NexPoint Real Estate Finance, Inc.

Thank you for standing by. My name is Amy and I will be your conference operator for today. At this time, I would like to welcome you to the next point, Real Estate Finance Q2 2024 Earnings Conference Call. Please note that all lines have been placed on mute to prevent any background noise. It's now my pleasure to turn the call over to Kristin Thomas, Investor Relations. Please begin.

Thank you. Good day, everyone, and welcome to NextPoint Real Estate Finance Conference Call to review the company's results for the second quarter into June 30, 2024. On the call today are Brian Mitts, Executive Vice President and Chief Financial Officer, Matt McGrainer, Executive Vice President and Chief Investment Officer, 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 this conference call speak only as of today's date and except as required by law, NREF 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 Mitts. Please go ahead, Brian.

Thank you, Kristen, and appreciate everyone joining us today. I'm going to briefly discuss our quarterly results and then give our guidance for the next quarter. before turning it over to the team for a detailed commentary on the portfolio and the macro lending environment. Q2 results are as follows. For the second quarter, we reported a net income of 40 cents per diluted share compared to net income of 33 cents per diluted share for the second quarter of 2023. The increase in net income for the quarter was due to the change in net assets related to consolidated CMBS including the sale of CMDS BPs for a realized gain of $6.2 million. That interest income increased by $2.5 million to $6.7 million in the second quarter, from $4.2 million in the second quarter 2023. The increase is driven by an increase in interest income, which is driven by higher rates as well as lower interest expense from deleveraging that occurred in the first quarter this year. Earnings available for distribution was 68 cents per diluted share in Q2 compared to 50 cents per diluted share in the same period of 2023. Cash available for distribution was 64 cents per diluted share in Q2 compared to 53 cents per diluted share in the same period of 2023. The increase in earnings available for distribution was driven by the increase in net income for the quarter. We paid a regular dividend of 50 cents per share in the second quarter, and the Board has declared a dividend of 50 cents per share payable for the third quarter of 2024. Our regular dividend in the second quarter was 1.28 times covered by cash available for distribution. Book value per share decreased 1.1% from Q1 2024 to $16.51 per diluted share. with the decrease being primarily due to the decrease in fair value marks on our common stock investments. During the quarter, we funded $55.1 million on the drawable first mortgage on the Life Science Development property in Cambridge. We originated a $150 million promissory note funding $67.5 million, which yields 16.5%, and purchased a $31.9 million CMBS BP with a bond equivalent of 9.5%. During the quarter, we sold 1.5 million shares of our Series B cumulative preferred or redeemable preferred for net proceeds of 32.6 million. Our portfolio is comprised of 85 investments with a total outstanding balance of 1.2 billion. Our investments are allocated across sectors as follows, 18.8% in single-family rental, 56.9% multifamily, 22.2% life sciences, 1.5% in storage, and 0.6% in marina. A fixed income portfolio is allocated across investments as follows. 11.5% senior loans, 36.7% MBS pieces, 20.7% preferred equity investments, 19.5% mezzanine loans, 4.2% IO strips, 1.6% MBS, and 5.8% promissory notes. The assets collateralizing our investments are allocated geographically as follows. 17% in Texas, 14% in Massachusetts, 8% in California, 7% in Florida, 6% in Georgia, 4% in Maryland, with the remainder across states with less than 4% exposure, reflecting our heavy preference for Sunbelt markets. Collateral on our portfolio is 80.3% stabilized with a 62.3% loan-to-value and a weighted average DSCR of 1.52 times. We have 861 million debt outstanding of this 281 million or 32.6% short-term debt. Our weighted average cost of debt is 6.2% and has a weighted average maturity of 1.6 years. Our debt is collateralized by 1.1 billion of collateral with a weighted average maturity of 4.9 years. and our debt to equity ratio is 1.78 times. Moving to guidance for the second quarter, we are guiding to earnings available for distribution and cash available for distribution as follows. Earnings 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. Cash available for distribution of 45 cents per diluted share at the midpoint with a range of 40 cents on the low end and 50 cents on the high end. So, with that, I'd like to turn it over to Paul for a discussion of our portfolio.