TSX Symbol FC
TORONTO,
March 15, 2013 /CNW/ - Firm Capital
Mortgage Investment Corporation (the "Corporation") (TSX FC), today
released its financial statements for the quarter and fiscal year
ended December 31, 2012.
PROFIT & RETURN ON EQUITY
Profit for the fourth quarter ended December 31, 2012 increased by 6% to $4,071,325 as compared to $3,843,403 for the same period last year.
Basic weighted average profit per share for the fourth quarter
ended December 31, 2012 was
$0.243, which is lower in comparison
to the $0.256 reported for the fourth
quarter ended December 31, 2011. For
the year ended December 31, 2012,
profit increased by 14% to $16,755,292 as compared to $14,659,462 for the year ended December 31, 2011. Basic weighted average
profit per share for the year ended December
31, 2012 of $0.999 was
slightly higher in comparison to the $0.995 for the year ended December 31, 2011. Profit for the year ended
December 31, 2012 represented an
annualized return on shareholders' equity of 9.83%. This return on
shareholders' equity represents 874 basis points per annum over the
average Government of Canada One Year Treasury Bill yield and is
well in excess of the Corporation's stated target yield objective
of 400 basis points per annum over the average One Year Treasury
Bill yield.
DIVIDENDS:
For the twelve months ended December 31, 2012, the Corporation paid dividends
totaling $16,755,292 versus
$14,659,462 for the twelve months
ended December 31, 2011. The
Corporation distributed 100% of its profits to shareholders.
INVESTMENT PORTFOLIO HIGHLIGHTS:
Details on the Corporation's investment
portfolio as at December 31, 2012 are
as follows:
- Total gross investment portfolio equals $297,217,271
- Conventional first mortgages, being those mortgages with loan
to values less than 75%, comprise 62.3% of our total
portfolio.
- Approximately 70% of the portfolio matures within 12 months.
This results in a continuously revolving portfolio, allowing
management to assess market conditions.
- The average face interest rate on the portfolio is 9.03% per
annum.
- Regionally, the portfolio is diversified approximately as
follows: Ontario 74.6%,
Alberta 15.1%, Quebec 8.2% and British Columbia 2.1%.
- Investment portfolio breakdown by loan size is as follows:
| |
|
|
|
|
Amount |
Number of
Investments |
% |
Total Amount |
% |
| $0 - $2,500,000 |
98 |
71% |
$ |
83,230,849 |
28% |
| $2,500,001 - $5,000,000 |
22 |
16% |
|
75,932,651 |
26% |
| $5,000,001 - $7,500,000 |
10 |
7% |
|
56,508,748 |
19% |
| $7,500,000 + |
9 |
6% |
|
81,545,023 |
27% |
| |
139 |
100% |
$ |
297,217,271 |
100% |
IMPAIRMENT PROVISION:
Management has always taken a proactive approach
to the loan impairment provision. This is a prudent approach to
protecting our Shareholders' equity. Impairment provisions
increased by $200,000 over 2011 to
$3,180,000 representing 1.1% of the
gross loan portfolio.
UNRECOGNIZED INCOME COLLECTED:
As at December 31,
2012, the Corporation has banked non-refundable fee income
of $520,055, which will be recognized
as income over the term of the corresponding investments.
FINANCING UPDATE
On March 4, 2013,
the Corporation entered into an agreement to sell, on a bought deal
basis, to a syndicate of underwriters, $20,000,000 aggregate principal amount of 4.75%
convertible unsecured subordinated debentures due March 31, 2020 (the "Debentures") at a price of
$1,000 per Debenture. The
Corporation has granted the underwriters an over-allotment option
to purchase up to $3,000,000
additional aggregate principal amount of Debentures, exercisable,
in whole or in part, at any time until 30 days following the
closing of the offering. The Debentures will bear interest at
a rate of 4.75% per annum, payable semi-annually in arrears on the
last day of March and September in each year commencing
September 30, 2013, and will mature
on March 31, 2020 (the "Maturity
Date"). The Debentures will be convertible at the holder's
option into common shares of the Corporation (the "Shares") at any
time prior to the earlier of the Maturity Date and the date fixed
for redemption at a conversion price of $15.80 per Share (the "Conversion Price"),
subject to adjustment in certain circumstances.
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 plans allows participants to have their
monthly cash dividends reinvested in additional shares at a 2%
discount to market and grants participants the right to purchase,
without commission, additional shares, up to a maximum of
$12,000 per annum.
ABOUT THE CORPORATION
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 by pursuing a
strategy of growth through investments in selected niche markets
that are under-serviced by large lending institutions. Lending
activities to date continue to develop a diversified mortgage
portfolio, producing a stable return to Shareholders. 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 Firm Capital, available on
the SEDAR website at www.sedar.com. In addition, supplemental
information is available on Firm Capital'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 distributions, 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
our 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.
SOURCE Firm Capital Mortgage Investment Corporation