
17,461
|
|
|
|
17,461
|
|
|
|
17,461
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
30,246
|
|
|
|
30,246
|
|
|
|
30,246
|
|
|
Shares attributable
to potential redemption of Series B Preferred
|
|
|
(6,826)
|
|
|
|
(6,826)
|
|
|
|
(6,826)
|
|
|
Adjusted weighted
average common shares outstanding - diluted
|
|
|
23,420
|
|
|
|
23,420
|
|
|
|
23,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS per Weighted
Average Share - diluted
|
|
$
|
0.38
|
|
|
$
|
0.42
|
|
|
$
|
0.46
|
|
|
EPS per Adjusted
Weighted Average Share - diluted
|
|
$
|
0.39
|
|
|
$
|
0.44
|
|
|
$
|
0.49
|
|
|
EAD per Adjusted
Weighted Average Share - diluted
|
|
$
|
0.45
|
|
|
$
|
0.50
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS Dividend
Coverage Ratio
|
|
|
0.76
|
x
|
|
|
0.84
|
x
|
|
|
0.92
|
x
|
|
EPS Adjusted
Dividend Coverage Raito
|
|
|
0.78
|
x
|
|
|
0.88
|
x
|
|
|
0.98
|
x
|
|
EAD Adjusted
Dividend Coverage Raito
|
|
|
0.90
|
x
|
|
|
1.00
|
x
|
|
|
1.10
|
x
|
Cash Available for Distribution2
- 3Q 2024 CAD per diluted share
guidance is $0.455 at the
midpoint
|
|
Low
|
|
|
Mid
|
|
|
High
|
|
|
|
Sept. 30,
2024
|
|
|
Sept. 30,
2024
|
|
|
Sept. 30,
2024
|
|
|
EAD
|
|
$
|
10,539
|
|
|
|
11,710
|
|
|
$
|
12,881
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
premiums
|
|
|
2,422
|
|
|
|
2,422
|
|
|
|
2,422
|
|
|
Accretion of
discounts
|
|
|
(4,573)
|
|
|
|
(4,573)
|
|
|
|
(4,573)
|
|
|
Amortization and
depreciation
|
|
|
1,062
|
|
|
|
1,062
|
|
|
|
1,062
|
|
|
CAD
|
|
$
|
9,450
|
|
|
$
|
10,621
|
|
|
$
|
11,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
17,461
|
|
|
|
17,461
|
|
|
|
17,461
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
30,246
|
|
|
|
30,246
|
|
|
|
30,246
|
|
|
Shares attributable
to potential redemption of Series B Preferred
|
|
|
(6,826)
|
|
|
|
(6,826)
|
|
|
|
(6,826)
|
|
|
Adjusted weighted
average common shares outstanding - diluted
|
|
|
23,420
|
|
|
|
23,420
|
|
|
|
23,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS per Weighted
Average Share - diluted
|
|
$
|
0.38
|
|
|
$
|
0.42
|
|
|
$
|
0.46
|
|
|
EPS per Adjusted
Weighted Average Share - diluted
|
|
$
|
0.39
|
|
|
$
|
0.44
|
|
|
$
|
0.49
|
|
|
CAD per Adjusted
Weighted Average Share - diluted
|
|
$
|
0.40
|
|
|
$
|
0.45
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS Dividend
Coverage Ratio
|
|
|
0.76
|
x
|
|
|
0.84
|
x
|
|
|
0.92
|
x
|
|
EPS Adjusted
Dividend Coverage Raito
|
|
|
0.78
|
x
|
|
|
0.88
|
x
|
|
|
0.98
|
x
|
|
CAD Adjusted
Dividend Coverage Raito
|
|
|
0.80
|
x
|
|
|
0.90
|
x
|
|
|
1.00
|
x
|
Conference Call Details
The Company is scheduled to
host a conference call on Thursday, August
1, 2024, at 11:00 a.m. ET
(10:00 a.m. CT), to discuss second
quarter 2024 financial results.
The conference call can be accessed live over the phone by
dialing 888-660-4430 or +1 646-960-0537 and entering Conference ID
6891136. A live audio webcast of the call will be available online
at the Company's website, https://nref.nexpoint.com (under
"Resources"). An online replay will be available shortly after the
call on the Company's website and continue to be available for 60
days.
