TSX Symbol FC
TORONTO, May 6, 2015 /CNW/ – Firm Capital Mortgage Investment Corporation (the “Corporation”) (TSX FC) today released its financial statements for the three months ended March 31, 2015.
PROFIT & RETURN ON EQUITY
Income and profit (“Profit”) for the first quarter ended March 31, 2015 decreased by 2% to $4,847,865 as compared to $4,969,604 for the same period last year. Basic weighted average profit per Common Share for the first quarter ended March 31, 2015 was $0.240, compared to $0.253 per Common Share reported for the first quarter ended March 31, 2014.
Profit for the quarter ended March 31, 2015 represented an annualized return on shareholders’ equity (based on the average of the month end shareholders’ equity) of 9.26% versus a previously reported return on shareholders’ equity of 9.54% for the quarter ended March 31, 2014. This return on shareholders’ equity represents 868 basis points per annum over the average Government of Canada One Year treasury bill yield for the year of 0.58%, 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 first quarter ended March 31, 2015, the Corporation declared dividends totaling $4,724,328, or $0.234 per share versus $4,699,017 or $0.234 per share for the quarter ended March 31, 2014. The number of Shares outstanding at March 31, 2015 was 20,243,034 as compared to 20,081,399 at March 31, 2014.
INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation’s investment portfolio as at March 31, 2015 are as follows:
- Total gross investment portfolio of $372,457,082, which is a 9% increase over December 31, 2014.
- Conventional first mortgages, being first mortgages with loan to values less than 75%, which comprise 66% of our total portfolio, and total conventional mortgages with loan to values under 75% comprise 76% of our total portfolio.
- Related investments total 18% of the portfolio.
- Non-conventional mortgages total 5% of the portfolio.
- Discounted debt investments total 1% of the portfolio.
- Approximately 62% of the portfolio matures by March 31, 2016. This results in a continuously revolving portfolio, allowing management to assess market conditions.
- The average face interest rate on the portfolio is 8.33% per annum.
- Regionally, the portfolio is diversified approximately as follows: Ontario (70%), Quebec (16%), Alberta (10%) and Other (4%).
- Gross investment portfolio breakdown by loan size is as follows:
|
Amount |
Number of |
% |
Total Amount |
% |
|
|
$0 – $2,500,000 |
143 |
73.7% |
$ 130,521,661 |
35.0% |
|
|
$2,500,001 – $5,000,000 |
34 |
17.5% |
$ 110,571,782 |
29.7% |
|
|
$5,000,001 – $7,500,000 |
13 |
6.7% |
$ 74,116,388 |
19.9% |
|
|
$7,500,001 + |
4 |
2.1% |
$ 57,247,251 |
15.4% |
|
|
194 |
100% |
$ 372,457,082 |
100% |
||
IMPAIRMENT PROVISION UPDATE
Management has always taken a proactive approach which allowance provision reserves. This is a prudent approach to protecting our Shareholders’ equity. The impairment provision of $3,360,000 as at March 31, 2015 represents approximately 1% of the investment portfolio balance.
UNRECOGNIZED INCOME COLLECTED
As at March 31, 2015, the Corporation has recorded unearned income on its books (banked non-refundable Commitment fee income) of $814,272, 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.
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.
Where Mortgage Deals Get Done®
Boutique Mortgage Lenders®
SOURCE Firm Capital Mortgage Investment Corporation
