DALLAS, April 27,
2023 /PRNewswire/ -- NexPoint Real Estate Finance,
Inc. ("NREF" or the "Company") (NYSE: NREF) today reported its
financial results for the quarter ended March 31, 2023.
NREF reported net income of $9.4
million, or $0.37 per diluted
share1, for the three months ended March 31, 2023.
NREF reported cash available for distribution2 of
$12.4 million, or $0.55 per diluted share1, for the
three months ended March 31,
2023.
Matt McGraner, Chief Investment
Officer of NREF, said "NREF delivered another quarter of strong
earnings while continuing to deploy capital in our core verticals,
including workforce housing and life sciences. Our resilient credit
portfolio continues to outperform in uncertain economic conditions
while maintaining a robust yield profile."
First Quarter 2023 Highlights
- Outstanding total portfolio of $1.7
billion, composed of 88 investments3
- Single-family rental ("SFR"), multifamily, life sciences, and
self-storage represent 43.9%, 50.7%, 3.9%, and 1.5% of the
Company's debt portfolio, respectively
- Weighted-average loan to value ("LTV")4 and debt
service coverage ratio ("DSCR") on our SFR, CMBS, CMBS IO strips,
preferred, mezzanine, credit risk transfer and mortgage-backed
security investments are 68.7% and 1.90x3,
respectively
- As of April 26, 2023, there are
no loans currently in default or forbearance in our portfolio
- On February 10, 2023, NREF
purchased a $14.0MM preferred equity
investment with a current yield of 11.11%
- On March 10, 2023, NREF purchased
a $5.7MM mortgage-backed security
with a current yield of 13.10%
- During 1Q 2023, NREF received $11.5MM and $24.7MM
in preferred equity and mezzanine redemptions, respectively
- On April 26, 2023 NREF announced
a second quarter 2023 dividend of $0.50 per common share and a special dividend of
$0.185 per common share
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1
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Weighted-average
diluted shares outstanding assumes vesting of all outstanding
unvested restricted stock units and the conversion of all
redeemable non-controlling interests.
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|
2
|
Earnings available for
distribution and cash available for distribution are non-GAAP
measures. For a discussion of why we consider these non-GAAP
measures useful and reconciliations of earnings available for
distribution and cash available for distribution to net income
(loss) attributable to common stockholders, see the
"Reconciliations of Non-GAAP Financial Measures" and "Non-GAAP
Financial Measures" sections of this release.
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|
3
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As of April 26, 2023;
CMBS B-Pieces reflected on an unconsolidated
basis.
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|
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 2Q 2023 is estimated to be between $6.7MM
and $8.7MM. See reconciliations below.
|
Looking Ahead: Second Quarter 2023 Guidance
Earnings Available for Distribution
- 2Q 2023 EAD per diluted common share guidance is $0.465 at the midpoint
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Low
|
|
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Mid
|
|
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High
|
|
|
|
Jun. 30,
2023
|
|
|
Jun. 30,
2023
|
|
|
Jun. 30,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
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6,735
|
|
|
$
|
7,695
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|
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$
|
8,654
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|
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Net income
attributable to redeemable noncontrolling interests
|
|
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1,529
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|
|
|
1,716
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|
|
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1,903
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|
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Adjustments
|
|
|
|
|
|
|
|
|
|
|
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Amortization of
stock-based compensation
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1,104
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|
1,104
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|
|
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1,104
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EAD
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$
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9,368
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|
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$
|
10,515
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|
|
$
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11,661
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
17,885
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|
|
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17,885
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|
|
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17,885
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|
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Weighted average
common shares outstanding - diluted
|
|
|
22,924
|
|
|
|
22,924
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|
|
|
22,924
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|
|
|
|
|
|
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|
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|
|
|
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EPS per Diluted
Weighted Average Share
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$
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0.36
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$
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0.41
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|
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$
|
0.46
|
|
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EAD per Diluted
Weighted Average Share
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|
$
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0.41
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|
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$
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0.46
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$
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0.51
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Cash Available for Distribution
- 2Q 2023 CAD per diluted common
share guidance is $0.505
at the midpoint
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Low
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|
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Mid
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|
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High
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Jun. 30,
2023
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Jun. 30,
2023
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|
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Jun. 30,
2023
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|
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|
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EAD
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$
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9,368
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|
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10,515
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$
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11,661
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|
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Adjustments
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|
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Amortization of
premiums
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3,809
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|
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3,809
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3,809
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Accretion of
discounts
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(3,412)
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(3,412)
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(3,412)
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Amortization and
depreciation
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|
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439
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|
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439
