Executive Summary

Q3 2021 results: total income rose to $7.64M (vs. $6.05M in Q3’20) on higher hotel revenue; net income was $2.46M (EPS $0.22) vs. $6.06M (EPS $0.52) in Q3’20, with the YoY decline driven by 2020’s one‑time securities mark‑to‑market gains that did not recur in 2021 .
Sequentially, EPS fell to $0.22 from $0.28 in Q2’21 as total income increased (Q3: $7.64M; Q2: $6.74M) but net interest income declined and hotel operating expenses rose with higher occupancy .
Capital markets catalyst: the company closed an upsized $87.5M 6.75% Series A preferred offering and listed ICR PR A on NYSE (Sept 22), earmarking proceeds for first‑mortgage originations; management flagged ~$136.4M in term sheets expected to close primarily in Q4’21 .
Operations: CRE loan book expanded to 34 loans ($521.3M principal) with 97% floating rate exposure and stronger hotel metrics (Q3 occupancy 57%, RevPAR $65, ADR $114); management reiterated intent to divest the hotel over time and focus on CRE debt .

What Went Well and What Went Wrong

What Went Well
- Portfolio growth and pipeline: Loan portfolio reached 34 loans/$521.3M principal and management executed term sheets on ~$136.4M of first mortgages, mostly expected to close in Q4’21 .
- Hotel recovery: Renaissance O’Hare occupancy/RevPAR/ADR improved to 57%/$65/$114 in Q3’21 (from 48%/$43/$89 in Q2’21 and 22%/$19/$89 in Q3’20) .
- Liquidity and capital raise: Cash rose to $134.8M; company completed/ listed an $87.5M 6.75% Series A preferred offering to fund originations .
What Went Wrong
- Net interest spread pressure: Net interest income declined YoY to $4.92M from $5.68M and sequentially from $4.99M, with weighted average financing cost rising vs. prior year and spread compression in the loan/securities mix .
- Higher operating costs: Real estate‑owned operating expenses increased to $3.27M in Q3’21 vs. $0.94M in Q3’20 as the hotel operated at higher activity levels; total net operating expenses rose to $5.17M from $3.52M .
- No earnings call/limited external guidance: The quarter lacked an earnings call/transcript and traditional financial guidance, limiting external estimate frames; consensus from S&P Global was unavailable for comparison (see Estimates Context).

Financial Results

Metric	Q3 2020	Q2 2021	Q3 2021
Total income ($USD Millions)	$6.05	$6.74	$7.64
Net interest income ($USD Millions)	$5.68	$4.99	$4.92
Revenue from real estate owned ($USD Millions)	$0.37	$1.74	$2.72
Net income ($USD Millions)	$6.06	$3.30	$2.46
Diluted EPS ($)	$0.52	$0.28	$0.22

KPIs and balance sheet highlights:

Loan portfolio: 34 loans; principal $521.3M; weighted average years to maximum maturity 3.2; 97% variable rate exposure (as of 9/30/21) .
Average leverage and levered yield (Q3): 221.5% and 11.6% .
Liquidity & debt: Cash $134.8M; amounts outstanding under loan repo/credit facilities $357.6M; committed financing capacity $475.0M .
Hotel KPIs (Renaissance O’Hare): Q3’21 occupancy 57%, RevPAR $65, ADR $114; Q2’21: 48%/$43/$89; Q3’20: 22%/$19/$89 .
Distributions: Monthly gross common distributions were $0.1042 per share for July, August, and September 2021 across all classes (net varies for certain classes) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Loan originations pipeline	Q4 2021	N/A	Executed term sheets on ~$136.4M in first mortgage loans; majority expected to close in Q4’21	New disclosure
Common distributions	Jul–Sep 2021	$0.1042 monthly (June)	Maintained $0.1042 monthly for July–September	Maintained
Share Repurchase Plan (SRP) limits	From Oct 1, 2021	Jul–Sep 2021 expected cap: ≤1% monthly, ≤2.5% quarterly	SRP cap: ≤2% monthly, ≤5% quarterly beginning Oct 1, 2021	Increased capacity
Preferred stock	Listed Sept 22, 2021	Pricing announced Sept 15 ($87.5M gross)	Offering closed; ICR PR A approved for NYSE listing; proceeds to fund originations	Completed/Listed

Note: The company did not issue traditional revenue/EPS/expense/tax guidance.

