Firm Capital Mortgage Investment Corporation Announces Q2/2013 Results

CNW Group

TSX Symbol FC

TORONTO , Aug. 13, 2013 /CNW/ - Firm Capital Mortgage Investment Corporation (the "Corporation") (TSX FC), today released its financial statements for the three and six months ended June 30, 2013 .

PROFIT & RETURN ON EQUITY
Comprehensive income and profit ("Profit") for the three months ended June 30, 2013 decreased slightly to $4,527,827 as compared to $4,610,727 for the same period last year. Profit for the six months ended June 30, 2013 increased slightly to $8,722,292 as compared to $8,548,639 for the same period last year. Basic weighted average profit per share for the three and six months ended June 30, 2013 was $0.257 and $0.497 , respectively. Profit for the three months ended June 30, 2013 of $4,527,827 exceeded dividends to Shareholders during the three month period of $4,160,814 .  Profit for the six months ended June 30, 2013 of $8,722,292 exceeded dividends to Shareholders during the six month period of $8,258,271 .

Profit for the three months ended June 30, 2013 represented an annualized return on shareholders' equity of 9.97%. This return on shareholders' equity represents 883 basis points per annum over the average Government of Canada One Year Treasury Bill yield for the second quarter of 2013 of 1.14%, 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, 2013 , the Corporation declared dividends totaling $4,160,814 and $8,258,271 , respectively or $0.234 and $0.468 per share, versus $3,997,429 and $7,715,964 or $0.234 and $0.468 per share for the three and six months ended June 30, 2012 .

INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation's investment portfolio as at June 30, 2013 are as follows:

  • Total gross investment portfolio of $318,852,724 , which is a 7% 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 75% of our total portfolio.
  • Related investments total 15% of the portfolio.
  • Non-conventional mortgages total 8% of the portfolio.
  • Discounted debt investments total 2% of the portfolio.
  • Approximately 67% of the portfolio matures by June 30, 2014 . This results in a continuously revolving portfolio, allowing management to assess market conditions.
  • The average face interest rate on the portfolio is 8.70% per annum.
  • Regionally, the portfolio is diversified approximately as follows: Ontario (71%), Quebec (12%), Alberta (11%), British Columbia (5%) and Other (1%).
  • Investment portfolio breakdown by loan size is as follows:

         
Amount Number of Investments % Total Amount %
  $0 - $2,500,000 100 69%  $ 82,914,503 26%
  $2,500,001 - $5,000,000 25 17% 86,328,817 27%
  $5,000,001 - $7,500,000 14 10% 84,630,627 27%
  $7,500,000 + 6 4% 64,978,777 20%
    145 100%  $  318,852,724 100%

 

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 remains unchanged at $3,180,000 which represents 1% of the gross loan portfolio.

UNRECOGNIZED INCOME COLLECTED
As at June 30, 2013 , the Corporation has recorded as unearned income on its books, banked non-refundable fee income of $615,787 , 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.

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

Contact:

Firm Capital Mortgage Investment Corporation
Eli Dadouch
President & Chief Executive Officer
(416) 635-0221

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