Timbercreek Mortgage Investment Corporation announces 2014 fourth quarter, year-end results
Toronto Stock Exchange: TMC
TORONTO, Feb. 26, 2014 /CNW/ - Timbercreek Mortgage Investment Corporation (TSX: TMC) (the "Company") today announced its financial results for the three months and year ended December 31, 2014 where it reported strong portfolio growth in Q4 and distribution income that exceeds the quarterly dividends.
"We are very pleased with the strong investment activity in 2014. Despite challenging market conditions and extraordinary turn-over, we were able to deploy $499 million dollars without compromising quality in the portfolio. This strong performance has allowed us to end the year with a portfolio that is more than 100% invested at an average interest rate that is in line with the Company's budget. As a result we feel we are well positioned for success in 2015," states Andrew Jones, Chief Executive Officer of the Company.
Fourth Quarter Highlights
- Net mortgage investments up 15% to $397.3 million (September 30, 2014 - $346.1 million)
- Net interest income up 13% to $9.8 million (Q3 2014 - $8.7 million) and down 2% from $9.9 million in Q4 2013.
- Net income per share down by $0.01 to $0.14 from $0.15 in Q3 2014 and down $0.03 from $0.17 in Q4 2013
- Exposure to Alberta decreased to 6.3% (Q3 2014 - 11.1%)
- Distributable Income per share of $0.20 (Q34 2014 - $0.16) exceeds the dividend payout of $0.18
- Unrealized fair value loss recorded of $0.8 million relating to foreclosed properties held for sale
Year End Financial Highlights
- Net interest income down 7.6% to $36.7 million (2013 - $39.7 million) which was a result of a delay in redeploying capital from extraordinary repayments experienced in the second quarter.
- Income from operations up 10.9% to $28.3 million (2013 - $25.5 million) resulting from lower expenses from the prior year that included one-time Transition costs of $3.5 million and trailer fees of $0.7 million.
- Earnings per share of $0.63 down from $0.65 in 2013, a result of lower net income for the Year which was partially offset by the reduction in expenses resulting from no Transition costs and trailer fees and a higher mortgage loss provision experienced in 2013.
- Credit facility balance of $9.1 million at year end, in line with the Company's expectation to be continually leveraged into 2015.
2014 Investment Portfolio Highlights
- Net mortgage investments up 25.3% to $397.3 million (December 31, 2013 - $317.2 million).
- Weighted average loan-to-value unchanged at 70.8% (December 31, 2013 – 70.8%) and remains well below the Company's maximum threshold of 85%.
- Weighted average interest rate down 40 basis points to 9.4% (December 31, 2013 - 9.8%) resulting from downward pressure on lending rates.
- Weighted average lender fees for 2014 were down to 1.6% from 1.7% for 2013. Despite a lower weighted average lender fee, lender fees received was up 60% to $5.8 million (2013 - $3.6 million) resulting from a significant increase of $202.6 million in advances on new mortgage investments in 2014 (2013 – decrease of $96.7 million)
- Weighted average term of 2.1 years (December 31, 2013 – 2.2 years) and an average remaining term to maturity of 1.4 years (December 31, 2013 – 1.2 years).
- The portfolio continues to be well-diversified across Canada's largest provinces: Ontario (44.4%), Quebec (14.3%), Alberta (6.3%) and B.C. (9.9%).
Operating Results Highlights
| For the three months ended December 31, |
For the year ended December 31, |
|||||||||
| 2014 |
2013 |
2014 |
2013 |
2012 |
||||||
| Net interest income |
$ |
9,774 |
$ |
9,926 |
$ |
36,710 |
$ |
39,731 |
$ |
38,655 |
| Income from operations |
$ |
7,438 |
$ |
6,844 |
$ |
28,272 |
$ |
25,487 |
$ |
29,178 |
| Net income (loss) and comprehensive income (loss) |
$ |
5,812 |
$ |
4,050 |
$ |
24,917 |
$ |
507 |
$ |
(402) |
| Earnings per share (basic and diluted) |
$ |
0.14 |
$ |
0.17 |
$ |
0.63 |
0.65 |
n/a |
||
| Adjusted net income (loss) and comprehensive income (loss) |
$ |
5,812 |
$ |
6,624 |
$ |
24,917 |
$ |
28,361 |
$ |
28,826 |
| Adjusted earnings per share (basic and diluted) |
$ |
0.14 |
$ |
0.17 |
$ |
0.63 |
$ |
0.74 |
$ |
0.81 |
| Dividends to shareholders |
$ |
7,326 |
$ |
4,953 |
$ |
30,263 |
$ |
29,274 |
$ |
29,201 |
| Cash flow from operating activities |
$ |
7,984 |
$ |
4,025 |
$ |
26,185 |
$ |
23,812 |
$ |
32,551 |
| Distributable income |
$ |
8,013 |
$ |
7,536 |
$ |
27,899 |
$ |
30,204 |
$ |
29,505 |
| Distributable income per share (basic and diluted) |
$ |
0.20 |
$ |
0.20 |
$ |
0.71 |
$ |
0.79 |
$ |
0.83 |
| Targeted dividend yield |
6.52% |
6.61% |
6.55% |
6.61% |
6.61% |
|||||
| Actual dividend yield |
8.58% |
8.52% |
9.16% |
8.33% |
7.68% |
|||||
| Payout ratio |
91.4% |
97.8% |
108.5% |
96.9% |
99.0% |
|||||
| Dividends per share: |
||||||||||
| Class A |
$ |
– |
$ |
0.063 |
$ |
– |
$ |
0.630 |
$ |
0.780 |
| Class B |
$ |
– |
$ |
0.067 |
$ |
– |
$ |
0.670 |
$ |
0.828 |
| Common |
$ |
0.180 |
$ |
0.134 |
$ |
0.762 |
$ |
0.134 |
$ |
– |
| NET MORTGAGE INVESTMENTS INFORMATION |
||||||||||
| Net mortgage investments |
$ |
397,341 |
$ |
317,154 |
$ |
397,341 |
$ |
317,154 |
$ |
368,253 |
| Total number of net investments |
105 |
96 |
105 |
96 |
77 |
|||||
| Average net mortgage investments |
$ |
3,784 |
$ |
3,304 |
$ |
3,784 |
$ |
3,304 |
$ |
4,783 |
| Weighted average interest rate |
9.4% |
9.8% |
9.4% |
9.8% |
10.1% |
|||||
| Weighted average lender fee |
1.5% |
1.6% |
1.6% |
1.7% |
1.7% |
|||||
| Turnover ratio |
37.3% |
24.2% |
112.6% |
79.8% |
80.1% |
|||||
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on February 27, 2015 at 2:00 p.m. (EST) which will be followed by a question and answer period with analysts. Instructions on how to participate on this call are provided below:
Dial-in-number(s): 1-(855) 223-7310
Event Conference ID: 86487831
The playback of the conference call will also be available on www.timbercreekmic.com following the call.
About the Company
The Company provides investors with an opportunity to invest in a diversified portfolio of 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-IFRS 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 Mortgage Investment Corporation
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