Terra Firma Capital Corporation
TSX VENTURE : TII

Terra Firma Capital Corporation

August 22, 2013 16:00 ET

Terra Firma Capital Corporation Reports Results for the Second Quarter Ended June 30, 2013

77% Total Revenue Growth Year Over Year

TORONTO, ONTARIO--(Marketwired - Aug. 22, 2013) -

All amounts are stated in Canadian dollars.

Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the "Company"), a real estate finance company, today released its financial results for the three and six months ended June 30, 2013.

SECOND QUARTER 2013 HIGHLIGHTS:

  • Total revenue is $2.0 million, an increase of $848,000 or 77%, compared to the same period last year.

  • Total assets increased by 36% to $58.4 million from $42.8 million at June 30, 2012.

"We are encouraged by the positive momentum we have experienced in the second quarter. Our portfolio is growing and is providing for significant revenue increases." commented Y. Dov Meyer, President and Chief Executive Officer. "We have established ourselves in the marketplace as a recognizable name. We continue to actively focus on our strategy of strengthening our brand and our relationships with experienced real estate owners, co-lenders and investors. Our first cycle of loan investments has reached maturity, which has enabled us to redeploy capital and secure additional capital from investors for our pipeline of loans. I believe that Terra Firma is well positioned to capitalize on future growth opportunities and excited about our prospects in the market." he further said.

Results of operations - three months ended June 30, 2013

Net income in the second quarter ended June 30, 2013 was $263,000 or $0.01 per basic and diluted share, compared to $212,000, or $0.01 per basic and diluted share, in the second quarter ended June 30, 2012. Net income in the three and six months ended June 30, 2013 was impacted by internalization of the management. General and administrative expenses for the second quarter ended June 30, 2013 increased by $240,000 as compared to second quarter ended June 30, 2013.

Interest and fee income for the second quarter ended June 30, 2013 aggregated $2.0 million, an increase of 77% over the $1.1 million in the same period in the previous year, and an increase of 15% over $1.7 million in the first quarter ended March 31, 2013.

Interest expense for the second quarter ended June 30, 2013 was $1.2 million, compared to $503,000 for the comparative period last year and $937,000 for the first quarter ended March 31, 2013, representing the growth of our business and the increase in syndication capital to fund the investment activities.

The company's loan and mortgage investments increased from $32.0 million at December 31, 2012 to $43 million at June 30, 2013, an increase of 34%. The average interest rate in the mortgage portfolio at June 30, 2013 was 18.5% compared to 19.9% at December 31, 2012.

The Company's Management's Discussion & Analysis and Financial Statements as at and for the three and six months ended June 30, 2013 have been filed and are available on SEDAR (www.sedar.com).

About Terra Firma

Terra Firma is a full service, publicly traded real estate finance company that provides customized equity and debt solutions to the real estate industry. Our focus is to arrange and provide financing with flexible terms to property owners looking to improve or add to their existing real estate assets but who may be limited by conventional bank financing, as well as to invest in quality commercial and residential developments by proven real estate developers. Terra Firma offers a full spectrum of real estate financing under the guidance of strict corporate governance, clarity and transparency. For further information please visit Terra Firma's website at www.terrafirmacapital.ca.

The TSXV has neither approved nor disapproved the contents of this press release. The TSXV does not accept responsibility for the adequacy or accuracy of this press release.

This Press Release contains forwardlooking statements with respect matters concerning the business, operations, strategy and financial performance of Terra Firma. These statements generally can be identified by use of forward looking word such as "may", "will", "expects", "estimates", "anticipates", "intends", "believe" or "could" or the negative thereof or similar variations. The future business, operations and performance of Terra Firma could differ materially from those expressed or implied by such statements. Such forwardlooking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forwardlooking statements are based on a number of assumptions which may prove to be incorrect. Additional, important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, local real estate conditions, competition, changes in government regulation, dependence on tenants' financial conditions, interest rates, the availability of equity and debt financing, environmental and tax related matters, and reliance on key personnel. There can be no assurances that forwardlooking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forwardlooking statements. The cautionary statements qualify all forwardlooking statements attributable to Terra Firma and persons acting on its behalf. Unless otherwise stated, all forward looking statements speak only as of the date of this Press Release and Terra Firma has no obligation to update such statements except as required by law.

Terra Firma Capital Corporation
Consolidated Statements of Income and Comprehensive Income
For the three and six months ended June 30, 2013 and 2012
(Unaudited)
Three months ended Six months ended
June 30,
2013
June 30,
2012
June 30,
2013
June 30,
2012
Revenue
Interest and fees earned $ 1,840,180 $ 1,058,182 $ 3,426,395 $ 2,024,469
Rental income 115,558 49,606 222,654 99,238
1,955,738 1,107,788 3,649,049 2,123,707
Expenses
Property operating costs 21,238 17,513 68,853 35,051
General and administrative expenses 372,923 133,199 740,086 260,963
Share based compensation 32,345 129,311 32,345 159,668
Interest expense 1,157,172 503,070 2,094,584 998,761
1,583,678 783,093 2,935,868 1,454,443
Income before income taxes 372,060 324,695 713,181 669,264
Income tax provision 108,503 112,462 184,279 203,814
Net income and comprehensive income $ 263,557 $ 212,233 $ 528,902 $ 465,450
Earnings per share - basic and diluted $ 0.01 $ 0.01 $ 0.02 $ 0.02
Terra Firma Capital Corporation
Consolidated Statements of Financial Position
As at June 30, 2013 and December 31, 2012
(Unaudited)
June 30,
2013
December 31,
2012
Assets
Cash and cash equivalents $ 4,694,541 $ 3,223,291
Amounts receivable and prepaid expenses 1,982,091 2,396,180
Loan and mortgage investments 42,952,481 31,996,731
Investment properties 7,848,487 7,834,576
Portfolio investment 950,000 950,000
Total assets $ 58,427,600 $ 46,400,778
Liabilities
Accounts payable and accrued liabilities $ 1,710,805 $ 1,192,616
Provision for discontinued operations 384,245 445,957
Unearned income 213,177 16,965
Income taxes payable - 474,297
Deferred income taxes 16,232 15,602
Loans and mortgages payable 32,677,167 21,406,070
Convertible debentures 10,108,781 10,093,325
Total liabilities 45,110,407 33,644,832
Shareholders' Equity
Share capital $ 10,757,405 $ 10,757,405
Contributed surplus 605,484 573,139
Retained earnings 1,954,304 1,425,402
Total shareholders' equity 13,317,193 12,755,946
Total liabilities and Shareholders' Equity $ 58,427,600 $ 46,400,778

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