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Timbercreek Senior Mortgage Investment Corporation announces 2014 third quarter results - Timbercreek Senior Mortgage Investment Corporation

Toronto Stock Exchange: MTG

TORONTO, Nov. 5, 2014 /CNW/ - Timbercreek Senior Mortgage Investment Corporation (TSX: MTG) (the "Company") today announced its financial results for the three and nine months ended September 30, 2014.

"The Company experienced another active quarter with over $111 million in capital deployed bringing net mortgage investments to $417 million and representing growth of 22% since the end of the second quarter.  This activity demonstrates that we continue to identify high quality mortgage investments that fit within the Company's investment strategy without compromising quality," states Andrew Jones, Chief Executive Officer of the Company.

Mr. Jones added that "following the extraordinary repayments in the second quarter, turnover has returned to a more moderate pace and the portfolio is at its target utilization, and is nearing full capacity.  Despite a slightly lower average interest rate in the portfolio, we are still able to generate earnings that are more than sufficient to cover our current dividend to shareholders through the quarter."

Key Financial Highlights

  • Net interest income for the three months ended September 30, 2014 ("Q3 2014") and for the nine months ended September 30, 2014 (the "Period") was $6.6 millionand $21.0 million compared to $7.4 million and $20.9 million for the comparable periods in 2013, or a 10.0% decrease and 0.4% increase, respectively.  Although a decrease in comparison to the comparable three month period, overall YTD 2014 has experienced a slight increase in net interest income.  This increase is in spite of smaller average net mortgage investments through the Period resulting from the one-time redemption in late 2013 relating to the Company's transition to the regulatory regime for non-investment fund reporting issuers. 

  • Income from operations for Q3 2014 and the Period increased to $5.5 million and$17.3 million or 126.1% and 36.2% respectively compared to $2.4 million and $12.7 million for the comparable periods in 2013.  The increase is primarily due to the one-time cost incurred of $3.7 million relating to the Company's transition in 2013. 

  • Net mortgage investments increased by 22.0% and 4.0% for the three and nine months ended September 30, 2014 respectively to $417.7 million from $341.2 million as at June 30, 2014 and $401.5 million as at December 31, 2013. 

  • Earnings per share for Q3 2014 and the Period were $0.15 and $0.45 per common share. 

  • Credit facility utilization increased to 30.8% of total assets (December 31, 2013 – 27.0%).

Investment Portfolio Highlights

  • For Q3 2014, 15 new net mortgage investments were funded (Q3 2013 – 13) totaling $103.6 million (Q3 2013 – $47.4 million), had additional advances on existing net mortgage investments totaling $7.9 million (Q3 2013 – $5.5 million) and received four full repayments (Q3 2013 – 10) and partial pay downs totaling $34.9 million (Q3 2013 – $52.8 million), resulting in net mortgage investments of $417.7 million as at September 30, 2014 (June 30, 2014 – $341.2 million). 

  • Weighted average loan-to-value was 52.3% (December 31, 2013- 50.8%), well below the 70% loan-to-value limit in the Company's asset allocation model. 

  • Weighted average interest rate on net mortgage investments decreased to 6.21% at September 30, 2014 from 6.52% at December 31, 2013.  2014 has seen increased competition from other lenders, although weighted average interest rate increased following period end after syndications. 

  • Weighted average lender fees received as a percentage of new mortgage investments funded was 0.70% and 0.68% for Q3 2014 and the Period compared with 0.91% and 0.90% for the same comparable periods in 2013. 

  • Weighted average term to maturity was 2.5 years at September 30, 2014(December 31, 2013- 2.2 years), well within range of its 2-3 year target. 

  • The Company has a well-diversified portfolio across Canada's largest provinces:Ontario (48.6%), Quebec (23.5%), Alberta (4.0%) and B.C. (10.7%).

Financial Highlights*



Three months ended

Nine months ended

Year ended


September 30,

2014

September 30,

2013

September 30,

2014

September 30,

2013

December 31,

2013

FINANCIAL INFORMATION (FOR THE PERIOD)



Distributable income

$

4,897

$

5,461

$

13,789

$

15,502

$

21,082

Targeted dividend yield


4.61%


4.69%


4.56%


4.61%


4.61%

Actual dividend yield


6.51%


6.64%


6.58%


6.71%


7.03%

Payout ratio

96.66%

103.35%

102.98%

109.81%

104.50%

Net income per share (basic and diluted)

$

0.15

$

-

$

0.45

$

-

$

0.42

Class A

$

-

$

0.15

$

-

$

0.45

$

0.50

Class B

$

-

$

0.16

$

-

$

0.49

$

0.54

Class I

$

-

$

0.16

$

-

$

0.49

$

0.54

Class J

$

-

$

0.16

$

-

$

0.47

$

0.52

Common

$

0.15

$

-

$

0.45

$

-

$

0.10

MORTGAGE INVESTMENTS INFORMATION



Net mortgage investments

$

417,711

$

392,821

$

417,711

$

392,821

$

401,456

Total number of net mortgage investments


65


57


65


57


62

Average net mortgage investment

$

6,426

$

6,892

$

6,426

$

6,892

$

6,475

Weighted average interest rate


6.21%


6.71%


6.21%


6.71%


6.52%

Weighted average lender fee


0.70%


0.91%


0.67%


0.90%


0.90%

Turnover ratio


8.97%


13.58%


48.68%


55.85%


84.35%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management onThursday, November 6, 2014 at 2:00 p.m. (EST). Instructions on how to participate on this call are provided below:

Dial-in-number(s):  1-(855) 223-7310

Event Conference ID:  6850234

The playback of the conference call will also be available onwww.timbercreekseniormic.com following the call.

About the Company

The Company provides investors with an opportunity to invest in a diversified portfolio of first-only 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 Senior Mortgage Investment Corporation

Timbercreek Asset Management Inc., Carrie Morris, Investor Relations, 416-800-1552, cmorris@timbercreek.com