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 million).
- During the Period, the Company foreclosed on three mortgages totaling $3.8M.
- 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 positions.
- 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 investments.
- 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 shareholders.
*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
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Timbercreek Asset Management Inc.