NexPoint Real Estate Finance, Inc.

Hello and welcome to Next Point Real Estate Finance Q2 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. And if you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Kristen Thomas. Please go ahead. Thank you.

Good day, everyone, and welcome to Next Point Real Estate Finances conference call to review the company's results for the second quarter ended June 30th, 2023. On the call today are Brian Mitz, Executive Vice President and Chief Financial Officer, Matt McGranner, Executive Vice President and Chief Investment Officer, Matt Goetz, 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 risk and other factors that could affect the forward-looking statements. The statements made during this conference call speak only as of today's date and accessed as required by law. Interim 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 Vitz. Please go ahead, Brian.

Thank you, Kristen. I appreciate everyone joining us today. I'm going to get us started by discussing our results for the second quarter, and then I'll provide guidance for the third quarter. and then turn it over to the rest of the team for their prepared comments. Q2 results are as follows. The second quarter, we reported net income of $0.36 per diluted share compared to net income of $0.26 per diluted share for the second quarter of 2022. The increase in net income is a result of improved performance of our CMBS investments in the second quarter of 23. Earnings available for distribution was 46 cents per diluted share in the second quarter compared to 49 cents per diluted share in the same period of 22. Cash available for distribution was 49 cents per diluted share in the second quarter compared to 56 cents per diluted share in the same period of 22. The decrease in earnings available for distribution and cash available for distribution from the prior year was partially driven by higher weighted average share counts, as well as a loss on the common stock component of two of our new investments. We paid a dividend of 50 cents per share in the second quarter. The Board has declared a dividend of 50 cents per share payable for the third quarter. The Board also declared a special dividend of 18.5 cents per share for the third quarter, and we intend to pay the same special dividend of 18.5 cents per share for the fourth quarter as well. Our dividend for the second quarter was 0.92 times covered by earnings available for distribution and 0.98 times covered by cash available for distribution. Put value for share decreased 1.6% quarter-over-quarter to $19.28 per diluted share, primarily due to the special dividend and mark-to-mark adjustments on our common stock investments. During the quarter, we originated three investments with $27.1 million outstanding principal with a blended all-in yield of 16.7 percent. We had one investment that partially redeemed for $6.2 million of outstanding principal, and two senior loans that fully redeemed for $11 million. Moving to guidance for the third quarter, we're guiding to earnings available for distribution and cash available for distribution as follows. Earnings available for distribution of 46 cents per diluted share at the midpoint, with a range of 41 cents on the low end and 51 cents on the high end. Cash available for distribution of 50 cents per diluted share at the midpoint with a range of 45 cents on the low end and 55 cents on the high end. The increase in cash available for distribution for the second quarter is driven primarily by the impact the new preferred equity investments made in the second quarter. Now I'd like to turn it over to Matt Goetz for his comments.