TRMT - Earnings call transcript Q3 2019

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Operator

Good morning. Welcome to Tremont Mortgage Trust's Third Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded.

to of conference Marketing like Ranjitkar, to now Director Senior and would turn over the Christopher I Investor Relations. ahead. go Please

Christopher Ranjitkar

XXXX. Thank third Officer, will about our Doug David Lanois. everyone. provide morning, and Chief With details call and just quarter and joining for Blackman; President performance Debbie, Treasurer, Officer are Executive today. the me and a Thanks Chief our and In of business Financial us the on you, for good moment, they

I note is retransmission prohibited consent First, to of today's without written and like the recording would that prior company. conference strictly of call the the

statements November today's Also actual X, made based to results and that beliefs forward-looking as Reform to that meaning materially we of no from on or of the of The forward-looking differ of Private expectations publicly those today, may conference obligation call. company note release today's the conference forward-looking statements Act undertakes within securities revisions the are call contains revise XXXX, other project. XXXX results Tremont's Litigation Securities any in and the and These statements laws.

SEC, the cause and information filings any statements. are Investors factors place our reliance is Exchange to from undue with website, be can Additional upon contained forward-looking the concerning Commission, in differences those SEC's website. accessed could that or our which or Securities trmtreit.com cautioned not

now, call And to the I will turn David. over

David Blackman

the Welcome good to and earnings Christopher, you, Thank Trust. quarter Tremont call morning. third for Mortgage

estimates $X.XX announced quarter discuss Doug core greater we $X.XX. earnings in of consensus share, beat will per third detail, morning, this which As by

premiums $XXX,XXX. plus loans repaid earned had we nonrecurring totaling early, quarter, X $XX.X the million, of prepayment During

ended Bank, million quarter we've with with below We Texas proceeds, long-term paid our facility our leverage million. by totaling term loan down these fully our repurchase Citi target. With the $XX.X $XX.X and repaid Capital

capital to million has Tremont of originate bridge loans. As of $XX today, sufficient transitional

approximately potential opportunities billion we During $X.X loan commitments. the evaluated XX of with quarter,

X and outstanding $XX.X million in term loan negotiation applications approved application X commitments have we today, and sheets aggregate. of total $XXX for accepted under X diligence plus of As for million in

by Our expectation is quarter. loan to no further fully during fourth be repayments the year-end, barring invested

asset addition capital, portfolio. In loan focused on available our our we managing remain to investing

$X.XX paid declared August. of This consistent with our what per October, the by In per third earnings is quarter. supported Tremont share, of distribution in share we distribution core in $X.XX

We quarter to not as expect of earnings the to be third core invested. as a fully fourth down compared result quarter being

its support earnings believe our distribution our XXXX will at when January we during declare next XXXX. our maintaining our be However, current total Board we core level in to sufficient for distribution

I the balance our to will turn and sheet. review results Doug now Doug? financial to over call

Doug Lanois

David, Thank everyone. and good you, morning,

income Let's the statement. begin with of a review

a weighted Our This diluted with to $XX.X share The XXXX last per investment third million for year-over-year our XXXX. year. net improvement $X.X held diluted million weighted average compares quarter loss or $X.XX the largely $XXX.X million share. for the average from increase of loans attributed per to in income in $X.XX was in net period is same

partial our $X million loans net income related on for with $XX.X investments master quarter, us payments was from $X expenses quarter our reflects quarter repurchase was $X and million, and Interest incurred the XX million. Interest interest the income from approximately leaving quarter. which payments borrowings facility payable the totaling million, from note of quarter X investments the on and in repaid for full loans on interest

basis of XXXX, XXX on package, As presented September is points. weighted investments floor in our average LIBOR and plus as LIBOR supplemental our basis our points is all-in XX, our average XXX financial yield weighted

expense $XXX,XXX. G&A totaled expense. of to consistent of stock shared The Shared noncash services with reimbursement $XXX,XXX remainder and compensation for expected quarter the Our XXXX. services expenses expenses expense $XXX,XXX, levels include in amounted our are was of which levels G&A approximately third and the $XX,XXX

