Toronto Stock Exchange: TMC
TORONTO, Nov. 14, 2013 /CNW/ - Timbercreek Mortgage Investment
Corporation (TSX: TMC) (the "Company") today announced its financial results for the third
quarter ended September 30, 2013 (the "Period").
Third Quarter Highlights
At a special shareholder meeting held on September 12th, Shareholders voted in favour of the transition (the "Transition") of
the Company from the Canadian securities regulatory regime for
investments funds to the regulatory regime for non-investment fund
reporting issuers. Over 50% of all shareholders participated in the
vote and 99.9% of the votes were voted in favour of the Transition.
The Transition took effect on September 13, 2013, but there remain a
few elements related to the Transition that will be completed on or
before November 30, 2013.
Net interest income down 3.1% to $9.9 million from $10.2 million.
Income from operations, less interest on credit facility, plus
Transition related costs and provision for mortgage and loan investment
loss is virtually unchanged year over year at $7.9 million.
Investment Portfolio Highlights
Net mortgage investments were up 8.1% year over year to $355.0 million
The Company advanced 17 new mortgage investments (Q3 2012 - 12) totaling
$42.1 million (Q3 2012 - $62.7 million), had additional advances on
existing mortgage and loan investments totaling $6.5 million (Q3 2012 -
$21.2 million) and received full repayments on 14 investments (Q3 2012
- 12) and partial pay downs totaling $44.3 million (Q3 2012 - $96.7
During the Period, the Company foreclosed on three mortgages totaling
The Company's mortgage allocation of first (51%) vs. non-first mortgages
(49%) has changed moderately from December 31, 2012 to September 30,
2013 with a 6% change in the portfolio allocation between these two
The weighted average interest rate on net mortgage and loan investments
at September 30, 2013 was 9.58% (December 31, 2012 - 10.14%).
The weighted average term to maturity as at September 30, 2013 is 2.1
years (December 31, 2012 - 2.9 years), well within range of its 1.5 -
3.0 year target. At September 30, 2013, 88.2% of mortgage investments
mature by December 31, 2015.
The portfolio continues to be well diversified across Canada's largest
provinces as follows: Ontario (53.5%), Quebec (12.3%), Alberta (11.0%)
and B.C. (6.2%)
The loan-to-value on the mortgage and loan investments at September 30,
2013 was 63.9% (December 31, 2012 - 69.5%), well below the 85%
loan-to-value limit in the Company's asset allocation model.
For the three months and nine months ended September 30, 2013 the
Company has recognized an impairment provision of $400,000 and
$1,200,000 (no impairment provision for the three months and nine
months ended September 30, 2012).
"We are very pleased to be able to state that the Company has been a
reporting issuer for greater than five years now. Over that period,
which includes the global financial crisis, we have incurred no
impairments of principal while distributing predictable, consistent
cash flow to investors," states Andrew Jones, Managing Director, Debt
Investments of Timbercreek Asset Management Inc., the manager of the
Company (the "Manager"). "We will continue to focus on making
investments that are primarily secured by income-producing properties,
rather than land and construction financing, and are pleased to report
that currently over 90% of the Company's mortgage investments are in
fact secured by cash-flowing investment grade commercial real estate."
Q3 2013 Results
Net interest income earned by the Company was $9.9 million (Q3 2012 -
$10.2 million), a decrease of $0.3 million, or 3.1%, from the same
period last year. The decrease is mainly due to lower lender fees
recognized in Q3 2013. The timing of the lender fees fluctuate with the
timing of the funding and repayments of the mortgage and loan
The Company received non‐refundable lender fees of $0.6 million (Q3 2012
- $1.0 million) or 1.5% (Q3 2012 - 1.7%) of new mortgage and loan
investments funded in the three months ended September 30, 2013.
The Company recognized an impairment provision of $0.4 million (Q3 2012
- nil) or approximately 0.1% of net mortgage and loan investments at
September 30, 2013. To be prudent the Company has recognized this
amount relating to its existing mortgage investments in arrears.
The Company generated income from operations of $4.3 million (Q3 2012 -
$8.0 million) or an increase per Class A and Class B share of $0.11 (Q3
2012 - $0.21) and $0.20 (Q3 2012 - $0.22), respectively. The decrease
in Q3 2013 income from operations is mainly due to a one-time cost of
$3.4 million relating to the Company's Transition.
The Company distributed $7.3 million (Q3 2012 - $7.3 million) or $0.19
(Q3 2012 - $0.19) per Class A share and $0.20 (Q3 2012 - $0.20) per
Class B share.
The Company exchanged 14,500 Class B shares (Q3 2012 - 1,747,223) for
15,370 Class A shares (Q3 2012 - 1,852,055). The Company also acquired
for cancellation under the normal-course issuer bid ("NCIB"), 340,800
Class A shares (Q3 2012 - nil) at a cost of $3.1 million (Q3 2012 -
nil) during Q3 2013.
About the Company
The Company provides investors with an opportunity to receive attractive
yields by investing indirectly, through holding shares of the Company,
in mortgage and loan investments selected and determined to be high
quality by its manager, Timbercreek Asset Management Inc. The
investment objective of the Company is, with a primary focus on capital
preservation, to acquire and maintain a diversified portfolio of
mortgage and loan investments that generates attractive, stable returns
in order to permit the Company to pay monthly distributions to its
*Non-GAAP Measures The Company prepares and releases audited annual financial statements
and unaudited condensed consolidated interim financial statements in
accordance with IFRS. As a complement to results provided in accordance
with IFRS, the Company discloses certain financial measures not
recognized under IFRS and that do not have standard meanings prescribed
by IFRS (collectively the "non-IFRS measures"). These non-IFRS measures
are further described in Management's Discussion and Analsysis ("MD&A")
available on SEDAR. The Company has presented such non-IFRS measures
because the Manager believes they are relevant measures of the ability
of the Company to earn and distribute cash dividends to investors and
to evaluate the Company's performance. These non-IFRS measures should
not be construed as alternatives to net income (loss) or cash flows
from operating activities determined in accordance with IFRS as
indicators of the Company's performance.
SOURCE: Timbercreek Mortgage Investment Corporation
For further information:
Timbercreek Asset Management Inc.