Timbercreek Financial Announces 2016 Second Quarter Results
Marketwired
TORONTO, ON--(Marketwired - August 04, 2016) - Timbercreek Financial (TF.TO) (the "Company") announced today its financial results for the three months and six months ended June 30, 2016 ("Q2 2016" and "YTD 2016", respectively).
"We are pleased to be reporting earnings to our shareholders for the first time as Timbercreek Financial. After the overwhelming support we have received for the amalgamation, we continue to be committed to seeking ways to enhance value, while delivering a strong, risk-adjusted yields to our shareholders. We believe we have set the foundation for greater success going forward, allowing for better growth opportunities for the business in order to enhance shareholder value," states Andrew Jones, Chief Executive Officer of the Company.
Second Quarter Highlights (versus Q2 2015)
For financial reporting purposes, the amalgamation contemplates Timbercreek Mortgage Investment Corporation ("TMC") as the acquirer of Timbercreek Senior Mortgage Investment Corporation ("MTG") on June 30, 2016, and as a result, the financials reflect a full quarter of TMC's results combined with one day of operations for MTG.
Net interest income of $10.9 million down 5% from $11.5 million (Q1 2016 -- $10.5 million)
Net income and comprehensive income of $13.3 million up from $7.7 million (Q1 2016 -- $7.2 million). Net income and comprehensive income in Q2 2016 was impacted positively by $6.1 million resulting from net non-recurring gains from the amalgamation
Basic earnings per share increased to $0.33 from $0.19 (Q1 2016 -- $0.18), diluted earnings per share of $0.32 from $0.19 (Q1 2016 -- $0.18) and adjusted earnings per share of $0.18 from $0.19
Exposure to Alberta remains low at 8.7% (Q1 2016 -- 5.9%)
Weighted average interest rate for the period decreased to 9.1% from 9.2% (Q1 2016 -- 8.9%)
Weighted average lender fees for Q2 2016 decreased to 1.5% from 1.7% (Q1 2016 -- 1.8%)
Distributable income per share remained stable at $0.19 (Q1 2016 -- $0.18)
Credit facility balance of $232.9 million at quarter end (March 31, 2016 -- $53.0 million), with a leverage ratio of 29.2% from 9.9% (March 31, 2016 -- 19.3%)
On July 29, 2016, the Company completed a bought offering of $40.0 million aggregate principal amount of 5.40% convertible unsecured subordinated debentures of the Company due July 31, 2021. On August 3, 2016, the underwriters of the offering exercised an option to acquire an additional $5.8 million of such debentures, which is expected to close on August 5, 2016.
Six months ended June 30, 2016 (versus YTD 2015)
Net interest income of $21.7 million down 1.4% from $22.0 million
Net income and comprehensive income of $20.5 million up 36% from $15.0 million. Adjusted net income and comprehensive income was $14.4 million from $15.0 million
Basic and diluted earnings per share of $0.50 from $0.37 with adjusted earnings per share of $0.35 from $0.37
Weighted average interest rate for the period down 20 basis points to 9.0% from 9.2%
Distributable income per share remained stable at $0.37
June 30, 2016 -- Investment Portfolio Highlights
Net mortgage investments increased by 103% to $893.9 million (December 31, 2015 -- $439.5 million) due to $136.7 million in advances offset by $147.3 million in repayments received as well as $469.5 million from the amalgamation of Timbercreek Senior Mortgage Investment Corporation
Weighted average loan-to-value decreased to 68.1% (December 31, 2015 -- 70.4%)
Weighted average term of 2.3 years (December 31, 2015 -- 2.1 years) and an average remaining term to maturity of 1.2 years (December 31, 2015 -- 1.2 years)
The portfolio continues to be well diversified across Canada's largest provinces: Ontario (43.6%), Quebec (19.7%), British Columbia (11.3%), and Alberta (8.7%)
Operating Results Highlights
Three months ended June 30,
Six months ended June 30,
Year ended December 31,
2016
2015
2016
2015
2015
Net interest income
$
10,922
$
11,532
$
21,720
$
22,028
$
43,004
Income from operations
$
8,504
$
9,051
$
16,867
$
17,308
$
32,750
Net income and comprehensive income
$
13,342
$
7,722
$
20,518
$
14,956
$
28,021
Earnings per share (basic)
$
0.33
$
0.19
$
0.50
$
0.37
$
0.69
Net income and comprehensive income (diluted)
$
14,008
$
7,722
$
21,850
$
14,956
$
28,021
Earnings per share (diluted)
$
0.32
$
0.19
$
0.50
$
0.37
$
0.69
Adjusted net income and comprehensive income
$
7,199
$
7,722
$
14,375
$
14,956
$
28,021
Adjusted earnings per share (basic and diluted)
$
0.18
$
0.19
$
0.35
$
0.37
$
0.69
Dividends to shareholders
$
7,294
$
7,321
$
14,589
$
14,645
$
29,253
Distributable income
$
7,607
$
7,868
$
14,859
$
15,070
$
29,484
Distributable income per share
$
0.19
$
0.19
$
0.37
$
0.37
$
0.73
Payout ratio1
95.9%
93.1%
98.2%
97.2%
99.2%
Dividends per common share
$
0.18
$
0.18
$
0.36
$
0.36
$
0.72
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on Friday, August 5, 2016 at 11:00 a.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:
Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to qualified 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 ability of the Company to earn and distribute cash dividends to investors and to evaluate the Company's performance. These non-IFRS measures should not be construed as alternatives to net income (loss) and comprehensive income (loss) or cash flows from operating activities 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 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.
