NexPoint Real Estate Finance, Inc. (NYSE:NREF) announced on Thursday the resignation of Brian Mitts as Chief Financial Officer, Executive Vice President-Finance, Secretary, and Treasurer, effective midnight on December 31, 2024. Mitts, however, will maintain his role on the company's Board of Directors.
The company disclosed the departure in a regulatory filing with the SEC, detailing the terms of a separation agreement dated November 11, 2024. In accordance with the agreement, Mitts will receive two separation payments totaling $400,000, to be paid in February and August 2025, and his COBRA premiums will be subsidized for a year. The agreement also amends the vesting conditions for Mitts's outstanding restricted stock units with the company and its affiliates, allowing his service as a director to count towards vesting.
Following Mitts's resignation, NexPoint appointed Paul Richards as the new CFO, Executive Vice President-Finance, Assistant Secretary, and Treasurer, effective January 1, 2025. Richards, 36, has been with the company since 2020 and has held various positions across NexPoint's affiliates.
Simultaneously, David Willmore was named as the company's new Chief Accounting Officer, Assistant Secretary, and Assistant Treasurer, effective on the same date as Richards's appointment. Willmore, 39, has served as the company’s VP of Finance since 2020 and has held positions at NexPoint Residential (NYSE:NXRT) Trust, Inc. and other affiliates.
The company's announcement ensures a planned transition of financial leadership, with both Richards and Willmore bringing extensive experience in finance and accounting to their new roles.
In other recent news, NexPoint Real Estate Finance, Inc. reported a significant financial turnaround for the third quarter of 2024. The company announced a net income of $0.74 per diluted share, a notable recovery from the net loss reported in the same quarter of the previous year, primarily due to unrealized gains on common stock investments and an increase in net interest income. NexPoint also declared a $0.50 dividend per share for Q4 2024, with its investment portfolio valued at $1.1 billion, primarily in multifamily, Life Sciences, and single-family rentals.
Projected earnings available for distribution at $0.79 per diluted share for Q4 2024 were announced, with plans to underwrite around $250 million in multifamily sector opportunities. Despite a slight decline in debt service coverage ratios due to repositioning loans and minor slippage in multi-SFR, the company remains optimistic about the Life Sciences sector.
NexPoint is considering various financing options, including a potential high-yield bond deal, to support growth and manage $29 million in unfunded commitments. The company's pipeline opportunities include a $100 million garden-style portfolio across Arizona, Texas, and Georgia, and a $75 million construction financing project.
InvestingPro Insights
As NexPoint Real Estate Finance, Inc. (NYSE:NREF) undergoes this leadership transition, investors may find additional context from recent financial data and expert insights. According to InvestingPro, NREF boasts a robust dividend yield of 12.1%, aligning with the InvestingPro Tip that the company "pays a significant dividend to shareholders." This high yield could be particularly attractive to income-focused investors during this period of executive change.
The company's financial health appears solid, with InvestingPro data showing a Price to Book ratio of 1.12 as of the last twelve months ending Q3 2024, suggesting the stock may be reasonably valued relative to its book value. Additionally, NREF has demonstrated strong recent performance, with a 19.12% price total return over the past three months, corroborating the InvestingPro Tip of a "strong return over the last three months."
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into NREF's financial position and future prospects as it navigates this leadership transition.
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