SEVN Q3 10-Q: $0.36 EPS as Credit Reversal Replaces Q2 Provision; Cash Falls to $51.5M
SEVN is trading near its 52-week low of $5.98 (5.3% above the low).
Summary
Seven Hills' Q3 10-Q shows $8.05M of net income ($0.36 per share) driven by a $3.6M credit-loss reversal after the Dallas office loan was resolved, with cash down to $51.5M and book value at $14.13 per share.
Key Events · Earnings and Guidance · SEVN
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Q3 Swings to $8.05M Net Income
Net income of $8,052 thousand, or $0.36 per diluted share, versus a Q2 2026 net loss of $867 thousand; Distributable Earnings were $3,791 thousand ($0.17 per share), or $5,291 thousand ($0.24 per share) excluding the $1,500 thousand realized loss.
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Credit Reversal Replaces Q2 Provision
A $3,600 thousand reversal of credit losses in Q3 versus a $4,923 thousand provision in Q2, driven by the Dallas office loan repayment: $4,788 thousand of allowance reversed and $1,500 thousand realized loss on a $44,217 thousand loan repaid at $42,717 thousand.
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Cash Falls on Origination Pace
Cash and cash equivalents fell to $51,468 thousand from $123,471 thousand at December 31, 2025, as originations of $248,997 thousand outpaced repayments of $240,641 thousand and $19,000 thousand of distributions were paid.
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Risk Ratings Deteriorate
Weighted average risk rating rose to 3.2 from 2.8 at December 31, 2025; five loans (~19% of amortized cost) are rated 4 and one (~4%) rated 5, the Carlsbad office loan repaid ~$22,100 thousand in October 2026.
Analysis · SEVN · Real Estate & Construction
The quarter flipped from a $867K net loss in Q2 to $8.05M of net income, but the swing is mostly accounting: a $3.6M reversal of credit losses replaced Q2's $4.9M provision after the Dallas office loan was resolved at 97% of par for a $1.5M realized loss. Strip that out and Distributable Earnings were $0.17 per share, or $0.24 excluding the realized loss. For a leveraged lender, the balance sheet is the part that matters: cash dropped to $51.5M from $123.5M at year-end as originations of $249.0M outran repayments, and the weighted average risk rating worsened to 3.2 from 2.8, with five loans (~19% of amortized cost) now rated 4 and one (~4%) rated 5. Book value slipped to $14.13 per share from $14.55 at year-end, so the $6.30 stock trades well below book.
How filings like this one have moved
In the 30 days to Oct 28, 2026, 30.5% of the 1494 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.03%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, SEVN was trading at $6.30 on NASDAQ in the Real Estate & Construction sector, with a market capitalization of approximately $141.6M. The 52-week trading range was $5.98 to $10.61. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.