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Timbercreek Financial Announces 2024 First Quarter Results

TORONTO, May 06, 2024 (GLOBE NEWSWIRE) — Timbercreek Financial (TSX: TF) (the “Company”) announced today its financial results for the three months ended March 31, 2024 (“Q1 2024”).

Q1 2024 Highlights1

“During the first quarter of 2024, we were able to generate solid income levels and deliver on our monthly distribution at a comfortable payout ratio while continuing to focus on re-deploying capital that is being generated from desired repayments,” said Blair Tamblyn, CEO of Timbercreek Financial. “The lower quarter-end portfolio balance reflects two quarters of significant repayments, including the desired repayment of the larger Quebec City portfolio of loans in early January 2024. This was the primary factor in the reduced top-line income versus last year’s first quarter, which represented a high-water mark for net investment income over the past two years. However, interest expense on the credit facility also declined on a smaller portfolio balance, allowing us to maintain net income margins. While we were intentionally cautious on new lending activity through much of 2023, our team remains optimistic that a stable interest rate environment in 2024 will promote increased commercial real estate activity and present attractive risk-adjusted opportunities for us to expand the portfolio back to historical levels. It was a strong first quarter for originations during what is typically a competitive period, which allowed us to grow the portfolio modestly from year-end levels.”

Mr. Tamblyn added: “At the same time, our team continues to make headway on the Stage 2 and Stage 3 loans. We are adept and experienced at actively managing these situations to ensure the best outcomes for our shareholders – that remains a key focus in the coming quarters.”

Quarterly Comparison

$ millions Q1 2024     Q1 2023   Q4 2023
             
Net Mortgage Investments 1 $ 977.5       $ 1,149.1     $ 946.2  
Enhanced Return Portfolio Investments 1 $ 63.4       $ 59.4     $ 62.7  
Real Estate Inventory, net of collateral liability $ 92.8       $ 30.3     $ 92.6  
             
Net Investment Income $ 24.6       $ 32.7     $ 29.7  
Income from Operations $ 20.9       $ 28.3     $ 25.1  
Net Income and comprehensive Income $ 14.4       $ 18.1     $ 15.0  
–Adjusted Net Income and comprehensive Income $ 14.2       $ 18.0     $ 14.7  
Distributable income 1 $ 15.8       $ 18.3     $ 17.5  
Dividends declared to Shareholders2 $ 14.3       $ 14.5     $ 14.3  
             
$ per share Q1 2024     Q1 2023   Q4 2023
             
Dividends per share $ 0.17       $ 0.17     $ 0.17  
Distributable income per share 1 $ 0.19       $ 0.22     $ 0.21  
Earnings per share $ 0.17       $ 0.22     $ 0.18  
–Adjusted Earnings per share $ 0.17       $ 0.21     $ 0.18  
             
Payout Ratio on Distributable Income 1   90.6 %       79.1 %     82.0 %
Payout Ratio on Earnings per share   99.7 %       79.8 %     95.8 %
–Payout Ratio on Adjusted Earnings per share   100.8 %       80.1 %     97.7 %
             
Net Mortgage Investments Q1 2024     Q1 2023   Q4 2023
             
Weighted Average Loan-to-Value   64.4 %       68.5 %     65.6 %
Weighted Average Remaining Term to Maturity   0.8 yr       0.8 yr     0.7 yr
First Mortgages   85.7 %       92.0 %     88.9 %
Cash-Flowing Properties   85.7 %       89.0 %     86.0 %
Multi-family residential   54.6 %       50.8 %     56.5 %
Floating Rate Loans with rate floors (at quarter end)   88.6 %       88.2 %     86.1 %
             
Weighted Average Interest Rate            
For the quarter ended   9.9 %       9.7 %     10.0 %
Weighted Average Lender Fee            
New and Renewed   0.8 %       1.1 %     1.0 %
New Net Mortgage Investment Only   0.9 %       1.5 %     1.2 %
  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.
  2. Dividends declared exclude special dividends.

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Tuesday, May 7, 2024 at 1:00 p.m. (ET) which will be followed by a question and answer period with analysts.

To join the Zoom Webinar:

If you are a Guest please click the link below to join:

https://us02web.zoom.us/j/82687372656?pwd=TU1KQ0g3QVdoUkVMNnVuRVlmV0ZUZz09

Webinar ID: 826 8737 2656
Passcode: 1234

Or Telephone:
Dial (for higher quality, dial a number based on your current location):
Canada: +1 204 272 7920, +1 438 809 7799, +1 587 328 1099, +1 647 374 4685, +1 647 558 0588, +1 778 907 2071, +1 780 666 0144

International numbers available: https://us02web.zoom.us/u/kcWEcyxzG7

Speakers will receive a separate link to the Webinar.

