Company Quick10K Filing
Community Healthcare Trust
Price43.16 EPS0
Shares20 P/E141
MCap871 P/FCF38
Net Debt214 EBIT13
TEV1,084 TEV/EBIT84
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-04
10-K 2020-12-31 Filed 2021-02-16
10-Q 2020-09-30 Filed 2020-11-03
10-Q 2020-06-30 Filed 2020-08-04
10-Q 2020-03-31 Filed 2020-05-05
10-K 2019-12-31 Filed 2020-02-25
10-Q 2019-09-30 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-02-26
10-Q 2018-09-30 Filed 2018-11-06
10-Q 2018-06-30 Filed 2018-08-07
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-09
10-K 2016-12-31 Filed 2017-02-23
10-Q 2016-09-30 Filed 2016-11-10
10-Q 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-05-12
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-12
10-Q 2015-06-30 Filed 2015-08-13
8-K 2020-11-30
8-K 2020-11-03
8-K 2020-08-04
8-K 2020-05-07
8-K 2020-05-05
8-K 2020-02-25
8-K 2020-01-03
8-K 2019-11-05
8-K 2019-11-05
8-K 2019-11-05
8-K 2019-08-06
8-K 2019-05-16
8-K 2019-05-07
8-K 2019-05-02
8-K 2019-04-01
8-K 2019-03-11
8-K 2019-02-26
8-K 2019-01-03
8-K 2018-11-06
8-K 2018-08-07
8-K 2018-08-07
8-K 2018-05-18
8-K 2018-05-08
8-K 2018-04-02
8-K 2018-02-22
8-K 2018-01-23
8-K 2018-01-02

CHCT 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1. Summary of Significant Accounting Policies
Note 2. Real Estate Properties
Note 3. Real Estate Leases
Note 4. Real Estate Acquisitions and Dispositions
Note 5. Debt, Net
Note 6. Derivative Financial Instruments
Note 7. Stockholders' Equity
Note 8. Net Income per Common Share
Note 9. Incentive Plan
Note 10. Other Assets, Net
Note 11. Other Liabilities, Net
Note 12. Fair Value of Financial Instruments
Note 13. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 chct-20210331xexhibitx311.htm
EX-31.2 chct-20210331xexhibitx312.htm
EX-32.1 chct-20210331xexhibitx321.htm

Community Healthcare Trust Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
0.60.50.40.20.10.02013201520172020
Assets, Equity
0.10.10.10.00.00.02016201720182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12013201520172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO
Commission file number: 001-37401
Community Healthcare Trust Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Maryland
46-5212033
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
3326 Aspen Grove Drive
Suite 150
Franklin, Tennessee 37067
(Address of Principal Executive Offices) (Zip Code)
(615771-3052
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading SymbolName of each exchange on which registered
Common stock, $0.01 par value per shareCHCTNew York Stock Exchange
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 (§232.405 of this chapter) 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
Emerging-growth company
Non-accelerated filer
Smaller reporting 
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 pursuant to Section13(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
The Registrant had 24,417,124 shares of Common Stock, $0.01 par value per share, outstanding as of April 30, 2021.
1


COMMUNITY HEALTHCARE TRUST INCORPORATED
FORM 10-Q
March 31, 2021
TABLE OF CONTENTS
Page
2


PART I. FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
March 31, 2021December 31, 2020
ASSETS
Real estate properties
Land and land improvements
$91,428 $83,714 
Buildings, improvements, and lease intangibles
705,224 651,398 
Personal property
218 247 
Total real estate properties
796,870 735,359 
Less accumulated depreciation
(109,908)(102,899)
Total real estate properties, net
686,962 632,460 
Cash and cash equivalents
5,605 2,483 
Restricted cash
398 409 
Other assets, net
42,346 33,050 
Total assets
$735,311 $668,402 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net
$260,446 $212,374 
Accounts payable and accrued liabilities
6,526 5,743 
Other liabilities, net
18,253 20,369 
Total liabilities
285,225 238,486 
Commitments and contingencies


