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InPoint Commercial Real Estate Income, Inc. (ICR-PA)·Q1 2022 Earnings Summary

Executive Summary

  • Q1 2022 total income was $7.59M, net income $2.36M, and EPS $0.08; YoY net interest spread compressed to 2.5% from 3.1% as tighter spreads and mix changes offset portfolio growth .
  • Loan portfolio expanded 9.7% sequentially to $730.1M on seven new floating-rate originations ($164.7M principal; $152.1M initial funding). All 41 loans were current with no interest deferrals, underscoring credit quality .
  • REO hotel remained a drag: Q1 occupancy 48%, RevPAR $48, ADR $100; management reiterated intent to sell the asset when conditions allow, balancing price versus continued operating losses (REO net loss of $1.188M reduces COVID reserve, no negative NAV effect) .
  • Distributions were maintained: common stock gross monthly $0.1042 per share; Series A preferred dividend $0.421875 per share paid Mar 30, 2022. No SEC-filed earnings call transcript; Wall Street consensus estimates unavailable .

What Went Well and What Went Wrong

What Went Well

  • “We originated seven floating rate loans totaling $164.7 million… initial funding of $152.1 million,” expanding the portfolio to $730.1M and maintaining floating-rate exposure .
  • “All 41 of our loans were current on their contractual interest payments with no interest deferrals,” highlighting portfolio performance in a rising-rate environment .
  • Distributions to common stockholders were fully covered by cash from operating activities in Q1 2022 (“all of our distributions paid in cash were paid from cash flows from operating activities”)—a positive change versus prior periods .

What Went Wrong

  • Net interest spread decreased to 2.5% from 3.1% YoY as weighted-average yields compressed; weighted average levered yield fell to 10.3% from 11.6% YoY .
  • REO hotel continued to generate losses; Q1 REO net loss of $1.188M and seasonal softness vs Q3 2021 levels kept headwinds in place despite March improvement .
  • Operating expenses rose, largely due to REO operating costs and higher advisory fees tied to growth in NAV and activity (net operating expenses $5.228M vs $4.060M YoY) .

Financial Results

Consolidated Metrics (YoY comparison)

Metric (USD thousands unless noted)Q1 2021Q1 2022
Interest Income$6,451 $8,571
Interest Expense$(1,894) $(2,741)
Net Interest Income$4,557 $5,830
Revenue from REO$868 $1,760
Total Income$5,425 $7,590
Net Operating Expenses$(4,060) $(5,228)
Net Income$1,365 $2,362
EPS (basic & diluted)$0.12 $0.08
Net Interest Spread (%)3.1% 2.5%
Weighted Avg Leverage (%)186.3% 223.7%

Estimates comparison: Wall Street consensus (S&P Global) was unavailable for Q1 2022.

Balance Sheet (Sequential comparison)

Metric (USD thousands)Dec 31, 2021Mar 31, 2022
Cash and Cash Equivalents$57,268 $76,320
Commercial Mortgage Loans (carrying value)$665,498 $730,098
Total Assets$764,428 $847,326
Repurchase Agreements (outstanding)$307,083 $410,270
Loan Participations Sold (liability)$109,772 $110,016
Total Liabilities$457,283 $547,559
Stockholders’ Equity$307,145 $299,767

Segment Reporting

SegmentQ1 2022
Reportable segments (GAAP)One segment

KPIs

KPIDec 31, 2021Mar 31, 2022
Total Loans (principal balance, $000s)$664,170 $728,814
Number of Loans38 41
All-in Yield (weighted avg)4.6% 4.3%
Weighted Avg Years to Max Maturity3.6 3.8
Repurchase Facilities Outstanding ($000s)$321,474 $410,338
Available Facility Capacity ($000s)n/a$164,700

REO Hotel Operating Metrics (five quarters)

PeriodAverage OccupancyRevPAR ($)ADR ($)
Q1 202128% $23 $80
Q2 202148% $43 $89
Q3 202157% $65 $114
Q4 202147% $54 $113
Q1 202248% $48 $100

