Timbercreek Senior Mortgage Investment Corporation announces 2014 second quarter results

Toronto Stock Exchange: MTG

TORONTO, Aug. 12, 2014 /CNW/ - Timbercreek Senior Mortgage Investment Corporation (TSX: MTG) (the "Company") today announced its financial results for the three and six months ended June 30, 2014.

"The second quarter of 2014 was our most active quarter since inception with over $57 million in new loans funded over the course of three months," said Andrew Jones, Chief Executive Officer of the Company.  "The portfolio continues to perform very well and the quality of our borrowers and the underlying security is demonstrated by the extraordinary repayments of $112 million in the quarter.  This activity represents over 30% turn-over in the quarter - our highest ever."

Mr. Jones continued:  "We believe this strong performance is a function of the diversification strategy we continue to employ across the portfolio and continued focus on loans secured by well-located, income producing properties."

Highlights for the quarter

  • Net interest income for the three months ended June 30, 2014 ("Q2 2014") and for the six months ended June 30, 2014 (the "Period") increased to $7.1 million and $14.3 million or 1.7% and 6.0% respectively compared to $7.0 million and $13.5 million for the three months ended June 30, 2013 ("Q2 2013") and the six months ended June 30, 2013 ("YTD 2013").

  • Income from operations for Q2 2014 and the Period increased to $5.9 million and $11.8 million or 10.6% and 15.2% respectively compared to $5.4 million and $10.3 million for the same periods in 2013.  The increase primarily resulted from the savings from the removal of the requirement to pay trailer fees.

  • Net mortgage investments decreased by 15.4% to $341.2 million from $401.5 million as at December 31, 2013.

  • Earnings per share for Q2 2014 and the Period were $0.153 and $0.301 per common share.

  • Credit facility utilization decreased to 24.9% of aggregate assets (December 31, 2013 - 27.0%).

  • For Q2 2014, five new net mortgage investments were funded (Q2 2013 - 13) totaling $29.5 million (Q2 2013 - $82.7 million), had additional advances on existing net mortgage investments totaling $27.7 million (Q2 2013 - $1.5 million) and received full repayments on 14 net mortgage investments (Q2 2013 - 16) and partial pay downs totaling $112.2 million (Q2 2013 - $59.4 million), resulting in net mortgage investments of $341.2 million as at June 30, 2014 (March 31, 2014 - $396.2 million).

  • On June 18, 2014, the credit facility agreement with a syndicate of lenders was amended and increased to $145.0 million, providing the Company with enhanced borrowing ability.  The credit facility matures in June 2016.

Investment Portfolio Highlights

  • As at June 30, 2014, the average loan-to-value was 49.4% (December 31, 2013 - 45.1%) whereas the weighted average loan-to-value was 49.2% (December 31, 2013- 50.8%), well below the 70% loan-to-value limit in the Company's asset allocation model.

  • Weighted average interest rate on net mortgage investments decreased to 6.40% at June 30, 2014 from 6.52% at December 31, 2013.

  • Weighted average lender fees received as a percentage of new mortgage investments funded was 0.79% and 0.73% for Q2 2014 and the Period compared with 0.62% and 0.79% for the same comparable periods in 2013.

  • Weighted average term to maturity was 2.5 years at June 30, 2014 (December 31, 2013- 2.2 years), well within range of its 2-3 year target.

  • The Company has a well-diversified portfolio across Canada's largest provinces: Ontario (51.7%), Quebec (24.0%), Alberta (3.6%) and B.C. (11.0%).

Financial Highlights*

  Three months ended Six months ended Year ended
June 30,
June 30,
June 30,
June 30,
December 31,
Distributable income $ 4,393 $ 4,900 $ 8,893 $ 10,042 $ 21,082
Targeted dividend yield 1   4.57%   4.58%   4.54%   4.57%   4.61%
Actual dividend yield 2   6.80%   6.68%   6.84%   6.72%   7.03%
Payout ratio 107.79% 116.48% 106.46% 113.32% 104.50%
Dividends per share:                    
  Class A $ - $ 0.150 $ - $ 0.300 $ 0.500
  Class B $ - $ 0.162 $ - $ 0.324 $ 0.540
  Class I $ - $ 0.162 $ - $ 0.324 $ 0.540
  Class J $ - $ 0.156 $ - $ 0.312 $ 0.520
  Common $ 0.150 $ - $ 0.300 $ - $ 0.100
Net mortgage investments $ 341,151 $ 392,732 $ 341,151 $ 392,732 $ 401,456
Average net mortgage investment $ 6,318 $ 7,273 $ 6,318 $ 7,273 $ 6,475
Weighted average interest rate   6.40%   6.73%   6.40%   6.73%   6.52%
Weighted average lender fee   0.79%   0.62%   0.73%   0.79%   0.86%
Turnover ratio   30.72%   14.97%   39.87%   42.39%   84.35%

  Targeted dividend yield equals the monthly average 2-Year Government of Canada Bond Yield plus 350 basis points.
  Actual dividend yield equals the total per share dividend for the stated period for Class A shares and common shares divided by the trading close price at the stated period end (annualized).

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Wednesday, August 13, 2014 at 2:00 p.m. (EST). Instructions on how to participate on this call are provided below:

Dial-in-number(s):  1-(855) 223-7310

Event Conference ID:  76159846

The playback of the conference call will also be available on www.timbercreek.com following the call.

About the Company

The Company provides investors with an opportunity to invest in a diversified portfolio of first-only mortgage investments originated and underwritten by its manager, Timbercreek Asset Management Inc. (the "Manager").  The Company focuses on capital preservation and the generation of attractive, stable returns, allowing for the payment of monthly dividends to shareholders.

*Non-GAAP Measures

The Company prepares and releases 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 Analysis ("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) and comprehensive income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of the Company's performance.

Certain statements contained in this news release may contain projections and "forward looking statements" within the meaning of that phrase under Canadian securities laws. When used in this news release, the words "may", "would", "should", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "objective" and similar expressions may be used to identify forward looking statements. By their nature, forward looking statements reflect the Company's current views, beliefs, assumptions and intentions are subject to certain risks and uncertainties, known and unknown, including, without limitation, those risks disclosed in the Company's public filings. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward looking statements. The Company does not intend to nor assumes any obligation to update these forward looking statements whether as a result of new information, plans, events or otherwise, unless required by law. 

SOURCE: Timbercreek Senior Mortgage Investment Corporation

For further information:


Timbercreek Asset Management Inc.
Carrie Morris
Investor Relations

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Timbercreek Senior Mortgage Investment Corporation

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