Stockholders' Equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding
  
Common stock, $0.01 par value; 450,000,000 shares authorized; 24,417,124 and 23,888,090 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively
244 239 
Additional paid-in capital
571,781 550,391 
Cumulative net income
41,946 36,631 
Accumulated other comprehensive loss
(8,111)(11,846)
Cumulative dividends
(155,774)(145,499)
Total stockholders’ equity
450,086 429,916 
Total liabilities and stockholders' equity
$735,311 $668,402 

See accompanying notes to the condensed consolidated financial statements.
3


COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Unaudited; Dollars in thousands, except per share amounts)
Three Months Ended
March 31,
20212020
REVENUES
Rental income
$20,780 $17,428 
Other operating interest
615 508 
21,395 17,936 
EXPENSES
Property operating
3,729 3,343 
General and administrative
2,859 2,192 
Depreciation and amortization
7,225 6,059 
13,813 11,594 
INCOME FROM OPERATIONS
7,582 6,342 
Interest expense
(2,229)(2,249)
Deferred income tax expense
(39) 
Interest and other income, net
1 7 
NET INCOME
$5,315 $4,100 
NET INCOME PER COMMON SHARE:
Net income per common share – Basic
$0.21 $0.18 
Net income per common share – Diluted
$0.21 $0.18 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC
22,809,222 20,734,618 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED
22,809,222 20,734,618 

See accompanying notes to the condensed consolidated financial statements.
4


COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Unaudited; Dollars in thousands)
Three Months Ended
March 31,
20212020
NET INCOME
$5,315 $4,100 
Other comprehensive income (loss):
Increase (decrease) in fair value of cash flow hedges
2,803 (8,875)
Reclassification for amounts recognized as interest expense
932 257 
Total other comprehensive income (loss)
3,735 (8,618)
COMPREHENSIVE INCOME (LOSS)
$9,050 $(4,518)

See accompanying notes to the condensed consolidated financial statements.

5


COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(Unaudited; Dollars in thousands, except per share amounts)
Preferred Stock
Common Stock
Additional Paid in Capital
Cumulative Net Income
Accumulated Other Comprehensive (Loss) Income
Cumulative Dividends
Total Stockholders' Equity
Shares
Amount
Shares
Amount
Balance at December 31, 2020 $ 23,888,090 $239 $550,391 $36,631 $(11,846)$(145,499)$429,916 
Issuance of common stock, net of issuance costs— — 435,272 4 19,841 — — — 19,845 
Stock-based compensation— — 93,762 1 1,549 — — — 1,550 
Unrecognized gain on cash flow hedges— — — — — — 2,803 — 2,803 
Reclassification adjustment for losses included in net income (interest expense)— — — — — — 932 — 932 
Net income— — — — — 5,315 — — 5,315 
Dividends to common stockholders ($0.4275 per share)
— — — — — — — (10,275)(10,275)
Balance at March 31, 2021 $ 24,417,124 $244 $571,781 $41,946 $(8,111)$(155,774)$450,086 
Balance at December 31, 2019 $ 21,410,578 $214 $447,916 $17,554 $(4,808)$(107,465)$353,411 
Issuance of common stock, net of issuance costs— — 610,786 6 26,896 — — — 26,902 
Stock-based compensation— — 103,905 1 1,012 — — — 1,013 
Unrecognized loss on cash flow hedges— — — — — — (8,875)— (8,875)
Reclassification adjustment for losses included in net income (interest expense)— — — — — — 257 — 257 
Net income— — — — — 4,100 — — 4,100 
Dividends to common stockholders ($0.4175 per share)
— — — — — — — (9,033)(9,033)
Balance at March 31, 2020 $ 22,125,269 $221 $475,824 $21,654 0$(13,426)$(116,498)$367,775 


