TORONTO, Nov. 4, 2015 /CNW/ - Trez Capital Mortgage Investment Corporation (TSX: TZZ) (the "Company") is pleased to report financial results for the quarter ended September 30, 2015.
For the three months ended September 30th
- Income from operations totaled $3.0 million, an increase from $2.6 million in Q3 of 2014
- Net income for the quarter totaled $2.8 million, an increase from $2.6 million in Q3 of 2014
- Basic and diluted earnings per share were $0.14 versus dividends declared of $0.175 per share
For the nine months ended September 30th
- Income from operation totaled $8.9 million, a decrease from $9.9 million at September 30, 2014
- Net income totaled $8.2 million, a decrease from $9.4 million at September 30, 2014
- Basic and diluted earnings per share were $0.42, a decrease from $0.48 at September 30, 2014
- Dividends declared totaled $0.525 per share, unchanged from September 30, 2014
The decline in income from operations, net income and consequently earnings per share for the nine month period was driven primarily by the impact of non-performing mortgages. During the third quarter, the dollar value of the past due mortgages declined from 27% of the portfolio at the end of Q2 2015 to 8% at the end of Q3 2015. The Company recorded present value adjustments relating to these non-performing loans. These non-cash present value charges do not affect cashflow but do have a negative impact on earnings. Management believes that in the coming quarters, earnings will trend towards a normalized annual rate of $0.70 per Class A share. Moreover, as each of these loans is monetized, these non-cash fair value adjustments will be brought back into income. Based on these projections and all relevant circumstances, on October 20, 2015, the Company announced that its board of directors approved maintaining the current annual dividend of $0.70 per Class A share.
Investment Portfolio Highlights
- 77% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 68%, below the Company's Investment Guideline of 75%
- Weighted average interest rate and term to maturity on mortgage investments was 7.6% and 15 months, respectively
- Geographically diversified portfolio across Canada: Ontario 40%, Alberta 27%, British Columbia 11%, New Brunswick 11% and Nova Scotia 10%
- 100% of equity remained fully invested throughout Q3
Special Committee Review Update
The Special Committee is nearing completion of the initial phase of its review, which included the input of advisors and the Company's stakeholders. The Committee has examined a number of alternatives to deal with issues relating to the current trading price of the shares relative to net asset value. The Committee has determined that the interests of shareholders and the Company would best be served by concentrating its efforts on a focused list of substantive alternatives to the status quo in order to enhance shareholder value. Such alternatives could include a monetization of the portfolio or recapitalization of the Company. The timing of these alternatives will depend upon a number of factors, not all of which are in the Committee's control, such as the diligence processes of third party counterparties. There can be no assurances that a transaction will occur following this subsequent phase of the Committee's process. The Committee only intends to make further announcements with respect to this next phase of the process if, as and when material developments occur.
The Company will review the financial results for the quarter ended September 30, 2015 on November 5, 2015 at 2:00pm EST.
Conference Call Details:
Dial-in-number: 416-764-8688 or toll free 888-390-0546
Event Conference ID: 18665953
A taped replay of the conference call will be available until December 2, 2015 by dialing 416- 764-8677 or 1-888-390-0541, passcode: 665953 #.
Certain statements in this news release about Trez Capital Mortgage Investment Corporation (the "Company"), and its business, operations, investments and strategies, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, "forward looking statements"). The forward-looking statements are stated as of the date of this news release and are based on estimates and assumptions made by Trez Capital Fund Management LP ("Trez") in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Trez believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Past performance is not an indication of future returns, and there can be no guarantee that targeted returns or yields can be achieved. Trez refers you to the Company's public disclosure for information regarding these forward-looking statements, including the assumptions made in preparing forward-looking statements and management's expectations, and the risk factors that could cause the Company's actual results, yield, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. Such public disclosure is available on SEDAR and at the request of Trez. This news release does not represent an offer or solicitation to sell securities of the Company.
About the Company
The Company's objective is to acquire and maintain a diversified portfolio of mortgages in Canada that preserves capital and generates attractive returns in order to pay monthly distributions to its shareholders. The Company accomplishes its investment objectives through prudent investments in mortgages to qualified real estate investors and developers, focusing primarily on short-term bridge financing needs not serviced by traditional real estate lenders. Trez Capital Fund Management Limited Partnership is the Manager of the Company. The Manager has over 17 years of bridge financing experience in the real estate sector and currently manages $1.9 billion in assets.
SOURCE Trez Capital Junior Mortgage Investment Corporation
For further information: Karyn Phuong, Vice President, Investor Relations, Trez Capital, Tel: (647) 788-1788, E-mail: KarynP@trezcapital.com