DALLAS, Oct. 27,
2022 /PRNewswire/ -- NexPoint Real Estate
Finance, Inc. ("NREF" or the "Company") (NYSE: NREF) today reported
its financial results for the quarter ended September 30, 2022.
NREF reported net loss of $8.7
million, or $(0.54) per
diluted share1, for the three months ended September 30, 2022, respectively, as compared to
net income of $25.2 million, or
$1.17 per diluted share, for the
three months ended September 30,
2021.
NREF reported cash available for distribution2 of
$11.2 million, or $0.50 per diluted share1, for the
three months ended September 30,
2022.
Matt McGraner, Chief Investment
Officer of NREF, said "NREF continued to effectively deploy capital
into over $100 million of accretive
investments in our core verticals – workforce multifamily housing,
single family rental and self-storage. Through our commitment
to investing in high-quality assets backed by prudent sponsors,
we've built a resilient credit profile that is well-positioned to
continue to perform in this rising interest rate environment."
Third Quarter 2022 Highlights
- Outstanding total portfolio of $1.7
billion, composed of 83 investments3
- Single-family rental ("SFR"), multifamily, life sciences, and
self-storage represent 42.1%, 53.9%, 2.5%, 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 68.1% and 1.76x3,
respectively
- As of October 26, 2022, there are
no loans currently in default or forbearance in our portfolio
- On July 1, 2022, NREF originated
a $9.0MM mezzanine loan
with a current yield of 11.1%
- On July 28, 2022,
NREF purchased a $70.5MM floating rate Freddie Mac K-Series
B-Piece, with a yield of SOFR + 525bps
- On September 25, 2022, one
single–family rental first mortgage loan with an aggregate
principal amount of $4.6MM was repaid
in full
- On September 29, 2022, NREF
purchased a $8.0MM mortgage-backed
security with a yield of SOFR +578bps
- During 3Q 2022, NREF purchased $17.5MM of preferred equity investments with a
blended current yield of 12.7%
- Year-over-year changes of earnings per diluted share, earnings
available for distribution per diluted share, cash available for
distribution2 per diluted share and book value per
combined share (common shares and noncontrolling interests) of
-146.2%, -5.9%, -19.4% and -1.7%, respectively
- On October 25, 2022 NREF
announced a fourth quarter 2022 dividend of $0.50 per common share
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 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.
3 As of October 26, 2022;
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 4Q
2022 is estimated to be between $7.5MM and $9.2MM.
See reconciliations below.
Looking Ahead: Fourth Quarter 2022 Guidance
Earnings Available for Distribution
- 4Q 2022 EAD per diluted common share guidance is $0.535 at the midpoint
|
|
Low
|
|
|
Mid
|
|
|
High
|
|
|
|
Sep. 30,
2022
|
|
|
Sep. 30,
2022
|
|
|
Sep. 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
|
7,455
|
|
|
$
|
8,323
|
|
|
$
|
9,190
|
|
Net income
attributable to redeemable noncontrolling interests
|
|
|
2,569
|
|
|
|
2,836
|
|
|
|
3,104
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
stock-based compensation
|
|
|
870
|
|
|
|
870
|
|
|
|
870
|
|
EAD
|
|
$
|
10,894
|
|
|
$
|
12,029
|
|
|
$
|
13,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
15,557
|
|
|
|
15,557
|
|
|
|
15,557
|
|
Weighted average
common shares outstanding - diluted
|
|
|
22,696
|
|
|
|
22,696
|
|
|
|
22,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAD per Diluted
Weighted Average Share
|
|
$
|
0.48
|
|
|
$
|
0.53
|
|
|
$
|
0.58
|
|
Cash Available for Distribution
- 4Q 2022 CAD per diluted common
share guidance is $0.525
at the midpoint
|
|
Low
|
|
|
Mid
|
|
|
High
|
|
|
|
Sep. 30,
2022
|
|
|
Sep. 30,
2022
|
|
|
Sep. 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAD
|
|
$
|
10,894
|
|
|
$
|
12,029
|
|
|
$
|
13,164
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
premiums
|
|
|
4,451
|
|
|
|
4,451
|
|
|
|
4,451
|
|
Accretion of
discounts
|
|
|
(5,235)
|
|
|
|
(5,235)
|
|
|
|
(5,235)
|
|
Amortization and
depreciation
|
|
|
557
|
|
|
|
557
|
|
|
|
557
|
|
CAD
|
|
$
|
10,667
|
|
|
$
|
11,802
|
|
|
$
|
12,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
15,557
|
|
|
|
15,557
|
|
|
|
15,557
|
|
Weighted average
common shares outstanding - diluted
|
|
|
22,696
|
|
|
|
22,696
|
|
|
|
22,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAD per Diluted
Weighted Average Share
|
|
$
|
0.47
|
|
|
$
|
0.52
|
|
|
$
|
0.57
|
|
Conference Call Details
The Company is scheduled to
host a conference call on Thursday, October
27, 2022, at 11:00 a.m. ET
(10:00 a.m. CT), to discuss third
quarter 2022 financial results.