See accompanying notes to the condensed consolidated financial statements.
6


COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; Dollars in thousands)
Three Months Ended March 31,
20212020
OPERATING ACTIVITIES
Net income
$5,315 $4,100 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
7,225 6,059 
Other amortization
229 127 
Stock-based compensation
1,550 1,013 
Straight-line rent receivable
(838)(878)
Deferred income tax expense
39  
Changes in operating assets and liabilities:
Other assets
(291)(235)
Accounts payable and accrued liabilities
(820)396 
Other liabilities
1,084 (329)
Net cash provided by operating activities
13,493 10,253 
INVESTING ACTIVITIES
Acquisitions of real estate
(60,007)(36,384)
        Acquisition and funding of notes receivable
(7,110)(1,750)
Proceeds from the repayment of notes receivable
890 3,300 
Capital expenditures on existing real estate properties
(1,045)(673)
Net cash used in investing activities
(67,272)(35,507)
FINANCING ACTIVITIES
Net (repayments) borrowings on revolving credit facility
(26,000)9,000 
Term loan borrowings
125,000  
Term loan repayments(50,000) 
Mortgage note repayments
(29)(27)
Dividends paid
(10,275)(9,033)
Proceeds from issuance of common stock
19,919 26,928 
Equity issuance costs
(76)(29)
Debt issuance costs
(1,649) 
Net cash provided by financing activities
56,890 26,839 
Increase in cash and cash equivalents and restricted cash
3,111 1,585 
Cash and cash equivalents and restricted cash, beginning of period
2,892 2,023 
Cash and cash equivalents and restricted cash, end of period
$6,003 $3,608 
Supplemental Cash Flow Information:
Interest paid
$2,105 $1,876 
Invoices accrued for construction, tenant improvement and other capitalized costs
$1,591 $1,165 
Reclassification of registration statement costs incurred in prior year to equity issuance costs
$81 $32 
Leasing commission accrued
$ $125 
Increase (decrease) in fair value of cash flow hedges
$2,803 $(8,875)
Income taxes paid
$25 $2 
See accompanying notes to the condensed consolidated financial statements.
7


COMMUNITY HEALTHCARE TRUST INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021
(Unaudited)

Note 1. Summary of Significant Accounting Policies

Business Overview
Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2021, the Company had investments of approximately $801.0 million in 147 real estate properties (including a portion of one property accounted for as a financing lease with a gross amount totaling approximately $3.0 million and one property classified as held for sale with a gross amount totaling approximately $1.1 million). The properties are located in 33 states, totaling approximately 3.2 million square feet in the aggregate and were approximately 89.1% leased at March 31, 2021 with a weighted average remaining lease term of approximately 8.3 years. Any references to square footage, property count, or occupancy percentages, and any amounts derived from these values in these notes to the condensed consolidated financial statements, are outside the scope of our independent registered public accounting firm's review.

COVID-19 Pandemic
The world was, and continues to be, impacted by the novel coronavirus (COVID-19) pandemic. COVID-19 and measures to prevent its spread impacted many healthcare providers, including some of our tenants. During 2020, some of them were not seeing patients, others saw a reduced number of elective procedures and/or patient visits, while others experienced limited impact, or even saw improved cash flows from either increases in census or government funding.

As a result of the pandemic, the Company entered into deferral agreements with 18 tenants, with deferrals representing less than one percent of our annualized rent in the aggregate. Amounts due under the deferral agreements were generally repaid during 2020, however, at March 31, 2021, there was approximately $51,000 remaining to be billed and paid during the remainder of 2021.

Basis of Presentation
The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2021. All material intercompany accounts and transactions have been eliminated.

Use of Estimates in the Condensed Consolidated Financial Statements
Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates.

8

Notes to Condensed Consolidated Financial Statements - Continued
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash consists of amounts held by the lender of our mortgage note payable to provide for future real estate tax, insurance expenditures and tenant improvements related to one property. The carrying amount approximates fair value due to the short term maturity of these investments. The following table provides a reconciliation of cash and cash equivalents and restricted cash:
 Balance as of March 31,
(Dollars in thousands)20212020
Cash and cash equivalents$5,605 $3,326 
Restricted cash398 282 
Cash, cash equivalents and restricted cash$6,003 $3,608 

Income Taxes
The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). The Company and one subsidiary have also elected for that subsidiary to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has recorded income tax expense or benefit for the TRS to the extent applicable. The Company also evaluates the realizability of its deferred tax assets and will record valuation allowances if it is determined that more likely than not the asset will not be recovered. The Company intends at all times to qualify as a REIT under the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a REIT.

New Accounting Pronouncements
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.


