SOURCE: Firm Capital Mortgage Investment Corporation

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November 07, 2017 18:33 ET

Firm Capital Mortgage Investment Corporation Announces Q3/2017 Results

TORONTO, ON--(Marketwired - November 07, 2017) - Firm Capital Mortgage Investment Corporation (the "Corporation") (TSX: FC) today released its financial statements for the three and nine months ended September 30, 2017.

HIGHLIGHTS

INCREASE IN PROFIT
Income and profit (referred to herein as "Profit") for the three months ended September 30, 2017 increased by approximately 9% to $5,903,828 as compared to $5,406,432 for the same period in the prior year. Profit for the nine months ended September 30, 2017 increased by approximately 18% to $18,698,778 compared to $15,821,762 for the nine months ended September 30, 2016.

Basic weighted average profit per share for the three months ended September 30, 2017 and for the three months ended September 30, 2016 was $0.241. Basic weighted average profit for the nine months ended September 30, 2017 was $0.786, compared to $0.733 per share reported for the same period in 2016.

REALIZED GAIN ON DISPOSAL OF MARKETABLE SECURITIES AND DEBENTURE PORTFOLIO INVESTMENTS
During the three months ended September 30, 2017, the Corporation sold part of its marketable securities investment portfolio for proceeds of $1,644,171. The Corporation realized a total gain on disposal of marketable security investments of $143,021 and this amount was reclassified from accumulated other comprehensive income to the statements of income.

PORTFOLIO GROWTH
The Corporation's investment portfolio (the "Investment Portfolio") as at September 30, 2017 increased by $90 million to approximately $533.8 million compared to $444.3 million as at December 31, 2016 (before the impairment provision of $5.31 million and $4.46 million respectively).

RETURN ON EQUITY
The Corporation continues to exceed its yield objective of producing a return on shareholders' equity in excess of 400 basis points over the average one year Government of Canada Treasury bill yield. Profit for the quarter ended September 30, 2017 represents an annualized return on shareholders' equity (based on the month end average shareholders' equity in the quarter) of 8.69%, which is 729 basis points per annum over the average one year Government of Canada Treasury bill yield of 1.40%.

COMPLETION OF A REDEMPTION OF CONVERTIBLE DEBENTURE
On September 20, 2017, the Corporation completed the early redemption and cancellation of its outstanding 5.75% convertible unsecured subordinated debentures, which were scheduled to mature on October 31, 2017. Of the outstanding $31,443,000 principal, $21,278,427 was converted to common shares at a price of $12.09 per share, which equaled to 95% of the weighted average market price per share for the preceding 20 trading days ending on the fifth trading day preceding the redemption date (being September 13, 2017). The remaining balance of $10,164,573 was repaid in cash.

INVESTMENT PORTFOLIO DETAILS

Details on the Corporation's investment portfolio as at September 30, 2017 are as follows:

  • Total gross investment portfolio of $539,180,548, which is a 20% increase over December 31, 2016.
  • Conventional first mortgages, being those first mortgages with loan to values less than 75%, comprise 72% of our total portfolio, and total conventional mortgages, with loan to values under 75%, comprise 85% of our total portfolio.
  • Approximately 66% of the portfolio matures by September 30, 2018.
  • The average face interest rate on the portfolio is 8.03% per annum.
  • Regionally, the portfolio is diversified approximately as follows: Ontario (86%), Quebec (4%), Alberta (5%), and Other (5%).
  • 248 of the 265 investments are individually less than $7.5 million with 217 investments being less than $2.5 million:
             
Amount  Number of
Investments
    Total Amount
(before provision)
  
 $0 - $2,500,000  217  81.9%  $190,018,269  35.2%
 $2,500,001 - $5,000,000  24  9.1%  $85,111,392  15.8%
 $5,000,001 - $7,500,000  7  2.6%  $40,653,256  7.6%
 $7,500,001 +  17  6.4%  $223,397,631  41.4%
   265  100%  $539,180,548  100%

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 DRIP allows participants to have their monthly cash dividends reinvested in additional shares of the Corporation. A 3% discount will only apply if the weighted average trading share price, calculated five trading days immediately preceding each dividend date, is higher than $14.10. Once registered under the Share Purchase Plan, participants have the right to purchase additional shares, totaling no greater than $12,000 per year with a minimum of $250 per month. Participating shareholders pay no commission for shares issued from treasury.

About The Corporation

Where Mortgage Deals Get Done®

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. 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 dividends, 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), which could cause our actual results and performance to differ materially from the forward-looking statements contained in this circular. 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.

Contact Information

  • For further information, please contact:
    Firm Capital Mortgage Investment Corporation
    Eli Dadouch
    President & Chief Executive Officer
    (416) 635-0221