A replay of the conference call will also be available through
Thursday, August 15, 2024, by dialing
1 800- 770- 2030 or, for international callers, +1 647- 362- 9199
and entering passcode 6891136.
For additional commentary and portfolio information, please view
NREF's earning supplement, which was posted on the Company's
website, http://nref.nexpoint.com.
Reconciliations of Non-GAAP Financial Measures
The
following table provides a reconciliation of Earnings Available for
Distribution2 and Cash Available for
Distribution2 to GAAP net income attributable to common
stockholders and Adjusted Diluted Weighted Average Shares
Outstanding to Diluted Weighted Average Shares Outstanding (in
thousands, except per share amounts):
|
|
For the Three Months
Ended June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
Net income (loss)
attributable to common stockholders
|
|
$
|
7,488
|
|
|
|
5,747
|
|
|
Net income
attributable to redeemable noncontrolling interests
|
|
|
2,275
|
|
|
|
1,856
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Amortization of
stock-based compensation
|
|
|
1,454
|
|
|
|
1,262
|
|
|
Provision for
(reversal of) credit losses
|
|
|
(2)
|
|
|
|
(6)
|
|
|
Equity in (income)
losses of equity method investments (1)
|
|
|
892
|
|
|
|
889
|
|
|
Unrealized (gains) or
losses (2)
|
|
|
3,852
|
|
|
|
1,708
|
|
|
EAD
|
|
$
|
15,959
|
|
|
$
|
11,456
|
|
|
|
|
|
|
|
|
|
|
|
EAD per Adjusted
Diluted Weighted-Average Share
|
|
$
|
0.68
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Amortization of
premiums
|
|
$
|
1,682
|
|
|
|
3,806
|
|
|
Accretion of
discounts
|
|
|
(3,693)
|
|
|
|
(3,572)
|
|
|
Depreciation and
amortization of real estate investments
|
|
|
1,082
|
|
|
|
478
|
|
|
Amortization of
deferred financing costs
|
|
|
12
|
|
|
|
11
|
|
|
CAD
|
|
$
|
15,042
|
|
|
$
|
12,179
|
|
|
|
|
|
|
|
|
|
|
|
CAD per Adjusted
Diluted Weighted-Average Share
|
|
$
|
0.64
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
|
|
17,422
|
|
|
|
17,213
|
|
|
Weighted-average
common shares outstanding - diluted
|
|
|
27,788
|
|
|
|
23,080
|
|
|
Shares attributable
to potential redemption of Series B Preferred
|
|
|
4,357
|
|
|
|
—
|
|
|
Adjusted
weighted-average common shares outstanding - diluted
|
|
|
23,431
|
|
|
|
23,080
|
|
|
|
|
(1)
|
Starting in the third
quarter of 2023, the Company has adjusted EAD to remove the
(income) / loss from equity method investments as it does not
represent distributable earnings. We will include income from
equity method investments to the extent that we receive cash
distributions and upon realizing gains and/or losses.
|
|
(2)
|
Unrealized gains
represent the net change in unrealized gains on investments held at
fair value.
|
About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded REIT,
with its common stock and 8.50% Series A Cumulative Redeemable
Preferred Stock listed on the New York Stock Exchange, primarily
focused on originating, structuring and investing in first-lien
mortgage loans, mezzanine loans, preferred equity, convertible
notes, multifamily properties and common equity investments, as
well as multifamily and single-family commercial mortgage-backed
securities securitizations, promissory notes and mortgage-backed
securities. More information about the Company is available at
http://nref.nexpoint.com.
Forward-Looking Statements
This press release 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 beliefs. Forward-looking statements can often be identified by
words such as "anticipate", "believe," "estimate", "expect,"
"intend," "may", "should" and similar expressions, and variations
or negatives of these words. These forward-looking statements
include, but are not limited to, statements regarding the Company's
business, strategy and industry in general, third quarter 2024
guidance, including net income attributable to common stockholders,
EAD, CAD, EAD and CAD per diluted share, EPS per adjusted diluted
share and related coverage ratios, assumptions and estimates and
the Company's intent to not settle Series B Preferred redemptions
in shares of common stock when the Company's common stock price is
below book value. They are not guarantees of future results and
forward-looking statements are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statement, including
those described in greater detail in our filings with the
Securities and Exchange Commission, particularly those described in
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Readers should not place undue reliance on any forward-looking
statements and are encouraged to review the Company's Annual Report
on Form 10-K and the Company's other filings with the SEC for a
more complete discussion of risks and other factors that could
affect any forward-looking statement. The statements made herein
speak only as of the date of this press release and except as
required by law, the Company does not undertake any obligation to
publicly update or revise any forward-looking statements.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A
"non-GAAP financial measure" is defined as a numerical measure of a
company's financial performance that excludes or includes amounts
so as to be different than the most directly comparable measure
calculated and presented in accordance with GAAP in the statements
of income, balance sheets or statements of cash flows of the
Company. The non-GAAP financial measures used within this press
release are EAD, CAD, EAD and CAD per diluted share, EPS per
adjusted diluted share and adjusted weighted average diluted shares
outstanding.
