NexPoint Real Estate Finance Inc
For the period ended Dec 31, 2023. Filed Mar 22, 2024.
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FY2023 · Filed Mar 22, 2024
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Item 1. 0
The following table sets forth a summary of our operating results for the years ended December 31, 2023 and 2022 (in thousands):
| For the Year Ended December 31, · $ Change · % Change | ||||||
|---|---|---|---|---|---|---|
| 2023 · 2022 | ||||||
| Net interest income | $16,798 | $37,733 | $(20,935) | (55.5)% | ||
| Other income (loss) | 25,292 | 2,661 | 22,631 | 850.5% | ||
| Operating expenses | (23,350) | (26,180) | 2,830 | (10.8)% | ||
| Net income | 18,740 | 14,214 | 4,526 | 31.8% | ||
| Net (income) attributable to Series A Preferred shareholders | (3,496) | (3,512) | 16 | (0.5)% | ||
| Net (income) attributable to Series B Preferred shareholders | (80) | — | (80) | N/A | ||
| Net (income) attributable to redeemable noncontrolling interests | (4,765) | (4,969) | 204 | (4.1)% | ||
| Net (income) attributable to redeemable noncontrolling interests in subsidiaries | — | (2,499) | 2,499 | N/A | ||
| Net income attributable to common stockholders | $10,399 | $3,234 | $7,165 | 221.6% | ||
The change in our net income for the year ended December 31, 2023 as compared to the net income for the year ended December 31, 2022 primarily relates to an decrease in operating expenses and a decrease in other income including changes in net assets related to consolidated CMBS VIEs. Our net income attributable to common stockholders for the year ended December 31, 2023 was approximately $10.4 million. We earned approximately $16.8 million in net interest income, generated income of $25.3 million in other income, incurred operating expenses of $23.4 million, allocated $3.5 million of income to Series A Preferred stockholders, allocated $0.1 million of income to Series B Preferred stockholders, and allocated $4.8 million of income to redeemable non-controlling interests for the year ended December 31, 2023.
Revenues
Net interest income. Net interest income was $16.8 million for the year ended December 31, 2023 compared to $37.7 million for the year ended December 31, 2022 which was a decrease of approximately $20.9 million. The decrease between the periods is primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period. As of December 31, 2023 we own 87 discrete investments compared to 83 as of December 31, 2022.
Other income (loss). Other income was $25.3 million for the year ended December 31, 2023 compared to $2.7 million for the year ended December 31, 2022 which was an increase of approximately $22.6 million. This was primarily due to an increase in unrealized gains related to consolidated CMBS VIEs and an increase in fair value marks between the periods.
Expenses
G&A expenses. G&A expenses were $9.2 million for the year ended December 31, 2023 compared to $7.2 million for the year ended December 31, 2022 which was an increase of approximately $2.0 million. The increase between the periods was primarily due to a $1.1 million increase in stock compensation expense, a $0.6 million increase in legal fees, and a $0.7 million increase in audit fees compared to the prior period.
Loan servicing fees. Loan servicing fees were $4.2 million for the year ended December 31, 2023 compared to $4.4 million for the year ended December 31, 2022 which was a decrease of approximately $0.2 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period.
Management fees. Management fees were $3.3 million for the year ended December 31, 2023 compared to $3.2 million for the year ended December 31, 2022 which was an increase of approximately $0.1 million. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.
The following table sets forth a summary of our operating results for the years ended December 31, 2022 and 2021 (in thousands):
| For the Year Ended December 31, | ||||
|---|---|---|---|---|
| 2022 | 2021 | $ Change | % Change | |
| Net interest income | $37,733 | $26,055 | $11,678 | 44.8% |
| Other income (loss) | 2,661 | 71,263 | (68,602) | (96.3)% |
| Operating expenses | (26,180) | (13,846) | (12,334) | 89.1% |
| Net income | 14,214 | 83,472 | (69,258) | (83.0)% |
| Net (income) attributable to preferred shareholders | (3,512) | (3,508) | (4) | 0.1% |
| Net (income) attributable to redeemable noncontrolling interests | (4,969) | (40,387) | 35,418 | (87.7)% |
| Net (income) loss attributable to redeemable noncontrolling interests in subsidiaries | (2,499) | — | (2,499) | N/A |
| Net income attributable to common stockholders | $3,234 | $39,577 | $(36,343) | (91.8)% |
The change in our net income for the year ended December 31, 2022 as compared to the net income for the year ended December 31, 2021 primarily relates to an increase in operating expenses and a decrease in other income including changes in net assets related to consolidated CMBS VIEs partially offset by increases in net interest income. Our net income attributable to common stockholders for the year ended December 31, 2022 was approximately $3.2 million. We earned approximately $37.7 million in net interest income, generated income of $2.7 million in other income, incurred operating expenses of $26.2 million, allocated $3.5 million of income to preferred stockholders, allocated $5.0 million of income to redeemable noncontrolling interests and allocated $2.5 million of income to redeemable non-controlling interests in subsidiaries for the year ended December 31, 2022.
Revenues
Net interest income. Net interest income was $37.7 million for the year ended December 31, 2022 compared to $26.1 million for the year ended December 31, 2021 which was an increase of approximately $11.7 million. The increase between the periods is primarily due to an increase in investments compared to the prior period. Additionally, prepayment penalties related to early paydowns offset by accelerated premium amortization contribute to the increase between the periods. As of December 31, 2022 we owned 83 discrete investments compared to 74 as of December 31, 2021.
Other income (loss). Other income (loss) was $2.7 million for the year ended December 31, 2022 compared to $71.3 million for the year ended December 31, 2021 which was a decrease of approximately $68.6 million. This was primarily due to an increase in unrealized losses related to consolidated CMBS VIEs and a decrease in fair value marks between the periods.
Expenses
G&A expenses. G&A expenses were $7.2 million for the year ended December 31, 2022 compared to $6.4 million for the year ended December 31, 2021 which was an increase of approximately $0.8 million. The increase between the periods was primarily due to a $1.3 million increase in stock compensation expense and a $0.7 million increase in legal fees compared to the prior period.
Loan servicing fees. Loan servicing fees were $4.4 million for the year ended December 31, 2022 compared to $5.2 million for the year ended December 31, 2021 which was a decrease of approximately $0.8 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period.
Management fees. Management fees were $3.2 million for the year ended December 31, 2022 compared to $2.3 million for the year ended December 31, 2021 which was an increase of approximately $0.9 million. The increase between the periods was primarily due to an increase in equity as defined by the Management Agreement.
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