Timbercreek Financial Announces 2018 Third Quarter Results

TORONTO, Nov. 13, 2018 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the "Company") announced today its financial results for the three months and nine months ended September 30, 2018 (“Q3 2018”).

“The third quarter results reflect continued robust transaction activity and higher average interest rates across the portfolio, which drove strong increases in investment income and income from operations in the period,” said Cameron Goodnough, CEO of Timbercreek Financial. “The portfolio remains very conservatively positioned, with a clear emphasis on first mortgages on income-producing properties. As a short-term lender, we have been successful at transitioning a sizable portion of the portfolio to floating rates to preserve our margins in an environment of rising rates.”

Third Quarter Highlights (versus Q3 2017)

  • Net investment income earned was $24.5 million, up from $23.5 million Q3 2017 (Q2 2018 – $23.5 million).
  • Net income and comprehensive income was $13.7 million, compared to $13.2 million Q3 2017 (Q2 2018 – $12.4 million).
  • Distributable income per share was to $0.19, compared to $0.19 in Q3 2017 ($0.18 in Q2 2018).
  • Basic and diluted earnings per share of $0.17 compared to $0.18 basic and diluted Q3 2017 (Q2 2018 – $0.16 basic and diluted).
  • The weighted average interest rate during the third quarter on all loans in the portfolio was 7.5% compared to 7.2% Q3 2017 (Q2 2018 - 7.3%).
  • The weighted average interest rate as at September 30, 2018 on all loans in the portfolio increased to 7.6% from 7.4% on June 30, 2018, reflecting portfolio turnover and reinvestment.
  • As at September 30, 2018, 43.4% of the total loan portfolio was invested in loans with floating rates.
  • Weighted average lender fees on all investments were 1.0%, compared to 1.6% Q3 2017 (Q2 2018 – 1.1%).
  • Payout ratio on distributable income increased to 92.8% compared to 89.8% Q3 2017 (Q2 2018 – 88.4%).
  • On October 19, 2018, the Company completed a private placement offering for gross proceeds of $14.4 million at a price of $9.22 and issued 1,561,331 of common shares as a result of the transaction.

September 30, 2018 – Investment Portfolio Highlights

  • Net mortgage investments increased by 4.1% to $1,136.2 million (June 30, 2018 – $1,091.9 million) reflecting $182.6 million in advances offset by $138.1 million in repayments received.
  • Other investments within the enhanced return portfolio were $87.2 million (June 30, 2018 – $83.5 million), a net increase of $3.8 million.
  • Net mortgage investments secured by cash-flowing properties represented 84.5% of the net mortgage investments (June 30, 2018 – 83.9%), a key hallmark of our defensive investment strategy and highlighted by 38.7% secured by rental apartments (June 30, 2018 – 40.9%)
  • First mortgages, represented 91.5% of the net mortgage investments (June 30, 2018 – 92.1%)
  • Weighted average loan-to-value of the net mortgage investments decreased to 66.6% (June 30, 2018 – 67.7%)
  • Weighted average remaining term to maturity of the net mortgage investments is 1.1 years (June 30, 2018 – 1.1 years)
  • The net mortgage investments continues to be well diversified across Canada's largest provinces: Ontario (46.4%), British Columbia (21.9%), Alberta (13.7%), and Quebec (8.4%)

Operating Results Highlights

 Three months ended September 30,
 Nine months ended September 30,
 Year ended December 31, 
  2018  2017  2018  2017  2017 
Net investment income$24,465 $23,547 $69,790 $65,762 $88,937 
Net rental income$135 $94 $463 $94 $193 
Income from operations$20,826 $19,832 $59,342 $55,733 $75,374 
Total net income and comprehensive income$13,708 $13,248 $37,803 $39,329 $52,204 
Earnings per share (basic)$0.17 $0.18 $0.48 $0.53 $0.70 
Earnings per share (diluted)$0.17 $0.18 $0.48 $0.53 $0.70 
Adjusted total net income and comprehensive income$13,708 $13,248 $37,803 $39,329 $52,204 
Adjusted earnings per share (basic)$0.17 $0.18 $0.48 $0.53 $0.70 
Adjusted earnings per share (diluted)$0.17 $0.18 $0.48 $0.53 $0.70 
Dividends to shareholders$13,746 $12,677 $40,814 $37,967 $50,736 
Dividends per common share$0.173 $0.171 $0.518 $0.513 $0.685 
Payout ratio on earnings per share 100.3% 95.7% 108.0% 96.5% 97.2%
Distributable income$14,818 $14,091 $43,803 $41,585 $55,262 
Distributable income per share$0.19 $0.19 $0.56 $0.56 $0.75 
Payout ratio on distributable income92.8%89.8%93.2%91.1%91.8%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Wednesday, November 14, 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: 7191814

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