Community Healthcare Trust (CHCT) Financials

Community Healthcare Trust (NYSE: CHCT) has displayed several financial trends over the last four years based on the quarterly financial statements from Q3 2022 through Q4 2024.

Positive Points:

• Consistent growth in total assets, increasing from approximately $811.9 million in Q3 2022 to near $982.7 million by Q1 2024, indicating asset expansion.
• Stable levels of depreciation and amortization expenses with depreciation around $9-11 million quarterly, reflecting steady property and equipment utilization.
• Steady non-interest income, consistently in the $25 million to $29 million range quarterly, providing diversification from interest-based income.
• Generally positive consolidated net income in Q3 and Q4 of recent years (e.g., $4.57 million in Q4 2023 and $1.83 million in Q4 2024), showing profitability improvement after some previous losses.
• Operating cash flow remains strong, with net cash from continuing operating activities around $12-17 million each quarter, supporting ongoing operations and investment.
• Issuance of debt capital has supported investment and operations, with large issuances such as $87 million in Q4 2024, strengthening liquidity availability.
• Dividends paid have been stable or growing slightly, indicating management confidence in steady cash flow (e.g., dividends per share increased from about $0.44 in 2022 to $0.46 in 2024).
• Total common equity has grown from roughly $478 million in Q3 2022 to about $511 million by Q1 2024, indicating strengthened shareholder equity base.

Neutral Points:

• Net interest income is often negative or close to zero, resulting from higher interest expenses relative to interest income, which is typical in REITs focusing on real estate investments financed via debt.
• Total liabilities have increased moderately from $333 million in Q3 2022 to approximately $471 million in Q1 2024, tracking growth in long-term debt to fund property assets.

Negative Points:

• Volatile net income with some quarters showing losses, particularly in early 2023 (e.g., Q1 2023 net loss of over $6.9 million), which may concern investors regarding earnings stability.
• Substantial and ongoing investments expenditures, indicated by large negative cash flows from investing activities sometimes exceeding $30 million quarterly, which can strain liquidity if not matched by financing.
• High interest expense on long-term debt, consistently over $4 million to $6 million per quarter, creating pressure on net interest margin and earnings.
• Other operating expenses and property & liability insurance claims remain significant, with total non-interest expenses around $16-21 million quarterly, impacting profitability.

Summary: Over the last four years, Community Healthcare Trust has steadily expanded its asset base and equity capital while maintaining consistent operating cash flows and dividend payments. However, its profitability has faced challenges due to high interest expenses and significant operating costs, leading to some quarters of net loss. The company’s reliance on debt financing and large investing outlays highlight the importance of monitoring interest costs and capital allocation efficiency. Overall, CHCT shows signs of recovery and growth, but investors should be cautious about earnings volatility and operating leverage risks.