NEWTON, Mass.--(BUSINESS WIRE)--Tremont Mortgage Trust (Nasdaq: TRMT) today announced financial results for the quarter ended March 31, 2019.

David Blackman, President and Chief Executive Officer of TRMT, made the following statement:

"Tremont achieved three important milestones since its last quarterly earnings announcement. First, we fully committed the remainder of our IPO capital by closing two first mortgage whole loans for $47.5 million in aggregate commitments. Second, our manager, a wholly owned subsidiary of The RMR Group, committed $50.0 million in debt capital to us, which will allow us to originate approximately $180.0 million in new first mortgage whole loans while we explore other capital raising opportunities. Third, we increased our quarterly distribution rate from $0.11 per common share to $0.22 per common share.

Our origination momentum remains strong. Since the end of the first quarter, we closed an additional two first mortgage whole loans for $65.6 million in aggregate commitments, we have one whole loan under application for a $14.5 million commitment and we have a number of term sheets outstanding."

Results for the Quarter Ended March 31, 2019:

For the quarter ended March 31, 2019, net income was $0.6 million, or $0.18 per diluted share. For the quarter ended March 31, 2019, TRMT generated interest income of $3.0 million and incurred interest and related expenses of $1.5 million, which resulted in $1.5 million of income from investments, net.

Core Earnings for the quarter ended March 31, 2019 was $0.6 million, or $0.20 per diluted share.

Additional information and a reconciliation of net income determined in accordance with U.S. generally accepted accounting principles, or GAAP, to Core Earnings, a non-GAAP measure, for the quarters ended March 31, 2019 and 2018 appear later in this press release.

Recent Investment Activities:

In January 2019, TRMT closed a $24.6 million first mortgage whole loan to finance the acquisition of a 432 unit apartment community located in Rochester, NY at an as is loan to value ratio, or LTV, of approximately 74%. This loan requires the borrower to pay interest at a per annum floating rate of LIBOR plus a premium of 325 basis points. This loan was fully funded at closing and has a three year initial term with two, one year, extension options subject to the borrower meeting certain conditions.

In February 2019, TRMT closed a $22.9 million first mortgage whole loan to refinance a 96,000 square foot retail center located in Coppell, TX at an as is LTV of approximately 73%. This loan requires the borrower to pay interest at a per annum floating rate of LIBOR plus a premium of 350 basis points. This loan funded $20.0 million at closing, includes a future funding allowance of $2.9 million for building improvements and leasing capital and has a two year term with no extension options. As of March 31, 2019, TRMT had not advanced any of the future funding allowance.

During the first quarter of 2019, a loan application on an office portfolio located in Dallas, TX, expired. TRMT decided not to extend this application due to conditions uncovered during diligence that did not meet its investment criteria.

In May 2019, TRMT closed a $37.6 million first mortgage whole loan to finance the acquisition of a 932,000 square foot industrial facility in Barrington, NJ at an as is LTV of approximately 79%. This loan requires the borrower to pay interest at a per annum floating rate of LIBOR plus a premium of 350 basis points. This loan funded $34.9 million at closing, includes a future funding allowance of $2.7 million for building improvements and leasing capital and has a three year term with a one year extension option subject to the borrower meeting certain conditions.

Also in May 2019, TRMT closed a $28.0 million first mortgage whole loan to refinance a 220 unit apartment community in Houston, TX at an as is LTV of approximately 56%. This loan requires the borrower to pay interest at a per annum floating rate of LIBOR plus a premium of 350 basis points. This loan funded $27.5 million at closing, includes a future funding allowance of $0.5 million to cover interest shortfalls and has an 18 month term with two, one year, extension options subject to the borrower meeting certain conditions.

Additionally, TRMT entered into a loan application with a borrower for a first mortgage whole loan with a total commitment of $14.5 million to finance the acquisition of a retail property in Omaha, NE.

Recent Financing Activities:

As previously reported, in February 2019, TRMT entered into a credit agreement with its manager, Tremont Realty Advisors LLC, as lender, or the RMR Credit Agreement, pursuant to which, from time to time within six months following the date of the RMR Credit Agreement, TRMT could borrow up to $25.0 million in unsecured loans at a rate of 6.50% per annum. In May 2019, TRMT's manager increased its total commitment under the RMR Credit Agreement to $50.0 million. TRMT intends to use the proceeds of any borrowings under the RMR Credit Agreement principally to fund additional investments in first mortgage whole loans consistent with TRMT's business strategy and approved by its Board of Trustees. As of May 13, 2019, there was $14.2 million of outstanding borrowings under the RMR Credit Agreement.

In connection with the increase in commitment under the RMR Credit Agreement, also in May 2019, TRMT amended its master repurchase agreement with Citibank, N.A., or Citibank, to increase the maximum amount available for advancement under the master repurchase facility from $210.0 million to $250.0 million, with the additional advancements becoming available for borrowing under the facility if and as TRMT borrows under the RMR Credit Agreement or if and as TRMT receives proceeds from any public offering of its common shares or preferred equity, as further provided in the master repurchase facility agreement.

During the quarter ended March 31, 2019, Citibank advanced an aggregate of $31.9 million to TRMT under the master repurchase facility with respect to two first mortgage whole loans. This aggregate amount represented 75% of the aggregate outstanding principal of those two first mortgage whole loans. In May 2019, Citibank advanced an additional $48.2 million to TRMT under the facility with respect to the two first mortgage whole loans that closed in May 2019.

Distributions:

On February 21, 2019, TRMT paid a distribution of $0.11 per common share, or $350,000. This distribution was paid to shareholders of record as of the close of business on January 28, 2019.

On April 18, 2019, TRMT declared a distribution payable to common shareholders of record on April 29, 2019 of $0.22 per common share, or approximately $700,000. TRMT expects to pay this distribution on or about May 16, 2019.

TRMT is a real estate finance company that focuses primarily on originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate. TRMT is managed by Tremont Realty Advisors LLC, a Securities and Exchange Commission, or SEC, registered investment adviser and an indirect subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, MA.