TORONTO, May 05, 2025 (GLOBE NEWSWIRE) -- Timbercreek Financial (TSX: TF) (the "Company") announced today its financial results for the three months ended March 31, 2025 ("Q1 2025").
Q1 2025 Highlights1
- Strong top-line income and distributable income:
- Net investment income of $28.6 million compared to $24.6 million in Q1 2024.
- Net income and comprehensive income of $14.8 million (Q1 2024 - $14.4 million) or basic earnings per share of $0.18 (Q1 2024 - $0.17).
- Distributable income of $15.4 million ($0.19 per share) compared with $15.8 million ($0.19 per share) in Q1 2024.
- Declared a total of $14.3 million in dividends to shareholders, or $0.17 per share, reflecting a distributable income payout ratio of 92.8% (Q1 2024 - 90.6%).
- The dividend remains well-covered and at the current trading price of $7.00 represent a 9.9% yield - a 7.3% premium over the 2-year Canadian bond yield (2.6% as at May 2, 2025).
- The net mortgage investment portfolio increased by $101.6 million or 10.4% over the prior year and decreased modestly by $10.6 million to $1,079.2 million in Q1 2025.
- The weighted average interest rate ("WAIR") on the portfolio remains resilient due to a high percentage of variable rate loans with protection of interest rate floors - as indicated by the Company's WAIR decreasing by 1.2% relative to a 2.3% drop in the Bank of Canada prime rate over the same period. At the end of Q1 2025, variable rate loans with rate floors represented 84.8% of the portfolio (Q1 2024 - 88.6%) and 87.8% of these variable rate loans with floors are currently at their floor rates.
- While the Company continues to monitor developments closely with respect to tariffs and the potential impact to certain borrowers, its core asset class multi-family residential is expected to be well protected from any near-term implications and tends to perform well in periods of economic uncertainty.
- In March, the Company completed the sale of a Quebec-based retirement asset. This transaction resulted in full recovery of real estate held for sale and a repayment of the Company's real estate collateral liability.
"It was a solid first quarter, with healthy income levels allowing us to build on our long-term track record of stable monthly dividends that deliver a premium yield to shareholders," said Blair Tamblyn, CEO of Timbercreek Financial. "The transaction pipeline remains robust, with some expected delays due to broader volatility in financial markets. Periods such as this underscore the resiliency of our strategy and our core asset classes, led by multi-residential. During the quarter, our team also continued to advance the remaining staged loans and expects material progress during 2025."
Quarterly Comparison
| $ millions | Q1 2025 | Q1 2024 | Q4 2024 | |||||||||
| Net Mortgage Investments1 | $ | 1,079.2 | $ | 977.5 | $ | 1,089.8 | ||||||
| Enhanced Return Portfolio Investments1 | $ | 43.3 | $ | 63.4 | $ | 42.9 | ||||||
| Real Estate Inventory | $ | 29.6 | $ | 30.6 | $ | 32.5 | ||||||
| Real Estate held for sale, net of collateral liability | $ | - | $ | 62.2 | $ | 65.3 | ||||||
| Joint Venture | $ | 18.1 | $ | - | $ | - | ||||||
| Net Investment Income | $ | 28.6 | $ | 24.6 | $ | 27.9 | ||||||
| Income from Operations | $ | 23.3 | $ | 20.9 | $ | 11.0 | ||||||
