Timbercreek Financial Announces 2018 First Quarter Results

Toronto, Ontario, CANADA

TORONTO, May 03, 2018 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX:TF) (the "Company") announced today its financial results for the three months ended March 31, 2018 (“Q1 2018”).

“Overall transaction activity was healthy in the first quarter and the mortgage portfolio remains highly diversified and conservatively positioned in income-producing properties,” said Cameron Goodnough, CEO of Timbercreek Financial. “The first quarter experienced higher portfolio turnover and syndications levels than previous quarters, driving strong cash lender fees. The vast majority of new loans executed in the first quarter have floating rate coupons, and at quarter end, 28.5% of the loans in the mortgage portfolio were floating. With the new equity raised in the first quarter and increased access to credit, we are well positioned to continue to expand the investment portfolio.”

First Quarter Highlights (versus Q1 2017)

  • Funded $228.6 million in mortgage and other loan investments compared to $113.3 million in Q1 2017 (Q4 2017 - 140.8 million) which reflects our active portfolio management in the quarter as evidenced by higher turnover ratio of 16.2% compared to 7.3% (Q4 2017 - 10.8%)

  • Distributable income per share was stable at $0.18 (Q4 2017 – $0.18)

  • Net investment income earned was $21.8 million, up from $20.8 million (Q4 2017 – $23.2 million)

  • Net income and comprehensive income was $11.7 million, compared to $12.9 million (Q4 2017  – $12.9 million)

  • Basic and diluted earnings per share of $0.15 compared to $0.18 basic and $0.17 diluted (Q4 2017 – $0.17 basic and diluted)

  • The weighted average interest rate during the first quarter on all loans in the portfolio was 7.0% compared to 7.4% Q1 2017 (Q4 2017 - 7.1%), reflecting the repositioning of the portfolio into lower risk and more liquid mortgages.

  • The weighted average interest rate as at March 31, 2018 on all loans in the portfolio increased to 7.2% from 6.9% on December 31, 2017, reflecting portfolio turnover and reinvestment.

  • Weighted average lender fees on all investments were 1.2%, compared to 1.1% (Q4 2017 – 1.0%)

  • Payout ratio on distributable income increased to 99.1% compared to 94.2% (Q4 2017 – 93.3%)

  • During Q1 2018, the Company completed a public offering of 4,302,000 plus an over-allotment option of 545,300 common shares, at $9.30 per common share for total net proceeds of $42.4 million.

  • It is the Company’s intention to repurchase all outstanding 6.35% convertible debentures due March 2019 in July 2018, at a redemption price equal to the outstanding principal amount plus accrued and unpaid interest up to but excluding the redemption date, in accordance with the Company’s call privilege under the trust indenture governing the debentures. In order to proceed, the Company requires consent from its lenders under the second amended and restated credit agreement dated as of December 21, 2017 (the “Credit Agreement”) and this repurchase is expected to be funded by utilizing an advance under the Credit Agreement.

March 31, 2018 – Investment Portfolio Highlights

  • Net mortgage investments increased by 3.1% to $1,137.4 million (December 31, 2017 – $1,103.6 million) primarily due to $215.3 million in advances offset by $182.1 million in repayments received.

  • Other investments within the enhanced return portfolio were $55.7 million (December 31, 2017 – $57.9 million), a net decrease of $2.2 million.

  • Net mortgage investments secured by cash-flowing properties represented 86.8% of the portfolio (December 31, 2017 – 86.7%), a key hallmark of our defensive investment strategy and highlighted by 42.9% secured by rental apartments (December 31, 2017 – 50.1%)

  • First mortgages, which are lower risk, represented 92.7% of the portfolio (December 31, 2017 – 93.0%)

  • Weighted average loan-to-value increased to 67.9% (December 31, 2017 – 66.0%)

  • Weighted average remaining term to maturity decreased to 1 year (December 31, 2017 – 1.1 years)

  • The portfolio continues to be well diversified across Canada's largest provinces: Ontario (49.7%), Quebec (10.3%), British Columbia (15.6%), and Alberta (13.9%)

Operating Results Highlights

   Three months ended March 31,  Year ended
December 31,
   2018   2017   2017 
Net investment income $21,847  $20,764  $88,937 
Net rental income $149  $  $193 
Income from operations $18,610  $17,541  $75,374 
Total net income and comprehensive
 $11,667  $12,945  $52,204 
Earnings per share (basic) $0.15  $0.18  $0.70 
Earnings per share (diluted) $0.15  $0.17  $0.70 
Adjusted total net income and
  comprehensive income
 $11,667  $12,945  $52,204 
Adjusted earnings per share (basic) $0.15  $0.18  $0.70 
Adjusted earnings per share (diluted) $0.15  $0.17  $0.70 
Dividends to shareholders $13,383  $12,636  $50,736 
Dividends per common share $0.174  $0.171  $0.685 
Payout ratio on earnings per share  114.7%  97.6%  97.2%
Distributable income $13,508  $13,410  $55,262 
Distributable income per share $0.18  $0.18  $0.75 
Payout ratio on distributable income  99.1%  94.2%  91.8%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Friday, May 4, 2018 at 11:00 a.m. (ET) 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: 1169089

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 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.

SOURCE: Timbercreek Financial

For further information:

Timbercreek Financial
Cameron Goodnough
Chief Executive Officer and President