NexPoint Real Estate Finance, Inc.
For the period ended Mar 31, 2025. Filed May 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 4.
- Loans Held for Investment, Net
The Company’s investments in mortgage loans, mezzanine loans, preferred equity, promissory notes and revolving credit facilities are accounted for as loans held for investment. The mortgage loans are presented as “Mortgage loans, held-for-investment, net” and the mezzanine loans, preferred equity, promissory notes and revolving credit facilities are presented as “Loans, held-for-investment, net” on the Consolidated Balance Sheets. The following tables summarize our loans held-for-investment as of March 31, 2025 and December 31, 2024, respectively (dollars in thousands):
| Weighted Average | ||||||
|---|---|---|---|---|---|---|
| Loan Type | OutstandingFace Amount | Carrying Value (1) | Loan Count | Fixed Rate (2) | Coupon (3) | Life (years) (4) |
| Mortgage loans, held-for-investment | $271,417 | $273,452 | 10 | 44.27% | 10.16% | 2.15 |
| Mezzanine loans, held-for-investment | 133,207 | 134,827 | 22 | 78.31% | 9.40% | 4.11 |
| Preferred equity, held-for-investment | 219,500 | 215,779 | 17 | 43.62% | 11.13% | 2.11 |
| Promissory notes, held-for-investment | 3,500 | 3,487 | 1 | 100.00% | 15.00% | 0.28 |
| Revolving credit facility, held-for-investment | 148,600 | 135,849 | 1 | 100.00% | 13.50% | 2.75 |
| $776,224 | $763,394 | 51 | 60.85% | 10.96% | 2.58 | |
| Loan Type · Outstanding Face Amount · Carrying Value (1) · Loan Count · Weighted Average | ||||||
|---|---|---|---|---|---|---|
| Fixed Rate (2) · Coupon (3) · Life (years) (4) | ||||||
| Mortgage loans, held-for-investment | $260,901 | $263,395 | 10 | 46.23% | 9.99% | 2.41 |
| Mezzanine loans, held-for-investment | 133,207 | 134,870 | 22 | 78.31% | 9.41% | 4.35 |
| Preferred equity, held-for-investment | 224,423 | 223,653 | 16 | 42.43% | 11.92% | 2.27 |
| Promissory notes, held-for-investment | 4,000 | 3,992 | 2 | 100.00% | 14.69% | 0.49 |
| Revolving credit facility, held-for-investment | 148,600 | 135,029 | 1 | 100.00% | 13.50% | 3.00 |
| $771,131 | $760,939 | 51 | 61.31% | 11.15% | 2.81 | |
(1)Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses.
(2)The weighted-average of loans paying a fixed rate is weighted on current principal balance.
(3)The weighted-average coupon is weighted on outstanding face amount.
(4)The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset.
For the three months ended March 31, 2025 and 2024, the loans held for investment, net and preferred equity portfolio activity was as follows (in thousands):
| For the Three Months Ended March 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Balances, December 31, | $760,939 | $1,004,880 |
| Originations | 22,546 | 60,247 |
| Proceeds from principal repayments | (20,665) | (511,169) |
| PIK distribution reinvested in Preferred Units | 3,242 | 3,448 |
| Amortization of loan premium, net (1) | 957 | (25,670) |
| (Provision for) reversal of credit losses | (3,625) | 420 |
| Balance at March 31, | $763,394 | $532,156 |
(1)Includes net amortization of loan purchase premiums.
As of March 31, 2025 and December 31, 2024, there were $7.8 million and $8.8 million of unamortized premiums on loans, held-for-investment, net, respectively, on the Consolidated Balance Sheets.
As discussed in Note 2, the Company evaluates loans classified as held-for-investment on a loan-by-loan basis every quarter. In conjunction with the review of the portfolio, the Company assesses the risk factors of each loan and assign a risk rating based on a variety of factors. Loans are rated “1” through “5,” from least risk to greatest risk, respectively. See Note 2 for a more detailed discussion of the risk factors and ratings. The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands):
| Risk Rating | Number of Loans | Carrying Value | % of Loan Portfolio |
|---|---|---|---|
| 1 | — | $— | — |
| 2 | — | — | — |
| 3 | 49 | 742,408 | 97.25% |
| 4 | 1 | 12,500 | 1.64% |
| 5 | 1 | 8,486 | 1.11% |
| 51 | $763,394 | 100.00% |
| Risk Rating · December 31, 2024 | |||
|---|---|---|---|
| Number of Loans · Carrying Value · % of Loan Portfolio | |||
| 1 | — | $— | — |
| 2 | — | — | — |
| 3 | 49 | 739,960 | 97.24% |
| 4 | 2 | 20,979 | 2.76% |
| 5 | — | — | — |
| 51 | $760,939 | 100.00% | |
Our loan portfolio had a weighted-average risk rating of 3.0 as of March 31, 2025, and 3.0 as of December 31, 2024.
The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of March 31, 2025 and December 31, 2024 (dollars in thousands):
| March 31, 2025 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Carrying Value by Year of Origination (1) | |||||||||
| Risk Rating | Number ofLoans | Outstanding Face Amount | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total Carrying Value |
| 1 | — | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 | — | — | — | — | — | — | — | — | — |
| 3 | 49 | 755,124 | 1,158 | 296,141 | 87,060 | 76,594 | 38,551 | 242,904 | 742,408 |
| 4 | 1 | 12,600 | — | — | — | — | 12,500 | — | 12,500 |
| 5 | 1 | 8,500 | — | — | — | 8,486 | — | — | 8,486 |
| 51 | $776,224 | $1,158 | $296,141 | $87,060 | $85,080 | $51,051 | $242,904 | $763,394 | |
(1)Represents the date a loan was originated or acquired.
| December 31, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Carrying Value by Year of Origination (1) | |||||||||
| Risk Rating | Number ofLoans | Outstanding Face Amount | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Total Carrying Value |
| 1 | — | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 | — | — | — | — | — | — | — | — | — |
| 3 | 49 | 750,031 | 284,958 | 94,446 | 74,658 | 38,067 | 19,812 | 228,019 | 739,960 |
| 4 | 2 | 21,100 | — | — | 8,479 | 12,500 | — | — | 20,979 |
| 5 | — | — | — | — | — | — | — | — | — |
| 51 | $771,131 | $284,958 | $94,446 | $83,137 | $50,567 | $19,812 | $228,019 | $760,939 | |
(1)Represents the date a loan was originated or acquired.
The following tables present the geographies and property types of collateral underlying the Company’s loans held-for-investment as a percentage of the loans’ face amounts.
| Geography | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Massachusetts | 24.24% | 22.68% |
| Texas | 16.58% | 16.39% |
| Georgia | 10.97% | 8.68% |
| Maryland | 8.53% | 8.61% |
| California | 7.05% | 8.55% |
| Virginia | 5.21% | 5.15% |
| Florida | 4.47% | 5.15% |
| Other (21 and 21 states each at <4%) | 22.95% | 24.79% |
| 100.00% | 100.00% |
*Included in "Other."
| Collateral Property Type | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Life Science | 35.07% | 34.57% |
| Multifamily | 34.26% | 34.98% |
| Single Family Rental | 26.58% | 26.57% |
| Self-Storage | 2.95% | 2.73% |
| Marina | 1.14% | 1.15% |
| 100.00% | 100.00% |
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