TORONTO, May 07, 2019 (GLOBE NEWSWIRE) -- Firm Capital Mortgage Investment Corporation (the “Corporation”) (TSX FC) released its financial statements for the three months ended March 31, 2019.
Q1/2019 HIGHLIGHTS
- Profit for the quarter increased by 3.1% to $6.6 million as compared to $6.4 million reported for the same period in 2018.
- The investment portfolio as at March 31, 2019 increased by $28.8 million to $549.7 million in comparison to $520.9 million as at December 31, 2018 (gross of provision).
- Profit for the quarter represents an annualized return on shareholders’ equity of 8.97%.
- Equity offering of $23.0 million (including $3.0 million over-allotment).
PROFIT
For the three month period ended March 31, 2019, income and profit (referred to herein as “Profit”) increased to $6,588,877 as compared to $6,434,989 reported for the three months ended March 31, 2018.
Basic weighted average profit per share for the three months ended March 31, 2019, was $0.246 which is largely in-line to the $0.247 per share reported for the three months ended March 31, 2018.
INVESTMENT PORTFOLIO
Details on the Corporation’s investment portfolio as at March 31, 2019 are as follows:
- Total gross investment portfolio of $549,657,435, which is higher than the $520,944,509 reported at December 31, 2018 (net of the allowance of $4,950,000, for both periods).
- The weighted average face interest rate on the Corporation’s Investment Portfolio increased to 8.60% per annum as at March 31, 2019 compared to 8.58% per annum as at December 31, 2018.
- Conventional first mortgages, being those first mortgages with loan-to-values less than 75%, comprise 74% of the total portfolio, and total conventional mortgages with loan-to-values less than 75%, comprise 83% of the total portfolio.
- Approximately 65% of the portfolio matures by December 31, 2019 and 96% maturing on or before December 31, 2020.
- Regionally, the mortgage investment portfolio is diversified approximately as follows: Ontario (91%), Quebec (2%), Western Canada (3%), and Other (4%).
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 three months ended March 31, 2019 represents an annualized return on shareholders’ equity (based on the average of the month end shareholders’ equity in the quarter) of 8.97%, representing a return on shareholders’ equity of 727 basis points per annum over the average one year Government of Canada Treasury bill yield of 1.70%.
COMPLETION OF AN EQUITY OFFERING
On March 1, 2019, the Corporation completed an equity offering of 1,520,000 common shares at a price of $13.20 per share for gross proceeds of $20,064,000. The over-allotment option was exercised in full and the Corporation issued an additional 228,000 shares at a price of $13.20 per share for gross proceeds of $3,009,600. The total shares issued was 1,748,000.
REDEMPTION
On March 29, 2019, the Corporation completed the redemption of its 5.25% convertible unsecured subordinated debentures. It was a cash redemption of the aggregate principal amount of $20,485,000 and all accrued interest to the time of Redemption Date.
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 December 31, 2018 stood at $4,950,000 and represents approximately 1% of the Corporation’s investment portfolio.
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.
For further information, please contact:
Firm Capital Mortgage Investment Corporation
Eli Dadouch
President & Chief Executive Officer
(416) 635-0221
Boutique Mortgage Lenders®
