TSX Symbol FC
TORONTO, Aug. 7, 2014 /CNW/ - Firm Capital Mortgage
Investment Corporation (the "Corporation") (TSX FC) today released
its financial statements for the three months and six months ended
June 30, 2014 and is pleased to
announce the appointment of a new independent director.
PROFIT & RETURN ON EQUITY
Profit for the second
quarter ended June 30, 2014 increased
by 6% to $4,800,625 as compared to
$4,527,827 for the same period last
year. Profit for the six months ended June
30, 2014 increased by 12% to $9,770,228 as compared to $8,722,292 for the same period last year.
Basic weighted average profit per share for the second quarter
ended June 30, 2014 was $0.239, which is lower than the $0.257 per share reported for the second quarter
ended June 30, 2013.
Profit for the quarter ended June 30,
2014 represented an annualized return on shareholders'
equity (based on the month end average shareholders' equity) of
9.21% versus a previously reported return on shareholders' equity
of 9.97% for the quarter ended June 30,
2013. This return on shareholders' equity represents 820
basis points per annum over the average Government of Canada one year treasury bill yield for the
period being 1.01%, 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.
DIVIDEND OVERVIEW
For the three and six months ended
June 30, 2014, the Corporation
declared dividends totaling $4,700,202 and $9,399,219 respectively or $0.234 and $0.468
per Share versus $4,160,723 and
$8,258,271 or $0.234 and $0.468
per share for the three and six months ended June 30, 2013. While the per share amount of
dividends did not change quarter over quarter, the quantum of
dividends paid is higher in 2014 as a result of the increase in the
number of shares outstanding. The number of shares outstanding as
June 30, 2014 was 20,095,452 as
compared to 18,083,368 as at June 30,
2013.
INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the
Corporation's investment portfolio as at June 30, 2014 are as follows:
- Total gross investment portfolio of $344,892,561, which is a 2% increase over
December 31, 2013.
- Conventional first mortgages, being those first mortgages with
loan to values less than 75%, comprise approximately 68% of the
Corporation's total portfolio, and total conventional mortgages
with loan to values under 75% comprise 77% of the Corporation's
total portfolio.
- Related investments total 16% of the portfolio.
- Non-conventional mortgages total 5% of the portfolio.
- Discounted debt investments total 1% of the portfolio.
- Conventional non first mortgages total 10% of the
portfolio.
- Approximately 70% of the portfolio matures by June 30, 2015. This results in a continuously
revolving portfolio, allowing management to assess market
conditions.
- The average face interest rate on the portfolio is 8.37% per
annum.
- Regionally, the portfolio is diversified approximately as
follows: Ontario (67%),
Quebec (12%), Alberta (9%), British Columbia (6%) and Other (6%).
- Gross investment portfolio breakdown by loan size is as
follows:
|
|
|
|
|
Amount
|
Number
of
Investments
|
%
|
Total
Amount
|
%
|
|
$0 -
$2,500,000
|
111
|
68%
|
$ 103,788,345
|
30%
|
|
$2,500,001 -
$5,000,000
|
33
|
20%
|
$ 120,969,753
|
35%
|
|
$5,000,001 -
$7,500,000
|
16
|
10%
|
$ 82,014,464
|
24%
|
|
$7,500,001
+
|
3
|
2%
|
$ 38,119,999
|
11%
|
|
|
163
|
100%
|
$ 344,892,561
|
100%
|
IMPAIRMENT PROVISION UPDATE
Management has always
taken a proactive approach to allowance provision reserves. This is
a prudent approach to protecting our shareholders' equity. The
impairment provision of $3,330,000 as
at June 30, 2014 represents the total
amount of management's estimate of the shortfall between the
investment portfolio principal balances and the estimated net
realizable recovery from the collateral securing the loans. The
impairment provision represents 1% of the investment portfolio
balance.
UNRECOGNIZED INCOME COLLECTED
As at June 30, 2014, the Corporation has recorded as
unearned income, banked non-refundable fee income of $603,053, which will be recognized as income over
the term of the corresponding investments.
DIVIDEND AND SHARE PURCHASE PLAN
The Corporation has
in place a Dividend Reinvestment Plan (DRIP) and a Share Purchase
Plan that are available to its shareholders. The Plans allow
participants to have their monthly cash dividends reinvested in
additional common shares of the Corporation and grant participants
the right to purchase additional shares.
APPOINTMENT OF INDEPENDENT DIRECTOR
The Corporation is
also pleased to announce the appointment of Keith L. Ray as a new independent director of
the Corporation.
Since 2007, Keith has been the Chief Executive Officer of
Realvest Management, a privately-owned company with investments
that include real estate and mortgages. Keith also currently sits
on the boards of two TSX publicly-listed companies and acts as
chair of the audit committees for both companies.
For 27 years, until his retirement in 2007, Keith was a partner
at KPMG LLP and its predecessor firm. While at KPMG, Keith
helped oversee the first initial public offering of a REIT in
Canada and was an audit partner to
many public and private real estate companies. In addition, Keith
was the partner in charge of the Corporation's audit.
Eli Dadouch, President & CEO
of the Corporation, stated, "We are pleased to announce the
appointment of Keith Ray as a member
of the Board. With experience as a chartered accountant and
involvement with many publicly listed companies, we believe that he
will bring added experience to the Board."
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