Name: InPoint Commercial Real Estate Income, Inc. Q2 2022 Earnings Call
Start: 2022-07-18T00:00:00.000Z

Executive Summary

Q2 2022 showed continued portfolio growth and higher net interest income: total income was $9.45M, net interest income rose to $5.42M, and net income was $3.28M; EPS was $0.16 versus $0.08 in Q1 2022 and $0.28 in Q2 2021 .
Loan book expanded to $803.27M carrying value (43 loans), with all loans current on contractual interest; originations were three floating-rate loans totaling $88.7M and net borrowings increased $64.3M on repo lines .
Rate tailwinds materialized as SOFR/LIBOR moved above floors; a 25–50 bps rise would lift net interest by 1.25–3.44%, while equivalent declines modestly reduce net interest given floors .
Hotel REO metrics improved materially (occupancy 59%, RevPAR $87, ADR $146) aiding REO revenue ($4.03M), but REO operating costs also rose with activity .
Post-quarter, the Board authorized a Series A Preferred repurchase program (up to 1.0M shares or $15M through year-end 2022) and maintained common monthly distributions of $0.1042 gross per share (class-specific netting applies) .

What Went Well and What Went Wrong

“We originated three floating-rate loans totaling $88.7 million… and increased our loan portfolio 10% to $803.3 million during the quarter; all 43 loans were current with no interest deferrals” .
Rate environment improved net interest dynamics: net interest income increased $0.43M YoY and $0.59M sequentially; sensitivity analysis shows positive convexity to further hikes above floors .
Hotel REO performance rebounded: occupancy up to 59%, RevPAR $87, ADR $146 versus Q1 2022 and Q2 2021, reflecting easing travel restrictions and seasonal normalization .

Operating expenses increased to $6.17M (from $3.44M YoY) primarily due to higher REO operating costs as hotel activity picked up, which compressed operating margin despite revenue gains .
Weighted-average levered yield declined YoY (9.1% vs. 11.6%), driven by tighter loan spreads even as leverage rose, modestly reducing net interest spread .
Common EPS of $0.16 declined YoY from $0.28; REO operations still produced losses before D&A and advisory fees increased with portfolio/NAV growth .

Metric	Q2 2021	Q1 2022	Q2 2022
Interest Income ($USD Millions)	$7.22	$8.57	$9.04
Net Interest Income ($USD Millions)	$4.99	$5.83	$5.42
REO Revenue ($USD Millions)	$1.74	$1.76	$4.03
Total Income ($USD Millions)	$6.74	$7.59	$9.45
Net Operating Expenses ($USD Millions)	$3.44	$5.23	$6.17
Net Income ($USD Millions)	$3.30	$2.36	$3.28
EPS (Basic & Diluted, $)	$0.28	$0.08	$0.16
Net Income Margin (%)	48.9%	31.1%	34.7%

Non-GAAP

Metric	Q2 2021	Q1 2022	Q2 2022
FFO ($USD Millions)	$3.57	$1.13	$2.04
MFFO ($USD Millions)	$4.05	$1.60	$2.54

Balance Sheet / Portfolio KPIs

Metric	Q1 2022	Q2 2022
Commercial Mortgage Loans (Carrying Value, $USD Millions)	$730.10	$803.27
Number of Loans	41	43
All-in Yield (Loans)	4.3%	5.2%
Weighted Avg Years to Maturity (Loans)	1.8	1.7
Repo Borrowings Outstanding ($USD Millions)	$410.27	$474.57
Cash & Equivalents ($USD Millions)	$76.32	$57.97
NAV per Share (Aggregate)	$19.8225	$19.6320

Hotel REO Performance

Period	Occupancy (%)	RevPAR ($)	ADR ($)
Q1 2022	48%	$48	$100
Q2 2022	59%	$87	$146

Interest Sensitivity

Metric	Period	Previous Guidance	Current Guidance	Change
Common Monthly Distribution (Gross)	Jul 2022	$0.1042/share (ongoing)	$0.1042/share; Class T/D net $0.0899/$0.1000	Maintained
Series A Preferred Dividend	Q2 2022	$0.421875/share quarterly (6.75% annualized)	$0.421875/share quarterly	Maintained
Series A Preferred Repurchase Program	Through 12/31/2022	None	Authorized up to lesser of 1,000,000 shares or $15.0M	New

Topic	Q4 2021 (Portfolio Info)	Q1 2022	Q2 2022	Trend
Portfolio Growth & Leverage	Portfolio positioned for floating-rate senior loans; repo facilities in place	Originated 7 loans ($164.7M); net repo drawings $103.2M	Originated 3 loans ($88.7M); net repo drawings $64.3M	Continued growth with disciplined funding
Rate Environment / Floors	Emphasis on floating-rate positioning	Lower borrowing costs from floors; levered yield 10.3%	LIBOR/SOFR above floors; sensitivity positive to hikes	Increasing rates beneficial above floors
LIBOR → SOFR Transition	N/A	New originations on SOFR; CF Repo converted in Mar 2022	All agreements include fallback; ongoing conversion plan	Execution progressing
Hotel REO (Renaissance O’Hare)	Pandemic headwinds persisted	Net operating loss; early signs of recovery in Mar	Significant metric improvement; higher REO revenue & costs	Recovery underway but cost-intensive
Distribution Coverage	N/A	Cash distributions largely covered by operating cash flows	All common distributions covered by operating cash flows	Improving coverage

“Net income attributable to common stockholders was $1.8 million, or $0.16 per share… we paid an annual gross distribution rate of $1.25 per common share” .
“We originated three floating-rate loans totaling $88.7 million… resulting in a 10% increase in our loan portfolio to $803.3 million… all 43 of our loans were current on their contractual interest payments” .
“We had net drawings of $64.3 million on our repurchase agreements during the three months ended June 30, 2022” .
“The hotel’s performance improved during the second quarter of 2022… travel and group events increasing… results show significant improvement in operating metrics” .

No publicly filed Q2 2022 earnings call transcript was available; analysis is based on the 10‑Q and 8‑K exhibit portfolio materials .

Wall Street consensus EPS and revenue estimates via S&P Global were unavailable for Q2 2022 for ICR-PA; attempted retrieval returned an error (daily request limit exceeded). If needed, we can re-query later and add comparisons to consensus. Values would be sourced from S&P Global.

Rate hikes above LIBOR/SOFR floors are accretive to net interest income; sensitivity shows +25–50 bps adds 1.25–3.44% to net interest—supportive near-term earnings as the book is ~98% floating .
Portfolio growth remains disciplined with all loans current; originations and fundings outpaced repayments, and leverage increased to support growth .
REO hotel performance is recovering, boosting revenue but also raising variable costs; disposition timing remains a strategic lever given improving metrics and market conditions .
Common distributions were fully covered by operating cash in H1 2022, indicating healthier cash generation versus prior year; monthly gross $0.1042/share maintained .
NAV per share slipped modestly (19.82 → 19.63) as operating expenses rose and balance sheet expanded; continued execution on originations and rate tailwinds should support NAV stabilization .
Preferred shareholder support: new repurchase program up to $15M through year-end could underpin ICR‑PA trading levels and improve capital structure flexibility .
Watch near-term catalysts: additional SOFR-linked originations, repo facility capacity utilization, and sustained hotel KPI improvement; monitor advisory fee drag and REO operating costs on margins .