TORONTO, Aug. 15, 2016 /CNW/ - Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the "Company") today released its financial results for the quarter ended June 30, 2016.
For the three months ended June 30th
- Loss from operations totaled $0.8 million, compared to income from operations of $1.4 million in Q2 of 2015
- Net loss totaled $0.8 million, compared to net income of $1.2 million in Q2 of 2015
- Basic and diluted losses per share were $0.10 and dividends declared were $0.146 per share
During the second quarter, income from operations and net income declined primarily as a result of lower commitment fees and interest revenue resulting from a reduction in the average size of the mortgage portfolio. In addition, there was an increase in expenses primarily related to the orderly wind up plan. Included in those expenses, an incentive fee program was approved by the Shareholders on June 16, 2016 whereby the manager would be paid a fee when the realized proceeds on mortgage dispositions exceeded a specified minimum. Accounting standards require that a provision, in the amount of $1.0 million as of June 30, 2016, be recorded in the financial statements commencing this quarter. This estimated amount is based on the current fair value of investments in mortgages. The amount of the incentive fee currently owing as of June 30, 2016 is $36,224. The estimated fee will be adjusted quarterly and any adjusted balance will be due and payable as proceeds are realized from the monetization of the mortgage investments and the net proceeds become available for distribution to the Company's shareholders. Other significant increases in expenses relate to audit, legal fees and charges related to fair value adjustments on investments in mortgages.
Investment Portfolio Highlights
- 100% of the portfolio was invested in first mortgages
- Weighted average loan-to-value of the mortgage portfolio was 40.5%, well below the Company's Investment Guideline of 70%
- Weighted average interest rate and term to maturity on mortgage investments was 6.1% and 14.6 months, respectively
- Geographically diversified portfolio across Canada: Ontario 34.3%, Alberta 47.2%, British Columbia 16.5%, and Nova Scotia 2.0%
Since the shareholders approved the orderly wind-up plan on June 16, 2016, the Company has received repayment of approximately $10.2 million principal amount of mortgages.
Over the next 90 days the Company anticipates receiving approximately $7.6 million in refinancing of existing mortgages by other private funds managed by the Manager. In addition, over the next 90 days, the Company anticipates receiving repayment of up to $1.3 million principal amount of mortgages, however, there can be no assurance that any such repayments will occur.
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 17 years of bridge financing experience in the real estate sector and currently manages $1.9 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: KarynP@trezcapital.com