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.

OPERATING RESULTS1

  Three months
ended March 31,
  Year ended
December 31,
 
NET INCOME AND COMPREHENSIVE INCOME   2024     2023     2023  
Net investment income on financial assets measured at amortized cost $ 24,590   $ 32,709   $ 124,205  
Fair value gain and other income on financial assets measured at FVTPL   337     282     1,282  
Net rental gain (loss)   474     (359 )   (595 )
Fair value gain on real estate properties       63     63  
Expenses   (4,498 )   (4,443 )   (19,140 )
Income from operations $ 20,903   $ 28,252   $ 105,815  
       
Financing costs:      
Financing cost on credit facility   (4,285 )   (7,898 )   (30,396 )
Financing cost on convertible debentures   (2,250 )   (2,250 )   (8,998 )
Net income and comprehensive income $ 14,368   $ 18,104   $ 66,421  
Payout ratio on earnings per share   99.7 %   79.8 %   86.7 %
       
ADJUSTED NET INCOME AND COMPREHENSIVE INCOME  
Net income and comprehensive income   14,368     18,104     66,421  
Add: Net unrealized loss on financial assets measured at FVTPL   (166 )   (57 )   (342 )
Adjusted net income and comprehensive income1 $ 14,202   $ 18,047   $ 66,078  
Payout ratio on adjusted earnings per share1   100.8 %   80.1 %   87.2 %
       
DISTRIBUTABLE INCOME      
Adjusted net income and comprehensive income1 $ 14,202   $ 18,047   $ 66,078  
Less: Amortization of lender fees   (1,405 )   (2,465 )   (8,279 )
Add: Lender fees received and receivable   1,179     1,709     6,597  
Add: Amortization of financing costs, credit facility   416     253     953  
Add: Amortization of financing costs, convertible debentures   243     244     972  
Add: Accretion expense, convertible debentures   113     113     454  
Add: Unrealized fair value loss (gain) on DSU   153     75     (67 )
Add: Expected credit loss   912     300     3,649  
Distributable income1 $ 15,813   $ 18,276   $ 70,357  
Payout ratio on distributable income1   90.6 %   79.1 %   81.9 %
       
PER SHARE INFORMATION      
Dividends declared to shareholders $ 14,319   $ 14,451   $ 57,603  
Weighted average common shares (in thousands)   83,010     83,970     83,509  
Dividends per share $ 0.17   $ 0.17   $ 0.69  
Earnings per share (basic) $ 0.17   $ 0.22   $ 0.80  
Earnings per share (diluted) $ 0.17   $ 0.21   $ 0.78  
Adjusted earnings per share (basic)1 $ 0.17   $ 0.21   $ 0.79  
Adjusted earnings per share (diluted)1 $ 0.17   $ 0.21   $ 0.78  
Distributable income per share1 $ 0.19   $ 0.22   $ 0.84  
  1. Refer to non-IFRS measures section

Net mortgage investments
(In thousands of Canadian dollars, except units, per unit amounts and where otherwise noted)

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, 2024       December 31, 2023  
Mortgage investments, excluding mortgage syndications   $ 976,474     $ 943,488  
Mortgage syndications     504,309       601,624  
Mortgage investments, including mortgage syndications     1,480,783       1,545,112  
Mortgage syndication liabilities     (504,309 )     (601,624 )
      976,474       943,488  
Interest receivable     (17,063 )     (14,585 )
Unamortized lender fees     5,026       5,226  
Expected credit loss     13,112       12,093  
Net mortgage investments   $ 977,549     $ 946,222  

Enhanced return portfolio

As at     March 31, 2024       December 31, 2023  
Other loan investments, net of expected credit loss   $ 47,560     $ 47,033  
Finance lease receivable, measured at amortized cost     6,020       6,020  
Investment in participating debentures, measured at FVTPL     4,545       4,380  
Joint venture investment in indirect real estate development     2,225       2,225  
Investment in equity instrument     3,000       3,000  
Total Enhanced Return Portfolio   $ 63,350     $ 62,658  

Real estate inventory, net of collateral liability

As at     March 31, 2024       December 31, 2023  
Real estate land inventory   $ 30,645     $ 30,577  
Real estate properties inventory     130,987       130,987  
Real estate inventory   $ 161,632     $ 161,564  
Real estate inventory collateral liabilities     (68,787 )     (69,008 )
Total Real Estate Inventory, net of collateral liability   $ 92,845     $ 92,556  

SOURCE: Timbercreek Financial

For further information, please contact:

Timbercreek Financial
Blair Tamblyn, CEO
Tracy Johnston, CFO
416-923-9967
www.timbercreekfinancial.com


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