TORONTO, Nov. 11, 2016 /CNW/ - Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the "Company") today released its financial results for the quarter ended September 30, 2016.
On June 16, 2016 the shareholders of the Company approved the orderly wind-up of the Company. As such, the financial results will reflect the ongoing reduction in the size of the portfolio as capital is returned to shareholders.
For the three months ended September 30th
- Income from operations totaled $0.6 million, compared to income from operations of $1.5 million in Q3 of 2015
- Net income totaled $0.6 million, compared to net income of $1.2 million in Q3 of 2015
- Basic and diluted earnings per share were $0.08 and dividends declared were $2.127 per share
During the third quarter, income from operations and net income declined primarily as a result of lower interest revenue resulting from a reduction in the average size of the mortgage portfolio. There were no commitment fees in the period as the Company is no longer funding loans.
As of September 30, 2016 the book value per share was $7.00 versus $9.05 at June 30, 2016. On October 15, 2016 the Company paid a special distribution of $1.981 per share, in the form of a return of capital, to shareholders of record at September 30, 2016. The Company expects this trend will continue throughout the orderly wind-up
Investment Portfolio Highlights
- 100% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 37.2%
- Weighted average interest rate and term to maturity on mortgage investments was 6.4% and 16.2 months, respectively
- Geographical exposure: Ontario 48.0%, Alberta 49.0%, and Nova Scotia 3.0%
On September 6, 2016 the Company announced the declaration of a special distribution of $1.981 per Class A share of the Company. The special distribution, which constitutes a return of capital pursuant to the winding-up of the Company's business as approved by Shareholders on June 16, 2016, was paid on October 17, 2016 to holders of Class A shares of record on September 30, 2016.
On September 28, 2016 the Company announced the resignation of Michael J.R. Nisker as President and Chief Executive Officer due to his retirement from Trez Capital Group LP the parent company of Trez Capital Fund Management Limited Partnership (the "Manager"). Effective November 10, 2016, Sandy Manson, who is currently the Company's Chief Financial Officer, assumed the role of President and Chief Executive Officer. Effective November 10, 2016, Greg Vorwaller was appointed to the Board replacing Mr. Nisker as one of the Manager's Board nominees. Greg Vorwaller is currently the President of the Manager.
On September 30, 2016 the Company announced the resumption of its normal course issuer bid (the "NCIB") as well as approval by the Toronto Stock Exchange to enter into an automatic share purchase plan. The Company anticipates using the automatic share purchase plan during the course of its NCIB to enable purchases of its Shares when the Company ordinarily would not be active in the market due to trading blackout periods, insider trading rules or otherwise. Purchases will be made by the Company's broker based upon the parameters prescribed by the TSX, applicable Canadian securities laws and the terms of the parties' written agreement. As of November 10, 2016, 22,513 shares have been purchased for cancellation under the NCIB.
The Board of Directors is currently reviewing options for the distribution of future returns of capital taking into consideration tax consequences to shareholders, expenses to be incurred, and compliance with regulations to maintain the Company's status as a Mortgage Investment Corporation under the Tax Act. The Company expects to announce the details relating to the next return of capital distribution in the near future.
Forward Looking Statements
Certain statements in this news release about Trez Capital Senior 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 holds a diversified portfolio of mortgages in Canada. Trez Capital Fund Management Limited Partnership is the manager of and portfolio advisor to the Company. On June 16, 2016 the Shareholders of the Company approved the orderly wind-up of the Company. Under the orderly wind-up plan the Company will distribute the net proceeds through special distributions, the repurchase of shares pursuant to the normal course issuer bid, or otherwise.
SOURCE Trez Capital Senior Mortgage Investment Corporation
For further information: Karyn Phuong, Vice President, Investor Relations, Trez Capital, Tel: (647) 788-1788, E-mail: KarynP@trezcapital.com