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Timbercreek Financial Announces 2022 First Quarter Results

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Timbercreek Financial
Timbercreek Financial

TORONTO, May 10, 2022 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the “Company”) announced today its financial results for the three months ended March 31, 2022 (“Q1 2022”).

Q1 2022 Highlights1

  • Q1 2022 results reflect high funding volumes from a strong pipeline of opportunities. The Company executed on net new mortgage fundings of $210.5 million, and advances on existing mortgages of $16.1 million, offset by net mortgage repayments of $122.2 million. At the end of the period, net mortgage investments were $1,263.3 million (versus $1,159.6 at year-end 2021). The robust transaction volume resulted in a Q1 2022 turnover ratio of 11.4%.

  • Declared $14.3 million in dividends to shareholders, or $0.17 per share, and delivered distributable income and adjusted distributable income of $15.2 million, or $0.18 per share, representing a payout ratio of 93.9% on both distributable income and adjusted distributable income. The Q1 2022 adjusted distributable income payout ratio of 93.9% was within management's target payout range of low to mid-90s for the quarter and compares with 91.2% for Q1 2021.

  • Net income and comprehensive income of $12.9 million which includes $0.9 million of fair value losses on mortgages and investment properties measured at fair value through profit and loss. After adjusting for these losses, adjusted net income and comprehensive income was $13.8 million for the period.

  • Basic and diluted earnings per share were $0.16, and basic and diluted adjusted earnings per share were $0.17, reflecting a payout ratio of 93.9% (Q1 2021 – 91.2%) on an adjusted distributable income basis.

  • Maintained conservative portfolio risk position focused on income-producing commercial real estate

    • 71.3% weighted average loan-to-value

    • 92.5% first mortgages in mortgage investment portfolio

    • 90.3% of mortgage investment portfolio is invested in cash-flowing properties

    • 6.6% quarterly weighted average interest rate on net mortgage investments

  • Expanded the credit facility by $59 million in February, which provided greater ability to fund more loans accretively, resulting in an increased credit facility utilization rate of 92.0% as at Q1 2022 (Q1 2021 - 87.2%).

  • Subsequent to quarter-end, the Company completed the disposition of the Saskatchewan Portfolio for proceeds approximating carrying value as well as successfully aligned its interest in two FVTPL loans to an equity position in one of the assets that can now be positioned for sale

“Overall, it was a good start to 2022 as our team managed a particularly busy period on the funding front, reflecting improved market activity, our expanded capital base, and Timbercreek’s strong standing and reputation in the market nationally,” said Blair Tamblyn, CEO of Timbercreek Financial. “At the same time, we made meaningful progress to exit the remaining non-core assets, which will free up additional capital to put to work in core mortgages that will be accretive to distributable income. Looking ahead, our expectation is that interest rate increases will also have a positive impact on our distributable income as the majority of our loans are structured with floating rates. Given the short duration of our loans, we have considerable flexibility to react to changing real estate fundamentals in a rising rate environment.”

  1. Refer to non-IFRS measures section below for net mortgages, enhanced return portfolio adjusted net income and comprehensive income and adjusted distributable income

Quarterly Comparison

$ millions

Q1 2022

Q1 2021

Q4 2021

Net Mortgage Investments1

$

1,263.3

$

1,147.6

$

1,159.6

Enhanced Return Portfolio Investments1

$

80.6

$

87.4

$

84.6

Net Investment Income

$

22.7

$

22.4

$

22.4

Income from Operations

$

18.7

$

19.4

$

7.2

Net Income and comprehensive Income

$

12.9

$

15.0

$

2.4

--Adjusted Net Income and comprehensive Income

$

13.8

$

14.1

$

14.0

Distributable Income

$

15.2

$

15.3

$

16.2

--Adjusted Distributable Income

$

15.2

$

15.3

$

16.2

Dividends declared to Shareholders

$

14.3

$

14.0

$

14.2

$ per share

Q1 2022

Q1 2021

Q4 2021

Dividends per share

$

0.17

$

0.17

$

0.17

Distributable Income per share

$

0.18

$

0.19

$

0.20

Adjusted distributable Income per share

$

0.18

$

0.19

$

0.20

Earnings (loss) per share

$

0.16

$

0.19

$

0.03

--Adjusted Earnings per share

$

0.17

$

0.17

$

0.17

Payout Ratio on Distributable Income1

93.9

%

91.2

%

87.6

%

--Payout ratio on Adjusted Distributable Income

93.9

%

91.2

%

87.6

%

Payout Ratio on Earnings per share

110.8

%

93.1

%

587.6

%

--Payout Ratio on Adjusted Earnings per share

103.2

%

98.8

%

100.9

%

Net Mortgage Investments

Q1 2022

Q1 2021

Q4 2021

Weighted Average Loan-to-Value

71.3

%

68.8

%

70.1

%

Weighted Average Remaining Term to Maturity

1.1 yr

1.0 yr

1.0 yr

First Mortgages

92.5

%

90.3

%

93.2

%

Cash-Flowing Properties

90.3

%

86.7

%

88.3

%

Rental Apartments

55.3

%

51.2

%

48.0

%

Floating Rate Loans with rate floors (at quarter end)

85.6

%

76.3

%

84.6

%

Weighted Average Interest Rate

For the quarter ended

6.6

%

7.3

%

6.9

%

Weighted Average Lender Fee

New and Renewed

1.2

%

0.9

%

0.9

%

New Net Mortgage Investment Only

1.2

%

1.0

%

1.3

%

  1. Refer to non-IFRS measures section below for net mortgages, enhanced return portfolio investments, adjusted net income and comprehensive income, distributable income and adjusted distributable income.

