Firm Capital Mortgage Investment Corporation Announces Results

TSX Symbol FC

TORONTO, March 15, 2013 /CNW/ - Firm Capital Mortgage Investment Corporation (the "Corporation") (TSX FC), today released its financial statements for the quarter and fiscal year ended December 31, 2012.

PROFIT & RETURN ON EQUITY

Profit for the fourth quarter ended December 31, 2012 increased by 6% to $4,071,325 as compared to $3,843,403 for the same period last year.  Basic weighted average profit per share for the fourth quarter ended December 31, 2012 was $0.243, which is lower in comparison to the $0.256 reported for the fourth quarter ended December 31, 2011. For the year ended December 31, 2012, profit increased by 14% to $16,755,292 as compared to $14,659,462 for the year ended December 31, 2011.  Basic weighted average profit per share for the year ended December 31, 2012 of $0.999 was slightly higher in comparison to the $0.995 for the year ended December 31, 2011. Profit for the year ended December 31, 2012 represented an annualized return on shareholders' equity of 9.83%. This return on shareholders' equity represents 874 basis points per annum over the average Government of Canada One Year Treasury Bill yield and is well in excess of the Corporation's stated target yield objective of 400 basis points per annum over the average One Year Treasury Bill yield.

DIVIDENDS:

For the twelve months ended December 31, 2012, the Corporation paid dividends totaling $16,755,292 versus $14,659,462 for the twelve months ended December 31, 2011.  The Corporation distributed 100% of its profits to shareholders.

INVESTMENT PORTFOLIO HIGHLIGHTS:

Details on the Corporation's investment portfolio as at December 31, 2012 are as follows:

• Total gross investment portfolio equals $297,217,271
• Conventional first mortgages, being those mortgages with loan to values less than 75%, comprise 62.3% of our total portfolio.
• Approximately 70% of the portfolio matures within 12 months. This results in a continuously revolving portfolio, allowing management to assess market conditions.
• The average face interest rate on the portfolio is 9.03% per annum.
• Regionally, the portfolio is diversified approximately as follows: Ontario 74.6%, Alberta 15.1%, Quebec 8.2% and British Columbia 2.1%.
• Investment portfolio breakdown by loan size is as follows:

Amount	Number of Investments	%	Total Amount		%
$0 - $2,500,000	98	71%	$	83,230,849	28%
$2,500,001 - $5,000,000	22	16%		75,932,651	26%
$5,000,001 - $7,500,000	10	7%		56,508,748	19%
$7,500,000 +	9	6%		81,545,023	27%
	139	100%	$	297,217,271	100%

 

IMPAIRMENT PROVISION:

Management has always taken a proactive approach to the loan impairment provision. This is a prudent approach to protecting our Shareholders' equity. Impairment provisions increased by $200,000 over 2011 to $3,180,000 representing 1.1% of the gross loan portfolio.

UNRECOGNIZED INCOME COLLECTED:

As at December 31, 2012, the Corporation has banked non-refundable fee income of $520,055, which will be recognized as income over the term of the corresponding investments.

FINANCING UPDATE

On March 4, 2013, the Corporation entered into an agreement to sell, on a bought deal basis, to a syndicate of underwriters, $20,000,000 aggregate principal amount of 4.75% convertible unsecured subordinated debentures due March 31, 2020 (the "Debentures") at a price of $1,000 per Debenture.  The Corporation has granted the underwriters an over-allotment option to purchase up to $3,000,000 additional aggregate principal amount of Debentures, exercisable, in whole or in part, at any time until 30 days following the closing of the offering.  The Debentures will bear interest at a rate of 4.75% per annum, payable semi-annually in arrears on the last day of March and September in each year commencing September 30, 2013, and will mature on March 31, 2020 (the "Maturity Date").  The Debentures will be convertible at the holder's option into common shares of the Corporation (the "Shares") at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $15.80 per Share (the "Conversion Price"), subject to adjustment in certain circumstances.

DIVIDEND AND SHARE PURCHASE PLAN:

The Corporation has in place a Dividend Reinvestment Plan (DRIP) and Share Purchase Plan that is available to its Shareholders. The plans allows participants to have their monthly cash dividends reinvested in additional shares at a 2% discount to market and grants participants the right to purchase, without commission, additional shares, up to a maximum of $12,000 per annum.

ABOUT THE CORPORATION

The Corporation, through its Mortgage Banker, Firm Capital Corporation, is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The Corporation's investment objective is the preservation of Shareholders' equity, while providing Shareholders with a stable stream of monthly dividends from investments. The Corporation achieves its investment objectives by pursuing a strategy of growth through investments in selected niche markets that are under-serviced by large lending institutions. Lending activities to date continue to develop a diversified mortgage portfolio, producing a stable return to Shareholders. Full reports of the financial results of the Corporation for the year are outlined in the audited financial statements and the related management discussion and analysis of Firm Capital, available on the SEDAR website at www.sedar.com.  In addition, supplemental information is available on Firm Capital's website at www.firmcapital.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, our performance, our mortgage portfolio and our distributions, as well as statements with respect to management's beliefs, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intent", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes 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 Annual Information Form under "Risk Factors" (a copy of which can be obtained at www.sedar.com), which could cause our actual results and performance to differ materially from the forward-looking statements contained in this circular.  Those risks and uncertainties include, among others, risks associated with mortgage lending, dependence on the Corporation's manager and mortgage banker, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters, shareholder liability and the introduction of new tax rules.  Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include, among others, that the Corporation is able to invest in mortgages at rates consistent with rates historically achieved; adequate mortgage investment opportunities are presented to the Corporation; and adequate bank indebtedness and bank loans are available to the Corporation.  Although the forward-looking information continued in this new release is based upon what management believes are 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 news release are qualified by these cautionary statements.  Except as required by applicable law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE: Firm Capital Mortgage Investment Corporation

Firm Capital Mortgage Investment Corporation
Eli Dadouch
President & Chief Executive Officer
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