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 2021. Thematic evolution across Q1–Q3 2021 based on 10‑Qs:

Topic	Previous Mentions (Q1 2021)	Previous Mentions (Q2 2021)	Current Period (Q3 2021)	Trend
Credit performance & risk ratings	31 loans; focus on monitoring hospitality/retail; no new allowances; risk ratings: 22 loans rated 2, six rated 3, three rated 4 .	36 loans; risk ratings: 28 rated 2, six rated 3, two rated 4 .	34 loans; risk ratings: 28 rated 2, six rated 3, none rated 4 .	Improving risk mix
Loan originations & demand	Origination pick‑up; two loans closed; continued demand .	Seven loans in Q2; continued demand & selective term sheets .	Robust pipeline (~$136.4M term sheets) .	Strengthening pipeline
Hotel operations (Renaissance O’Hare)	Intent to sell in time; improving monthly metrics (Apr occupancy ~46%) .	Q2 occupancy 48%, RevPAR $43, ADR $89; still impacted by COVID .	Q3 occupancy 57%, RevPAR $65, ADR $114; still plan to sell hotel .	Recovery progressing
Liquidity & financing	Access to repo lines; new WA Credit Facility signed Mar 10, 2021 .	Borrowings increased with originations; cash $51.9M .	Cash $134.8M; borrowings $357.6M; committed capacity $475M .	Enhanced liquidity
Distributions & SRP	SRP reinstatement for death/disability (Mar 1); plan to reinstate for all on Jul 1 .	SRP reinstated Jul 1 with interim caps; monthly distributions increased to $0.1042 by June .	SRP caps raised from Oct; $0.1042 monthly maintained Jul–Sep .	Normalization
LIBOR transition	Disclosed risks and fallback; monitoring timelines .	Same .	All loans/facilities include fallback; monitoring SOFR transition .	Stable planning

Management Commentary

“We continue to see significant loan demand in our target markets and asset classes. As of September 30, 2021, we have executed borrower term sheets on approximately $136.4 million in first mortgage loans, the majority of which we expect to close during the fourth quarter 2021.” .
“Ultimately, we intend to sell the Renaissance O’Hare and remain focused on our core business of investing in CRE debt.” .
“On September 22, 2021, we completed the Preferred Stock Offering, generating net proceeds of approximately $84.0 million. We plan to use the proceeds to primarily originate first mortgage loans.” .

Q&A Highlights

No Q3 2021 earnings call/Q&A transcript was available in company filings; no analyst Q&A themes to report.

Estimates Context

Wall Street consensus estimates (EPS/revenue) from S&P Global were unavailable for Q3 2021 at the time of this review; therefore, comparisons to consensus cannot be provided.

Key Takeaways for Investors

Deployment runway: The $87.5M preferred raise and $134.8M cash position provide ample liquidity to fund a ~$136M near‑term pipeline of first mortgages, supporting NII growth into Q4’21/Q1’22 if closings proceed as expected .
Portfolio quality improving: Loan risk ratings shifted positively (no loans rated 4 as of Q3) while hotel operating metrics improved; hospitality/retail exposure remained modest (~9.6% by loans) .
Earnings mix normalization: 2020 securities marks inflated YoY comps; 2021 income drivers are shifting toward core NII and REO operations, with hotel recovery aiding REO revenue but also lifting operating expenses until divestiture .
Rate positioning: With ~97% variable‑rate loans and repo financing, a rising rate backdrop can pressure spread if liability costs outpace floors; however, portfolio LIBOR floors and asset yields offer partial protection .
Shareholder liquidity/returns: Monthly common distributions held at $0.1042 through Q3; SRP capacity increased from October, potentially improving common holder liquidity (non‑listed); preferred dividends are fixed at 6.75% with NYSE trading in ICR PR A .
Strategic focus: Management reiterates hotel exit intention and CRE credit focus; proceeds earmarked for senior, floating‑rate lending in favored asset classes (multifamily/industrial/selected office) .

Supporting Detail

Additional KPIs

Cash and unencumbered assets: Cash $134.8M; unencumbered assets $30.5M (as of 9/30/21) .
Facilities snapshot (9/30/21): CF Repo $203.2M out; JPM Repo $140.0M out; WA Credit Facility $14.4M out; total outstanding $357.6M; weighted average rate ~2.48% .
NAV per share (9/30/21): Class P $20.2106; Class A $20.2568; Class T $20.2557; Class D $20.2520; Class I $20.2575 .

Other Relevant Press Releases (Q3 2021)

Pricing of upsized $87.5M 6.75% Series A preferred (Sept 15) .
Closing of preferred offering and NYSE approval for ICR PR A (Sept 22) .
Q3 2021 portfolio information presentation furnished Oct 14 (Ex. 99.1) .

Prior Two Quarters – Trend Summary

Q2 2021: Total income $6.74M; net income $3.30M; EPS $0.28; 36 loans/$554.8M; hotel occupancy 48%, RevPAR $43, ADR $89 .
Q1 2021: Total income $5.43M; net income $1.37M; EPS $0.12; 31 loans/$474.9M; monthly distributions ramped during Q1 .

All citations:
Financials and MD&A: .
Q2: .
Q1: .
Preferred offering press: .
Portfolio information 8‑K: .

InPoint Commercial Real Estate Income, Inc. (ICR-PA)·Q3 2021 Earnings Summary