TSX Symbol FC
TORONTO, Aug. 10, 2015 /CNW/ - Firm Capital Mortgage
Investment Corporation (the "Corporation") (TSX FC) today released
its financial statements for the three and six months ended
June 30, 2015.
PROFIT & RETURN ON EQUITY
Income and profit
("Profit") for the three months ended June
30, 2015 remained relatively consistent at $4,800,434 compared to 4,800,625 for the same
period in the prior year. Profit for the six months ended
June 30, 2015 remained relatively
consistent at $9,648,299 compared to
$9,770,228 for the six months ended
June 30, 2014. Basic weighted average
profit per share for the three months ended June 30, 2015 was $0.237, compared to $0.239 per share reported for the same period in
2014.
Profit for the quarter ended June 30,
2015 represented an annualized return on shareholders'
equity (based on the average of the month end shareholders' equity)
of 9.12% versus a previously reported return on shareholders'
equity of 9.21% for the quarter ended June
30, 2014. This return on shareholders' equity represents 854
basis points per annum over the average Government of Canada One
Year treasury bill yield for the year of 0.58%, 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,
2015, the Corporation declared dividends totaling
$4,741,613 and $9,465,941 respectively or $0.234 and $0.468
per share versus $4,700,202 and
$9,399,219 or $0.234 and $0.468
per share for the three and six months ended June 30, 2014. While the per share amount of
dividends did not change quarter over quarter, the quantum of
dividends paid is higher in 2015 as a result of the increase in the
number of shares outstanding. The number of shares outstanding at
June 30, 2015 was 20,275,619 as
compared to 20,095,452 at June 30,
2014.
MORTGAGE AND DEBT INVESTMENT PORTFOLIO
HIGHLIGHTS
Details on the Corporation's investment portfolio
as at June 30, 2015 are as
follows:
- Total gross investment portfolio of $397,369,555, which is a 16% increase over
December 31, 2014.
- Conventional first mortgages, being first mortgages with loan
to values less than 75%, which comprise 68% of our total portfolio,
and total conventional mortgages with loan to values under 75%
comprise 77% of our total portfolio.
- Related investments total 17% of the portfolio.
- Non-conventional mortgages total 5% of the portfolio.
- Discounted debt investments total 1% of the portfolio.
- Approximately 55% of the portfolio matures by June 30, 2016. This results in a continuously
revolving portfolio, allowing management to assess market
conditions.
- The average face interest rate on the portfolio is 8.02% per
annum.
- Regionally, the mortgage portfolio is diversified approximately
as follows: Ontario (74%),
Quebec (12%), Alberta (9%) and Other (5%).
- Gross investment portfolio breakdown by loan size is as
follows:
|
|
|
|
|
|
Amount
|
Number of
Investments
|
%
|
Total Amount
(before provision)
|
%
|
$0 -
$2,500,000
|
156
|
76.1%
|
$ 134,151,598
|
33.8%
|
$2,500,001 -
$5,000,000
|
30
|
14.6%
|
103,852,447
|
26.1%
|
$5,000,001 -
$7,500,000
|
10
|
4.9%
|
68,342,855
|
17.2%
|
$7,500,001
+
|
9
|
4.4%
|
91,022,655
|
22.9%
|
|
|
205
|
100%
|
$ 397,369,555
|
100%
|
IMPAIRMENT PROVISION UPDATE
Management has always taken a proactive approach with impairment
provision reserves. This is a prudent approach to protecting our
Shareholders' equity. The impairment provision of $3,360,000 as at June 30,
2015 represents approximately 1% of the investment portfolio
balance.
UNRECOGNIZED INCOME COLLECTED
As at June 30, 2015, the Corporation has recorded
unearned income on its books (banked non-refundable Commitment fee
income) of $959,097, 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 Common Shares and grants participants the right to
purchase, without commission, additional Common 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 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. 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 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 the
Corporation's Annual Information Form under "Risk Factors" (a copy
of which can be obtained at www.sedar.com). 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