TORONTO, Feb. 26, 2024 (GLOBE NEWSWIRE) — Timbercreek Financial (TSX:TF) (the “Company”) announced today its financial results for the three months and year ended December 31, 2023 (“Q4 2023”).
Full-Year 2023 Highlights1
Record net investment income of $124.2 million versus $109.8 million in 2022.
Net income and comprehensive income of $66.4 million, up from $55.9 million last year. Basic and diluted earnings per share for 2023 were $0.80, and $0.78 (2022 – $0.67 and $0.67).
Distributable income of $70.4 million, or $0.84 per share (2022 – $66.2 million, $0.79 per share) representing a payout ratio of 81.9% on distributable income.
Shareholders’ equity of $701.1 million at year end (book value per share of $8.45).
Subsequent to quarter end:
The Company is declaring a $0.0575 per share special dividend to shareholders on record on March 5, 2024, reflecting strong top line income performance in 2023. The special dividend will be paid on March 11, 2024.
“We generated solid financial performance for the year 2023, highlighted by record net investment income and strong year-over-year increases in net income and distributable income,” said Blair Tamblyn, CEO of Timbercreek Financial. “In addition to continuing our long track record of monthly dividends, our strong distributable income drove book value per share up to $8.45 from $8.33 last year and enabled us to report a special dividend for this year. We achieved these results while navigating a more challenging period of the real estate cycle, which placed strain on some of our borrowers. Our team has demonstrated the ability to actively manage these situations to ensure the best outcomes for our shareholders, and we made meaningful progress on resolving and reducing Stage 2 and Stage 3 loans which was an important focus in 2023.”
Mr. Tamblyn added: “We were intentionally cautious on new lending given the uncertainty in 2023, adjusting the pace of new investments while ensuring sufficient lending to maintain a healthy payout ratio. As we look forward to 2024, our team is optimistic about the current investment environment with the expectation that a stable interest rate environment will promote increased commercial real estate activity. With our renewed credit facility, we are a strong liquidity position to capitalize on attractive risk-adjusted opportunities and expand the portfolio back to historical levels.”
Q4 2023 Highlights1
Record net investment income of $29.7 million versus $31.3 million in 2022.
Net income and comprehensive income of $15.0 million, up from $14.8 million in the same period last year. Basic and diluted earnings per share for 2023 were $0.18 (2022 – $0.18).
Distributable income of $17.5 million, or $0.21 per share (2022 – $18.4 million, $0.22 per share) representing a payout ratio of 81.9% on distributable income.
Declared $14.3 million, or $0.17 per share in regular dividends to shareholders, reflecting a payout ratio of 95.8% (Q4 2022 – 97.7%) on earnings per share.
Net new mortgage advances were $61.2 million and advances on existing mortgages were $16.2 million, offset by net mortgage repayments of $176.2 million and net syndications of $23.5 million. Portfolio turnover increased to 19.2%, compared with 6.0% in Q3 2023 demonstrating borrowers’ ability to execute on their exit plans (i.e. sale or refinancing with term debt).
At the end of the period, net mortgage investments were $946.2 million (versus $1,195.8 million at Q4 2022) bearing a weighted-average interest rate of 10.0% (versus 9.7% at Q4 2022 and 9.9% at Q3 2023) and a weighted-average LTV of 65.6% (versus 68.3% at Q4 2022 and 67.0% at Q3 2023). The Company also had net real estate inventory of $92.5 million at Q4 2023, versus $30.2 million at Q4 2022.
A portfolio of seven Stage 3 loans totaling $146.1 million returned to Stage 1 in the quarter and were subsequently sold to an institutional buyer in Q1 2024; the Company recovered all its principal and accrued interest.
The Company continues to closely manage its other Stage 3 and Stage 2 loans. The investment team, which is experienced in navigating these situations and utilizing various approaches to achieve resolution, continues to anticipate repayment of principal outstanding as the asset sale processes are completed.
Maintained conservative portfolio risk composition focused on income-producing commercial real estate:
65.6% weighted average loan-to-value;
88.9% first mortgages in mortgage investment portfolio; and
86.0% of mortgage investment portfolio is invested in cash-flowing properties.
Quarterly Comparison
$ millions
Q4 2023
Q4 2022
Q3 2023
Net Mortgage Investments 1
$
946.2
$
1,195.8
$
1,068.6
Enhanced Return Portfolio Investments 1
$
62.7
$
72.9
$
59.3
Real Estate Inventory, net of collateral liability
$
92.6
$
30.2
$
92.5
Net Investment Income
$
29.7
$
31.3
$
30.3
Income from Operations
$
25.1
$
25.2
$
26.1
Net Income and comprehensive Income
$
15.0
$
14.8
$
16.5
–Adjusted Net Income and comprehensive Income
$
14.7
$
14.7
$
16.4
Distributable and adjusted distributable income 1, 2
$
17.5
$
18.4
$
16.8
Dividends declared to Shareholders
$
14.3
$
14.5
$
14.4
$ per share
Q4 2023
Q4 2022
Q3 2023
Dividends per share
$
0.17
$
0.17
$
0.17
Distributable and adjusted distributable income per share 1, 2
$
0.21
$
0.22
$
0.20
Earnings per share
$
0.18
$
0.18
$
0.20
–Adjusted Earnings per share
$
0.18
$
0.17
$
0.20
Payout Ratio on Distributable and adjusted distributable Income 1, 2
82.0
%
78.7
%
85.6
%
Payout Ratio on Earnings per share
95.8
%
97.7
%
87.4
%
–Payout Ratio on Adjusted Earnings per share
97.7
%
98.6
%
87.7
%
Net Mortgage Investments
Q4 2023
Q4 2022
Q3 2023
Weighted Average Loan-to-Value
65.6
%
68.3
%
67.0
%
Weighted Average Remaining Term to Maturity
0.7 yr
0.9 yr
0.7 yr
First Mortgages
88.9
%
92.4
%
92.2
%
Cash-Flowing Properties
86.0
%
87.4
%
86.5
%
Multi-family residential
56.5
%
52.5
%
58.2
%
Floating Rate Loans with rate floors (at quarter end)
86.1
%
88.5
%
87.5
%
Weighted Average Interest Rate
For the quarter ended
10.0
%
9.7
%
9.9
%
Weighted Average Lender Fee
New and Renewed
1.0
%
1.2
%
0.7
%
New Net Mortgage Investment Only
1.2
%
1.4
%
1.0
%
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.
There are no adjustments for the periods presented.
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on Tuesday, February 27, 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/82280798392?pwd=WUZtdXFza0FZVnhPd2NzblBPbVdDdz09
Webinar ID: 822 8079 8392
Passcode: 1234
Or Telephone:
Dial (for higher quality, dial a number based on your current location):
Canada: +1 778 907 2071, +1 780 666 0144, +1 204 272 7920, +1 438 809 7799,
+1 587 328 1099, +1 647 374 4685, +1 647 558 0588
International numbers available: https://us02web.zoom.us/u/kbtEE30QVY
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, …
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