TORONTO, March 30, 2016 /CNW/ - Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the "Company") financial results for the year ended December 31, 2015 are as follows:
For the three months ended December 31, 2015
- Income from operations totaled $0.5 million, down from $1.3 million at Q4 of 2014
- Net income totaled $0.3 million, down from $1.1 million at Q4 of 2014
- Basic and diluted earnings per share were $0.04 down from $0.14 at Q4 2014
The decrease in income from operations, net income, and earnings per share resulted from an $800,000 adjustment to the carrying value of a single mortgage in the fourth quarter of 2015. The borrower defaulted on the mortgage in March 2016 and has requested a renegotiation of its terms. These negotiations, combined with financial disclosures of the borrower as of December 31, 2015, have led the Company to conclude that increased risk conditions existed as at December 31, 2015. The fair value adjustment is a non-cash charge to reflect changes in credit risk and may be reversed in the future.
For the year ended December 31, 2015
- Income from operations totaled $4.8 million, a decrease from $5.8 million at December 31, 2014
- Net income totaled $3.8 million, a decrease from $4.6 million at December 31, 2014
- Basic and diluted earnings per share were $0.51, a decrease from $0.61 at December 31, 2014
- Dividends declared totaled $0.58 per share, an increase from $0.53 at December 31, 2014
The financial results for the 2015 fiscal year were adversely impacted by the fair value adjustment that took place in the fourth quarter, as discussed above.
Investment Portfolio Highlights as of December 31, 2015
- 100% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 44.4%, well below the Company's Investment Guideline of 70%, and one of the lowest among all Canadian publicly traded mortgage investment corporations
- Weighted average interest rate and remaining term to maturity on mortgage investments was 6.3% and 16.2 months, respectively
- Geographically diversified across Canada: Ontario 54.4%, Alberta 39.0%, British Columbia 5.0%, and Nova Scotia 1.6%
Special Committee Review Update
On September 28, 2015 the Board of Directors of the Company established a Special Committee of independent directors (the "Special Committee") to consider alternatives to enhance value for its shareholders. On February 18, 2016 the Special Committee announced that it was pursuing a monetization process (the "Monetization Process") and discussions are ongoing with third parties who had expressed an interest in a monetization transaction involving the Company and/or its assets. The Special Committee's strategic review process is continuing.
To the extent that the Monetization Process identifies a transaction that the Special Committee believes is in the best interests of all shareholders, it is the intention of the Special Committee to bring forward the proposed transaction for consideration by shareholders at the upcoming annual and special meeting scheduled for May 30, 2016. The record date for shareholders to be eligible to vote at the annual and special meeting is March 31, 2016. There can be no assurances at this time that the Special Committee's strategic review process will result in a monetization transaction or any transaction.
The Company will review the financial results for the quarter and year ended December 31, 2015 on Friday April 1, 2016 at 11:00am EST.
Conference Call Details:
Dial-in-number: 416-764-8688 or toll free 888-390-0546
Event Conference ID: 87029591
A taped replay of the conference call will be available until April 30, 2016 by dialing 416-764-8677 or toll free 888-390-0541, passcode 029591#.
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's objective is to acquire and maintain a relatively conservative and well diversified portfolio of first 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 18 years of bridge financing experience in the real estate sector and currently manages $1.8 billion in assets.
SOURCE Trez Capital Senior Mortgage Investment Corporation
For further information: Karyn Phuong, Vice President, Investor Relations, Trez Capital, Tel: (647) 788-1788, E-mail: [email protected]