Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q1 2023 Earnings Presentation
20 slides from Seven Hills Realty Trust's earnings presentation, Apr 24, 2023
Slide 1: Seven Hills Realty Trust First Quarter 2023 Financial Results
Seven Hills Realty Trust First Quarter 2023 Financial Results Exhibit 99.2
Slide 2: Seven Hills Realty Trust Announces First Quarter 2023 Results
Q1 2023 2 Seven Hills Realty Trust Announces First Quarter 2023 Results "SEVN’s earnings continued to benefit from rising interest rates in the first quarter of 2023 and the credit quality of our diversified portfolio of floating rate loans remains sound with a weighted average risk rating of 2.9. W
Slide 3: First Quarter 2023 Highlights
Q1 2023 3 Financial Results Investment Activity Portfolio Liquidity & Capitalization • Generated net income of $7.8 million, or $0.53 per diluted share, and Adjusted Distributable Earnings of $5.8 million, or $0.39 per diluted share. • Quarterly distribution of $0.35 per common share, declared and p
Slide 4: First Quarter 2023 Results
Q1 2023 4 Adjusted Distributable Earnings per Common Share $0.24 $0.27 $0.37 $0.39 Q2 2022 Q3 2022 Q4 2022 Q1 2023 FINANCIAL RESULTS First Quarter 2023 Results Net income per common share $0.31 $0.35 $0.46 $0.53 The credit quality of SEVN's diversified floating rate portfolio and higher interest rat
Slide 5: First Quarter 2023 Portfolio Activity
Q1 2023 5 $678.6 $678.6 $626.7 $628.7 $1.8 $51.7 $49.0 $45.8 Q4 2022 Portfolio Fundings Repayments Q1 2023 Portfolio First Quarter 2023 Portfolio Activity (dollars in millions) Total Loan Commitments (dollars in thousands) As of March 31, 2023 Number of loans 25 Average loan commitment $26,979 Total
Slide 6: Portfolio Originations and Diversity
Q1 2023 6 Retail West 24% South 22% Midwest 37% East 17% Office 40% Multifamily 31% Retail 11% Industrial 18% Geographic Region (2) Property Type (2) (dollars in millions) Portfolio Originations and Diversity (1) Includes loans originated by TRMT and acquired by SEVN on September 30, 2021, as a resu
Slide 7: Office Loans
Q1 2023 7 Retail Office Risk Rating 2-3 31% Office Risk Rating 4 9% Other Property Types 60% Office Loans Total Portfolio (1) FINANCIAL RESULTS (1) Percentage of portfolio and office risk rating distribution based on principal balance of loans held for investment as of March 31, 2023. • No office lo
Slide 8: Portfolio Credit Quality
Q1 2023 8 Loan Count 16% 14% 26% 36% 8% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan to Value (1) % of Portfolio Portfolio Credit Quality Loan Count 4 2 7 10 2 1 5 16 3 0 2% 20% 63% 15% Lower Risk (1) Average Risk (2) Acceptable Risk (3) Higher Risk (4) Impaired/Loss Likely (5) Risk Rating
Slide 9: Secured Financing Facilities
Q1 2023 9 (1) The weighted average remaining maturity of the Master Repurchase Facilities is determined using the earlier of the underlying loan maturity date and the respective repurchase agreement maturity date. The weighted average remaining maturity of the BMO Facility is determined using the un
Slide 10: Interest Rate Sensitivity
Q1 2023 10 The above table illustrates the incremental impact on our annual income from investments, net, from hypothetical immediate changes in LIBOR and SOFR, taking into consideration our borrowers’ interest rate floors as of March 31, 2023. The results in the table above are based on our loan po
Slide 11: Appendix
Mba SEVEN HILLS Appendix
Slide 12: Management
Q1 2023 12 Management Our manager, Tremont, is registered with the SEC as an investment adviser and is owned by RMR. As of March 31, 2023, RMR had over $37 billion of real estate assets under management and the combined RMR managed companies had more than $16 billion of annual revenues, nearly 2,100
Slide 13: First mortgage loans
Q1 2023 13 First mortgage loans as of March 31, 2023: # Location Property Type Origination Date Committed Principal Amount Principal Balance (1) Coupon Rate All in Yield Maturity Date Maximum Maturity Date LTV Risk Rating 1 Olmsted Falls, OH Multifamily 01/28/2021 $ 54,575 $ 46,084 L + 4.00% L + 4.6
Slide 14: First mortgage loans (continued)
Q1 2023 14 First mortgage loans as of March 31, 2023: # Location Property Type Origination Date Committed Principal Amount Principal Balance (1) Coupon Rate All in Yield Maturity Date Maximum Maturity Date LTV Risk Rating 14 Downers Grove, IL Office 12/09/2021 23,530 23,530 L + 4.25% L + 4.57% 12/09
Slide 15: Financial Summary
Q1 2023 15 Financial Summary March 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 84,300 $ 71,057 Restricted cash 8 10 Loans held for investment 622,070 669,929 Allowance for credit losses (1) (4,135) — Loans held for investment, net 617,935 669,929 Accrued interest receivable 3,346 3
Slide 16: Condensed Consolidated Statements of Operations
Q1 2023 16 Condensed Consolidated Statements of Operations Three Months Ended March 31, 2023 2022 INCOME FROM INVESTMENTS: Interest and related income $ 15,856 $ 9,579 Purchase discount accretion 1,185 5,935 Less: interest and related expenses (7,694) (1,737) Income from investments, net 9,347 13,77
Slide 17: Distributable Earnings and Adjusted Distributable Earnings
Q1 2023 17 Three Months Ended March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Distributable Earnings and Adjusted Distributable Earnings Net income $ 7,803 $ 6,760 $ 5,176 $ 4,578 $ 11,126 Non-cash equity compensation expense 120 129 259 548 82 Non-cash accretion of
Slide 18: Non-GAAP Financial Measures and Certain Definitions
Q1 2023 18 ON -G AA P FI NA NC IA L ME AS UR ES A ND C ER TA IN D EF IN IT IO NS 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
Slide 19: Non-GAAP Financial Measures and Certain Definitions (continued)
Q1 2023 19 ON -G AA P FI NA NC IA L ME AS UR ES A ND C ER TA IN D EF IN IT IO NS 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 th
Slide 20: Forward-looking statements
Q1 2023 20 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”, “intend”, “plan”, “estimate”, “w
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