TORONTO, Nov. 13, 2020 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the “Company”) announced today its financial results for the three months and nine months ended September 30, 2020 (“Q3 2020”).
Q3 2020 Highlights
- Portfolio continues to perform well through the COVID-19 pandemic with no material increase in delinquencies
- Generated $0.18 in distributable income per share and $0.17 adjusted net income per share as well as delivered a 98.3% distributable income payout ratio and a 102.5% adjusted net income payout ratio.
- Funded $89.4M on new and existing mortgages versus repayments of $145.8M. This resulted in a reduction of net mortgage investments to $1,153.2M in Q3 2020. The increase in repayments resulted in a Q3 turnover ratio of 12.3% versus 6.4% in Q2 and is a positive sign of increased market activity that will provide capital for new investment opportunities. Of note, the majority of these repayments (71%) occurred in September.
- Maintained conservative portfolio risk position focused on income-producing commercial real estate
° 90.4% of mortgage investment portfolio are first mortgages
° 84.1% of mortgage investment portfolio is invested in cash-flowing properties
° 68.2% weighted average loan-to-value
° 7.2% quarterly weighted average interest rate on net mortgage investment
- Delivered adjusted net income and comprehensive income of $13.6 million and distributable income of $14.2 million
- Paid $14.0 million in dividends to shareholders
“Our mortgage portfolio continued to perform solidly in the third quarter, with collection rates remaining high and trending in line with historical norms,” said Blair Tamblyn, Chief Executive Officer of Timbercreek Financial. “This performance underscores the benefit of our emphasis on durable, income-generating assets and our conservative portfolio positioning. Importantly, we delivered distributable income in line with our expectations. New investment activity was lower in the quarter as transaction volumes declined across the industry. We had a material volume of repayments, which, when combined with a larger debt facility, will enable us to capitalize on new investment opportunities in the market. We have already seen an uptick in transaction activity in the current quarter.”
Quarterly Comparison
| $ millions | Q3 2020 | Q3 2019 | Q2 2020 | |||||||||
| Net Mortgage Investments | $ | 1,153.2 | $ | 1,174.1 | $ | 1,210.3 | ||||||
| Enhanced Return Portfolio Investments | $ | 93.6 | $ | 103.0 | $ | 82.6 | ||||||
| Net Investment Income | $ | 24.1 | $ | 24.7 | $ | 22.0 | ||||||
| Income from Operations | $ | 20.2 | $ | 21.3 | $ | 18.2 | ||||||
| Net Income and comprehensive Income | $ | 14.4 | $ | 13.9 | $ | 11.7 | ||||||
| --Adjusted Net Income and comprehensive Income | $ | 13.6 | $ | 13.9 | $ | 11.5 | ||||||
| Distributable Income | $ | 14.2 | $ | 15.9 | $ | 14.8 | ||||||
| Dividends to Shareholders | $ | 14.0 | $ | 14.3 | $ | 14.2 | ||||||
| $ per share | Q3 2020 | Q3 2019 | Q2 2020 | |||||||||
| Dividends per share | $ | 0.17 | $ | 0.17 | $ | 0.17 | ||||||
| Distributable Income per share | $ | 0.18 | $ | 0.19 | $ | 0.18 | ||||||
| Earnings per share | $ | 0.18 | $ | 0.17 | $ | 0.14 | ||||||
| --Adjusted Earnings per share | $ | 0.17 | $ | 0.17 | $ | 0.14 | ||||||
| Payout Ratio on Distributable Income | 98.3 | % | 90.2 | % | 95.7 | % | ||||||
| Payout Ratio on Earnings per share | 96.7 | % | 103.0 | % | 120.5 | % | ||||||
| Payout Ratio on Adjusted Earnings per share | 102.5 | % | 103.0 | % | 122.6 | % | ||||||
| Net Mortgage Investments | Q3 2020 | Q3 2019 | Q2 2020 | |||||||||
| Weighted Average Loan-to-Value | 68.2 | % | 67.8 | % | 68.7 | % | ||||||
| Weighted Average Remaining Term to Maturity | 1.1 yr | 1.1 yr | 1.3 yr | |||||||||
| First Mortgages | 90.4 | % | 92.8 | % | 92.1 | % | ||||||
| Cash-Flowing Properties | 84.1 | % | 87.4 | % | 85.8 | % | ||||||
| Rental Apartments | 50.0 | % | 46.5 | % | 51.6 | % | ||||||
| Floating Rate Loans with rate floors (at quarter end) | 77.3 | % | 58.0 | % | 75.1 | % | ||||||
| Weighted Average Interest Rate | ||||||||||||
| For the quarter ended | 7.2 | % | 7.3 | % | 7.1 | % | ||||||
| Weighted Average Lender Fee | ||||||||||||
| New and Renewed | 0.7 | % | 0.9 | % | 0.7 | % | ||||||
| New Net Mortgage Investment Only | 1.2 | % | 1.2 | % | 1.1 | % | ||||||
Board of Director Changes
The Company also announced the following changes to its Board of Directors, which reflect the recently announced evolution of Timbercreek Asset Management (“Timbercreek”).
- Scott Rowland, Chief Investment Officer of Timbercreek, joins the Board as a director. Mr. Rowland is responsible for the development of investment strategies and the overall performance of Timbercreek’s portfolios, and oversees the company’s investment team. Mr. Rowland has over 20 years of industry experience with roles including the Co-Head of Debt Strategies for Fiera Properties and the Managing Director for Blackstone’s debt business in Canada. During a 19-year career at GE Capital, Mr. Rowland held a variety of roles including credit underwriting, Asset Management Leader, Originations Leader and the Managing Director for Real Estate in Canada.
- Steven Scott, a long-time independent director of the Company, has reached an agreement in principle to acquire an ownership position in Timbercreek, and will become a non-independent director as a result. To ensure the appropriate ratio of independent directors, Ugo Bizzarri, has agreed to resign from the Board of Directors.
- Amar Bhalla joins the Board as an independent director. Mr. Amar Bhalla is a principal at the Amdev Property Group, a private real estate company that owns and manages a portfolio of apartment buildings, commercial sites, and development projects in the GTA. He has over 20 years of experience in the acquisition, repositioning and redevelopment of GTA-based real estate across asset classes. Mr. Bhalla serves on the boards of several TSX and TSX-V listed businesses, including acting as Chair of Dream Impact Trust. Mr. Bhalla is a CFA charterholder and a member of the Institute of Corporate Directors.
- Cameron Goodnough, who is transitioning the Timbercreek CEO role to Blair Tamblyn, will also no longer serve on the Board.
“We’re thrilled to add Scott and Amar as new directors. Given Scott’s enhanced role with Timbercreek as CIO, we look forward to his direct involvement with the Board. Amar’s extensive experience in value-add real estate strategies make him an ideal addition and an excellent complement to the skill-sets of the existing directors,” added Mr. Tamblyn. “On behalf of the Board, I would like to thank Ugo and Cam for their significant contributions to the success of Timbercreek Financial over many years. We look forward to collaborating with them as they continue to grow their direct real estate and public securities business under the Hazelview brand.”
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on Monday, November 16, 2020 1:00 p.m. (EST) which will be followed by a question and answer period with analysts. To join the call:
https://timbercreekfinancial.adobeconnect.com/tfq32020/
Participant Toll Free Dial-In Number: (855) 223-7310
Participant International Dial-In Number: (647) 788-4930
Conference ID Number: 4282428
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
Chief Executive Officer
btamblyn@timbercreek.com
Tracy Johnston
Chief Financial Officer
tjohnston@timbercreek.com