TSX Symbol FC
TORONTO, Nov. 7, 2018 /CNW/ - Firm Capital Mortgage
Investment Corporation (the "Corporation") (TSX FC) released its
financial statements for the three and nine months ended
September 30, 2018.
THIRD QUARTER AND YEAR-TO-DATE (YTD) HIGHLIGHTS
- Profit up 17% to $6.9 million;
YTD up 5% to $19.7 million.
- Interest and fees income up 15% to $12.3
million; YTD up 22% to $35.5
million.
- Weighted average portfolio interest rate increased by 2 basis
points to 8.11% from December 31,
2017.
- Third quarter profit represents an annualized return on
shareholders' equity of 9.69%.
- Issuance of $25.0 million of
5.40% convertible debentures maturing June
30, 2025.
PROFIT
For the three month period ended September 30, 2018, income and profit (referred
to herein as "Profit") increased to $6,930,678 compared to $5,903,828 reported for the three months ended
September 30, 2017. For the nine
month period ended September 30,
2018, income and profit (referred to herein as "Profit")
increased to $19,652,997
compared to $18,698,778 reported for
the nine months ended September 30,
2017.
Basic weighted average profit per share for the three months
ended September 30, 2018, was
$0.265, which is greater than the
$0.241 per share reported for the
three months ended September 30,
2017. Basic weighted average profit per share for the nine
months ended September 30, 2018, was
$0.753, which is lower than the
$0.786 per share reported for the
nine months ended September 30,
2017.
The first quarter of 2017 included the recognition of special
income in the amount of $2,737,500 in
fees related to non-conventional investments.
PORTFOLIO
The Corporation's investment portfolio (the
"Investment Portfolio"), as at September 30,
2018, stood at $530.1 million
which is lower than the $555.8
million as at December 31,
2017 (net of the principal impairment allowance of
$5.05 million and $5.70 million, respectively).
RETURN ON EQUITY
The Corporation continues to exceed
its yield objective of producing a return on shareholders' equity
in excess of 400 basis points over the average one year Government
of Canada Treasury bill yield. Profit for the quarter ended
September 30, 2018 represents an
annualized return on shareholders' equity (based on the average of
the month end shareholders' equity in the quarter) of 9.69%,
representing a return on shareholders' equity of 770 basis points
per annum over the average one year Government of Canada Treasury
bill yield of 1.99%.
COMPLETION OF A CONVERTIBLE DEBENTURE OFFERING
On
June 21, 2018, the Corporation
completed a public offering of 25,000 5.40% convertible unsecured
subordinated debentures at a price of $1,000 per debenture for gross proceeds of
$25,000,000. The debentures mature on
June 30, 2025 and interest is paid
semi-annually. The debentures are convertible at the option of the
holder at any time prior to the maturity date at a conversion price
of $15.00.
PRUDENT IMPAIRMENT ALLOWANCE
Management has always
taken a proactive approach to loan impairment allowance. This is a
prudent approach to protecting the stability of dividends to
shareholders in the event there are any future issues with any of
the investments within the Corporation's investment portfolio. The
impairment allowance as at September 30,
2018 stood at $5,050,000 and
represents approximately 1% of Corporation's investment
portfolio.
INVESTMENT PORTFOLIO DETAILS
Details on the
Corporation's investment portfolio as at September 30, 2018 are as follows:
- Total gross investment portfolio of $535,127,671, which is lower than the
$561,501,977 reported at December 31, 2017.
- Conventional first mortgages, being those first mortgages with
loan-to-values less than 75%, comprise 79% of the total portfolio,
and total conventional mortgages with loan-to-values less than 75%,
comprise 85% of the total portfolio.
- Approximately 80% of the portfolio matures by September 30, 2019.
- The average face interest rate on the portfolio increased to
8.11% per annum, as compared to 8.09% at December 31, 2017
- Regionally, the mortgage investment portfolio is diversified
approximately as follows: Ontario
(93%), Quebec (2%), Western Canada (3%), and Other (2%).
DIVIDEND AND SHARE PURCHASE PLAN
The Corporation has
in place a Dividend Reinvestment Plan (DRIP) and Share Purchase
Plan that is available to its Shareholders. The DRIP allows
participants to have their monthly cash dividends reinvested in
additional shares. The Price paid per share is 97% (if the share
price is higher than $14.10) of the
weighted average trading price calculated five trading days
immediately preceding each dividend date with no commission cost.
Once registered with the Share Purchase Plan, participants have the
right to purchase additional shares, totaling no greater than
$12,000 per year and no less than
$250 per month. Shareholders
participating pay no commission.
ABOUT THE CORPORATION
Where Mortgage Deals Get Done®
The Corporation, through its mortgage banker, Firm Capital
Corporation, is a non-bank lender providing residential and
commercial short-term bridge and conventional real estate
financing, including construction, mezzanine, and equity
investments. The Corporation's investment objective is the
preservation of Shareholders' equity, while providing Shareholders
with a stable stream of monthly dividends from investments. The
Corporation achieves its investment objectives through investments
in selected niche markets that are under-serviced by large lending
institutions. Lending activities to date continue to develop a
diversified mortgage portfolio, producing a stable return to
Shareholders. Full reports of the financial results of the
Corporation for the year are outlined in the audited financial
statements and the related management discussion and analysis of
Firm Capital, available on the SEDAR website at www.sedar.com.
In addition, supplemental information is available on Firm
Capital's website at www.firmcapital.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of applicable securities laws including, among others,
statements concerning our objectives, our strategies to achieve
those objectives, our performance, our mortgage portfolio and our
dividends, as well as statements with respect to management's
beliefs, estimates, and intentions, and similar statements
concerning anticipated future events, results, circumstances,
performance, or expectations that are not historical facts.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intent", "estimate", "anticipate",
"believe", "should", "plans", or "continue", or similar expressions
suggesting future outcomes or events. Such forward-looking
statements reflect management's current beliefs and are based on
information currently available to management.
These statements are not guarantees of future performance and
are based on our estimates and assumptions that are subject to
risks and uncertainties, including those described in our Annual
Information Form under "Risk Factors" (a copy of which can be
obtained at www.sedar.com), which could cause our actual results
and performance to differ materially from the forward-looking
statements contained in this circular. Those risks and
uncertainties include, among others, risks associated with mortgage
lending, dependence on the Corporation's mic manager and mortgage
banker, competition for mortgage lending, real estate values,
interest rate fluctuations, environmental matters, Shareholder
liability, and the introduction of new tax rules. Material
factors or assumptions that were applied in drawing a conclusion or
making an estimate set out in the forward-looking information
include, among others, that the Corporation is able to invest in
mortgages at rates consistent with rates historically achieved;
adequate mortgage investment opportunities are presented to the
Corporation; and adequate bank indebtedness and bank loans are
available to the Corporation. Although the forward-looking
information continued in this new release is based upon what
management believes are reasonable assumptions, there can be no
assurance that actual results and performance will be consistent
with these forward-looking statements.
All forward-looking statements in this news release are
qualified by these cautionary statements. Except as required
by applicable law, the Corporation undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events, or otherwise.
Boutique Mortgage Lenders®
SOURCE Firm Capital Mortgage Investment Corporation