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Common stock monthly gross distribution per shareJan–Mar 2022$0.1042 per share (ongoing since Jun 2021) $0.1042 per share Maintained
Series A Preferred dividend per shareQ1 2022$0.459375 (Dec 30, 2021, partial initial period) $0.421875 (Mar 30, 2022; 6.75% annualized) Maintained annual rate
Facility maturity (JPM Repo)Subsequent EventsMay 6, 2022 Extended to May 6, 2023 Extended
Revenue, EPS, margin guidanceQ1 2022None disclosedNone disclosedn/a

Other relevant press releases in Q1 2022: Series A preferred dividend announcement (Mar 3, 2022) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2021)Previous Mentions (Q4 2021)Current Period (Q1 2022)Trend
Interest rate/macro“Volatility in treasuries and potential rising rates favors floating rate investments” Portfolio highlights emphasize floating-rate senior loans 98% variable-rate exposure; sensitivity shows slight decline in net interest income at +25–50bps; mix and floors relevant Consistent floating-rate positioning; resilient but spread compression
LIBOR→SOFR transitionNot highlightedNot highlightedCF Repo converted to SOFR; all new loans based on SOFR; legacy to transition by maturity or 6/30/23 Transition actively underway
Loan originations and spreads“Increasing demand for high-quality loans, tightening spreads” Floating vs fixed mix consistent Seven floating-rate loans originated; portfolio all-in yield down to 4.3% amid tighter spreads Growth with tighter spreads
Hotel recoveryNot discussedNot discussed in slidesSeasonal soft patch vs Q3; March improved toward Q3 levels; intent to sell asset Gradual recovery; strategic exit contemplated
Leverage and liquidityNot discussedNot discussed in slidesNet drawings of $103.2M; facility capacity $164.7M; liquidity sources detailed Higher leverage supporting growth

Note: No SEC-filed earnings call transcript for Q1 2022 was found; themes sourced from 10-Q MD&A and prior 8-K investor materials .

Management Commentary

  • “We originated seven floating rate loans totaling $164.7 million… We had $155.8 million in advances on loans and loan repayments of $91.2 million resulting in a 9.7% increase in our loan portfolio to $730.1 million…” .
  • “All 41 of our loans were current on their contractual interest payments with no interest deferrals during the three months ended March 31, 2022.” .
  • “We recognized a net operating loss from the hotel of $1.3 million… Ultimately, we intend to sell the Renaissance O’Hare and remain focused on our core business of investing in CRE debt.” .
  • “We had net drawings of $103.2 million on our repurchase agreements and repaid the $14.4 million outstanding on our credit facility.” .
  • “For the three months ended March 31, 2022, all of our distributions paid in cash were paid from cash flows from operating activities…” .

Q&A Highlights

No Q1 2022 earnings call transcript was filed with the SEC; no Q&A content available from primary sources .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q1 2022 were unavailable; no comparison to estimates can be made for revenue or EPS in this period.

Key Takeaways for Investors

  • Portfolio growth with credit quality intact (41 loans, all current) positions the REIT to benefit from rising rates given predominant floating-rate exposure, though tighter loan spreads are compressing net interest spread (2.5% vs 3.1% YoY) .
  • Elevated leverage and ample facility capacity ($410.3M outstanding; $164.7M available) provide funding for further originations; monitor borrowing costs and floors as SOFR transition continues .
  • REO hotel remains a non-core headwind; with intent to sell and March metrics improving, the timing of exit is a catalyst that could reduce earnings volatility and refocus capital on CRE debt .
  • Distribution sustainability improved: Q1 cash distributions were fully covered by operating cash flows, supporting income-oriented holders; continued coverage will hinge on originations and REO drag .
  • Liquidity solid (cash $76.3M) with multiple financing lines and sponsor backstop letters; watch covenant compliance and facility maturities/extensions (JPM repo extended to May 2023) .
  • NAV per share across classes remained near ~$19.82; repurchases continued within program limits, indicating functioning shareholder liquidity mechanisms in a non-listed common structure .
  • With no public market for common stock and preferred trading under ICR PR A, near-term price reaction is limited; fundamental catalysts include loan growth, spread dynamics, and REO disposition .