trmt-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-38199

Tremont Mortgage Trust

(Exact Name of Registrant as Specified in Its Charter)


Maryland			82-1719041
(State of Organization)			(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, MA 02458-1634

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code 617-796-8317

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Shares of Beneficial Interest

TRMT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided in Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of registrant's common shares of beneficial interest, $0.01 par value per share, outstanding as of July 26, 2021: 8,312,322

Table of Contents

TREMONT MORTGAGE TRUST

FORM 10-Q

June 30, 2021

INDEX


		Page
PART I	Financial Information
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets — June 30 , 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30 , 2021 and 2020	2
	Condensed Consolidated Statements of Shareholders’ Equity — Three and Six Months Ended June 30 , 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30 , 2021 and 2020	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
	Warning Concerning Forward-Looking Statements	31
PART II	Other Information	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 6.	Exhibits	42
	Signatures	43

References in this Quarterly Report on Form 10-Q to the Company, we, us or our include Tremont Mortgage Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

TREMONT MORTGAGE TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)


	June 30,		December 31,
	2021		2020
ASSETS
Cash and cash equivalents	$	8,273	$	10,521
Restricted cash	95		—
Loans held for investment, net	237,697		282,246
Accrued interest receivable	796		996

Prepaid expenses and other assets	303		419
Total assets	$	247,164	$	294,182

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, accrued liabilities and deposits	$	1,127	$	5,041
Master repurchase facility, net	155,562		200,233

Due to related persons	602		5
Total liabilities	157,291		205,279

Commitments and contingencies

Shareholders' equity:
Common shares of beneficial interest, $0.01 par value per share; 25,000,000 shares authorized; 8,312,322 and 8,302,911 shares issued and outstanding, respectively	83		83
Additional paid in capital	89,288		89,160
Cumulative net income	12,461		10,788
Cumulative distributions	(11,959)		(11,128)
Total shareholders’ equity	89,873		88,903
Total liabilities and shareholders' equity	$	247,164	$	294,182

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

TREMONT MORTGAGE TRUST

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
INCOME FROM INVESTMENTS:
Interest income from investments	$	4,148	$	4,496	$	8,634	$	8,780
Less: interest and related expenses	(988)		(1,368)		(2,123)		(3,125)
Income from investments, net	3,160		3,128		6,511		5,655

OTHER EXPENSES:

Base management fees	341		—		682		—
Management incentive fees	—		—		620		—
General and administrative expenses	685		524		1,328		1,064
Reimbursement of shared services expenses	206		242		344		563
Transaction related expenses	1,822		—		1,849		—
Total expenses	3,054		766		4,823		1,627

Income before income tax expense	106		2,362		1,688