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439
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CAD
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$
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10,204
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$
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11,351
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$
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12,497
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
17,885
|
|
|
|
17,885
|
|
|
|
17,885
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
22,924
|
|
|
|
22,924
|
|
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22,924
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|
|
|
|
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EPS per Diluted
Weighted Average Share
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$
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0.36
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$
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0.41
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$
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0.46
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CAD per Diluted
Weighted Average Share
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$
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0.45
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$
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0.50
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$
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0.55
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Conference Call Details
The Company is scheduled to
host a conference call on Thursday, April
27, 2023, at 11:00 a.m. ET
(10:00 a.m. CT), to discuss first
quarter 2023 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, May 11, 2023, 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 Distribution and Cash Available for Distribution to
GAAP net income attributable to common stockholders (in thousands,
except per share amounts):
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For the Three Months
Ended March 31,
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2023
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2022
|
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Net income
attributable to common stockholders
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$
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6,567
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|
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$
|
12,406
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Net income
attributable to redeemable noncontrolling interests
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1,937
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|
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4,783
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Adjustments
|
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|
|
|
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Amortization of
stock-based compensation
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|
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847
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|
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673
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Provision for
(reversal of) credit losses, net
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(34)
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—
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Unrealized (gains) or
losses (1)
|
|
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2,564
|
|
|
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8,545
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EAD
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$
|
11,881
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$
|
26,407
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|
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|
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EPS per Diluted
Weighted-Average Share
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$
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0.37
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$
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0.78
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EAD per Diluted
Weighted-Average Share
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$
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0.52
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$
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1.20
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Adjustments
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|
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Amortization of
premiums
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$
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3,531
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$
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9,900
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Accretion of
discounts
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(3,500)
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(3,030)
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Depreciation and
amortization of real estate investment
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476
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|
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944
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Amortization of
deferred financing costs
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|
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11
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|
12
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CAD
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$
|
12,399
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$
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34,233
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|
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EPS per Diluted
Weighted-Average Share
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$
|
0.37
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$
|
0.78
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CAD per Diluted
Weighted-Average Share
|
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$
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0.55
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$
|
1.55
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Weighted-average
common shares outstanding - basic
|
|
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17,118
|
|
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13,855
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Weighted-average
common shares outstanding - diluted
|
|
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22,678
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|
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22,030
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(1)
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Unrealized gains
represent the net change in unrealized gains on investments held at
fair value.
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About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded REIT,
with its shares listed on the New York Stock Exchange under the
symbol "NREF" primarily focused on originating, structuring and
investing in first-lien mortgage loans, mezzanine loans, preferred
equity, convertible notes, multifamily properties and common stock
investments, as well as multifamily commercial mortgage-backed
securities securitizations, multifamily structured credit risk
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", "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 and
industry in general and second quarter 2023 guidance, including net
income attributable to common stockholders, EAD and CAD and related
assumptions and estimates. 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 earnings available for distribution ("EAD") and cash
available for distribution ("CAD").
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.
We calculate CAD by adjusting EAD by adding back amortization of
premiums, amortization and depreciation and amortization of
deferred financing costs and by removing accretion of discounts and
non-cash items, such as stock dividends. 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.
Contact:
Kristen
Thomas
Director, Investor Relations
KThomas@nexpoint.com
Media: MediaRelations@nexpoint.com
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SOURCE NexPoint Real Estate Finance, Inc.