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Timbercreek Senior Mortgage Investment Corporation Reports Third Quarter 2013 Results

Toronto Stock Exchange: MTG

TORONTO, Nov. 14, 2013 /CNW/ - Timbercreek Senior Mortgage Investment Corporation (TSX: MTG) (the "Company") today announced its financial results for the third quarter ended September 30, 2013 (the "Period").

Third Quarter Highlights
  • At a special shareholder meeting held on September 12 th, Shareholders voted in favour of the transition (the "Transition") of the Company from the Canadian securities regulatory regime for investments funds to the regulatory regime for non-investment fund reporting issuers.  Over 50% of all shareholders participated in the vote and 99.9% of the votes were voted in favour of the Transition.  The Transition took effect on September 13, 2013, while the final conversion of the class shares to common shares will be completed on or before November 30, 2013.
  • Net interest income up 73.4% to $7.4 million from $4.3 million.
  • Income from operations, less interest on credit facility, plus Transition related costs is up 106% to $5.5 million from $2.7 million.

Portfolio Highlights
  • Net mortgage investments were up 43% year over year to $392.8 million
  • The Company advanced 13 new mortgage investments (Q3 2012 - 10) totaling $47.4 million (Q3 2012 - $132.9 million), had additional advances on existing mortgage and loan investments totaling $5.5 million (Q3 2012 - $3.8 million) and received full repayments on 10 mortgage investments (Q3 2012 - 4) and partial pay downs totaling $52.8 million (Q3 2012 - $49.7 million), resulting in net mortgage investments of $392.8 million ( September 30, 2012 - $274.8 million) as at September 30, 2013.
  • The weighted average interest rate on the mortgage investments at September 30, 2013 was slightly higher at 6.71% ( December 31, 2012 - 6.66%).
  • The weighted average term to maturity as at September 30, 2013 is 2.4 years ( December 31, 2012 - 3.1 years), well situated within the portfolio's target maturity of 2 - 3 years.  At Period end, 79.2% of mortgage investments mature by December 31, 2015.
  • The portfolio continues to be well diversified across Canada's largest provinces as follows: Ontario (59.7%), Quebec (16.8%), Alberta (11.9%) and B.C. (6.6%)
  • The loan-to-value on the mortgage portfolio at September 30, 2013 was 45.1% ( December 31, 2012 - 53.6%), well below the 70% loan-to-value limit in the Company's asset allocation model.
  • During the Period, no mortgage investments were in default and as a result management has determined that no provision for mortgage losses is required for the Period.

"We continue to take a very conservative approach when it comes to managing the Company and are focused primarily on lending against properties where we are comfortable that there is adequate income to service the debt - rather than land and construction," states Andrew Jones, Managing Director, Debt Investments of Timbercreek Asset Management Inc., the manager of the Company (the "Manager").  "With 100% of our portfolio focused in first mortgages, over 91% of mortgages in the portfolio secured by income-producing properties and an average loan-to-value across the portfolio of 45%, we feel the 60 cents per year we are distributing represents a compelling yield on a risk-adjusted basis."

Q3 2013 Results
  • Net interest income earned by the Company in Q3 2013 was $7.4 million (Q3 2012 - $4.3 million), an increase of $3.1 million, or 73.4%, from the same period last year. The increase from the same period last year is a result of fully deploying the equity raised from multiple equity offerings throughout 2012 into mortgage investments.
  • The Company received non‐refundable lender fees of $0.6 million (Q3 2012 - $1.0 million) or 1.2% (Q3 2012 - 0.7%) of new mortgage investments funded in Q3 2013.
  • Income from operations of $2.4 million were generated (Q3 2012 - $2.9 million) or per Class A, Class B, Class I and Class J share of $0.06, $0.07, $0.05 and $0.10 (Q3 2012 - $0.09, nil, $0.11 and $0.10), respectively. The income from operations in Q3 2013 has decreased from Q3 2012, as the Company incurred a one-time cost of $3.7 million relating to the Company's transition from the Canadian securities regulatory regime for investment funds to the regulatory regime for non-investment fund reporting issuers (the "Public Company Regime").
  • The Company paid dividends of $0.15 per Class A share for a total of $5.5 million (Q3 2012 - $0.15; $4.6 million), $0.16 per Class B share for a total of $0.04 million (Q3 2012 -nil; nil), $0.16 per Class I share for a total of $0.08 million (Q3 2012 - $0.16; $0.06 million) and $0.16 per Class J share for a total of $0.02 million (Q3 2012 - $0.16; $0.08 million).

About the Company

The Company provides investors with an opportunity to receive attractive yields by investing indirectly, through holding shares of the Company, in mortgage loan investments, comprised of first mortgages, selected and determined to be high quality by its manager, Timbercreek Asset Management Inc. (the "Manager").  The investment objective of the Company is, with a primary focus on capital preservation, to acquire and maintain a diversified portfolio of mortgage investments that generates attractive, stable returns in order to permit the Company to pay monthly distributions to its shareholders.

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