Firm Capital Mortgage Investment Corporation announces Q4/2013 results

TSX Symbol FC

TORONTO, March 21, 2014 /CNW/ - Firm Capital Mortgage Investment Corporation (the "Corporation") (TSX FC) today released its financial statements for the three and twelve months ended December 31, 2013.

PROFIT & RETURN ON EQUITY
Profit for the fourth quarter ended December 31, 2013 increased by 8% to $4,405,596 as compared to $4,071,325 for the same period last year.  For the year ended December 31, 2013, profit increased by 5% to $17,607,877 as compared to $16,755,292 for the year ended December 31, 2012.  Basic weighted average profit per share for the fourth quarter ended December 31, 2013 was $0.237, which is lower in comparison to the $0.243 reported for the fourth quarter ended December 31, 2012. Basic weighted average profit per share for the year ended December 31, 2013 of $0.987 was slightly lower in comparison to the $0.999 for the year ended December 31, 2012. The Corporation distributed 100% of its profits for 2013.

Profit for the year ended December 31, 2013 represented an annualized return on shareholders' equity (based on the month end average shareholders' equity) of 9.63% versus a previously reported return on shareholders' equity of 9.83% for the year ended December 31, 2012. This return on shareholders' equity represents 864 basis points per annum over the average Government of Canada One Year Treasury Bill yield for the year of 0.99%, and is well in excess of the Corporation's stated target yield objective of 400 basis points per annum over the average one year treasury bill yield.

DIVIDEND OVERVIEW
For the fourth quarter ended December 31, 2013, the Corporation declared dividends totaling $5,111,513 or $0.282 per share versus $5,007,886 or $0.288 per share for the fourth quarter ended December 31, 2012. The fourth quarter 2013 dividend comprised of regular dividends of $0.234 per share and the year-end special dividend of $0.048 per share. For the year ended December 31, 2013, the Corporation declared dividends totaling $17,607,877 or $0.984 per share versus $16,755,292 or $0.990 per share for the year ended December 31, 2012.

INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation's investment portfolio as at December 31, 2013 are as follows:

  • Total gross investment portfolio of $339,626,485, which is a 14% increase over December 31, 2012.
  • Conventional first mortgages, being those first mortgages with loan to values less than 75%, comprise 64% of our total portfolio, and total conventional mortgages with loan to values under 75% comprise 73% of our total portfolio.
  • Related investments total 17% of the portfolio.
  • Non-conventional mortgages total 9% of the portfolio.
  • Discounted debt investments total 1% of the portfolio.
  • Approximately 69% of the portfolio matures by December 31, 2014. This results in a continuously revolving portfolio, allowing management to assess market conditions.
  • The average face interest rate on the portfolio is 8.58% per annum.
  • Regionally, the portfolio is diversified approximately as follows: Ontario (72%), Quebec (8%), Alberta (11%), British Columbia (4%) and Other (5%).
  • Gross investment portfolio breakdown by loan size is as follows:


Amount
Number of
Investments
%   Total Amount %
  $0 - $2,500,000 99 68% $ 90,158,968 27%
  $2,500,001 - $5,000,000 30 20%  $ 117,895,458 35%
  $5,000,001 - $7,500,000 11 8%  $ 72,373,724 21%
  $7,500,001 + 6 4%  $ 59,198,335 17%
    146 100%  $ 339,626,485 100%

 

IMPAIRMENT PROVISION UPDATE
Management has always taken a proactive approach to allowance provision reserves. This is a prudent approach to protecting our Shareholders' equity. The impairment provision increased by $150,000 to $3,330,000 as at December 31, 2013 and represents the total amount of management's estimate of the shortfall between the investment portfolio principal balances and the estimated net realizable recovery from the collateral securing the loans. The impairment provision represents 1.0% of the Investment portfolio balance.

UNRECOGNIZED INCOME COLLECTED
As at December 31, 2013, the Corporation has recorded as unearned income on its books, banked non-refundable fee income of $653,191, which will be recognized as income over the term of the corresponding investments.

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 plans allows participants to have their monthly cash dividends reinvested in additional shares at a 2% discount to market and grants participants the right to purchase, without commission, additional shares, up to a maximum of $12,000 per annum.

For supplementary information regarding our return on equity, dividend history and mortgage portfolio, please refer to the following link. http://40rhel5streamview01.newswire.ca/media/2014/03/21/20140321-745037-38241-2d559b13-85ca-4570-8969-f10f21829f2c.pdf

ABOUT THE CORPORATION
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 by pursuing a strategy of growth 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 distributions, 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 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.   

SOURCE Firm Capital Corporation

PDF available at: http://stream1.newswire.ca/media/2014/03/21/20140321_C6569_DOC_EN_38241.pdf

For further information:


Firm Capital Mortgage Investment Corporation
Eli Dadouch
President & Chief Executive Officer
(416) 635-0221