NexPoint Real Estate Finance, Inc.

Hello. At this time, I would like to welcome everyone to the NextPoint Real Estate Finance Incorporated Q3 2024 earnings 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, just press star and the number one. I would now like to turn the call over to Kristen Thomas, Investor Relations. You may begin.

thank you good day everyone and welcome to next point real estate finance conference call to review the company's results for the third quarter ended september 30th 2024. on the call today are brian miss executive vice president and chief financial officer matt mcgriner 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 website at nref.nextpoint.com. Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the means 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 SEC for a more complete discussion of risk and reliability other factors that could affect the forward-looking statements. The statements made during this conference call speak only as of today's date and accept as required by law and 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.

Thanks, Kristen. Appreciate everybody's time this morning. I'm Brian Mitz. I'm joined today by Matt McGrainer and Paul Richards. I'm going to start the conference by briefly going through our quarterly results, get some portfolio and balance sheet stats, and then our guidance for the next quarter. And then I'll turn it over to Matt and the team to go through the portfolio in detail. Our key three results were as follows. For the third quarter, we reported net income of 74 cents per diluted share compared to net loss of 90 cents per diluted share for the third quarter of 2023. The increase in net income for the quarter was due to unrealized gains on our common stock investments, as well as an increase in net interest income. Interest income increased by 5.6 million to 23.6 million in the third quarter. from $18 million in the third quarter of 2023. The increase is driven by our increase in interest income, which is driven by higher rates, as well as lower interest expense from deleveraging that occurred in the first quarter of this year. Earnings available for distribution of $0.75 per diluted common share in Q3 compared to $0.43 per diluted share in the same period last year. cash available for distribution was 67 cents per diluted common share in the third quarter compared to 47 cents for the same period last year the increase in earnings available for distribution was driven by the increase in net income for the quarter 50 cents per share in the third quarter and the board has declared a 50 cent dividend per share payable in the fourth quarter 24. a regular dividend the third quarter is 1.34 times covered by cash available for distribution book value per share increased 2.6 percent in second quarter to 16.95 per diluted share with the increase again being primarily due to the unrealized gains on our common stocks during the quarter we funded 28.8 million on a life science development property cambridge which redeemed 9.7 million of, or sorry, we redeemed 9.7 million senior loans and sold an $82 million CMBSB piece with a bond equivalent yield of 9.2%. During the third quarter, we sold 1.9 million shares of our Series B cumulative redeemable preferred shares for net proceeds of 42 million. Moving to the portfolio and balance sheet, our portfolio is comprised of 83 investments, with a total outstanding balance of $1.1 billion. Our investments are allocated across sectors as follows, 17% SFR, 52.3% multifamily, 26.7% life sciences, 1.5% storage, 1.8% specialty manufacturing, and 0.6% marina. Our fixed income portfolio is allocated across investments as follows, 11.2% senior loans, 31% CMBS B pieces, 20.1% preferred equity investments, 23.2% mezzanine loans, 4.2% IO strips, 1% MBS, and 9.2% promissory notes. As far as the assets collateralizing our investments, they are allocated geographically as follows. 16% Texas, 20% Massachusetts, 8% California, 6% Florida, 6% Georgia and 5% Maryland with remainder 4% across other markets, but heavily in all of our portfolio is heavily exposed to Sunbelt markets. The collateral on our portfolio is 77.5% stabilized and with 60.2% loan to value and weighted average DSCR of 1.36 times. We have $816 million of debt outstanding. Of this $324 million or 39.7% is short-term debt. Our weighted average cost of debt is 6.1% and has a weighted average maturity of 1.4 years. Our debt is collateralized by $1.1 billion of collateral with a weighted average maturity of 3.9 years. Our debt to equity ratio is 1.52 times. Moving to guidance for the fourth quarter, we are guiding to earnings available for distribution of $0.79 per diluted share at the midpoint with a range of $0.75 on the low and $0.05 on the high end. We're guiding to cash available for distribution of $0.50 per diluted share at the midpoint with a range of $0.45 on the low end and $0.55 on the high end. So with that, let me turn it over to Matt. Matt, go ahead.