Timbercreek Financial Reports Fourth Quarter 2020 Results
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TORONTO, March 08, 2021 (GLOBE NEWSWIRE) – Timbercreek Financial (TSX: TF) (the “Company”) today announced its financial results for the quarter and fiscal year ended December 31, 2020 (“Q4 2020”).
Highlights of the fourth quarter of 2020
- Generated distributable income of $ 14.6 million and paid $ 14.0 million in dividends to shareholders
- Generated $ 0.18 in distributable income per share (distributable income payout ratio of 95.4%)
- Strong transaction activity, with financing of $ 280.9 million for new and existing mortgages, against repayments of $ 275.5 million. The increase in transaction volume resulted in a turnover rate of 19.6% in Q4 compared to 12.3% in Q3 2020.
- Maintaining a conservative portfolio risk position focused on income-producing commercial real estate
- 90.3% of the mortgage investment portfolio are first mortgage loans
- 84.9% of the mortgage investment portfolio is invested in cash-generating properties
- 68.5% of the weighted average loan / value ratio
- 7.2% quarterly weighted average interest rate on net mortgage investment
- Net income and comprehensive income of $ (1.6) million included $ 15.5 million of fair value losses on assets measured at fair value through profit or loss, including an asset of retail impacted by COVID-19. Adjusted primarily for these losses, adjusted net income and comprehensive income was $ 13.0 million, adjusted earnings per share was $ 0.16, and the payout ratio to adjusted earnings per share was 107, 2%.
- The portfolio continues to perform well during the COVID-19 pandemic, with interest and principal payments from borrowers in line with historical collection rates.
“We were faced with a rapidly changing operating environment in 2020, which presented new challenges for some of our borrowers and resulted in a downturn across the commercial real estate transaction industry,” said Blair Tamblyn, CEO of Timbercreek Financial. “Despite these headwinds, we generated distributable income in line with our expectations. Over the past 16 quarters, we have maintained an average dividend payout ratio of 94.9% on distributable income despite the historically low interest rate environment, demonstrating our ability to maintain stable income which is fundamental to our investment proposal. In addition, our portfolio has been quite resilient until 2020, due to our focus on income-producing assets and multi-family dwellings, a segment that has been particularly sustainable. Our conservative stance has served us well during the worst of this crisis. It is important to note that the interest and principal payments of our borrowers remain largely unchanged. “
Mr Tamblyn added: “While the portfolio remains in a strong position, certain types of assets, including retail, have been hit the hardest by the COVID crisis. We felt some impact in the fourth quarter as we recorded fair value adjustments primarily on a legacy, traditional small market format business asset that was materially affected by the negative retail environment. We believe this is a unique situation and not representative of other loans in this segment, which are collateralized by “high street” downtown assets in major cities and have high expectations of value at long term. As we look into 2021, we continue to see strong aggregate demand and attractive risk-adjusted opportunities, and the company is well capitalized to leverage and continue to meet our core investment goals. “
|millions of dollars||Q4 2020||Q4 2019||Q3 2020|
|Net mortgage investments||$||1,143.1||$||1,244.1||$||1,153.2|
|Portfolio investments with enhanced returns||$||91.6||$||78.2||$||93.6|
|Net investment income||$||24.0||$||24.7||$||23.9|
|Income from operations||$||3.9||$||21.6||$||20.2|
|Net income and comprehensive income||$||(1.6||)||$||14.1||$||14.4|
|–Adjusted net income and comprehensive income||$||13.0||$||13.6||$||14.0|
|Dividends to shareholders||$||14.0||$||14.4||$||14.0|
|$ per share||Q4 2020||Q4 2019||Q3 2020|
|Dividends per share||$||0.17||$||0.17||$||0.17|
|Distributable result per share||$||0.18||$||0.19||$||0.18|
|Earnings per share||$||(0.02||)||$||0.17||$||0.18|
|– Adjusted earnings per share||$||0.16||$||0.16||$||0.17|
|Payout ratio on distributable income||95.4||%||92.3||%||98.3||%|
|Payout ratio to earnings per share||n / A||101.8||%||96.7||%|
|– Payout ratio to adjusted earnings per share||107.2||%||105.5||%||102.5||%|
|Net mortgage investments||Q4 2020||Q4 2019||Q3 2020|
|Weighted average loan / value ratio||68.5||%||70.5||%||68.2||%|
|Weighted average residual maturity until maturity||1.0 year||1.4 years||1.1 years|
|Cash flow properties||84.9||%||86.8||%||84.1||%|
|Apartments for rent||52.3||%||54.1||%||50.0||%|
|Variable rate loans with floor rate (at the end of the quarter)||78.1||%||71.0||%||77.3||%|
|Weighted average interest rate|
|For the quarter ended||7.2||%||7.2||%||7.2||%|
|Weighted average lender commission|
|New and renewed||0.7||%||1.0||%||0.7||%|
|New net mortgage investment only||1.5||%||1.1||%||1.2||%|
Quarterly conference call
Interested parties are invited to participate in a conference call with management on Tuesday, March 9, 2021 at 1:00 p.m. EST, which will be followed by a question and answer period with analysts. To join the call:
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 term structured finance 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 not typically provided by Canadian financial institutions. By employing rigorous underwriting, active management and strong governance, we are able to meet these needs while generating strong risk-adjusted returns for investors. Further information is available on our website, www.timbercreekfinancial.com.
The Company prepares and publishes financial statements in accordance with IFRS. In addition to the results provided in accordance with IFRS, the Company discloses certain financial measures not recognized under IFRS and which do not have a standard meaning prescribed by IFRS (collectively the “non-IFRS measures”). These non-IFRS measures are described in more detail in the MD&A (“MD&A”) available on SEDAR. The Company has presented such non-IFRS measures because the Manager believes them to be relevant measures of the Company’s ability to earn and distribute cash dividends to shareholders and to assess its performance. The following non-IFRS financial measures should not be interpreted as alternatives to total net income and comprehensive income or cash flows from operating activities determined in accordance with IFRS as indicators of the performance of the Company. .
Certain statements contained in this press release may contain projections and “forward-looking statements” as such expression is defined under Canadian securities laws. When used in this press release, the words “may”, “should”, “should”, “could”, “may”, “intention”, “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 current opinions, beliefs, assumptions and intentions of the Company and are subject to certain risks and uncertainties, known and unknown, including, without limitation, the risks disclosed in the Company’s public documents. Many factors could cause actual results, performance or achievements to differ materially from results, performance or achievements future statements that may be expressed or implied by these forward-looking statements.The Company does not intend or assume any obligation to update these forward-looking statements, regardless of whether e either as a result of new information, plans, events or otherwise, except as required by law.
SOURCE: Timbercreek Financial
For more information, please contact:
Timbercreek FinancialBlair Tamblyn, CEO Tracy Johnston, CFO Karynna Ma, Vice President, Investor Relations
Source: Timbercreek Financial