Timbercreek Financial Announces 2018 Second Quarter Results

TORONTO, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the "Company") announced today its financial results for the three months and six months ended June 30, 2018 (“Q2 2018”).

“The Company generated very strong distributable income in the second quarter, reflecting another period of active portfolio management, including higher turnover and syndications,” said Cameron Goodnough, CEO of Timbercreek Financial. “In addition, we continued to have success in transitioning a higher percentage of the mortgage portfolio to floating rate loans. With the launch of the at-the-market equity program, we will further expand our capital base to execute on attractive opportunities we see for customized short-term transitional financing secured by commercial real estate. Our pipeline of new investment opportunities remains robust.”

Second Quarter Highlights (versus Q2 2017)

  • Net investment income earned was $23.5 million, up from $21.4 million (Q1 2018 – $21.8 million)
  • Net income and comprehensive income was $12.4 million, compared to $13.1 million (Q1 2018 – $11.7 million)
  • Distributable income per share increased to $0.20, from $0.19 in Q2 2017 (Q1 2018 – $0.18)
  • Basic and diluted earnings per share of $0.16 compared to $0.18 basic and diluted (Q1 2018 – $0.15 basic and diluted)
  • The weighted average interest rate during the second quarter on all loans in the portfolio was 7.3% compared to 7.2% Q2 2017 (Q1 2018 - 7.0%)
  • The weighted average interest rate as at June 30, 2018 on all loans in the portfolio increased to 7.4% from 7.2% on March 31, 2018, reflecting portfolio turnover and reinvestment.
  • Weighted average lender fees on all investments were 1.1%, compared to 0.9% (Q1 2018 – 1.2%)
  • Payout ratio on distributable income decreased to 88.4% compared to 89.9% (Q1 2018 – 99.1%)
  • On May 31, 2018, the Company announced redemption of 6.35% Convertible Unsecured Debentures with redemption date of July 3, 2018.
  • On June 21, 2018, the Company entered into an equity distribution agreement ("ATM") with a Canadian financial institution to offer common shares, having an aggregate offering amount up to $70 million for sale to the public. The ATM commenced on July 19, 2018.

June 30, 2018 – Investment Portfolio Highlights

  • Net mortgage investments decreased by 4.0% to $1,091.9 million (Q1 2018 – $1,137.4 million) primarily due to $160.0 million in advances offset by $205.7 million in repayments received.
  • Other investments within the enhanced return portfolio were $83.5 million (March 31, 2018 – $55.7 million), a net increase of $27.8 million.
  • Net mortgage investments secured by cash-flowing properties represented 83.9% of the portfolio (March 31, 2018 – 86.8%), a key hallmark of our defensive investment strategy and highlighted by 40.9% secured by rental apartments (March 31, 2018 – 42.9%)
  • First mortgages, which are lower risk, represented 92.1% of the portfolio (March 31, 2018 – 92.7%)
  • Weighted average loan-to-value decreased to 67.7% (March 31, 2018 – 67.9%)
  • Weighted average remaining term to maturity increased to 1.1 year (March 31, 2018 – 1 year)
  • The portfolio continues to be well diversified across Canada's largest provinces: Ontario (48.3%), British Columbia (20.5%), Alberta (12.9%), and Quebec (7.4%)

Operating Results Highlights

 Three months ended
June 30,

 Six months ended
June 30,
  Year ended
December 31,
  2018  2017  2018  2017  2017
Net investment income$23,477 $21,448 $45,077 $42,215 $88,937 
Net rental income$179 $ $328 $ $193 
Income from operations$19,904 $18,357 $38,521 $35,901 $75,374 
Total net income and comprehensive income$12,427 $13,135 $24,102 $26,081 $52,204 
Earnings per share (basic)$0.16 $0.18 $0.31 $0.35 $0.70 
Earnings per share (diluted)$0.16 $0.18 $0.31 $0.35 $0.70 
Adjusted total net income and comprehensive income$12,427 $13,135 $24,094 $26,081 $52,204 
Adjusted earnings per share (basic)$0.16 $0.18 $0.31 $0.35 $0.70 
Adjusted earnings per share (diluted)$0.15 $0.17 $0.31 $0.35 $0.70 
Dividends to shareholders$13,685 $12,656 $27,068 $25,290 $50,736 
Dividends per common share$0.173 $0.171 $0.345 $0.342 $0.685 
Payout ratio on earnings per share110.1%96.3%112.3%97.0%97.2%
Distributable income$15,477 $14,080 $28,984 $27,491 $55,262 
Distributable income per share$0.20 $0.19 $0.37 $0.37 $0.75 
Payout ratio on distributable income88.4%89.9%93.4%92.0%91.8%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Wednesday, August 15, 2018 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:

Dial-in-number(s): 1-(855) 223-7310

Event Conference ID: 4792607

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