| Net Income and comprehensive Income | $ | 14.8 | $ | 14.4 | $ | 2.4 | ||||||
| Distributable income1 | $ | 15.4 | $ | 15.8 | $ | 17.7 | ||||||
| Dividends declared to Shareholders | $ | 14.3 | $ | 14.3 | $ | 14.3 | ||||||
| $ per share | Q1 2025 | Q1 2024 | Q4 2024 | |||||||||
| Dividends per share | $ | 0.17 | $ | 0.17 | $ | 0.17 | ||||||
| Distributable income per share1 | $ | 0.19 | $ | 0.19 | $ | 0.21 | ||||||
| Earnings per share | $ | 0.18 | $ | 0.17 | $ | 0.03 | ||||||
| Payout Ratio on Distributable Income1 | 92.8 | % | 90.6 | % | 80.8 | % | ||||||
| Payout Ratio on Earnings per share | 96.9 | % | 99.7 | % | 603.4 | % | ||||||
| Net Mortgage Investments | Q1 2025 | Q1 2024 | Q4 2024 | |||||||||
| Weighted Average Loan-to-Value | 66.2 | % | 64.4 | % | 63.3 | % | ||||||
| Weighted Average Remaining Term to Maturity | 0.9 yr | 0.8 yr | 1.0 yr | |||||||||
| First Mortgages | 88.3 | % | 85.7 | % | 89.6 | % | ||||||
| Cash-Flowing Properties | 79.7 | % | 85.7 | % | 81.9 | % | ||||||
| Multi-family residential | 60.2 | % | 54.6 | % | 59.8 | % | ||||||
| Floating Rate Loans with rate floors (at quarter end) | 84.8 | % | 88.6 | % | 80.4 | % | ||||||
| Weighted Average Interest Rate | ||||||||||||
| For the quarter ended | 8.7 | % | 9.9 | % | 8.9 | % | ||||||
| Weighted Average Lender Fee | ||||||||||||
| New and Renewed | 0.9 | % | 0.8 | % | 1.0 | % | ||||||
| New Net Mortgage Investment Only | 1.1 | % | 0.9 | % | 1.2 | % | ||||||
- Refer to non-IFRS measures section below for net mortgages, enhanced return portfolio investments and distributable income.
Quarterly Conference Call
Interested parties are invited to participate in a conference call with management on Tuesday, May 6, 2025 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/81298506156?pwd=mrzLmbreCBzYqZzfvu38bVEvub7Tpj.1
Webinar ID: 812 9850 6156
Passcode: 1234
Or Telephone:
Dial (for higher quality, dial a number based on your current location):
Canada: +1 780 666 0144, +1 204 272 7920, +1 438 809 7799, +1 587 328 1099, +1 647 374 4685,
+1 647 558 0588, +1 778 907 2071
International numbers available: https://us02web.zoom.us/u/kbE03DvhIf
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 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 $ thousands | Three months ended | Year ended | |||||||
| March 31, | December 31, | ||||||||
| NET INCOME AND COMPREHENSIVE INCOME | 2025 | 2024 | 2024 | ||||||
| Net investment income on financial assets measured at amortized cost | $ | 28,573 | $ | 24,590 | $ | 104,344 | |||
| Fair value gain and other income on financial assets measured at FVTPL | 102 | 337 | 1,041 | ||||||
| Net rental income | 266 | 474 | 1,544 | ||||||
| Net income from joint venture | 17 | - | - | ||||||
| Gain on real estate properties and real estate held for sale collateral liability | - | - | 1,500 | ||||||
| Expenses: | |||||||||
| Management fees | (2,903 | ) | (2,393 | ) | (10,548 | ) | |||
| Servicing fees | (134 | ) | (159 | ) | (555 | ) | |||
| Expected credit loss | (1,554 | ) | (912 | ) | (16,134 | ) | |||
| General and administrative | (1,027 | ) | (1,034 | ) | (3,340 | ) | |||
| Income from operations | $ | 23,340 | $ | 20,903 | $ | 77,852 | |||
| Financing costs: | |||||||||
| Financing cost on credit facility | (5,955 | ) | (4,285 | ) | (21,664 | ) | |||