quarter fee its of we waive $XXX,XXX again announced period June $X.X agreed for for earnings Core the and manager XXXX, XX, savings average payments weighted partial the $X.XX million reminder, a our to that quarter loans. or loans for last As July full payments the share, which to diluted June includes quarter XX X, X XXXX, management amounted per from was quarter. from interest interest through which

cash third equivalents. Now we turning the of in cash end sheet. million At balance $X.X quarter, the to the had and

quarter million commitments. Our last a end at million, in of decrease unfunded $XX.X loans quarter. million from totaled $XXX.X quarter we had held for $XX.X At loan investment end,

down paid repurchase we master repayments, loan outstanding quarter, new the connection the with on million million. in balance facility our $XX.X During making the X $XXX.X

September in of capacity of $XX.X facility, existing million XX, pledged master which million is of our available repurchase we loans. As from $XX.X had

investment has capacity Citi Our approved maximum of originations committee. $XX repurchase approximately sufficient which agreement $XXX loan $XX.X million, creating new our capital a million of has been of for by million,

Our by fully invested expectation be to year-end. is

remarks. our prepared concludes this Operator,

take will sell-side questions from analysts. We research

Operator

comes The Instructions] question [Operator from Vandervliet with Brock UBS. first

Brock Vandervliet

line, now on that you Capital drawing Texas If, the from anticipate that, Do down. that's paid again? is

David Blackman

a that JFK our that loan funded term match was Hotel. Brock, the loan for

repaid, so note the Texas Capital And loan note. we in terminated the repaid that full when and

Doug Lanois

to accretive we to of would do time access I financing. when add, that good financing expect it's time type from a

Brock Vandervliet

it. Got

Okay.

sounds line, million, to you, extend options it other you've Citi like, it runway you're the bit? to got $XX exploring runway sounds fund like. Doug, that Are with So a

David Blackman

$XX working financial Well, capacity whilst we, our within lending covenants. million, the maximum is our Brock,

and equity just go need money. with along out additional So that. we can't We'll go to borrow

once we more really, have that. the with lending fund So $XX unless some million, don't we loans we any more have capacity

Brock Vandervliet

And it million million, total going close be $XX get you size, to sounds think assuming Okay. or book to your there, that we with that Is $XXX you're about reasonable? lastly, like thereabouts. just as

Doug Lanois

correct. that's Yes,

Operator

next Wang Citi. The question Kaili comes with from

Kaili Wang

expected now moved pipeline, being XQ. happen if talked I you you have want pipeline strong. to that delay guess, in XQ the of any of closing last but quarter there I the to origination into on the about terms incredibly in call know were might

David Blackman

very the so. XX or on been some to diligence either But We've closed million we're evaluating. we is separate hope we through transactions working continue the couple month still that strong. Kaili, or over on have and loans term have next probably to of a transactions here sheets $XXX of and get issued those pipeline in

Kaili Wang

loan And quarter Okay. the for your with do still will we be you activity and to it mentioned to XQ? able down EPS think what environment, given cover know dividend be this rate you I are interest quarter-over-quarter, but seeing XQ the

David Blackman

will full it for should when we the look per Board we when share adequate be because core we we quarter just funded fully fourth our at annual XXXX. support We be to our earnings, distribution down that think in the January haven't quarter. that the Yes, simply for maintaining in declare been $X.XX at

Kaili Wang

wondering And if in June? an you could the it. got on Omaha performance update of give the retail loan Okay, just originated you that in

Doug Lanois

look at our We the process. look loan the market, and that sponsor at we in look rating we quarterly the at So collateral performance.

included. are X, as and so, that still is of one a rated property That all performing stable And loans and our expected.

Operator

back our concludes President This for CEO, question-and-answer to to remarks. conference like closing would any and turn over session. Blackman, David I the

David Blackman

thank our earnings Thank you on for call. That today us today's concludes call. you, joining and Debbie,

Operator

for you Thank concluded. today's attending now has conference presentation. The

You may now disconnect.

Tremont Mortgage Trust (TRMT) 9 Nov 192019 Q3 Earnings call transcript