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Tuesday, May 10, 2022 at 1:00 p.m. (ET) which will be followed by a question and answer period with analysts. To join the call:

https://us02web.zoom.us/j/85277413702?pwd=UmhiUCs2aVF5ZHp1RFFwZ1B2YXFNQT09
Webinar ID: 852 7741 3702, Passcode: 1234
Participant Dial-In Number: +1 587 328 1099

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. Certain non-IFRS measures relating to net mortgages, adjusted net income and comprehensive income and adjusted distributable income have been shown below. 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.

Net Mortgage Investments

The Company’s exposure to the financial returns is related to the net mortgage investments as mortgage syndication liabilities are non-recourse mortgages with periodic variance having no impact on Company's financial performance. Reconciliation of gross and net mortgage investments balance is as follows:

Net Mortgage Investments

March 31, 2022

December 31, 2021

Mortgage investments, excluding mortgage syndications

$

1,263,848

$

1,159,210

Mortgage syndications

475,502

444,429

Mortgage investments, including mortgage syndications

1,739,350

1,603,639

Mortgage syndication liabilities

(475,502

)

(444,429

)

1,263,848

1,159,210

Interest receivable

(12,545

)

(10,824

)

Unamortized lender fees

8,497

8,278

Allowance for mortgage investments loss

3,541

2,970

Net mortgage investments

$

1,263,341

$

1,159,634


Enhanced return portfolio

As at

March 31, 2022

December 31, 2021

Collateralized loans, net of allowance for credit loss

$

54,240

$

58,000

Finance lease receivable, measured at amortized cost

6,020

6,020

Investment, measured at FVTPL

4,608

4,985

Indirect real estate development, measured using equity method:

Investment in Joint Venture

2,225

2,225

Total Other Investments

67,093

71,230

Investment properties

44,168

44,063

Credit facility (investment properties)

(30,683

)

(30,690

)

Net equity in investment properties

13,485

13,373

Total Enhanced Return Portfolio

$

80,578

$

84,603


OPERATING RESULTS

Three months ended
March 31,

Year ended
December 31,

NET INCOME AND COMPREHENSIVE INCOME

2022

2021

2021

Net Investment Income on financial assets measured at amortized cost

$

22,677

$

22,439

$

90,249

Total fair value (loss) gain and other income on financial assets measured at FVTPL

$

(103

)

$

479

$

(10,291

)

Net rental income

$

382

$

348

$

1,499

Total fair value loss on investment properties

$

$

(4,374

)

Expenses

$

4,241

$

3,895

$

16,237

Income from operations

$

18,715

$

19,371

$

60,846

Financing costs:

Financing cost on credit facilities

$

3,560

$

3,903

$

16,734

Financing cost on convertible debentures

$

2,273

$

1,454

$

6,745

Fair value (gain) loss on derivative contract

$

$

(977

)

$

(3,940

)

Net income (loss) and comprehensive income

$

12,882

$

14,991

$

41,307

Payout ratio on earnings per share

110.8

%

93.1

%

135.9

%

ADJUSTED NET INCOME AND COMPREHENSIVE INCOME

Net income (loss) and comprehensive income

$

12,882

$

14,991

$

41,307

Add: fair value (gain) loss on derivative contract (interest rate swap)

$

$

(977

)

$

(3,940

)

Add: net unrealized loss on financial assets measured at FVTPL

$

946

$

116

$

13,748

Add: Net unrealized loss on investment properties

$

$

$

4,374

Adjusted net income and comprehensive income

$

13,828

$

14,130

$

55,489

Payout ratio on adjusted earnings per share

103.2

%

98.8

%

101.2

%

OPERATING RESULTS

Three months ended
March 31,

Year ended
December 31,

DISTRIBUTABLE INCOME

2022

2021

2021

Adjusted net income and comprehensive income1

$

13,828

$

14,130

$

55,489

Less: amortization of lender fees

(2,290

)

(2,082

)

(9,275

)

Add: lender fees received and receivable

2,459

2,561

10,746

Add: amortization of financing costs, credit facility

215

154

1,022

Add: amortization of financing costs, debentures

252

181

1,060

Add: accretion expense, debentures

113

50

323

Add: unrealized fair value (gain) loss on DSU

(33

)

19

104

Add: allowance for expected credit loss

649

300

1,660

Distributable income

$

15,193

$

15,313

$

61,129

Payout ratio on distributable income

93.9

%

91.2

%

91.8

%

ADJUSTED DISTRIBUTABLE INCOME

Distributable income

$

15,193

$

15,313

$

61,129

Less: One-time distribution income

$

(707

)

Adjusted Distributable income

$

15,193

$

15,313

$

60,422

Payout ratio on adjusted distributable income1

93.9

%

91.2

%

92.9

%

SOURCE: Timbercreek Financial

For further information, please contact:
Timbercreek Financial
Blair Tamblyn, CEO
Tracy Johnston, CFO
Karynna Ma, Vice President, Investor Relations

1-844-304-9967
www.timbercreekfinancial.com


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