| Financing cost on convertible debentures | (2,613 | ) | (2,250 | ) | (10,031 | ) | |||
| Net income and comprehensive income | $ | 14,772 | $ | 14,368 | $ | 46,157 | |||
| Payout ratio on earnings per share | 96.9 | % | 99.7 | % | 124.1 | % | |||
| DISTRIBUTABLE INCOME | |||||||||
| Net income and comprehensive income | $ | 14,772 | $ | 14,368 | $ | 46,157 | |||
| Less: Amortization of lender fees | (2,779 | ) | (1,405 | ) | (6,588 | ) | |||
| Add: Lender fees received and receivable | 1,339 | 1,179 | 7,610 | ||||||
| Add: Amortization expense, credit facility | 212 | 416 | 1,030 | ||||||
| Add: Amortization expense, convertible debentures | 294 | 243 | 1,110 | ||||||
| Add: Accretion expense, convertible debentures | 160 | 113 | 569 | ||||||
| Add: Unrealized fair value (gain) loss on DSU | (97 | ) | 153 | 38 | |||||
| Add: Unrealized (gain) loss on FVTPL | (36 | ) | (166 | ) | 304 | ||||
| Add: Unrealized gain on real estate held for sale | - | - | (1,500 | ) | |||||
| Add: Expected credit loss | 1,554 | 912 | 16,134 | ||||||
| Distributable income1 | $ | 15,419 | $ | 15,813 | $ | 64,864 | |||
| Payout ratio on distributable income1 | 92.8 | % | 90.6 | % | 88.3 | % | |||
| PER SHARE INFORMATION | |||||||||
| Dividends declared to shareholders | $ | 14,307 | $ | 14,319 | $ | 57,277 | |||
| Weighted average common shares (in thousands) | 82,981 | 83,010 | 83,010 | ||||||
| Dividends per share | $ | 0.17 | $ | 0.17 | $ | 0.69 | |||
| Earnings per share (basic) | $ | 0.18 | $ | 0.17 | $ | 0.56 | |||
| Earnings per share (diluted) | $ | 0.18 | $ | 0.17 | $ | 0.56 | |||
| Distributable income per share1 | $ | 0.19 | $ | 0.19 | $ | 0.78 | |||
- 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, 2025 | December 31, 2024 | |||||
| Mortgage investments, excluding mortgage syndications | $ | 1,070,636 | $ | 1,078,238 | |||
| Mortgage syndications | 613,964 | 427,263 | |||||
| Mortgage investments, including mortgage syndications | 1,684,600 | 1,505,501 | |||||
| Mortgage syndication liabilities | (613,964 | ) | (427,263 | ) | |||
| 1,070,636 | 1,078,238 | ||||||
| Interest receivable | (15,699 | ) | (15,533 | ) | |||
| Unamortized lender fees | 5,937 | 6,276 | |||||
| Expected credit loss | 18,297 | 20,796 | |||||
| Net mortgage investments | $ | 1,079,171 | $ | 1,089,777 |
Enhanced return portfolio
| As at | March 31, 2025 | December 31, 2024 | ||||
| Other loan investments, net of expected credit loss | $ | 31,332 | $ | 30,912 | ||
| Finance lease receivable, measured at amortized cost | 6,020 | 6,020 | ||||
| Investment in participating debentures, measured at FVTPL | 766 | 756 | ||||
| Joint venture investment in indirect real estate development | 2,225 | 2,225 | ||||
| Investment in equity instrument, measured at FVTPL | 3,000 | 3,000 | ||||
| Total enhanced return portfolio | $ | 43,343 | $ | 42,913 |
Real estate held for sale, net of collateral liability
| As at | March 31, 2025 | December 31, 2024 | |||||
| Real estate held for sale | - | 132,635 | |||||
| Real estate held for sale collateral liability | - | (67,312 | ) | ||||
| Total real estate held for sale, net of collateral liability | $ | - | $ | 65,323 | |||
SOURCE: Timbercreek Financial
For further information, please contact:
Timbercreek Financial
Blair Tamblyn, CEO
Tracy Johnston, CFO
416-923-9967
www.timbercreekfinancial.com
