May 20, 2022
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LTC reports dip in Q4 earnings

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Westlake Village-based real estate investment trust LTC Properties on Feb. 17 reported a 27% year-to-year decline in fourth quarter net income for 2021, in financial results released after the market closed on Feb. 17.

The company’s net income was $12.7 million, or 32 cents per diluted share, in the fourth quarter of 2021, down from $17.5 million, or 45 cents per diluted share, a year earlier.

LTC owns properties in the health care and senior living industries. Compared to the same quarter in 2020, the company said its fourth quarter 2021 results were impacted by higher interest income from mortgage loans resulting from mortgage loan originations and higher income from unconsolidated joint ventures due to mezzanine loan funding.

The company also noted an impairment loss of $3 million in the fourth quarter of 2020 related to a memory care community in Colorado that was operated by Chicago-based Senior Lifestyle, higher provisions for credit losses because of mortgage loan and working capital originations during the fourth quarter of 2021, and higher general and administrative expenses because of higher incentive compensation and higher non-cash compensation charges.

LTC also said the latest quarterly results were impacted by lower rental income related to the transition of 11 properties previously leased to Senior Care Centers and Senior Care’s parent company, Abri Health Services, to HMG Healthcare; lower rental income related to the releasing of the 18 properties previously leased to Senior Lifestyle Corp.; and abated and deferred rent, partially offset by annual rent escalations and capital improvement funding.

“Both transitions are expected to generate additional rental income in 2022,” the financial report states.

During the fourth quarter of 2021, LTC originated a $52.5 million mortgage loan secured by 13 assisted living communities with an aggregate of more than 520 housing units and originated a $27 million mortgage loan secured by a 189-bed skilled nursing center in Louisiana with a regional operator new to LTC. It also originated a $16.7 mortgage loan secured by a 68-unit assisted living and memory care community in Florida with a regional operator new to LTC.

LTC has 193 properties in 28 states with 35 operating partners consisting of real property investments, first mortgages, mezzanine loans, working capital notes and unconsolidated joint ventures. The company’s stock closed at $34.05 on Feb. 17, before the earnings announcement.