Terra Firma Capital Corporation Reports First Quarter 2015 Financial Results

TORONTO, ONTARIO--(Marketwired - May 6, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

All amounts are stated in Canadian dollars.

Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the "Company"), a real estate finance company, today released its financial results for the three month period ended March 31, 2015.

FIRST QUARTER 2015 HIGHLIGHTS:

• Total revenue in the first quarter amounted to $4.0 million, an increase of $1.3 million or 46%, as compared to the same period in the prior year.
  
  
• Net income and comprehensive income in the first quarter was $945,000, an increase of $327,000 or 53%, compared to the first quarter of 2014.
  
  
• Earnings per share was $0.02 per basic and diluted share, compared to $0.02 per basic and diluted share.
  
  
• Total assets increased by 10% to $80.1 million at March 31, 2015 from $73.0 million at March 31, 2014.
  
  

"We are very excited about the Company's prospects in 2015. First, our financial results for the first quarter demonstrate our continued commitment to the continued growth of our profitable loan portfolio with focus on maximizing interest income and overall shareholder value," commented Y. Dov Meyer, Chief Executive Officer. "Second, since the beginning of the year we have significantly bolstered the Company's balance sheet and liquidity through the recently completed $15.5 million bought deal and concurrent private placement equity offering and a new $10 million credit facility. The funds from these sources together with our access to syndicated capital will provide Terra Firma with growth capital for our activities in Canada and in the US. We expect to see continued revenue growth in the second quarter and beyond," concluded Mr. Meyer.

Results of operations - three months ended March 31, 2015

Net income in the first quarter ended March 31, 2015 was $945,438 or $0.02 per basic and diluted share, compared to $$618,000, or $0.02 per basic and diluted share, in the first quarter ended March 31, 2014.

Interest and fee income for the first quarter ended March 31, 2015 aggregated $4.0 million, an increase of 51% over the $2.6 million in the same period in the previous year, and an increase of 15% from the $3.4 million in the fourth quarter ended December 31, 2014. Interest and fees in the first quarter ended March 1, 2015 included a one-time fee of $544,212, which resulted an increase in fee income. The average interest rate in the loan and mortgage investments at March 31, 2015 was 21.1% compared to 19.6% at December 31, 2014.

Interest expense for the first quarter ended March 31, 2015 was $1.5 million, compared to $1.5 million for the comparative period last year and $1.6 million for the fourth quarter ended December 31, 2014. The Company's loan and mortgage investments increased from $56.3 million at March 31, 2014 to $64.9 million at March 31, 2015, an increase of 15%. The average interest rate in the loan and mortgage syndications at March 31, 2015 was 13.3% compared to 11.9% at December 31, 2014.

Net income and comprehensive income for the three months ended March 31, 2015 was $945,000 or $0.02 per basic and diluted share, compared to $618,000 or $0.02 per basic and diluted share, in the same period last year. General and administrative expenses for the three months ended March 31, 2015 increased to $798,000 from $355,000 for the same period last year, due to increased payroll related costs.

The Company's Management's Discussion & Analysis and Financial Statements as at and for the three months ended March 31, 2015 have been filed and are available on SEDAR (www.sedar.com).

About Terra Firma

Terra Firma is a full service, publicly traded real estate finance company that provides real estate financings secured by investment properties and real estate developments throughout Canada and the United States. The Company focuses on arranging and providing financing with flexible terms to real estate developers and owners who require shorter-term loans to bridge a transitional period of one to five years where they require capital at various stages of development or redevelopment of a property. These loans are typically repaid with lower cost, longer-term debt obtained from other Canadian financial institutions once the applicable transitional period is over or the redevelopment is complete, or from proceeds generated from the sale of the real estate assets. Terra Firma offers a full spectrum of real estate financing under the guidance of strict corporate governance, clarity and transparency. For further information please visit Terra Firma's website at www.tfcc.ca.

The TSXV has neither approved nor disapproved the contents of this press release. The TSXV does not accept responsibility for the adequacy or accuracy of this press release.

This Press Release contains forward‐looking statements with respect matters concerning the business, operations, strategy and financial performance of Terra Firma. These statements generally can be identified by use of forward looking word such as "may", "will", "expects", "estimates", "anticipates", "intends", "believe" or "could" or the negative thereof or similar variations. The future business, operations and performance of Terra Firma could differ materially from those expressed or implied by such statements. Such forward‐looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward‐looking statements are based on a number of assumptions which may prove to be incorrect. Additional, important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, local real estate conditions, competition, changes in government regulation, dependence on tenants' financial conditions, interest rates, the availability of equity and debt financing, environmental and tax related matters, and reliance on key personnel. There can be no assurances that forward‐looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‐looking statements. The cautionary statements qualify all forward‐looking statements attributable to Terra Firma and persons acting on its behalf. Unless otherwise stated, all forward looking statements speak only as of the date of this Press Release and Terra Firma has no obligation to update such statements except as required by law.

Terra Firma Capital Corporation
Consolidated Statements of Income and Comprehensive Income
For the three months ended March 31, 2015 and 2014
(Unaudited)

		Three months ended,
		March 31, 2015		March 31, 2014
Revenue
	Interest and fees	$	3,960,412	$	2,620,540
	Rental		47,348		115,437
			4,007,760		2,735,977
Expenses
	Property operating costs		15,254		42,076
	General and administrative		798,024		354,517
	Share based compensation		391,039		12,608
	Interest		1,503,032		1,478,919
			2,707,349		1,888,120
Income from continuing operations before income taxes			1,300,411		847,857
Income taxes			354,973		229,648
Net income and comprehensive income		$	945,438	$	618,209
Earnings per share
	Basic	$	0.02	$	0.02
	Diluted		0.02		0.02

Terra Firma Capital Corporation
Consolidated Statements of Financial Position
As at March 31, 2015 and December 31, 2014

	March 31, 2015		December 31, 2014
Assets
Cash and cash equivalents	$	2,037,589	$	1,083,745
Funds held in trust		2,449,335		834,065
Amounts receivable and prepaid expenses		2,375,690		2,058,846
Loan and mortgage investments		64,926,504		78,635,796
Investment properties		2,062,312		2,062,661
Portfolio investments		6,683,409		1,620,828
Deferred income tax asset		103,910		48,381
Total assets	$	80,638,749	$	86,344,322
Liabilities
Accounts payable and accrued liabilities	$	4,836,598	$	2,227,308
Provision for discontinued operations		27,500		27,500
Unearned income		507,459		639,307
Income taxes payable		128,790		341,432
Short-term unsecured loans payable		3,450,000		1,500,000
Loan and mortgage syndications		34,265,501		45,390,821
Mortgages payable		1,143,549		1,151,118
Convertible debentures		10,541,640		10,514,431
Total liabilities		54,901,037		61,791,917
Equity
Share capital	$	16,654,718	$	16,654,718
Equity component of convertible debentures		284,490		284,490
Contributed surplus		1,289,454		1,049,585
Retained earnings		7,298,395		6,352,957
		25,527,057		24,341,750
Non-controlling interest		210,655		210,655
Total equity		25,737,712		24,552,405
Total liabilities and Equity	$	80,638,749	$	86,344,322