9

Notes to Condensed Consolidated Financial Statements - Continued
Note 2. Real Estate Properties

As of March 31, 2021, we had investments of approximately $801.0 million in 147 real estate properties (including a portion of one property accounted for as a financing lease with a gross amount totaling approximately $3.0 million and one property classified as held for sale with a gross amount totaling approximately $1.1 million). The Company's investments are diversified by property type, geographic location, and tenant as shown in the following tables:
Property Type# of PropertiesGross Investment
(in thousands)
Medical Office Building55 $256,204 
Acute Inpatient Behavioral5 130,257 
Inpatient Rehabilitation Facilities6 127,676 
Specialty Centers34 106,054 
Physician Clinics28 80,886 
Surgical Centers and Hospitals10 54,071 
Behavioral Specialty Facilities8 30,945 
Long-term Acute Care Hospitals1 14,937 
Total147 $801,030 

State# of PropertiesGross Investment
(in thousands)
Texas14 $131,131 
Illinois16 119,233 
Florida14 65,649 
Ohio18 63,188 
Massachusetts2 35,298 
All Others (Less than 4%)83 386,531 
Total147 $801,030 

Primary Tenant# of PropertiesGross Investment
(in thousands)
US Healthvest3 $77,964 
Everest Rehabilitation3 57,100 
Genesis Care9 38,450 
Summit Behavioral Healthcare1 25,155 
All Others131 602,361 
Total147 $801,030 

Note 3. Real Estate Leases

The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2039. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and may also include additional rent, which may include the reimbursement of taxes (including property taxes), insurance, maintenance and other operating costs associated with the leased property.
10

Notes to Condensed Consolidated Financial Statements - Continued

Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. Some leases also allow the lessee to renew or extend their lease term or in some cases terminate their lease, based on conditions provided in the lease.

Future minimum lease payments under the non-cancelable operating leases due to the Company for the years ending December 31, as of March 31, 2021, are as follows (in thousands):
2021 (nine months ending December 31)$54,162 
202269,078 
202364,608 
202461,072 
202556,774 
2026 and thereafter365,330 
$671,024 

Straight-line rental income
Rental income is recognized as earned over the life of the lease agreement on a straight-line basis when collection of rental payments over the term of the lease is probable. Straight-line rent included in rental income was approximately $0.8 million and $0.9 million, respectively, for the three months ended March 31, 2021 and 2020.


Note 4. Real Estate Acquisitions and Dispositions

2021 Real Estate Acquisitions
During the first quarter of 2021, the Company acquired six real estate properties. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations through 2036. Amounts reflected in revenues and net income for these properties for the three months ended March 31, 2021 were approximately $0.7 million and $0.4 million, respectively, and transaction costs totaling approximately $0.2 million were capitalized relating to these property acquisitions. Concurrent with the acquisitions, the Company entered into a $6.0 million term loan and a revolver loan up to $4.0 million with the tenant on two of these properties.
Location
Property
Type (1)
Date
Acquired
Purchase
Price
Cash
Consideration
Real EstateOtherSquare Footage
(000's)(000's)(000's)(000's)
Brenham, TXPC01/19/21$5,029 $5,034 $5,072 $(38)37,354 
Lexington, VAPC01/25/213,101 3,142 3,151 (9)15,820 
Toledo, OHBSF02/05/214,825 4,893 4,893  13,290 
Hudson, OHBSF02/05/214,825 4,892 4,892  13,290 
Oklahoma City, OKIRF03/01/2121,000 21,025 21,025  39,637 
Keller, TXIRF03/01/2121,000 21,021 21,021  39,761 
$59,780 $60,007 $60,054 $(47)159,152 
(1) PC - Physician Clinic; BSF - Behavioral Specialty Facility; IRF - Inpatient Rehabilitation Facility
11

Notes to Condensed Consolidated Financial Statements - Continued
The following table summarizes the relative fair values of the assets acquired and liabilities assumed in the property acquisitions for the three months ended March 31, 2021.
Relative
Fair Value
Estimated
Useful Life
(in thousands)(in years)
Land and land improvements$7,813 13.2
Building and building improvements49,630 46.4
Intangibles:
At-market lease intangibles2,611 4.2
Total intangibles2,611 
Accounts payable, accrued liabilities and other liabilities assumed(12)
Prorated rent, interest and operating expense reimbursement amounts collected(35)
Total cash consideration$60,007 

Asset Held for Sale
Pursuant to the exercise of a purchase option by a tenant, the Company entered into a sales contract to dispose of a medical office building in Haleyville, Alabama during the first quarter of 2021. Assets held for sale totaling approximately $1.0 million are included in Other assets, net and Liabilities held for sale totaling $35,000 are included in Other liabilities, net on the Condensed Consolidated Balance Sheet as of March 31, 2021.

