Firm Capital Mortgage Investment Corporation (the “Corporation”)
(TSX FC, FC.DB.G, FC.DB,H, FC.DB.I, FC.DB.J ,FC.DB. K and FC.DB.L)
released its financial statements for the three and twelve months
ended December 31, 2022.
NET INCOMEFor the three months
ended December 31, 2022, net income increased by 2.9% to $7,955,086
as compared to $7,734,278 reported for the same period in 2021. Net
income for the year ended December 31, 2022, increased by 7.5% to
$32,234,067 as compared to $29,985,385 for the year ended December
31, 2021. The increase is primarily a result of higher interest
income due to a larger average Investment Portfolio size (the
portfolio size was on average $82 million higher in 2022), a higher
average interest rate (December 31, 2022 – 10.99% vs December 31,
2021 – 7.91%) and an increase in fee income offset by a decrease in
special income.
EARNINGS PER SHAREBasic
weighted average profit per share for the three months ended
December 31, 2022, was $0.231, as compared to the $0.234 per share
reported for the three months ended December 31, 2021. Basic
weighted average profit per share for the year ended December 31,
2022, was $0.939, compared to the $0.950 per share reported for the
year ended December 31, 2021.
PORTFOLIOThe Corporation’s
Investment Portfolio increased by $18.5 million to $661.0 million
as at December 31, 2022, in comparison to $642.5 million as at
December 31, 2021 (in each case, gross of impairment allowance,
fair value adjustment, and unamortized fees). During 2022, new
investment funding was $461.8 million (2021 – $515.2 million), and
repayments were $443.0 million (2021 – $432.0 million). On December
31, 2022, the Investment Portfolio comprised of 252 investments
(2021 – 224). The average gross investment size was approximately
$2.6MM, with 13 investments exceeding $7.5 million.
PRUDENT IMPAIRMENT ALLOWANCE
Management has always taken a proactive approach
to the Corporation’s loan impairment allowance. This is a prudent
approach that provides stability of dividends to our shareholders
in the event there are any future issues with any of the loans
within the Corporation’s Investment Portfolio. The allowance for
impairment and fair value adjustment as of December 31, 2022 was
$10.16 million (2021 – $5.75 million), comprising (i) $3.70 million
(2021 – $2.05 million) representing the total amount of
management’s estimate of the shortfall between the investment
balances and the estimated recoverable amount from the security
under the specific loans, (ii) $4.70 million (2021 – $2.60 million)
representing the total amount of management’s estimate of fair
value adjustment on an investment stated at fair value through
profit or loss; and (iii) a collective allowance balance of $1.76
million (2021 – $1.10 million).
INVESTMENT PORTFOLIO
DETAILS
Details on the Corporation’s investment
portfolio as at December 31, 2022, are as follows:
- Total gross investment portfolio of
$661,003,596, which is higher by 2.9% than the $642,531,533
reported at December 31, 2021.
- Conventional first mortgages, being
those first mortgages with loan-to-values less than 75%, comprise
83.5% of the total portfolio (73.4% as at December 2021), and total
conventional mortgages with loan-to-values less than 75%, comprise
88.6% of the total portfolio (81.6% as at December 2021).
- Approximately 68.3% of the
portfolio matures by December 31, 2023.
- The average face interest rate on
the portfolio is 10.99% per annum, as compared to 7.91% at December
31, 2021.
- Regionally, the mortgage investment
portfolio is diversified as follows: Ontario (84.5%), Quebec
(8.3%), Western Canada (3.6%), and USA (3.6%).
CASH DIVIDEND DISTRIBUTIONThe
Corporation is pleased to announce that its board of directors has
declared a monthly cash dividend of $0.078 per common share
(subject to adjustment at the discretion of the board of directors)
payable on each dividend payment date set out below to holders of
common shares of record at the close of business on each record
date set out below:
Record Date |
Dividend Payment Date |
April 30, 2023 |
May 15, 2023 |
May 31, 2023 |
June 15, 2023 |
June 30, 2023 |
July 17, 2023 |
|
|
DIVIDEND AND SHARE PURCHASE
PLANThe 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 $14.85) 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.
For the three months and year ended December 31,
2022, the Corporation declared dividends on its common shares
totaling $8,552,413 and $32,631,802 or $0.248 and $0.950 per share,
versus $8,148,312 and $29,985,385 respectively, or $0.246 and
$0.948 per share for the three months and year ended December 31,
2021. The number of common shares outstanding at December 31, 2022,
was 34,485,740, as compared to 33,610,885 at December 31, 2021.
About the
CorporationWhere 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 consolidated
financial statements and the related management discussion and
analysis of the Corporation, available on the SEDAR website at
www.sedar.com. In addition, supplemental information is available
on the Corporation’s website at www.firmcapital.com.
Forward-Looking StatementsThis
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 investment 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 current 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 news release.
Those risks and uncertainties include, among
others, risks associated with mortgage lending, dependence on the
Corporation’s manager and mortgage banker, competition for mortgage
lending, real estate values, interest rate fluctuations,
environmental matters, and shareholder liability. 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; and a non-material impact resulting from the COVID-19
pandemic. Although the forward-looking information contained in
this news 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.
For further information, please contact:
Firm Capital Mortgage Investment CorporationEli
DadouchPresident & Chief Executive Officer(416) 635-0221
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