TSX Symbol FC
TORONTO,
March 21, 2014 /CNW/ - Firm Capital
Mortgage Investment Corporation (the "Corporation") (TSX FC) today
released its financial statements for the three and twelve months
ended December 31, 2013.
PROFIT & RETURN ON EQUITY
Profit for the fourth quarter ended December
31, 2013 increased by 8% to $4,405,596 as compared to $4,071,325 for the same period last year.
For the year ended December 31, 2013,
profit increased by 5% to $17,607,877
as compared to $16,755,292 for the
year ended December 31, 2012.
Basic weighted average profit per share for the fourth quarter
ended December 31, 2013 was
$0.237, which is lower in comparison
to the $0.243 reported for the fourth
quarter ended December 31, 2012.
Basic weighted average profit per share for the year ended
December 31, 2013 of $0.987 was slightly lower in comparison to the
$0.999 for the year ended
December 31, 2012. The Corporation
distributed 100% of its profits for 2013.
Profit for the year ended December 31, 2013 represented an annualized
return on shareholders' equity (based on the month end average
shareholders' equity) of 9.63% versus a previously reported return
on shareholders' equity of 9.83% for the year ended December 31, 2012. This return on shareholders'
equity represents 864 basis points per annum over the average
Government of Canada One Year Treasury Bill yield for the year of
0.99%, 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 fourth quarter ended December 31,
2013, the Corporation declared dividends totaling
$5,111,513 or $0.282 per share versus $5,007,886 or $0.288 per share for the fourth quarter ended
December 31, 2012. The fourth quarter
2013 dividend comprised of regular dividends of $0.234 per share and the year-end special
dividend of $0.048 per share. For the
year ended December 31, 2013, the
Corporation declared dividends totaling $17,607,877 or $0.984 per share versus $16,755,292 or $0.990 per share for the year ended December 31, 2012.
INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation's investment portfolio as at
December 31, 2013 are as follows:
- Total gross investment portfolio of $339,626,485, which is a 14% increase over
December 31, 2012.
- Conventional first mortgages, being those first mortgages with
loan to values less than 75%, comprise 64% of our total portfolio,
and total conventional mortgages with loan to values under 75%
comprise 73% of our total portfolio.
- Related investments total 17% of the portfolio.
- Non-conventional mortgages total 9% of the portfolio.
- Discounted debt investments total 1% of the portfolio.
- Approximately 69% of the portfolio matures by December 31, 2014. This results in a continuously
revolving portfolio, allowing management to assess market
conditions.
- The average face interest rate on the portfolio is 8.58% per
annum.
- Regionally, the portfolio is diversified approximately as
follows: Ontario (72%),
Quebec (8%), Alberta (11%), British Columbia (4%) and Other (5%).
- Gross investment portfolio breakdown by loan size is as
follows:
Amount |
Number of
Investments |
% |
|
Total Amount |
% |
|
$0 - $2,500,000 |
99 |
68% |
$ |
90,158,968 |
27% |
|
$2,500,001 - $5,000,000 |
30 |
20% |
$ |
117,895,458 |
35% |
|
$5,000,001 - $7,500,000 |
11 |
8% |
$ |
72,373,724 |
21% |
|
$7,500,001 + |
6 |
4% |
$ |
59,198,335 |
17% |
|
|
146 |
100% |
$ |
339,626,485 |
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 increased by
$150,000 to $3,330,000 as at December
31, 2013 and 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 1.0% of the Investment portfolio balance.
UNRECOGNIZED INCOME COLLECTED
As at December 31, 2013, the
Corporation has recorded as unearned income on its books, banked
non-refundable fee income of $653,191, 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 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.
For supplementary information regarding our
return on equity, dividend history and mortgage portfolio, please
refer to the following link.
http://40rhel5streamview01.newswire.ca/media/2014/03/21/20140321-745037-38241-2d559b13-85ca-4570-8969-f10f21829f2c.pdf
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 Corporation
PDF available at:
http://stream1.newswire.ca/media/2014/03/21/20140321_C6569_DOC_EN_38241.pdf