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Timbercreek Mortgage Investment Corporation reports 2014 first quarter results - Timbercreek Mortgage Investment Corporation

Toronto Stock Exchange: TMC

TORONTO, May 6, 2014 /CNW/ - Timbercreek Mortgage Investment Corporation (TSX: TMC) (the "Company") today announced its financial results for the three months ended March 31, 2014.

First Quarter Highlights

  • Net interest income down 16.2% to $8.8 million from $10.5 million in Q1 2013 which is attributed to a smaller net mortgage investment portfolio in Q1 2014 resulting from the special redemption facilitated in Q4 2013 as well as a slightly lower average interest rate on the portfolio primarily due to larger than average first mortgage positions which will be syndicated in Q2 2014.

  • Income from operations down 11.3% to $6.8 million from $7.7 million in Q1 2013, primarily resulting from the lower net interest income which was partially offset by a $0.8 million decrease in expenses.

  • Earnings per share for the quarter ended March 31, 2014 was $0.173 per common share (Q1 2013 - $0.196)

  • In March 2014, the Company completed a public offering of $34.5 million (including the over-allotment option of $4.5 million) of 6.35% convertible unsecured subordinated debentures for net proceeds of $32.9 million (the "debentures") which now provides the Company with modest structural leverage.

  • Leverage capacity for the Company taking into consideration the convertible debentures as well as the maximum borrowing capacity on the credit facility was approximately 15.8% at March 31, 2014 (Q1 2013 - 6.8%)

  • 11 new mortgage investments advanced (Q1 2013 - 20) totaling $61.7 million (Q1 2013 - $69.1 million), additional advances on existing mortgage investments of $10.5 million (Q1 2013 - $13.8 million), full repayments on 11 mortgage investments (Q1 2013 - 13) and partial pay downs totaling $46.2 million (Q1 2013 - $97.0 million) resulting in a portfolio turnover of 14.13% (Q1 2013 - 27.50%).

  • Net mortgage investments at period end were up 6.9% to $339.2 million (December 31, 2013 - $317.2 million).

  • In Q1 2014, the Company foreclosed on one property totalling $4.3 million (Q1 2013 - NIL) which brings the total foreclosed properties held for sale to $15.8 million as at March 31, 2014 (Q1 2013 - NIL)

Investment Portfolio Highlights

  • Average loan-to-value of 61.6% (December 31, 2013- 61.7%), well below the 85% loan-to-value limit in the Company's asset allocation model.
  • Weighted average interest rate on net mortgage investments was 9.49% (December 31, 2013 - 9.81%). This is primarily a result of there being less exposure to non-first mortgage positions in the portfolio over the quarter.

  • Lender fees received as a percentage of new mortgage investments funded over the period was 1.1% (December 31, 2013 - 1.83%).  The reduction is expected to be temporary and is primarily due to the lower fees charged on first mortgage investments that the Company expects to syndicate in 2014.

  • Weighted average term to maturity of 2.2 years (December 31, 2013 - 2.2 years), well within range of its 1.5-3 year target.

  • Well diversified portfolio across Canada's largest provinces: Ontario (52.0%), Alberta (14.4%), Quebec (14.2%) and B.C. (9.7%).

Q1 Results*

Results March 31, 2014 March 31, 2013
Distributable Income $6.5 million $7.8 million
Target dividend yield 6.51% 6.55%
Actual dividend yield 8.74% 7.60%
Payout ratio 114.50% 93.03%
Dividends per share:    
  Class A - $0.189
  Class B - $0.201
  Common shares $0.201 -
Net mortgage and loan investments $339.0 million $354.1 million
Average mortgage and loan investment $3.5 million $4.2 million
Weighted average interest rate 9.49% 9.78%
Average lender fee 1.08% 1.92%
Turnover ratio 14.13% 27.50%

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