Note 5. Debt, net

The table below details the Company's debt as of March 31, 2021 and December 31, 2020.
Balance as of
(Dollars in thousands)March 31, 2021December 31, 2020Maturity Dates
Revolving Credit Facility$7,000 $33,000 3/26
A-1 Term Loan, net 49,908 n/a
A-2 Term Loan, net49,749 49,828 3/24
A-3 Term Loan, net74,396 74,524 3/26
A-4 Term Loan, net124,211  3/28
Mortgage Note Payable, net5,090 5,114 5/24
$260,446 $212,374 

On March 19, 2021, Community Healthcare Trust Incorporated, as borrower, entered into a third amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with a syndicate of lenders, under which Truist Bank serves as administrative agent. The Third Amended and Restated Credit Agreement amends and restates the Second Amended and Restated Credit Agreement dated as of March 29, 2017, by and among the Company’s operating partnership, Community Healthcare OP, LP, several banks and financial institutions party thereto as lenders (collectively, the “Lenders”), and SunTrust Bank (the predecessor in interest to Truist Bank), as the administrative agent. The Third Amended and Restated Credit Agreement allows the Company to borrow, through the accordion feature, up to $600.0 million, including the ability to add and fund incremental term loans (the “Credit Facility”). The Third Amended and Restated Credit Agreement extended the revolving credit facility (the "Revolving Credit Facility") maturity to March 19, 2026, removed collateral security provisions, repaid the five-year term loan facility in the aggregate principal amount of $50.0 million (the "A-1 Term Loan") which was set to mature
12

Notes to Condensed Consolidated Financial Statements - Continued
on March 29, 2022, entered into a new seven-year term loan facility in the aggregate principal amount of $125.0 million (the "A-4 Term Loan"), which matures on March 19, 2028, provides the Company the ability to apply lower margins to its annual interest rate after it obtains an investment grade rating of BBB-/Baa3 (or the equivalent) from a rating agency; and modified its debt covenants.

The Credit Facility, as amended, provides for a $150.0 million Revolving Credit Facility and $250.0 million in term loans (the "Term Loans"). The Credit Facility, through the accordion feature, allows borrowings up to a total of $600.0 million including the ability to add and fund additional term loans. The Revolving Credit Facility matures on March 19, 2026 and includes one 12-month option to extend the maturity date of the Revolving Credit Facility, subject to the satisfaction of certain conditions. The Term Loans include a seven-year term loan facility in the aggregate principal amount of $50.0 million (the "A-2 Term Loan"), which matures on March 29, 2024, a seven-year term loan facility in the aggregate principal amount of $75.0 million (the "A-3 Term Loan"), which matures on March 29, 2026, and the A-4 Term Loan in the aggregate principal amount of $125.0 million, which matures on March 19, 2028.

Amounts outstanding under the Revolving Credit Facility, as amended, bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 1.25% to 1.90% or (ii) a base rate plus 0.25% to 0.90% in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.20% of the amount of the unused portion of the Revolving Credit Facility if amounts borrowed are greater than 33.3% of the borrowing capacity under the Revolving Credit Facility and 0.25% of the unused portion of the Revolving Credit Facility if amounts borrowed are less than or equal to 33.3% of the borrowing capacity under the Revolving Credit Facility. The Company had $7.0 million outstanding under the Revolving Credit Facility and had a borrowing capacity remaining of $143.0 million at March 31, 2021.

Amounts outstanding under the Term Loans, as amended, bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 1.45% to 2.30% or (ii) a base rate plus 0.25% to 1.30%, in each case, depending upon the Company’s leverage ratio. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans. See Note 6 for more details on the interest rate swaps. At March 31, 2021, the Company had $250.0 million under the Term Loans which had a fixed weighted average interest rate under the swaps of approximately 3.95%.

