TSX Symbol FC
TORONTO, March 15, 2013 /CNW/ - Firm Capital Mortgage Investment
Corporation (the "Corporation") (TSX FC), today released its financial
statements for the quarter and fiscal year ended December 31, 2012.
PROFIT & RETURN ON EQUITY
Profit for the fourth quarter ended December 31, 2012 increased by 6% to
$4,071,325 as compared to $3,843,403 for the same period last year.
Basic weighted average profit per share for the fourth quarter ended
December 31, 2012 was $0.243, which is lower in comparison to the
$0.256 reported for the fourth quarter ended December 31, 2011. For the
year ended December 31, 2012, profit increased by 14% to $16,755,292 as
compared to $14,659,462 for the year ended December 31, 2011. Basic
weighted average profit per share for the year ended December 31, 2012
of $0.999 was slightly higher in comparison to the $0.995 for the year
ended December 31, 2011. Profit for the year ended December 31, 2012
represented an annualized return on shareholders' equity of 9.83%. This
return on shareholders' equity represents 874 basis points per annum
over the average Government of Canada One Year Treasury Bill yield 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
For the twelve months ended December 31, 2012, the Corporation paid
dividends totaling $16,755,292 versus $14,659,462 for the twelve months
ended December 31, 2011. The Corporation distributed 100% of its
profits to shareholders.
INVESTMENT PORTFOLIO HIGHLIGHTS:
Details on the Corporation's investment portfolio as at December 31,
2012 are as follows:
Total gross investment portfolio equals $297,217,271
Conventional first mortgages, being those mortgages with loan to values
less than 75%, comprise 62.3% of our total portfolio.
Approximately 70% of the portfolio matures within 12 months. This
results in a continuously revolving portfolio, allowing management to
assess market conditions.
The average face interest rate on the portfolio is 9.03% per annum.
Regionally, the portfolio is diversified approximately as follows:
Ontario 74.6%, Alberta 15.1%, Quebec 8.2% and British Columbia 2.1%.
Investment portfolio breakdown by loan size is as follows:
$0 - $2,500,000
$2,500,001 - $5,000,000
$5,000,001 - $7,500,000
Management has always taken a proactive approach to the loan impairment
provision. This is a prudent approach to protecting our Shareholders'
equity. Impairment provisions increased by $200,000 over 2011 to
$3,180,000 representing 1.1% of the gross loan portfolio.
UNRECOGNIZED INCOME COLLECTED:
As at December 31, 2012, the Corporation has banked non-refundable fee
income of $520,055, which will be recognized as income over the term of
the corresponding investments.
On March 4, 2013, the Corporation entered into an agreement to sell, on
a bought deal basis, to a syndicate of underwriters, $20,000,000
aggregate principal amount of 4.75% convertible unsecured subordinated
debentures due March 31, 2020 (the "Debentures") at a price of $1,000
per Debenture. The Corporation has granted the underwriters an
over-allotment option to purchase up to $3,000,000 additional aggregate
principal amount of Debentures, exercisable, in whole or in part, at
any time until 30 days following the closing of the offering. The
Debentures will bear interest at a rate of 4.75% per annum, payable
semi-annually in arrears on the last day of March and September in each
year commencing September 30, 2013, and will mature on March 31, 2020
(the "Maturity Date"). The Debentures will be convertible at the
holder's option into common shares of the Corporation (the "Shares") at
any time prior to the earlier of the Maturity Date and the date fixed
for redemption at a conversion price of $15.80 per Share (the
"Conversion Price"), subject to adjustment in certain circumstances.
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.
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.
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 Mortgage Investment Corporation
For further information:
Firm Capital Mortgage Investment Corporation
President & Chief Executive Officer