Seven Hills Realty Trust · NASDAQ:SEVN
Seven Hills Realty Trust — Q1 2024 Earnings Presentation
22 slides from Seven Hills Realty Trust's earnings presentation, Apr 29, 2024
Slide 1: Seven Hills Realty Trust First Quarter 2024 Financial Results
Seven Hills Realty Trust First Quarter 2024 Financial Results
Slide 2: Seven Hills Realty Trust Announces First Quarter 2024 Results
Seven Hills Realty Trust Announces First Quarter 2024 Results "SEVN reported strong first quarter Newton, MA (April 29, 2024). Seven Hills Realty Trust (Nasdaq: SEVN) today announced financial results for the quarter ended March 31, 2024. results highlighted by distributable earnings per share once
Slide 3: Company Snapshot
Company Snapshot (As of March 31, 2024, unless otherwise noted) Strong Loan Portfolio Conservative Leverage Integrated with RMR Real Estate Platform $629 million 1.6x 12% Floating rate Debt to equity ratio Ownership of SEVN first mortgage loan commitments $30 million $695 million ~$41 billion Averag
Slide 4: First Quarter 2024 Highlights
First Quarter 2024 Highlights (As of and for the three months ended March 31, 2024, unless otherwise noted) • Generated net income of $5.2 million, or $0.35 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: First Quarter 2024 Financial Summary
First Quarter 2024 Financial Summary (amounts in thousands, except per share data) Income Statement Balance Sheet Three Months Ended March 31, 2024 March 31, 2024 Income from loan investments, net $ 8,783 Loans held for investment, net $ 583,486 Revenue from real estate owned 579 Real estate owned,
Slide 6: Loan Portfolio Summary
Loan Portfolio Summary As of (dollars in thousands) March 31, 2024 Number of loans 21 First Quarter 2024 Loan Portfolio Activity Average loan commitment $29,947 (dollars in millions) Total loan commitments $628,891 $670.3 $628.9 Total Loan Commitments Unfunded loan commitments $38,259 $40.4 $40.4 $1
Slide 7: Loan Portfolio Originations and Diversity
Loan Portfolio Originations and Diversity Geographic Region (1) Loan Originations by Quarter East (dollars in millions) 14% South 35% $95.8 Midwest 22% $4.6 West 29% $60.5 $54.3 Total Loan Commitments (1) $8.9 $- Unfunded Commitments Property Type Retail $47.0 Hotel $37.5 $44.8 $91.2 8% $8.6 $- $3.2
Slide 8: Loan Portfolio Credit Quality
Loan Portfolio Credit Quality Loan to Value (1) % of Portfolio Weighted Average LTV: 68% 28% 28% 16% 15% 13% 30% - 60% 61% - 65% 66% - 70% 71% - 75% 76% - 80% Loan Count 4 2 5 7 3 Risk Rating Distribution (1) % of Portfolio Weighted Average 71% Risk Rating: 3.0 14% 15% —% —% 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 28% through diversified loan originations and repayments. Portfolio Composition (1) 2% 7% 8% 11% 11% 14% 19% 19% 18% 18% 17% 12% 10% Hotel 31% Industrial 35% 33% 33% 35% Retail Multifamily Office 4
Slide 10: Office Loans
Office Loans (1) • No office loans in urban or CBD markets in our portfolio. • In March 2024, we received the repayment of one office loan for $15.8 million. • Six office loans with a weighted average risk rating of 3.5 make up 28% of our portfolio as of March 31, 2024 compared to 40% as of March 31
Slide 11: Secured Financing Facilities
Secured Financing Facilities (As of March 31, 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 $ 57,893 $ 181,381 $ 87,767 $ 95,551 $ 422,592 Unused capacity $ 157,107 $ 23,619 $
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 March 31, 2024, RMR had over $41 billion of real Chris Mul
Slide 14: Loan Investment Details
Loan Investment Details (dollars in thousands) First mortgage loans as of March 31, 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 $ 5
Slide 15: Loan Investment Details (Continued)
Loan Investment Details (Continued) (dollars in thousands) First mortgage loans as of March 31, 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
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity (As of March 31, 2024) Annualized Impact to Net Interest Income per Share $0.20 $0.15 $0.14 $0.11 $0.10 $0.09 $0.06 $0.05 $0.03 $— $0.00 $(0.02) $-0.05 $(0.05) $(0.06) $-0.10 $(0.08) $(0.10) $-0.15 $-0.20 -125 bps -100 bps -75 bps -50 bps -25 bps 0 bps +25 bps +50 bps +75 b
Slide 17: Financial Summary
Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 93,298 $ 87,855 Loans held for investment 588,635 626,462 Allowance for credit losses (5,149) (4,376) Loans held for investment, net 583,486 622,086
Slide 18: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations (amounts in thousands, except per share data) Three Months Ended March 31, 2024 2023 INCOME FROM INVESTMENTS: Interest and related income $ 16,311 $ 15,856 Purchase discount accretion 1,145 1,185 Less: interest and related expenses (8,673) (7,694) Inco
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures (amounts in thousands, except per share data) Three Months Ended March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 Net income $ 5,233 $ 6,045 $ 7,473 $ 4,644 $ 7,803 Non-cash equity compensation expense 336 151 271 579 120 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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