Company: NREF
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001786248-25-000004
Chunk: 332

Company: NexPoint Real Estate Finance, Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1C
Chunk 332
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 A hearing was held on July 8, 2024. The court dismissed the claims against one respondent, CLO HoldCo Ltd., for lack of personal jurisdiction in a July 12, 2024 order. On August 24, 2024, UBS filed a notice of appeal for that dismissal order, which has not yet been briefed. The remaining respondents’ motions to dismiss, including Mr. Dondero’s, remain pending. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.

Components of Our Revenues and Expenses

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Table of Contents

Net Interest Income for the Years Ended December 31, 2024, 2023 and 2022

Interest income. Our earnings are primarily attributable to the interest income from mortgage loans, mezzanine loan and preferred equity investments. Loan premium/discount amortization and prepayment penalties are also included as components of interest income.

Interest expense. Interest expense represents interest accrued on our various financing obligations used to fund our investments and is shown as a deduction to arrive at net interest income.

The year ended December 31, 2024 as compared to the year ended December 31, 2023

The following table presents the components of net interest income for the years ended December 31, 2024 and 2023 (dollars in thousands):

For the Year EndedDecember 31,$ Change% Change20242023Interest income/(expense)AverageBalance (1)Yield (2)Interest income/(expense)AverageBalance (1)Yield (2)Interest incomeSenior loans, held-for-investment (3)$3,706 $223,945 1.65 %$27,259 $712,592 3.83 %$(23,553)(86.4)%Mezzanine loans, held-for-investment13,684 136,236 10.04 %14,191 144,536 9.82 %(507)(3.