TSX Symbol FC
TORONTO, March 21, 2017 /CNW/ - Firm Capital Mortgage
Investment Corporation (the "Corporation") (TSX FC) today released
its financial statements for the three and twelve months ended
December 31, 2016.
HIGHLIGHTS
PROFIT
Income and profit (referred to herein as "Profit") for the quarter
ended December 31, 2016 remained
relatively consistent at $5,368,851
as compared to $5,376,207 for the
same period in the prior year. Profit for the year ended
December 31, 2016 of $21,190,613 represents approximately a 6%
increase compared to $20,081,258
reported for the year ended December
31, 2015.
Basic weighted average profit per share for the quarter ended
December 31, 2016 was $0.239, which is 10% lower than the $0.265 per share reported for the quarter ended
December 31, 2015. Basic
weighted average profit per share for the year ended December 31, 2016 was $0.972, which is 2% lower compared to the
$0.991 per share reported for the
year ended December 31, 2015. The
Corporation distributed 100% of its profits for 2016.
DIVIDENDS
For the fourth quarter and year ended December 31, 2016, the Corporation declared
dividends totaling $0.264 and
$0.966 per share versus $0.289 and $0.991
per share for the fourth quarter and year ended December 31, 2015. The December, 2016 special
dividend was 3 cents per share.
YEAR OVER YEAR PORTFOLIO GROWTH
The Corporation's investment portfolio (the "Investment
Portfolio"), as at December 31, 2016
increased by $45.6 million to
approximately $444.3 million as
compared to $398.7 million as at
December 31, 2015 (net of the
impairment provision of $4.46 and
$4.23 million respectively). During
the year, Management was content to invest in lower yielding
mortgage investments that met its' adjusted risk tolerance.
SHORT TERM PORTFOLIO WITH SIGNIFICANT ANNUAL TURNOVER
In 2016, the Investment Portfolio repayments totaled $245.1 million with new investments during the
year totaling $290.4 million.
This turn is the key to our investment approach and the measure of
its success.
RETURN ON EQUITY
The Corporation continues to exceed its yield objective of
producing a return on shareholders' equity in excess of 400 basis
points over the average one year Government of Canada Treasury bill
yield. Profit for the quarter ended December
31, 2016 represents an annualized return on shareholders'
equity (based on the month end average shareholders' equity in the
quarter) of 8.87%, representing return on shareholders' equity of
824 basis points per annum over the average one year Government of
Canada Treasury bill yield of 0.63%.
PRUDENT IMPAIRMENT PROVISION
Management has always taken a proactive approach to allowance
provision reserves. This is a prudent approach to protecting the
stability of dividends to shareholders in the event there are any
future issues with any of the investments within the Corporation's
investment portfolio. The impairment provision was increased by
$230,000 during 2016 to $4,460,000 as at December
31, 2016, and represents 1% of the investment portfolio
balance.
INVESTMENT PORTFOLIO DETAILS
Details on the Corporation's investment portfolio as at
December 31, 2016 are as follows:
- Total gross investment portfolio of $448,754,633, which is an 11% increase over
December 31, 2015.
- Conventional first mortgages, being those first mortgages with
loan to values less than 75%, comprise 75.1% of our total
portfolio, and total conventional mortgages with loan to values
under 75% comprise 85.4% of our total portfolio.
- Approximately 67% of the portfolio matures by December 31, 2017.
- The average face interest rate on the portfolio is 7.83% per
annum.
- Regionally, the mortgage portfolio is diversified approximately
as follows: Ontario (83%),
Alberta (8%), Quebec (5%), and Other (4%).
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 DRIP allows
participants to have their monthly cash dividends reinvested in
additional shares. The Price paid per share is 97% (if the share
price is higher than $12.95) of the
weighted average trading price calculated five trading days
immediately preceding each dividend date with no commission cost.
Once registered with the Share Purchase Plan, participants have the
right to purchase additional shares, totaling no greater than
$12,000 per year and no less than
$250 per month. Shareholders
participating pay no commission.
ABOUT THE CORPORATION
Where Mortgage Deals Get Done®
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. 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
dividends, 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 mic 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.
Boutique Mortgage Lenders®
SOURCE Firm Capital Mortgage Investment Corporation