The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. The Company was in compliance with its financial covenants under its Credit Facility as of March 31, 2021.

Note 6. Derivative Financial Instruments

Risk Management Objective of Using Derivatives
The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.


13

Notes to Condensed Consolidated Financial Statements - Continued
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of March 31, 2021, the Company had fourteen outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $250.0 million, including four forward-starting interest rate swaps for notional amounts totaling $50.0 million, which will not become effective until March 31, 2022.

Tabular Disclosure of Fair Value of Derivative Instruments on the Balance Sheet
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020.
Asset Derivatives Fair Value atLiability Derivatives Fair Value at
(Dollars in thousands)March 31, 2021December 31, 2020Balance Sheet ClassificationMarch 31, 2021December 31, 2020Balance Sheet Classification
Interest rate swaps$538 $ Other assets, net$8,649 $11,846 Other liabilities, net

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive loss ("AOCI") and are subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $4.5 million will be reclassified from AOCI as an increase to interest expense.

Tabular Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)
The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2021 and 2020.
Three Months Ended
March 31,
(Dollars in thousands)20212020
Amount of unrealized gain (loss) recognized in OCI on derivatives$2,803 $(8,875)
Amount of loss reclassified from AOCI into interest expense$932 $257 
Total interest expense presented in the Condensed Consolidated Statements of Income in which the effects of the cash flow hedges are recorded$2,229 $2,249 

Tabular Disclosures of Offsetting Derivatives
The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of March 31, 2021 and December 31, 2020. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Condensed Consolidated Balance Sheets.
14

Notes to Condensed Consolidated Financial Statements - Continued
Offsetting of Derivative Assets (as of March 31, 2021)
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)Gross Amounts of Recognized AssetsGross Amounts Offset in the Condensed Consolidated Balance SheetNet Amounts of Assets in the Condensed Consolidated Balance SheetsFinancial InstrumentsCash Collateral ReceivedNet Amount
Derivatives$538 $ $538 $(278)$ $260 

Offsetting of Derivative Liabilities (as of March 31, 2021)
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Condensed Consolidated Balance SheetNet Amounts of Liabilities in the Condensed Consolidated Balance SheetsFinancial InstrumentsCash Collateral ReceivedNet Amount
Derivatives$(8,649)$ $(8,649)$278 $ $(8,371)

Offsetting of Derivative Assets (as of December 31, 2020)
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)Gross Amounts of Recognized AssetsGross Amounts Offset in the Condensed Consolidated Balance SheetNet Amounts of Assets in the Condensed Consolidated Balance SheetsFinancial InstrumentsCash Collateral ReceivedNet Amount
Derivatives$ $ $ $ $ $ 

Offsetting of Derivative Liabilities (as of December 31, 2020)
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
(in thousands)Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Condensed Consolidated Balance SheetNet Amounts of Liabilities in the Condensed Consolidated Balance SheetsFinancial InstrumentsCash Collateral ReceivedNet Amount
Derivatives$(11,846)$ $(11,846)$ $ $(11,846)

Credit-risk-related Contingent Features
As of March 31, 2021, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $8.6 million. As of March 31, 2021, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of approximately $8.6 million at March 31, 2021.


15

Notes to Condensed Consolidated Financial Statements - Continued
Note 7. Stockholders’ Equity

Common Stock
The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2021 and for the year ended December 31, 2020:
Three Months Ended
March 31, 2021
Year Ended
December 31, 2020
Balance, beginning of period23,888,090 21,410,578 
Issuance of common stock
435,272 2,206,976 
Restricted stock-based awards
93,762 270,536 
Balance, end of period24,417,124 23,888,090

ATM Program
The Company has an at-the-market offering program ("ATM Program"), with Piper Sandler & Co., Evercore Group L.L.C., Truist Securities, Inc., Regions Securities LLC, Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC., as sales agents (collectively, the “Agents”). Under the ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $360.0 million. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the agreement and applicable law.

