TORONTO, March 25, 2015 /CNW/ – Firm Capital Mortgage Investment Corporation (the “Corporation”) (TSX FC) today released its financial statements for the three and twelve months ended December 31, 2014 and announces that on March 24th it has completed a non-brokered private placement of common shares in the capital of the Corporation (“Common Shares”) for gross proceeds of $980,000.
PROFIT & RETURN ON EQUITY
Profit for the fourth quarter ended December 31, 2014 increased by 12% to $4,942,120 as compared to $4,405,596 for the same period last year. Profit for the year ended December 31, 2014 increased by 11% to $19,510,113, as compared to $17,607,877 for the year ended December 31, 2013. Basic weighted average profit per Common Share for the fourth quarter ended December 31, 2014 was $0.245, which is higher compared to $0.243 per Common Share reported for the fourth quarter ended December 31, 2013. Basic weighted average profit per Common Share for the year ended December 31, 2014 was $0.976, which is lower than the $0.987 per Common Share reported for the year ended December 31, 2013. The Corporation distributed 100% of it is profits for 2014.
Profit for the year ended December 31, 2014 represented an annualized return on shareholders’ equity (based on the average of the month end shareholders’ equity) of 9.34% versus a previously reported return on shareholders’ equity of 9.63% for the year ended December 31, 2013. This return on shareholders’ equity represents 835 basis points per annum over the average Government of Canada One Year treasury bill yield for the year of 0.99%, and is well in excess of the Corporation’s stated target yield objective of 400 basis points per annum over the average one year treasury bill yield.
DIVIDEND OVERVIEW
For the fourth quarter ended December 31, 2014, the Corporation declared dividends totaling $5,402,269 or $0.268 per Common Share versus $5,111,513 or $0.282 per Common Share for the fourth quarter ended December 31, 2013. The fourth quarter 2014 dividend comprised of regular dividends of $0.234 per Common Share and the year-end special dividend of $0.034 per Common Share. For the year ended December 31, 2014, the Corporation declared dividends totaling $19,510,113 or $0.970 per Common Share versus $17,607,877 or $0.984 per Common Share for the year ended December 31, 2013.
INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation’s investment portfolio as at December 31, 2014 are as follows:
- Total gross investment portfolio of $342,865,051, which is a 1% increase over December 31, 2013.
- Conventional first mortgages, being those first mortgages with loan to values less than 75%, comprise 73% of our total portfolio, and total conventional mortgages with loan to values under 75% comprise 82% of our total portfolio.
- Related investments total 14% of the portfolio.
- Non-conventional mortgages total 3% of the portfolio.
- Discounted debt investments total 1% of the portfolio.
- Approximately 63% of the portfolio matures by December 31, 2015. This results in a continuously revolving portfolio, allowing management to assess market conditions.
- The average face interest rate on the portfolio is 8.29% per annum.
- Regionally, the portfolio is diversified approximately as follows: Ontario (71%), Quebec (13%), Alberta (13%) and Other (3%).
- Gross investment portfolio breakdown by loan size is as follows:
|
Amount |
Number of Investments |
% |
Total Amount (before provision) |
% |
||
|
$0 – $2,500,000 |
130 |
73.5% |
$ 123,562,319 |
36.0% |
||
|
$2,500,001 – $5,000,000 |
29 |
164% |
$ 89,762,646 |
26.2% |
||
|
$5,000,001 – $7,500,000 |
13 |
7.3% |
$ 70,300,000 |
20.5% |
||
|
$7,500,001 + |
5 |
2.8% |
$ 59,240,086 |
17.3% |
||
|
177 |
100% |
$ 342,865,051 |
100% |
|||
IMPAIRMENT PROVISION UPDATE
Management has always taken a proactive approach to allowance provision reserves. This is a prudent approach to protecting our Shareholders’ equity. The impairment provision increased by $30,000 to $3,360,000 as at December 31, 2014. The impairment provision represents 1.0% of the Investment portfolio balance.
UNRECOGNIZED INCOME COLLECTED
As at December 31, 2014, the Corporation has recorded as unearned income on its books, banked non-refundable fee income of $700,202, which will be recognized as income over the term of the corresponding investments.
DIVIDEND AND SHARE PURCHASE PLAN
The Corporation has in place a Dividend Reinvestment Plan (DRIP) and Share Purchase Plan that is available to its shareholders. The plans allows participants to have their monthly cash dividends reinvested in additional Common Shares and grants participants the right to purchase, without commission, additional Common Shares, up to a maximum of $12,000 per annum.
Private Placement of Common Shares
Firm Capital Mortgage Investment Corporation announces on March 24th it has completed a non-brokered private placement of 80,000 Common Shares at a subscription price of $12.25 per Common Share for gross proceeds of $980,000.
The net proceeds of the private placement will be used for general corporate purposes.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy Common Shares. The Common Shares have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except in limited circumstances.
About The Corporation
The Corporation, through its mortgage banker, Firm Capital Corporation, is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The Corporation’s investment objective is the preservation of shareholders’ equity, while providing shareholders with a stable stream of monthly dividends from investments. The Corporation achieves its investment objectives through investments in selected niche markets that are under-serviced by large lending institutions. Lending activities to date continue to develop a diversified mortgage portfolio, producing a stable return to shareholders. The Corporation is a Mortgage Investment Corporation (MIC) as defined in the Income Tax Act (Canada). Accordingly, The Corporation is not taxed on income provided that its taxable income is paid to its shareholders in the form of dividends within 90 days after December 31 each year. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same position as if the mortgage investments made by the company had been made directly by the shareholder. Full reports of the financial results of the Corporation for the year are outlined in the audited financial statements and the related management discussion and analysis of Corporation, available on the SEDAR website at www.sedar.com. In addition, supplemental information is available on Corporation’s website at www.firmcapital.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, our performance, our mortgage portfolio and our distributions, as well as statements with respect to management’s beliefs, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intent”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management.
These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in the Corporation’s Annual Information Form under “Risk Factors” (a copy of which can be obtained at www.sedar.com). Those risks and uncertainties include, among others, risks associated with mortgage lending, dependence on the Corporation’s manager and mortgage banker, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters, shareholder liability and the introduction of new tax rules. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include, among others, that the Corporation is able to invest in mortgages at rates consistent with rates historically achieved; adequate mortgage investment opportunities are presented to the Corporation; and adequate bank indebtedness and bank loans are available to the Corporation. Although the forward-looking information continued in this new release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results and performance will be consistent with these forward-looking statements.
All forward-looking statements in this news release are qualified by these cautionary statements. Except as required by applicable law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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SOURCE Firm Capital Mortgage Investment Corporation
