NexPoint Real Estate Finance, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Next Point Real Estate Financial First Quarter 2025 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, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number one. As a reminder, today's call is being recorded. I will now hand today's call over to Kristen Griffith, Investor Relations. Please go ahead.

Thank you. Good day, everyone, and welcome to NextPoint Real Estate Finance conference call to review the company's results for the first quarter and in March 31st, 2025. On the call today are Paul Richards, Executive Vice President and Chief Financial Officer, and Matt McGreiner, Executive Vice President and Chief Investment Officer. As a reminder, this call is being webcast through the company's website at inrep.nextpoint.com. Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the meetings 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 risks, and other factors that could affect forward-looking statements. The statements made during this conference call speak only as of today's date and except as required by law, NREF did not undertake any obligation to publicly update or revise any forward-looking statements. The 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 Paul Richards. Please go ahead, Paul.

Thank you, Kristen, and welcome everyone joining us this morning. I'm going to briefly discuss our quarterly results, move to our balance sheet, and lastly provide guidance for the next quarter before turning it over to Matt for detailed commentary on the portfolio and the macro lending environment. Q1 results are as follows. For the first quarter, we reported net income of $0.70 per diluted share compared to a net loss of $0.83 per diluted share for the first quarter of 2024. The increase in net income for the quarter was due to an increase in interest income between the first quarter of 2025 and the first quarter of 2024. Interest income increased 23.6 million to 22 million in the first quarter of 2025 from a net loss of 1.6 million in the first quarter of 2024. The increase was driven by an uptick in interest income driven by higher rates. Interest expense decreased 0.7 million in the first quarter of 2025 compared to the same period in the prior year from the deleveraging that occurred in the first quarter of 2024. Earnings available for distribution was 41 cents per diluted common share in Q1 compared to negative 46 cents per diluted share in the same period of 2024. Cash available for distribution was 45 cents per diluted common share in Q1 compared to 60 cents per diluted common share in the same period of 2024. The increase in earnings available for distribution was driven by an increase in net income for the quarter. We paid a regular dividend of $0.50 per share in the first quarter, and the Board has declared a dividend of $0.50 per share payable for the second quarter of 2025. Our dividend in the first quarter was 0.9 times covered by cash available for distribution. Book value per share increased 1.47%. from Q4 2024 to $17.22 per diluted common share, with the increase being primarily due to unrealized gain on our preferred stock investments. During the quarter, we funded $55 million on a life science preferred, and we purchased a $15 million CMBS IO strip with a bond equivalent yield of 7.22%. During the first quarter, we sold 1.8 million shares of our Series B cumulative redeemable preferred for net proceeds of $44.7 million. Moving to our portfolio and balance sheet. Our portfolio is comprised of 85 investments with a total outstanding balance of 1.2 billion. Our investments are allocated across the sectors as follows. 49.4 multifamily, 31.9% life sciences, 15.6% single family rental, 1.6% storage, 0.9% specialty manufacturing, and 0.6% marina. Our portfolio is allocated across investments as follows. 28.4% CNBS BPs, 24.7% mezzanine loans, 19% preferred equity investments, 12.9% revolving credit facilities, 10.4% senior loans, 4.2% I.O. strips, and 0.3% promissory notes. The assets collateralizing our investments are allocated geographically as follows. 26% Massachusetts, 16% Texas, 7% California, 6% Georgia, 5% Maryland, 4% Florida, with the remaining across states with less than 4% exposure, reflecting our heavy preference for Sunbelt markets with the Massachusetts and California exposure heavily weighted towards life science. The collateral on our portfolio is 75.2 stabilized with 58.7% loan-to-value and a weighted average DSCR of 1.46 times. We have $831.5 million of debt outstanding. Of this, $433.6 million, or 52.1% is short-term debt. Our weighted average cost of debt is 6% and has a weighted average maturity of 1.2 years. Our debt is collateralized by $862.8 million of collateral with a weighted average maturity of four years. Our debt-to-equity ratio is 1.33 times. Moving on to guidance for the second quarter, we are guiding earnings available for distribution and cash available for distribution as follows. Earnings available for distribution of $0.43 per diluted common share at the midpoint with a range of $0.38 on the low end and $0.48 on the high end. Cash available for distribution of $0.48 per diluted common share at the midpoint with a range of $0.43 on the low end and $0.53 on the high end. Now I'd like to turn it over to Matt for a detailed discussion of the portfolio and markets.