Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q2 2023 Earnings Presentation
21 slides from Seven Hills Realty Trust's earnings presentation, Jul 31, 2023
Slide 1: Seven Hills Realty Trust Second Quarter 2023 Financial Results
Exhibit 99.2 Seven Hills Realty Trust Second Quarter 2023 Financial Results
Slide 2: Seven Hills Realty Trust Announces Second Quarter 2023 Results
Seven Hills Realty Trust Announces Second Quarter 2023 Results "SEVN produced another quarter of Newton, MA (July 31, 2023). Seven Hills Realty Trust (Nasdaq: SEVN) today announced financial results for the quarter and six months ended June 30, 2023. strong results, while continuing to actively mana
Slide 3: Company Snapshot
Company Snapshot (As of June 30, 2023, unless otherwise noted) Strong Loan Portfolio Conservative Leverage Integrated with RMR Real Estate Platform $678 million 1.7x 12% Floating rate Debt to equity ratio Ownership of SEVN first mortgage loan commitments $28 million $682 million ~$36 billion Average
Slide 4: Second Quarter 2023 Highlights
Second Quarter 2023 Highlights (As of and for the three months ended June 30, 2023, unless otherwise noted) • Generated net income of $4.6 million, or $0.32 per diluted share, Distributable Earnings of $5.4 million, or $0.37 per Financial diluted share, and Adjusted Distributable Earnings of $5.5 mi
Slide 5: Loan Portfolio Summary
Loan Portfolio Summary Second Quarter As of (dollars in thousands) Originations June 30, 2023 Number of loans 1 24 Second Quarter 2023 Loan Portfolio Activity (dollars in millions) Average loan commitment $37,500 $28,243 Total loan commitments $37,500 $677,822 $674.5 $677.8 Total Loan Commitments $4
Slide 6: Loan Portfolio Originations and Diversity
Loan Portfolio Originations and Diversity (1) Geographic Region (2) Loan Originations by Quarter (dollars in millions) East 14% South $164.7 28% $7.4 $139.5 Midwest $11.1 36% West 22% $95.8 $88.8 $4.6 Property Type (2) $11.8 Retail Retail $157.3 18% $128.4 $60.5 Office $8.9 $47.0 $37.5 Total Loan Co
Slide 7: Loan Portfolio Credit Quality
Loan Portfolio Credit Quality Loan to Value (1) % of Portfolio Weighted Average LTV: 67% 33% 29% 16% 14% 8% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan Count 4 2 7 9 2 Risk Rating Distribution (1) % of Portfolio Weighted Average 71% Risk Rating: 3.0 16% 13% —% Lower Risk (1) Average Risk
Slide 8: Office Loans
Office Loans (1) (2) • No office loans in urban or CBD markets in our portfolio. • While 9 office loans make up 36% of our portfolio, office loans have a weighted average risk rating of 3.0. • As of June 30, 2023, all of our borrowers with outstanding loans had paid their debt service obligations ow
Slide 9: Real Estate Owned
Real Estate Owned The debt service payment due in May 2023 on our loan secured by an office property in Yardley, PA was not received. In June 2023, we assumed ownership of the property through a deed in lieu of foreclosure. • Location: Yardley, PA. • Property type: Class A office. • Year built: 2009
Slide 10: Secured Financing Facilities
Secured Financing Facilities (As of June 30, 2023) Total/Weighted Citibank UBS (1) BMO Wells Fargo Average (dollars in thousands) Maximum facility size $ 215,000 $ 192,000 $ 150,000 $ 125,000 $ 682,000 Principal balance $ 150,101 $ 123,958 $ 84,855 $ 95,551 $ 454,465 Unused capacity $ 64,899 $ 68,04
Slide 11: Interest Rate Sensitivity
Interest Rate Sensitivity (As of June 30, 2023) Annualized Impact to Net Interest Income per Share $0.20 $0.15 $0.15 $0.12 $0.10 $0.09 $0.06 $0.05 $0.03 $— $0.00 $-0.05 $(0.03) $(0.05) $-0.10 $(0.08) $(0.10) $(0.12) $-0.15 $-0.20 -125 bps -100 bps -75 bps -50 bps -25 bps 0 bps +25 bps +50 bps +75 bp
Slide 12: Appendix
SEVEN HILLS REALTY TRUST Appendix a eo Ph ... ) — = 2
Slide 13: Company Profile, Governance and Research Coverage
Company Profile, Governance and Research Coverage Management Equity Research Coverage Our manager, Tremont, is registered with the Securities and Exchange Commission, or SEC, as an JMP Securities investment adviser and is owned by RMR. As of June 30, 2023, RMR had approximately $36 billion of Chris
Slide 14: Loan Investment Details
Loan Investment Details (dollars in thousands) First mortgage loans as of June 30, 2023: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 1 Olmsted Falls, OH Multifamily 01/28/2021 $ 54
Slide 15: Loan Investment Details (Continued)
Loan Investment Details (Continued) (dollars in thousands) First mortgage loans as of June 30, 2023: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 15 Downers Grove, IL Office 12/09/2
Slide 16: Financial Summary
Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) June 30, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 81,806 $ 71,057 Restricted cash 238 10 Loans held for investment 629,525 669,929 Allowance for credit losses (1) (4,201) — Loans held for investment,
Slide 17: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations (amounts in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 INCOME FROM INVESTMENTS: Interest and related income $ 15,821 $ 8,869 $ 31,677 $ 18,448 Purchase discount accretion 1,047 1,636 2,23
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures (amounts in thousands, except per share data) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Net income $ 4,644 $ 7,803 $ 6,760 $ 5,176 $ 4,578 Incentive fees 192 — — — — Non-cash equity compensation expense 579 120 129
Slide 19: Non-GAAP Financial Measures (Continued)
Non-GAAP Financial Measures (Continued) We present Distributable Earnings, Distributable Earnings per common share, Adjusted Distributable Earnings, Adjusted Distributable Earnings per common share and Adjusted Book Value per common share, which are considered “non-GAAP financial measures” within th
Slide 20: Other Measures and Definitions
Other Measures and Definitions All In Yield: All In Yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. BMO Facility: Amounts advanced under the facility loan agreement and security agreement w
Slide 21: Warning Concerning Forward-Looking Statements
Warning Concerning Forward-Looking Statements This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These statements include words such as “believe”, “expect”, “anticipate
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