Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q2 2024 Earnings Presentation
22 slides from Seven Hills Realty Trust's earnings presentation, Jul 29, 2024
Slide 1: Seven Hills Realty Trust Second Quarter 2024 Financial Results
Seven Hills Realty Trust Second Quarter 2024 Financial Results
Slide 2: Seven Hills Realty Trust Announces Second Quarter 2024 Results
Seven Hills Realty Trust Announces Second Quarter 2024 Results “SEVN reported strong second quarter Newton, MA (July 29, 2024). Seven Hills Realty Trust (Nasdaq: SEVN) today announced financial results for the quarter and six months ended June 30, 2024. results with distributable earnings per Distri
Slide 3: Company Snapshot
Company Snapshot (As of June 30, 2024, unless otherwise noted) Strong Loan Portfolio Conservative Leverage Integrated with RMR Real Estate Platform $652 million 1.5x 12% Floating rate Debt to equity ratio Ownership of SEVN first mortgage loan commitments $30 million $695 million ~$41 billion Average
Slide 4: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights (As of and for the three months ended June 30, 2024, unless otherwise noted) • Generated net income of $4.2 million, or $0.28 per diluted share and Distributable Earnings of $5.6 million, or $0.38 per Financial diluted share. Results • Quarterly distribution of $0.35 p
Slide 5: Second Quarter 2024 Financial Summary
Second Quarter 2024 Financial Summary (amounts in thousands, except per share data) Income Statement Balance Sheet Three Months Ended June 30, 2024 June 30, 2024 Income from loan investments, net $ 8,812 Loans held for investment, net $ 603,527 Revenue from real estate owned 568 Real estate owned, n
Slide 6: Loan Portfolio Summary
Loan Portfolio Summary Second Quarter As of (dollars in thousands) Originations June 30, 2024 Number of loans 2 22 Second Quarter 2024 Loan Portfolio Activity Average loan commitment $20,779 $29,645 (dollars in millions) Total loan commitments $41,557 $652,198 $628.9 $5.6 $17.3 $652.2 (1) Total Loan
Slide 7: Loan Portfolio Originations and Diversity
Loan Portfolio Originations and Diversity Geographic Region (1) Loan Originations by Quarter East (dollars in millions) 16% South 34% $60.5 $54.3 $8.9 Midwest $- 21% $47.0 $44.8 $3.2 $41.6 Total Loan Commitments West $8.6 $37.5 29% $- $5.6 Unfunded Commitments (1) Property Type Retail Hotel $24.4 $5
Slide 8: Loan Portfolio Credit Quality
Loan Portfolio Credit Quality Loan to Value (1) % of Portfolio Weighted Average LTV: 68% 30% 27% 17% 14% 12% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan Count 4 2 5 8 3 Risk Rating Distribution (1) % of Portfolio Weighted Average Risk Rating: 3.0 59% 24% 6% 11% —% Lower Risk (1) Average R
Slide 9: Reducing Office Loan Exposure
Reducing Office Loan Exposure Since the beginning of 2023, SEVN's office loan exposure has declined to 27% through diversified loan originations and repayments. Portfolio Composition (1) 2% 7% 8% 5% 11% 11% 14% 19% 19% 22% 18% 18% 17% 12% 10% 9% Hotel 31% Industrial 35% 33% 33% 35% 37% Retail Multif
Slide 10: Office Loans
Office Loans (1) • No office loans in urban or CBD markets in our portfolio. • Six office loans with a weighted average risk rating of 3.9 make up 27% of our portfolio as of June 30, 2024 compared to 36% as of June 30, 2023. • As of June 30, 2024, all of our borrowers had paid their debt service obl
Slide 11: Secured Financing Facilities
Secured Financing Facilities (As of June 30, 2024) Total/Weighted Citibank UBS BMO Wells Fargo Average (dollars in thousands) Maximum facility size $ 215,000 $ 205,000 $ 150,000 $ 125,000 $ 695,000 Principal balance $ 68,090 $ 167,581 $ 87,767 $ 95,551 $ 418,989 Unused capacity $ 146,910 $ 37,419 $
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, 2024, RMR had over $41 billion of real estate Chr
Slide 14: Loan Investment Details
Loan Investment Details (dollars in thousands) First mortgage loans as of June 30, 2024: 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, 2024: Committed Maximum Origination Principal Principal Coupon All in Maturity Maturity Risk # Location Property Type Date Amount Balance Rate Yield Date Date LTV Rating 14 Carlsbad, CA Office 10/27/2021 2
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity (As of June 30, 2024) Annualized Impact to Net Interest Income per Share $0.20 $0.16 $0.15 $0.13 $0.10 $0.10 $0.07 $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 17: Financial Summary
Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) June 30, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 69,603 $ 87,855 Loans held for investment 609,250 626,462 Allowance for credit losses (5,723) (4,376) Loans held for investment, net 603,527 622,086
Slide 18: 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, 2024 2023 2024 2023 INCOME FROM INVESTMENTS: Interest and related income $ 16,415 $ 15,821 $ 32,726 $ 31,677 Purchase discount accretion 782 1,047 1,927
Slide 19: 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, 2024 2024 2023 2023 2023 Net income $ 4,229 $ 5,233 $ 6,045 $ 7,473 $ 4,644 Non-cash equity compensation expense 497 336 151 271 579 Non-cash accretion
Slide 20: Non-GAAP Financial Measures (Continued)
Non-GAAP Financial Measures (Continued) We present Distributable Earnings, Distributable Earnings per common share and Adjusted Book Value per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not rep
Slide 21: 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 22: 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”, "could", “expect”, “a
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