TORONTO, March 10, 2021 (GLOBE NEWSWIRE) – Firm Capital Mortgage Investment Corporation (the “Corporation”) (TSX FC, FC.DB.E, FC.DB.F, FC.DB.G, FC.DB, H, FC .DB.I and FC.DB.J) have published the financial statements for the three and twelve months ended December 31, 2020.
For the three-month period ended December 31, 2020, income increased to $ 7,318,366, compared to $ 6,678,983 reported for the three months ended December 31, 2019.
For the year ended December 31, 2020, revenues decreased to $ 26,353,473, compared to $ 28,002,051 for the year ended December 31, 2019. Excluding the one-time, non-cash, share-based compensation expense of $ 906,131 recognized in 2020 , adjusted revenue for the year ended December 31, 2020 was $ 27,259,604.
PROFIT PER SHARE
Weighted average earnings per share for the three months ended December 31, 2020 was $ 0.249, compared to the reported $ 0.237 per share for the three months ended December 31, 2019.
Weighted average earnings per share for the twelve months ended December 31, 2020 was $ 0.913 (excluding share-based compensation costs were $ 0.945) compared to $ 1,008 for the year ended December 31, 2019.
The Corporation’s investment portfolio increased by $ 78.1 million to $ 559.0 million at December 31, 2020, compared to $ 480.9 million at December 31, 2019 (net of impairment in both cases). Most of the portfolio’s growth took place at the end of the year. The provision for impairment as of December 31, 2020 was $ 5.61 million (December 2019 – $ 5.48 million). There was a strong level of new investment funding in 2020 at $ 399.4 million (2019 – $ 260.2 million), and repayments during the year were $ 321.5 million (2019 – $ 300.3 million) , which resulted in an increase in the size of the investment portfolio.
RETURN ON EQUITY
The Corporation continues to exceed its return target to achieve returns on equity of more than 400 basis points over the one-year average return on government bonds of the Canadian government. For the quarter ended December 31, 2020, the annualized return on equity (based on the month-end average of equity in the quarter) was 8.77%, representing a return on equity of 857 basis points per year over the average yield on government bonds of the Canadian government for one year of 0.20%.
For the year ended December 31, 2020, the return on equity (based on the average equity at month-end in the year) of 8.18%, representing a return on equity of 798 basis points per annum over the year relative to the average yield on the Government of Canada Treasuries for one year of 0.20%.
PRUDENT VALUATION REMUNERATION
Management has always taken a proactive approach to the provision for loan losses. This is a prudent approach that provides our shareholders with a stable dividend should there be future problems with any of the loans in the company’s investment portfolio. The impairment allowance as of December 31, 2020 was $ 5,609,000, representing approximately 1% of the Corporation’s investment portfolio at that date.
DETAILS OF THE INVESTMENT PORTFOLIO
Details of the Company’s investment portfolio as of December 31, 2020 are as follows:
- Total gross investment portfolio of $ 559,007,922, which is higher than the $ 480,925,143 reported as of December 31, 2019.
- Conventional prime mortgages, being the first mortgages with a loan-to-value of less than 75%, make up 70.9% of the total portfolio, and the total of conventional mortgages with a loan-to-value of less than 75% , represent 78.0% of the total portfolio.
- By December 31, 2021, approximately 73.3% of the portfolio will expire.
- The average nominal interest rate of the portfolio is 8.20% per annum, compared to 8.49% on December 31, 2019.
- Regionally, the investment portfolio is diversified roughly as follows: Ontario (82.2%), Western Canada (14.1%), Quebec (3.3%) and the US (0.4%).
The borrower’s repayment performance has remained consistent with pre-COVID-19 performance and no deferral arrangements have been implemented.
DIVIDEND AND SHARE PURCHASE PLAN
The Corporation has a dividend reinvestment plan (DRIP) and a stock purchase plan available to its shareholders. Thanks to the DRIP, participants can reinvest their monthly cash dividends in additional shares. The price paid per share is 97% (if the stock price is above $ 14.10) of the weighted average trading price, calculated five trading days immediately prior to each dividend date with no commission charge. Once registered with the Share Purchase Plan, participants are entitled to purchase additional shares, for a total amount of no more than $ 12,000 per year and no less than $ 250 per month. Participating shareholders do not pay any commission.
For the three months and year ended December 31, 2020, the Corporation declared dividends on its common stock totaling $ 7,297,147 and $ 27,430,809, or $ 0.249 and $ 0.944 per share, respectively, versus $ 8,587,699 and $ 28,002,051, or $ 0.304 and $ 1,006 per share for the three months and year ended December 31, 2019. The number of common shares outstanding at December 31, 2020 was 30,843,166, compared to 28,334,972 as of December 31, 2019.
About the Corporation
Where mortgage agreements are made®
The Corporation, through its mortgage banker, Firm Capital Corporation, is a non-bank lender that provides residential and commercial short-term bridging and conventional real estate financing, including construction, mezzanine and equity investments. The Corporation’s investment objective is to maintain equity while providing shareholders with a steady flow of monthly dividends from investments. The Corporation achieves its investment goals by investing in selected niche markets that are underserved by major credit institutions. To date, the lending activities continue to develop a diversified mortgage portfolio, which provides a stable return for shareholders. Full reports of the Corporation’s financial results for the year are set forth in the audited consolidated financial statements and the related management discussion and analysis of the Corporation, available on the SEDAR website at www.sedar.com. In addition, additional information is available on the Corporation’s website at www.firmcapital.com.
This press release contains forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements about our objectives, our strategies to achieve those objectives, our performance, our investment portfolio and our dividends, as well as statements regarding management’s objectives. beliefs, estimates and intentions and similar statements about expected future events, results, conditions, performance or expectations that are not historical facts. Forward-looking statements can be generally identified through the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intention”, “estimate”, “anticipate”, “believe” , “should,” “plan,” or “continue,” or similar expressions that suggest future results or events. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management.
These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our current annual information form under “ Risk Factors ” (a copy of which can be obtained at www.sedar.com) , so our actual results and performance could differ materially from the forward-looking statements in this press release.
Those risks and uncertainties include risks related to the impact of existing or future waves of the COVID-19 pandemic, mortgage loans, dependence on the Corporation’s manager and mortgage banker, competition for mortgage loans, property values, interest rate fluctuations, environmental matters, shareholder liability. and the introduction of new tax rules. Material factors or assumptions used in reaching a conclusion or estimate as set forth in the forward-looking information include, among others, the Company’s ability to invest in mortgages at rates consistent with past rates. ; the Corporation will receive sufficient investment opportunities for mortgages; sufficient bank debt and bank loans are available to the Corporation; and an immaterial impact from the COVID-19 pandemic. While the forward-looking information in this press release is based on what management believes to be reasonable assumptions, there can be no assurance that actual results and performance will be consistent with these forward-looking statements.
All forward-looking statements in this press release are qualified by these cautionary statements. Except as required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For more information, please contact:
Firm Capital Mortgage Investment Corporation
President and Chief Executive Officer
Boutique Mortgage Lenders®