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Timbercreek Mortgage Investment Corporation announces 2014 second quarter results - Timbercreek Mortgage Investment Corporation

Toronto Stock Exchange: TMC

TORONTO, Aug. 12, 2014 /CNW/ - Timbercreek Mortgage Investment Corporation (TSX: TMC) (the "Company") today announced its financial results for the three and six months ended June 30, 2014.

"Throughout the first half of 2014, the portfolio has performed very well which we believe is a function of the strong diversification and continued focus on loans secured by well-located, income-producing properties." said Andrew Jones, Chief Executive Officer of the Company. "While competition in the quarter has been stronger than expected, we were still able to deploy $105 million in new mortgage investments over the course of three months, which is the strongest quarter we have experienced since inception.  This is a testament to the strong deal flow that continues to exist in the market and the effectiveness of our origination team."

Mr. Jones continued: "the second quarter also experienced the highest levels of repayments in the Company's history which clearly demonstrates the quality of our borrowers and the underlying security, but also presented challenges on earnings for the first half of the year.  We continue to actively work to deploy this capital and are pleased with the momentum we have leading into the third quarter."

Highlights for the quarter

  • Net interest income for the three months ended June 30, 2014 ("Q2 2014") increased to $9.5 million, or 0.7%, compared to $9.4 million for the three months ended June 30, 2013 ("Q2 2013"). Net interest income for the six months ended June 30, 2014 (the "Period") decreased to $18.3 million, or 8.2%, compared to $19.9 million for the six months ended June 30, 2013 ("YTD 2013").

  • Income from operations for Q2 2014 increased to $7.4 million, or 10.6%, compared to $6.7 million for Q2 2013. The increase primarily resulted from the savings from the removal of the requirement to pay trailer fees and no provision for mortgage investments loss in Q2 2014. Income from operations for the Period decreased to $14.2 million, or 1.1%, compared to $14.4 million for YTD 2013. The decrease primarily resulted from a decrease in net interest income due to a lower net mortgage investments portfolio over the Period, which was mainly offset by the savings from the removal of the requirement to pay trailer fees and a lower provision for mortgage investments loss in 2014.

  • Net mortgage investments increased by 3.3% to $327.5 million from $317.2 million as at December 31, 2013.

  • Earnings per share for Q2 2014 and the Period were $0.166 and $0.339 per common share.

  • The Company closed on a public offering of 3,737,500 common shares, including exercising the over-allotment option, at a price of $9.35 per share. The Company received net proceeds of $33.1 million.

  • During Q2 2014, the Company funded 19 new net mortgage investments (Q2 2013 - 14) totaling $104.7 million (Q2 2013 - $34.7 million), had additional advances on existing net mortgage investments totaling $10.4 million (Q2 2013 - $21.4 million) and received full repayments on 27 net mortgage investments (Q2 2013 - 7) and partial pay downs totaling $126.5 million (Q2 2013 - $56.0 million), resulting in net mortgage investments of $327.5 million as at June 30, 2014 (March 31, 2014 - $339.0 million).

Investment Portfolio Highlights

  • As at June 30, 2014, the average loan-to-value was 61.7% (December 31, 2013 - 61.1%) whereas the weighted average loan-to-value on the mortgage investment portfolio was 69.2% (December 31, 2013 - 70.8%), well below the 85% loan-to-value limit in the Company's asset allocation model.

  • Weighted average interest rate on net mortgage investments decreased to 9.48% at June 30, 2014 from 9.81% at December 31, 2013 relating to increased competition in the market.

  • Weighted average lender fees received as a percentage of new mortgage investments funded was 1.06% and 1.07% for Q2 2014 and the Period compared with 2.72% and 2.18% for the same comparable periods in 2013, a result of additional capital in the market.

  • Weighted average term to maturity was 2.2 years at June 30, 2014 (December 31, 2013 - 2.2 years), well within range of its 1.5 - 3.0 year target.

  • The Company has a well-diversified portfolio across Canada's largest provinces: Ontario (53.5%), Quebec (13.2%), Alberta (6.9%) and B.C. (11.9%).

Financial Highlights*

Three months ended Six months ended Year ended
June 30,
June 30,
June 30,
June 30,
December 31,
FINANCIAL INFORMATION (for the period ended)
Distributable income $ 6,977 $ 6,742 $ 13,477 $ 15,051 $ 30,204
Targeted dividend yield 1 6.57% 6.58% 6.54% 6.57% 6.61%
Actual dividend yield 2 8.47% 8.19% 8.52% 8.23% 8.33%
Closing trading price $ 9.52 $ 9.26 $ 9.52 $ 9.26 $ 9.17
Payout ratio 117.24% 108.43% 115.84% 97.06% 96.92%
Dividends per share:
Class A $ - $ 0.189 $ - $ 0.378 $ 0.630
Class B $ - $ 0.201 $ - $ 0.402 $ 0.670
Common $ 0.201 $ - $ 0.402 $ - $ 0.134
Net mortgage investments $ 327,509 $ 354,272 $ 327,509 $ 354,272 $ 317,154
Total number of net mortgage investments 88 91 88 91 96
Average net mortgage investment $ 3,722 $ 3,893 $ 3,722 $ 3,893 $ 3,304
Weighted average interest rate 9.48% 9.83% 9.48% 9.83% 9.81%
Weighted average lender fee 1.06% 2.72% 1.07% 2.18% 1.83%
Turnover ratio 36.30% 15.78% 51.13% 43.23% 79.76%

  Targeted dividend yield equals the monthly average 2-Year Government of Canada Bond Yield plus 550 basis points.
  Actual dividend yield equals the total per share dividend for the stated period for Class A shares and common shares divided by the trading close price at the stated period end (annualized).

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Wednesday, August 13, 2014 at 11:00 a.m. (EST). Instructions on how to participate on this call are provided below:

Dial-in-number(s):  1-(855) 223-7310

Event Conference ID:  76120777

The playback of the conference call will also be available on www.timbercreek.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-GAAP 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


Timbercreek Asset Management Inc.
Carrie Morris
Investor Relations