The conference call can be accessed live over the phone by
dialing +1 786-697-3501 or 866-580-3963 and entering conference ID
4232965. 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, November 3, 2022, by
dialing 1 866-583-1035 or, for international callers, +44 (0)
20-3451-9993 and entering passcode 4232965#.
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):
|
|
For the
Three Months Ended September
30,
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
|
%
Change
|
|
Net income (loss)
attributable to common stockholders
|
|
$
|
(8,059)
|
|
|
$
|
13,233
|
|
|
|
-160.9
|
%
|
Net income
attributable to redeemable noncontrolling interests
|
|
|
(1,509)
|
|
|
|
11,084
|
|
|
|
-113.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
stock-based compensation
|
|
|
870
|
|
|
|
538
|
|
|
|
61.7
|
%
|
Unrealized (gains) or
losses (1)
|
|
|
19,473
|
|
|
|
(14,336)
|
|
|
|
-235.8
|
%
|
EAD
|
|
$
|
10,775
|
|
|
$
|
10,519
|
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAD per Diluted
Weighted-Average Share
|
|
$
|
0.48
|
|
|
$
|
0.51
|
|
|
|
-5.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
premiums
|
|
$
|
3,425
|
|
|
$
|
5,390
|
|
|
|
-36.5
|
%
|
Accretion of
discounts
|
|
|
(3,517)
|
|
|
|
(2,976)
|
|
|
|
18.2
|
%
|
Depreciation and
amortization of real estate investment
|
|
|
545
|
|
|
|
—
|
|
|
N/A
|
|
Amortization of
deferred financing costs
|
|
|
12
|
|
|
|
—
|
|
|
N/A
|
|
CAD
|
|
$
|
11,240
|
|
|
$
|
12,933
|
|
|
|
-13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAD per Diluted
Weighted-Average Share
|
|
$
|
0.50
|
|
|
$
|
0.62
|
|
|
|
-19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
|
|
14,962
|
|
|
|
6,863
|
|
|
|
118.0
|
%
|
Weighted-average
common shares outstanding - diluted
|
|
|
22,678
|
|
|
|
20,721
|
|
|
|
9.4
|
%
|
(1)
|
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 shares listed on the New York Stock Exchange under the
symbol "NREF" primarily focused on originating, structuring and
investing in first mortgage loans, mezzanine loans, preferred
equity and alternative structured financings in commercial real
estate properties, as well as multifamily commercial
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, the Company built a resilient credit profile
that is well positioned to continue to perform in this rising
interest rate environment and fourth quarter 2022 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 the ultimate duration and
severity of the COVID-19 pandemic, and the effectiveness of actions
taken, or actions that may be taken, by governmental authorities to
contain the outbreak or treat its impact, as well as 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 net income
(loss) attributable to non-controlling interests and 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. We use EAD to
evaluate our performance which excludes the effects of certain GAAP
adjustments and transactions that we believe are not indicative of
our current operations 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
View original content to download
multimedia:https://www.prnewswire.com/news-releases/nref-announces-third-quarter-2022-results-provides-fourth-quarter-2022-guidance-301661191.html
SOURCE NexPoint Real Estate Finance, Inc.