Timbercreek Financial Announces 2017 Second Quarter Results

TORONTO, ON--(Marketwired - August 10, 2017) - Timbercreek Financial (TSX: TF) (the "Company") announced today its financial results for the three months and six months ended June 30, 2017 ("Q2 2017" and "YTD 2017", respectively).

"Our second-quarter financial and operational results were strong, highlighted by robust distributable income," said Andrew Jones, CEO of Timbercreek Financial. "Deal flow continues to be healthy and the competitive environment remains favourable, as evidenced by advances in the period, which were the highest in our history. The portfolio continues to perform well, delivering attractive risk-adjusted income to our shareholders."

Cameron Goodnough, President of Timbercreek Financial, added: "We continued to increase our capital base in the second quarter in order to capitalize on the demand for our customized financing solutions. We added $50 million of capacity to our credit facility, bringing the total available to $400 million, and completed our third convertible debenture offering since the merger, raising $45 million."

Second Quarter Highlights (versus Q2 2016)

For financial reporting purposes, the amalgamation contemplates Timbercreek Mortgage Investment Corporation ("TMC") as the acquirer of Timbercreek Senior Mortgage Investment Corporation ("MTG") on June 30, 2016, and as a result, the financials reflect a full quarter of TF's results for Q2 2017 in comparison to a full quarter of TMC's results for Q2 2016.

  • Net interest income was $21.4 million, up from $10.9 million (Q1 2017 - $20.8 million)
  • Net income and comprehensive income was $13.1 million, from $13.3 million (Q1 2017 - $12.9 million)
  • Basic adjusted earnings per share remained stable at $0.18 compared to $0.18 (Q1 2017 - $0.18) and diluted earnings per share were $0.18 compared to $0.18 (Q1 2017 - $0.17)
  • Weighted average interest rate on net mortgage investments was 7.2% compared to 9.1% (Q1 2017 - 7.3%), which reflects management's repositioning of the portfolio into lower-risk and more liquid mortgages
  • Weighted average lender fees on all investments were 0.9%, compared to 1.5% (Q1 2017 - 1.1%)
  • Distributable income per share remained stable at $0.19 (Q1 2017 - $0.18)
  • On June 13, 2017, the Company closed on an unsecured convertible debenture offering for gross proceeds of $40.0 million plus additional $5.0 million on June 27, 2017 from the over-allotment option and net proceeds of $42.8 million. The unsecured convertible debentures will mature on June 30, 2024 and pay interest semi-annually on June 30 and December 31 at a rate of 5.30% per annum

June 30, 2017 - Investment Portfolio Highlights

  • Net mortgage investments increased by 7.4% to $1,098.1 million (March 31, 2017 - $1,022.1 million) due to $191.4 million in advances offset by $115.4 million in repayments
  • Net other investments increased to $62.0 million (March 31, 2017 - $24.90 million) due to $38.1 million in net advances offset by $1.0 million in repayments
  • Net mortgage investments secured by cash-flowing properties represented 90.4% of the portfolio (March 31, 2017 - 88.6%), a key hallmark of our defensive investment strategy and highlighted by 50.3% secured by rental apartments
  • First mortgages, which are lower risk, increased to 91.9% of the portfolio (March 31, 2017 - 86.5%)
  • Weighted average loan-to-value decreased to 65.6% (March 31, 2017 - 67.2%)
  • Weighted average remaining term to maturity of 1.3 years (March 31, 2017 - 1.3 years)
  • The portfolio continues to be well diversified across Canada's largest provinces: Ontario (53.2%), Quebec (16.0%), British Columbia (11.6%), and Alberta (10.4%)

Operating Results Highlights

   Three months ended
June 30,
 Six months ended
June 30,
 Year ended December 31,
   2017  2016  2017  2016  2016
Net interest income  $21,448  $10,922  $42,214  $21,720  $61,422
Income from operations  $18,357  $8,504  $35,901  $16,867  $51,231
Total net income and comprehensive income  $13,135  $13,342  $26,081  $20,518  $45,999
Earnings per share (basic)  $0.18  $0.33  $0.35  $0.50  $0.80
Earnings per share (diluted)  $0.18  $0.32  $0.35  $0.50  $0.80
Adjusted total net income and comprehensive income  $13,135  $7,199  $26,081  $14,375  $39,940
Adjusted earnings per share (basic and diluted)  $0.18  $0.18  $0.35  $0.35  $0.70
Dividends to shareholders  $12,656  $7,294  $25,290  $14,589  $39,893
Dividends per common share  $0.171  $0.180  $0.342  $0.360  $0.702
Payout ratio on earnings per share   96.3%   54.7%   97.0%   71.1%   86.7%
Distributable income  $14,080  $7,606  $27,491  $14,860  $42,636
Distributable income per share  $0.19  $0.19  $0.37  $0.37  $0.74
Payout ratio on distributable income   89.9%   95.9%   92.0%   98.2%   93.5%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Friday, August 11, 2017 at 11:00 a.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:

 Dial-in-number(s): 1-(855) 223-7310
 Event Conference ID: 53923943

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.

Non-IFRS Measures

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 ability of the Company to earn and distribute cash dividends to investors and to evaluate the Company's performance. These non-IFRS measures should not be construed as alternatives to net income (loss) and comprehensive income (loss) or cash flows from operating activities 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 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.

Contact Information:

Timbercreek Financial
Cameron Goodnough