Firm Capital Mortgage Investment Corporation (the “Corporation”)
(TSX FC, FC.DB.F, FC.DB.G, FC.DB.H, FC.DB.I, FC.DB.J, FC.DB.K and
FC.DB.L) released its financial statements for the three and twelve
months ended December 31, 2021.
NET INCOMEFor the three months
ended December 31, 2021, net income increased by 5.7% to $7,734,278
as compared to $7,318,366 reported for the same period in 2020. Net
income for the year ended December 31, 2021 increased by 13.8% to
$29,985,385, as compared to $26,353,473 for the year ended December
31, 2020. The increase is mainly a result of higher interest income
due to a larger average investment portfolio size over the year (an
annual average balance increase of $44 million), offset by a
decrease in average interest rate on the investment portfolio.
EARNINGS PER SHAREBasic
weighted average profit per share for the three months ended
December 31, 2021 was $0.234, as compared to the $0.249 per share
reported for the three months ended December 31, 2020. Basic
weighted average profit per share for the year ended December 31,
2021 was $0.950, compared to the $0.913 per share reported for the
year ended December 31, 2020.
PORTFOLIOThe Corporation’s
investment portfolio increased by $83.5 million to $642.5 million
as at December 31, 2021, in comparison to $559.0 million as at
December 31, 2020 (in each case, gross of the impairment provision
and fair value adjustment). During 2021, new investment funding was
$515.5 million (2020 – $399.4 million), and repayments were $432.0
million (2020 – $321.5 million).
RETURN ON EQUITYThe 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. Income for the
year ended December 31, 2021 represented a return on total
shareholders’ equity (based on the average of the month end
shareholders’ equity in the year) of 8.46%, representing a return
on total shareholders’ equity of 771 basis points per annum over
the average one-year Government of Canada Treasury bill yield of
0.75%.
PRUDENT IMPAIRMENT ALLOWANCE
Management has always taken a proactive approach
to the Corporation’s loan impairment allowance. This is a prudent
approach that provides stability of dividends to our shareholders
in the event there are any future issues with any of the loans
within the Corporation’s investment portfolio. The allowance for
impairment and fair value adjustment as of December 31, 2021 was
$5,750,000 (December 31, 2020, allowance for impairment –
$5,609,000).
INVESTMENT PORTFOLIO
DETAILSDetails on the Corporation’s investment portfolio,
as at December 31, 2021, are as follows:
- Total gross investment portfolio of
$642,531,533, which is higher than the $559,007,922 reported at
December 31, 2020.
- Conventional first mortgages, being
those first mortgages with loan-to-values less than 75%, comprise
73% of the total portfolio (71% as at December 2020), and total
conventional mortgages with loan-to-values less than 75% comprise
82% of the total portfolio (78% as at December 2020).
- Approximately 66% of the portfolio
matures by December 31, 2022.
- The average face interest rate on
the portfolio is 7.91% per annum, as compared to 8.20% at December
31, 2020.
- Regionally, the
mortgage investment portfolio is diversified as follows: Ontario
(88%), Western Canada (6%), Quebec (4%) and USA (2%).
Borrower repayment performance has remained
consistent with pre-COVID-19 performance and no payment deferral
arrangements have been implemented.
CASH DIVIDEND DISTRIBUTIONThe
Corporation is pleased to announce that its board of directors has
declared a monthly cash dividend of $0.078 per common share
(subject to adjustment at the discretion of the board of directors)
payable on each dividend payment date set out below to holders of
common shares of record at the close of business on each record
date set out below:
Record Date |
Dividend Payment Date |
April 29, 2022 |
May 16, 2022 |
May 31, 2022 |
June 15, 2022 |
June 30, 2022 |
July 15, 2022 |
DIVIDEND AND SHARE PURCHASE PLANThe 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 $14.85) 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.
For the three months and year ended December 31,
2021, the Corporation declared dividends on its common shares
totaling $8,148,312 and $29,985,385, respectively, or $0.246 and
$0.948 per share, versus $7,297,147 and $27,430,809 respectively,
or $0.249 and $0.944 per share, for the three months and year ended
December 31, 2020. The number of common shares outstanding at
December 31, 2021 was 33,610,885, as compared to 30,843,166 at
December 31, 2020.
About the
CorporationWhere 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 consolidated
financial statements and the related management discussion and
analysis of the Corporation, available on the SEDAR website at
www.sedar.com. In addition, supplemental information is available
on the Corporation’s website at www.firmcapital.com.
Forward-Looking StatementsThis
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 investment 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 current 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 news release.
Those risks and uncertainties include, among
others, risks associated with the impact of existing or future
waves of the COVID-19 pandemic, 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; adequate bank
indebtedness and bank loans are available to the Corporation; and a
non-material impact resulting from any future COVID-19 waves.
Although the forward-looking information contained in this news
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.
For further information, please contact:
Firm Capital Mortgage Investment CorporationEli
DadouchPresident & Chief Executive Officer(416) 635-0221
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