EAD is defined as net income (loss) attributable to our common
stockholders computed in accordance with GAAP, including realized
gains and losses not otherwise included in net income (loss),
excluding any unrealized gains or losses or other similar non-cash
items that are included in net income (loss) for the applicable
reporting period, regardless of whether such items are included in
other comprehensive income (loss), or in net income (loss) and
adding back amortization of stock-based compensation. Net income
(loss) attributable to common stockholders may also be adjusted for
the effects of certain GAAP adjustments and transactions that may
not be indicative of our current operations. In addition, EAD in
this press release includes the dilutive effect of non-controlling
interests. We use EAD to evaluate our performance and to assess our
long-term ability to pay distributions. We believe providing EAD as
a supplement to GAAP net income (loss) to our investors is helpful
to their assessment of our performance and our long-term ability to
pay distributions. We also use EAD as a component of the management
fee paid to our manager. EAD does not represent net income or cash
flows from operating activities and should not be considered as an
alternative to GAAP net income, an indication of our GAAP cash
flows from operating activities, a measure of our liquidity or an
indication of funds available for our cash needs. Our computation
of EAD may not be comparable to EAD reported by other REITs.
Starting in the third quarter of 2023, the Company has adjusted EAD
to remove the income/(losses) from equity method investments as
they represent changes in the equity value of our investment rather
than distributable earnings. The Company will include income from
equity method investments to the extent that we receive cash
distributions and upon realizing gains and/or losses.
We calculate CAD by adjusting EAD by adding back amortization of
premiums, depreciation and amortization of real estate investment
and amortization of deferred financing costs and by removing
accretion of discounts. We use CAD to evaluate our performance and
our current ability to pay distributions. We also believe that
providing CAD as a supplement to GAAP net income (loss) to our
investors is helpful to their assessment of our performance and our
current ability to pay distributions. CAD does not represent net
income or cash flows from operating activities and should not be
considered as an alternative to GAAP net income, an indication of
our GAAP cash flows from operating activities, a measure of our
liquidity or an indication of funds available for our cash needs.
Our computation of CAD may not be comparable to CAD reported by
other REITs.
Adjusted weighted average diluted shares outstanding is
calculating by subtracting the dilutive effect of potential
redemptions of Series B Preferred shares for shares of our common
stock from weighted average diluted shares outstanding. We believe
providing adjusted weighted average diluted shares outstanding to
our investors is helpful in their assessment of our performance
without the potential dilutive effective of the Series B Preferred
shares. We have the right to redeem the Series B Preferred shares
for cash or shares of our common stock. Additionally, Series B
Preferred redemptions are capped at 2% of the outstanding Series B
Preferred shares per month, 5% per quarter and 20% per year.
Further, it is the Company's intent to not settle Series B
Preferred redemptions in shares of common stock when the Company's
common stock price is below book value.
EPS per adjusted diluted share is calculated by dividing net
income by adjusted weighted average diluted shares outstanding. We
believe providing EPS per adjusted diluted share to our investors
is helpful in their assessment of our performance without the
potential dilutive effect of the Series B Preferred shares.
Adjusted weighted average diluted shares outstanding and EPS per
adjusted diluted share should not be considered as alternatives to
the GAAP measures. Our computation of adjusted weighted average
diluted shares outstanding and EPS per adjusted diluted share may
not be comparable to adjusted weighted average diluted shares
outstanding or EPS per adjusted diluted share reported by other
companies.
Contact:
Kristen
Thomas
Investor Relations
IR@nexpoint.com
Media: pro-nexpoint@prosek.com
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SOURCE NexPoint Real Estate Finance, Inc.