Tremont Mortgage Trust (NASDAQ:TRMT) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 10:00 am ET


Tremont Mortgage Trust (NASDAQ:TRMT) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Tremont Mortgage Trust's Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

At this time, I'd like to turn the conference over to Christopher Ranjitkar, Senior Director of Marketing and Corporate Communications. Please go ahead.

Christopher Ranjitkar

Thank you, and good morning, everyone. Thanks for joining us today. With me on the call are President and Chief Executive Officer, David Blackman; and Chief Financial Officer and Treasurer, Doug Lanois. In just a moment, they will provide details about our business and our performance for the second quarter of 2020. We will then open the call to a question-and-answer session with sell-side analysts.

First, I would like to note that the recording and retransmission of today's conference call is strictly prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Tremont's beliefs and expectations as of today, Tuesday, August 4, 2020, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission or SEC, which can be accessed from our website,, or the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements.

In addition, we will be discussing non-GAAP numbers during this call, including core earnings. For a reconciliation of net income determined in accordance with the GAAP to core earnings, please see this morning's quarterly earnings release, which is available on our website.

I will now turn the call over to David. David?

David Blackman

Thanks, Christopher, and good morning. Welcome to the second quarter earnings call for Tremont Mortgage Trust. As we discussed last quarter, TRMT's capital is fully committed, which eliminated our capacity to originate new loans during the second quarter. As a result, our focus was on asset managing our loans amidst the impact that a partially closed economy had on many of our borrowers.

With that said, I'm pleased to report all of our borrowers are current on debt service payments. Recall that during the first quarter, we reported one nonpayment from a borrower that was quickly resolved. Throughout the rest of the quarter and including July, payments from borrowers have been paid as expected.

We do have some borrowers experience various levels of distress from tenants that are not able to operate and require rent relief. For the trailing 3 months ended June 30, 2020, we had 6 loans where the income generated from the tenants was not sufficient to pay operating expenses and debt service. However, 4 of the 6 loans are structured with reserves sufficient to meet these shortfalls. The 2 loans without reserves are secured