NexPoint Real Estate Finance, Inc.

Good day and welcome to the Next Point Real Estate Finance Q4 2021 Quarterly Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Jackie Graham. Please go ahead, ma'am.

Thank you. Good day, everyone, and welcome to Next Point Real Estate Finance's conference call to review the company's results for the fourth quarter and full year ended December 31st, 2021. On the call today are Brian Mitz, Executive Vice President and Chief Financial Officer, Matt McGrainer, Executive Vice President and Chief Investment Officer, Matt Guest, Senior Vice President, Investments and Asset Management, and Paul Richards, Vice President, Originations and Investments. As a reminder, this call is being webcast through the company's website at nref.nextpoint.com. Before we begin, I would like to remind everyone that this conference call 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. Listeners 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 the forward-looking statements. The statements made during the conference call speak only as of today's date and accept as required by law And REF does not undertake any obligation to publicly update or revise any forward-looking statements. This conference call also includes an analysis of non-GAAP financial measures. For a more complete discussion of these non-GAAP financial measures, see the company's presentation that was filed earlier today. I would now like to turn the call over to Brian Mick. Please go ahead, Brian.

Thank you, Jackie. Appreciate everyone joining us today. I'm going to discuss our results for the quarter of the year and then turn it over to the team for detailed commentary. Net income for the year was $3.93 per diluted share compared to net income of $1.74 per diluted share for 2020. Earnings available for distribution was $1.89 per diluted share in 2021 as compared to $1.46 per diluted share in 2020. or an increase of 29.5%. Cash flow level for distributions was $2.21 per diluted share in 2021, compared to $1.67 per diluted share in 2020, or an increase of 32.7%. Net income for the quarter was $0.92 per diluted share, compared to net income of $1.32 per diluted share Q4 2020. Earnings available for distribution was 54 cents per diluted share in Q4 of 2021, compared to 44 cents per diluted share in Q4 of 2020, and 51 cents per share in Q3 of 2021, or an increase of 22.7 and 5.9% respectively. Cash left available for distribution was 63 cents per diluted share in the fourth quarter of 2021, compared to $0.47 per diluted share in the fourth quarter of 2020 and $0.62 per diluted share in third quarter of 2021 for an increase of 34% and 1.6% respectively. Foot value per share increased 2.2% quarter over quarter and 10.4% year over year to $21.51. We recognized a mark-to-market gain of $9.1 million on the company's investment in next-point storage and $900,000 on the company's CMDS and IO stroke portfolio. During the quarter, we originated or purchased the following investments. We purchased a $61.3 million floating rate Freddie Mac K-Series VPs with an estimated yield of 525 basis points over SOFR. We originated mezzanine convertible notes with an aggregate principal amount of $40.8 million. Matt McGrain will discuss this investment in his remarks. We originated a preferred equity investment for $30 million, yielding 10%. We originated another preferred equity investment of $3.8 million, yielding 10%. We originated a third preferred equity investment for $5 million, yielding 10.5%. After quarter end, we funded an additional $41.8 million to this investment. We ended the quarter with 74 investments totaling approximately $1.7 billion. During the quarter, two single-family rental loans were repaid, totaling $20.2 million with penalties of $3.6 million paid. With the gross proceeds received, $18.6 million was used to pay down the Freddie Mac Senior Facility. As of February 17, 2022, across the portfolio, weighted average coupon is 6.32%. Weighted average remaining term on investments is 6.5 years. Weighted average loans value is 67.9%. And weighted average DSCR is 1.99 times. The values used for the collateral that we use in the LTV calculations, the value at the time the loan was purchased originated The values for multifamilyness of our assets have moved dramatically over the past few years and months. Paul will talk about these revised weighted average loan values using our estimates of the changes and the underlying collateral value during his prepared remarks. As of December 31st, our debt capital consisted of the following. $726.3 million of senior secured facility on single family rental loans. $59.9 million of senior secured facility on the mezzanine pool. $286.3 million in repurchase agreements, $171.5 million of unsecured notes, and $32.5 million of mortgages payable. As of February 17, 2022, our debt has a weighted average remaining term of 4.8 years and a weighted average rate of 2.79%, which provides a 353 basis points spread on our investment income over the cost of our debt. is that December 31st, 23.9% of our financing is subject to mark to market. Our debt to equity ratio was 2.5 times at December 31st. We paid a dividend of 47.5 cents per share in the fourth quarter, and the board has declared a dividend of 50 cents per share payable on March 31st, the first quarter of 2022. Our dividend is 1.14 times covered by earnings available for distribution and 1.3 times covered by tax available for distribution. Today, we're going to see guidance for earnings available for distribution and tax available for distribution for the first quarter of 2022 as follows. Earnings available for distribution per diluted share of $1.22 and cash available for distribution per diluted share of $1.57. Large increases over the prior quarter and prior year are driven by prepayment penalties on the single family rental loans that we have received for this quarter. Now let me turn it over to the rest of the team to provide their commentary on that.