Timbercreek Financial Announces 2020 Fourth Quarter Results

TORONTO, March 08, 2021 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the “Company”) announced today its financial results for the three months and year ended December 31, 2020 (“Q4 2020”).

Q4 2020 Highlights

  • Delivered distributable income of $14.6 million and paid $14.0 million in dividends to shareholders
  • Generated $0.18 in distributable income per share (95.4% distributable income payout ratio)
  • Strong transaction activity, with $280.9 million of funding for new and existing mortgages, versus repayments of $275.5 million. The increased transaction volume resulted in Q4 turnover ratio of 19.6% versus 12.3% in Q3 2020.
  • Maintained conservative portfolio risk position focused on income-producing commercial real estate
    • 90.3% of mortgage investment portfolio are first mortgages
    • 84.9% of mortgage investment portfolio is invested in cash-flowing properties
    • 68.5% weighted average loan-to-value
    • 7.2% quarterly weighted average interest rate on net mortgage investment
  • Net income and comprehensive income of $(1.6) million includes $15.5 million of fair value losses on assets measured at fair value through profit and loss, most notably from a retail asset impacted by COVID-19. After adjusting primarily for these losses, adjusted net income and comprehensive income was $13.0 million, adjusted earnings per share was $0.16 and payout ratio on adjusted earnings per share was 107.2%
  • Portfolio continues to perform well through the COVID-19 pandemic, with interest and principal payments from borrowers in line with historical collection rates.

“We faced a rapidly changing operating environment in 2020, which presented new challenges for some of our borrowers and resulted in an industry-wide slowdown in commercial real estate transaction activity,” said Blair Tamblyn, CEO of Timbercreek Financial. “Despite these headwinds, we delivered distributable income in line with our expectations. Over the past 16 quarters we have maintained an average dividend payout ratio of 94.9% on distributable income despite the historically low interest rate environment, demonstrating our ability to maintain steady income which is fundamental to our investment proposition. In addition, our portfolio was quite resilient through 2020, owing to our focus on income-producing assets and multi-family residential – a segment that has been especially durable. Our conservative positioning served us well through the worst of this crisis. Importantly, the interest and principal payments from our borrowers continue to be largely unaffected.”

Mr. Tamblyn added: “While the portfolio remains in a solid position, certain asset types, including retail, have been more affected by the COVID crisis. We felt some impact from this in Q4, as we recorded fair value adjustments principally on a legacy, smaller-market, traditional-format retail asset that has been materially affected by the negative retail environment. We believe this is a unique situation and not representative of other loans in this segment, which are secured by downtown ‘high-street’ assets in large cities and have strong long-term value expectations. As we look ahead to 2021, we continue to see strong overall demand and attractive risk-adjusted opportunities, and the business is well capitalized to take advantage and continue delivering on our core investment objectives.”

Quarterly Comparison

$ millionsQ4 2020  Q4 2019 Q3 2020
Net Mortgage Investments$1,143.1    $1,244.1  $1,153.2 
Enhanced Return Portfolio Investments$91.6    $78.2  $93.6 
Net Investment Income$24.0    $24.7  $23.9 
Income from Operations$3.9    $21.6  $20.2 
Net Income and comprehensive Income$(1.6)   $14.1  $14.4 
--Adjusted Net Income and comprehensive Income$13.0    $13.6  $14.0 
Distributable Income$14.6    $15.6  $14.2 
Dividends to Shareholders$14.0    $14.4  $14.0 
$ per shareQ4 2020  Q4 2019 Q3 2020
Dividends per share$0.17    $0.17  $0.17 
Distributable Income per share$0.18    $0.19  $0.18 
Earnings per share$(0.02)   $0.17  $0.18 
--Adjusted Earnings per share$0.16    $0.16  $0.17 
Payout Ratio on Distributable Income95.4 %  92.3% 98.3%
Payout Ratio on Earnings per sharen/a
    101.8% 96.7%
--Payout Ratio on Adjusted Earnings per share107.2 %  105.5% 102.5%
Net Mortgage InvestmentsQ4 2020  Q4 2019 Q3 2020
Weighted Average Loan-to-Value68.5 %  70.5% 68.2%
Weighted Average Remaining Term to Maturity1.0 yr
    1.4 yr  1.1 yr 
First Mortgages90.3 %  90.5% 90.4%
Cash-Flowing Properties84.9 %  86.8% 84.1%
Rental Apartments52.3 %  54.1% 50.0%
Floating Rate Loans with rate floors (at quarter end)78.1 %  71.0% 77.3%
Weighted Average Interest Rate      
  For the quarter ended7.2 %  7.2% 7.2%
Weighted Average Lender Fee      
  New and Renewed0.7 %  1.0% 0.7%
  New Net Mortgage Investment Only1.5 %  1.1% 1.2%

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Tuesday, March 9, 2021 1:00 p.m. (EST) which will be followed by a question and answer period with analysts. To join the call:

Participant Toll Free Dial-In Number: (855) 223-7310
Participant International Dial-In Number: (647) 788-4930
Conference ID Number: 6693355

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. The following non-IFRS financial 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, please contact:

Timbercreek Financial
Blair Tamblyn, CEO
Tracy Johnston, CFO
Karynna Ma, Vice President, Investor Relations