Transcontinental Realty Investors(TCI) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Financial Performance Q2 2025 Earnings Announcement Transcontinental Realty Investors, Inc. reported a significant decrease in net income and diluted earnings per share for the second quarter of 2025 compared to the same period in 2024 Q2 2025 vs. Q2 2024 Earnings Summary | Metric | Q2 2025 | Q2 2024 | | :----------------------------------- | :---------- | :---------- | | Net Income Attributable to Common Shares | $0.2 million | $1.5 million | | Diluted EPS | $0.02 | $0.17 | - Net income attributable to common shares decreased by $1.3 million, and diluted EPS decreased by $0.15[1] Financial Highlights - Q2 2025 Key financial movements for Q2 2025 included an increase in rental revenues, a decrease in net operating loss, but an overall decrease in net income attributable to the company due to various factors Rental Revenues (Q2 2025 vs. Q2 2024) | Period | Amount ($ millions) | Change ($ millions) | Primary Reason | | :----- | :------------------ | :------------------ | :------------- | | Q2 2025 | 11.5 | +0.3 | Increase in occupancy at Stanford Center | | Q2 2024 | 11.2 | | | Net Operating Loss (Q2 2025 vs. Q2 2024) | Period | Amount ($ millions) | Change ($ millions) | Primary Reason | | :----- | :------------------ | :------------------ | :------------- | | Q2 2025 | 0.8 | -0.3 | $0.1 million decrease in operating expenses (cost of insurance and property taxes) | | Q2 2024 | 1.1 | | | Net Income Attributable to the Company (Q2 2025 vs. Q2 2024) | Period | Amount ($ millions) | Change ($ millions) | Primary Reasons | | :----- | :------------------ | :------------------ | :-------------- | | Q2 2025 | 0.2 | -1.3 | Decrease in interest income, increase in tax provision, offset by increase in gain on real estate transactions | | Q2 2024 | 1.5 | | | Company Profile About Transcontinental Realty Investors, Inc. Transcontinental Realty Investors, Inc. is a Dallas-based real estate investment company with a diversified portfolio across the U.S., engaging in various investment methods - The company is a Dallas-based real estate investment firm with a diverse portfolio including office buildings, apartments, shopping centers, and developed/undeveloped land across the U.S.[6] - Investments are made through direct ownership, leases, partnerships, and mortgage loans on real estate, and the company also holds mortgage receivables[6] Operational & Strategic Updates Key Operational Highlights Operational highlights for Q2 2025 include specific occupancy rates for different property types, successful asset dispositions, and strategic debt repayment Occupancy Rates (June 30, 2025) | Property Type | Occupancy | | :------------ | :-------- | | Total | 82% | | Multifamily | 94% | | Commercial | 57% | Asset Sale (Q2 2025) | Item | Value | | :-------------------- | :------------ | | Single Family Lots Sold | 30 | | Sale Proceeds | $1.4 million | | Gain on Sale | $1.1 million | - On May 30, 2025, the company paid off a $10.8 million loan on 770 South Post Oak using cash on hand[7] Consolidated Statements of Operations Three Months Ended June 30, 2025 vs. 2024 The consolidated statements of operations for the three months ended June 30, 2025, show detailed changes in revenues, expenses, and net income compared to the prior year, highlighting a decrease in net income attributable to the Company Consolidated Statements of Operations (Three Months Ended June 30) | Item | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | | :----------------------------------- | :-------------------- | :-------------------- | | Revenues: | | | | Rental revenues | 11,510 | 11,188 | | Other income | 650 | 585 | | Total revenue | 12,160 | 11,773 | | Expenses: | | | | Property operating expenses | 6,535 | 6,624 | | Depreciation and amortization | 3,062 | 3,137 | | General and administrative | 1,383 | 1,414 | | Advisory fee to related party | 2,005 | 1,680 | | Total operating expenses | 12,985 | 12,855 | | Net operating loss | (825) | (1,082) | | Interest income | 3,982 | 5,200 | | Interest expense | (1,738) | (1,862) | | Equity in income from unconsolidated joint venture | — | 109 | | Gain on sale or write down of assets, net | 947 | — | | Income tax provision | (2,042) | (669) | | Net income | 324 | 1,696 | | Net income attributable to noncontrolling interest | (155) | (198) | | Net income attributable to the Company | 169 | 1,498 | | Earnings per share: | | | | Basic and diluted | 0.02 | 0.17 | | Weighted average common shares used in computing earnings per share (Basic and diluted) | 8,639,316 | 8,639,316 | Six Months Ended June 30, 2025 vs. 2024 The year-to-date consolidated statements of operations for the six months ended June 30, 2025, indicate an increase in total revenue and net income attributable to the Company, despite a higher income tax provision Consolidated Statements of Operations (Six Months Ended June 30) | Item | YTD 2025 ($ thousands) | YTD 2024 ($ thousands) | | :----------------------------------- | :--------------------- | :--------------------- | | Revenues: | | | | Rental revenues | 22,937 | 22,467 | | Other income | 1,231 | 1,205 | | Total revenue | 24,168 | 23,672 | | Expenses: | | | | Property operating expenses | 12,512 | 13,258 | | Depreciation and amortization | 5,945 | 6,309 | | General and administrative | 2,735 | 2,675 | | Advisory fee to related party | 4,436 | 3,845 | | Total operating expenses | 25,628 | 26,087 | | Net operating loss | (1,460) | (2,415) | | Interest income | 8,610 | 11,327 | | Interest expense | (3,519) | (3,731) | | Equity in income from unconsolidated joint venture | — | 544 | | Gain on sale or write down of assets, net | 4,838 | — | | Income tax provision | (3,364) | (1,272) | | Net income | 5,105 | 4,453 | | Net income attributable to noncontrolling interest | (318) | (406) | | Net income attributable to the Company | 4,787 | 4,047 | | Earnings per share: | | | | Basic and diluted | 0.55 | 0.47 | | Weighted average common shares used in computing earnings per share (Basic and diluted) | 8,639,316 | 8,639,316 |