TORONTO,– Timbercreek Financial (TSX: TF) (the “Company”) announced today its financial results for the three months ended March 31, 2019 (“Q1 2019”).
“It was a solid start to 2019 and a reasonably active period during what is typically a slower quarter for the company from an originations perspective,” said Cameron Goodnough, CEO of Timbercreek Financial. “We experienced modest margin compression in the quarter, but are seeing signs of rates normalizing in the multi-residential apartment market. Our team continues to evaluate attractive opportunities in all of our key markets, ensuring we find the right transactions for the portfolio with a key emphasis on income-producing properties in urban markets.”
First Quarter Highlights (versus Q1 2018)
- Net investment income earned was $24.5 million, up from $21.8 million Q1 2018 (Q4 2018: $25.2 million)
- Net income and comprehensive income was $13.1 million, compared to $11.7 million Q1 2018 (Q4 2018: $15.3 million)
- The Company recognized one-time net other income of $413, primarily from the recovery of HST credits from 2016 and before.
- Distributable income per share was $0.17, compared to $0.18 in Q1 2018 (Q4 2018: $0.20).
- Basic and diluted earnings per share of $0.16 compared to $0.15 basic and diluted Q1 2018 (Q4 2018: $0.17 basic and diluted excluding one-time recognition of net other income).
- The weighted average interest rate during the first quarter on all loans in the portfolio was 7.4% compared to 7.0% in Q1 2018 (Q4 2018: 7.6%)
- The weighted average interest rate as at March 31, 2019 on all loans in the portfolio was 7.2% compared to 7.3% as at March 31, 2018 (December 31, 2018: 7.5%)
- As at March 31, 2019, 67.0% of total loan portfolio was invested in floating rate loans compared to 29.2% as at March 31, 2018 (December 31, 2018: 57.7%)
- The weighted average lender fees on new and existing loans was 0.8%, compared to 1.2% Q1 2018 (Q4 2018: 0.9%). Weighted average lender fees on new loans only was 1.1%, compared to 1.3% Q1 2018 (Q4 2018: 1.1%)
- Payout ratio on distributable income was 99.4%, compared to 99.1% in Q1 2018 (Q4 2018: 86.3%). Excluding one-time recognition of net other income of $413, payout ratio would have been 102.4%
March 31, 2019 – Investment Portfolio Highlights
- Net mortgage investments increased by 1.5% to $1,228.6 million (December 31, 2018: $1,211.0 million) reflecting $152.4 million in advances offset by $134.3 million in repayments.
- Other investments within the enhanced return portfolio were $80.0 million (December 31, 2018: $91.0 million), a net decrease of $11.0 million mainly due to loan repayments.
- Net mortgage investments secured by cash-flowing properties represented 86.2% of the net mortgage investments (December 31, 2018: 87.5%), a key hallmark of our defensive investment strategy and highlighted by 46.8% secured by rental apartments (December 31, 2018: 40.1%)
- First mortgages, represented 92.8% of the net mortgage investments (December 31, 2018: 93.2%)
- Weighted average loan-to-value of the net mortgage investments increased to 68.1% (December 31, 2018: 67.1%)
- Weighted average remaining term to maturity of the net mortgage investments is 1.2 years (December 31, 2018: 1.2 years)
- The net mortgage investments continue to be well diversified across Canada’s largest provinces: Ontario (45.6%), British Columbia (23.7%), Alberta (16.8%), and Quebec (7.5%)
|Operating Results Highlights|
ended March 31,
|Net investment income||$||24,511||$||21,847||$||94,958|
|Net rental income||$||316||$||149||$||821|
|Income from operations||$||20,732||$||18,610||$||81,003|
|Other income, net||$||413||$||—||$||1,217|
|Total net income and comprehensive income||$||13,133||$||11,667||$||53,068|
|Earnings per share (basic)||$||0.16||$||0.15||$||0.67|
|Earnings per share (diluted)||$||0.16||$||0.15||$||0.67|
|Dividends to shareholders||$||14,120||$||13,383||$||54,890|
|Dividends per common share||$||0.173||$||0.173||$||0.692|
|Payout ratio on earnings per share||107.5||%||114.7||%||103.4||%|
|Distributable income per share||$||0.17||$||0.18||$||0.76|
|Payout ratio on distributable income||99.4||%||99.1||%||91.3||%|
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on Thursday, May 9, 2019 at 1:00 p.m. (EST) which will be followed by a question and answer period with analysts. Instructions on how to participate on this call are provided below:
Web conference: https://timbercreek.adobeconnect.com/q12019tfinvestorcall/
Dial-in-number(s): Toll Free 1-(855) 223-7310, International 1-(647) 788-4930
Event Conference ID: 3479523
The playback of the conference call will also be available on www.timbercreekfinancial.com following the call.
About the Company
Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to commercial real estate professionals. Our sophisticated, service-oriented approach allows us to meet the needs of borrowers, including faster execution and more flexible terms that are not typically provided by Canadian financial institutions. By employing thorough underwriting, active management and strong governance, we are able to meet these needs while generating strong risk-adjusted yields for investors. Further information is available on our website, www.timbercreekfinancial.com.
The Company prepares and releases financial statements in accordance with IFRS. As a complement to results provided in accordance with IFRS, the Company discloses certain financial measures not recognized under IFRS and that do not have standard meanings prescribed by IFRS (collectively the “non-IFRS measures”). These non-IFRS measures are further described in Management’s Discussion and Analysis (“MD&A”) available on SEDAR. The Company has presented such non-IFRS measures because the Manager believes they are relevant measures of the Company’s ability to earn and distribute cash dividends to shareholders and to evaluate its performance. These non-IFRS measures should not be construed as alternatives to total net income and comprehensive income or cash flows from operating activities as determined in accordance with IFRS as indicators of the Company’s performance.
Certain statements contained in this news release may contain projections and “forward looking statements” within the meaning of that phrase under Canadian securities laws. When used in this news release, the words “may”, “would”, “should”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “objective” and similar expressions may be used to identify forward looking statements. By their nature, forward looking statements reflect the Company’s current views, beliefs, assumptions and intentions and are subject to certain risks and uncertainties, known and unknown, including, without limitation, those risks disclosed in the Company’s public filings. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward looking statements. The Company does not intend to nor assumes any obligation to update these forward looking statements whether as a result of new information, plans, events or otherwise, unless required by law.