The Company's activity under the ATM Program for the three months ended March 31, 2021 is detailed in the table below. As of March 31, 2021, the Company had approximately $119.9 million remaining that may be issued under the ATM Program.
Three Months Ended
March 31, 2021
Shares issued435,272 
Net proceeds received (in millions)
$19.9 
Average gross sales price per share$46.70 


16

Notes to Condensed Consolidated Financial Statements - Continued
Note 8. Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income per common share for the three months ended March 31, 2021 and 2020, respectively.

Three Months Ended
March 31,
(In thousands, except per share data)20212020
Net income$5,315 $4,100 
          Participating securities' share in earnings(538)(424)
Net income, less participating securities' share in earnings$4,777 $3,676 
Weighted average Common Shares outstanding
Weighted average Common Shares outstanding
24,053 21,733 
Unvested restricted shares
(1,244)(998)
Weighted average Common Shares outstanding–Basic
22,809 20,735 
Dilutive potential common shares
  
Weighted average Common Shares outstanding –Diluted
22,809 20,735 
Basic Net Income per Common Share$0.21 $0.18 
Diluted Net Income per Common Share$0.21 $0.18 

Note 9. Incentive Plan

A summary of the activity under the Company's 2014 Incentive Plan, as amended, for the three months ended March 31, 2021 and 2020 is included in the table below, as well as compensation expense recognized from the amortization of the value of shares over the applicable vesting periods.
Three Months Ended
March 31,
(Dollars in thousands)20212020
Stock-based awards, beginning of period1,164,518 909,892 
Stock in lieu of compensation44,625 50,245 
Stock awards49,137 53,660 
   Total stock granted93,762 103,905 
Vested shares(100) 
Stock-based awards, end of period1,258,180 1,013,797 
Amortization expense$1,558 $1,019 


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Note 10. Other Assets, net

Other assets, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 are detailed in the table below.
Balance as of
(Dollars in thousands)March 31, 2021December 31, 2020
Notes receivable$21,630 $15,010 
Accounts and interest receivable1,522 1,675 
Straight-line rent receivable9,461 8,682 
Prepaid assets642 600 
Deferred financing costs, net1,058 479 
Leasing commissions, net1,093 1,134 
Deferred tax assets, net476 515 
Fair value of interest rate swaps538  
Above-market lease intangible assets, net581 617 
Sales-type lease receivable3,021 3,016 
Assets held for sale1,023  
Operating lease right-of-use assets821 821 
Other480 501 
$42,346 $33,050 

The Company's notes receivable mainly included:

At March 31, 2021 and December 31, 2020, notes receivable included a $14.3 million and $15.0 million, respectively, term loan, secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital owned by the borrower. The term loan will be repaid in equal monthly installments of $250,000 through the maturity date of December 31, 2025 and bears interest at 9% per annum.

At March 31, 2021, notes receivable included a $6.0 million term loan and $1.1 million drawn at March 31, 2021 of a $4.0 million revolving credit facility, secured by assets and ownership interests of six geriatric behavioral hospitals and affiliated companies all of which are co-borrowers on the loans. The term loan bears interest at 9% per annum, with interest only payments due for the first year and then equal monthly installments of principal payments due beginning March 31, 2022. The term loan facility matures on July 1, 2027. The revolving credit facility bears interest at 9% per annum and matures on December 31, 2025.

The Company identified the borrowers of these notes as variable interest entities ("VIEs"), but management determined that the Company was not the primary beneficiary of the VIEs because we lack either directly or through related parties any material impact in the activities that impact the borrowers' economic performance. We are not obligated to provide support beyond our stated commitment to the borrowers, and accordingly our maximum exposure to loss as a result of this relationship is limited to the amount of our outstanding notes receivable.
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The VIEs that we have identified at March 31, 2021 are summarized in the table below.
Classification
Carrying Amount
(in millions)
Maximum Exposure to Loss
(in millions)
Note receivable$14.3 $14.3 
Note receivable$1.1 $1.1 
Note receivable$6.0 $6.0 

Note 11. Other Liabilities, net

Other liabilities, net on the Company's Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 are detailed in the table below.

Balance as of
(Dollars in thousands)March 31, 2021December 31, 2020
Deferred rent$3,587 $2,596 
Security deposits4,208 4,141 
Below-market lease intangibles, net576 613 
Fair value of derivatives