NexPoint Real Estate Finance, Inc. Q1 FY2026 earnings call

Paul Richards walked through quarterly results, balance sheet, and provided Q2 guidance. Turned over to Matt for portfolio and macro lending environment. Successfully refinanced $180 million of senior unsecured notes. Executed re-remix of Frems 2017 K62 BPs, generating book value appreciation, reducing repo financing. Portfolio composition and allocation discussed. Matt discussed verticals: residential in supply trough, life sciences concentrated and de-risked, storage in cyclical bottoming process. Pipeline of $190 million in-rev investment and $275 million structured product opportunities. Deploying AI across underwriting, portfolio monitoring, credit risk, and operations functions

For the first quarter, net income was $0.42 per diluted share compared to $0.70 for Q1 2025, decrease due to small mark-to-mark declines on preferred stock and warrants, and decrease in change in net assets related to consolidated CMBS VIEs. Earnings available for distribution was $0.43 per diluted share in Q1 vs $0.41 in 2025. Cash available for distribution was $0.58 per diluted share in Q1 vs $0.45 in 2025. Paid regular dividend of $0.50 per share in Q1, covered 1.16 times by cash available for distribution. Book value per share decreased slightly by 0.3% to $18.96 per diluted share. Funded over $30 million on two loans paying mid-teens monthly coupon. Portfolio has 90 investments with total outstanding balance of $1.1 billion. Allocated by sector: 39.4% multifamily, 35.9% life sciences, 17.1% single family rental, 3.9% storage, 1.6% marina, 2.1% industrial. Allocated by fixed income investments: 19% CMVBPs, 22% MED loans, 24.5% PREF equity investments, 15.6% revolving credit facilities, 10.1% senior loans, 4.2% Iowa strips, 4.6% promissory notes. Geographically allocated: 28.7% Massachusetts, 17.6% Texas, 5.9% Florida, 4.9% Georgia, 5.2% California, 4.7% Maryland, etc. Collateral 81.2% stabilized with 59.9 loan to value and weighted average DSCR of 1.3 times. Debt outstanding $665.2 million with weighted average cost 5.2% and weighted average maturity 0.8 years; secured debt $571.3 million with weighted average maturity 3.8 years and debt to equity ratio 0.7 times

Earnings available for distribution: $0.43 per diluted share at midpoint, range $0.38-$0.48. Cash available for distribution: $0.54 per diluted share at midpoint, range $0.49-$0.59

Listeners should review company's annual report on Form 10-K and other SEC filings for more complete discussion of risk and other factors affecting forward-looking statements

Q: Rates are trending higher year to date and was wondering what you think the impact to the CRE recovery outlook will be, particularly around multifamily as bridge loans taken out during the COVID years are up for maturity.

A: In terms of capital markets transactions, they've continued without material disruption, some slight walkbacks, but liquidity still plentiful on multifamily side, and fundamentals in multifamily sector turning and firming up.

Q: The life science update has been quite impressive, and I was wondering if you could give some thoughts. Do you view the alewife exposure as unique to NREF, or are you also seeing green shoots elsewhere in the portfolio? And then overall, do you view NREF's exposure as, you know, better than the market?

A: Alewife project is unique, our own investment in terms of loan to cost, sponsor relationship, and in a cluster built sub market. Green shoots in biotech index nearing cyclical highs, venture capital at high since 2021, and AI spend widening demand funnel.

Q: Hey, guys. Thanks for taking the question. I want to actually piggyback on what Dave was just asking. You know, it sounds like Alewife is, is doing great. Some other exposures, you know, Holly Spring, Vacaville, California, you guys have low attachment points, but it looks like the senior mortgages are due maybe kind of by the end of the year. Just any color you can give on expectations for the underlying asset, whether it's a refi or a sale, et cetera, I think would be helpful as it pertains to life science exposure away from airways.

A: Holly Springs and Vacaville are advanced manufacturing assets, Holly Springs underlying collateral topped out with a tenant likely to be refied out, Vacaville has project names in semiconductor and advanced manufacturing, and ALY being repaid could see capital come back in next 12 months.

Q: And then one more kind of just on the accounting side. In the other income, right, the $17 million, can you guys break out kind of the components of that all just for us before we get to Q, or do we need to wait for the Q for that?

A: Wait to the Q for that one, it'll give a good breakdown of the other income and we can provide a breakdown of the supplement going forward for better analysis