Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Investor Presentation (December 2019)
22 slides from Firm Capital Mortgage Investment's investor presentation, December 2019
Slide 1: Investor Presentation
Firm Capital Mortgage Investment Corporation Firm Capital Mortgage Investment Corporation is a non-bank lender providing residential and commercial real estate financing. Investor Presentation December 2019 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Slide 2: Contents
CONTENTS PAGE INTRODUCTION 3 FIRM CAPITAL ADVANTAGE 4 INVESTMENT HIGHLIGHTS 5 ALIGNED MANAGEMENT INTERESTS 6 LENDING APPROACH 7 CAPITAL STACK 8 OPERATING STANDARDS 9 2019 Q3 FINANCIAL HIGHLIGHTS 10 2019 Q3 RESULTS OF OPERATIONS 11 ANNUALIZED RETURN ON SHAREHOLDERS’ EQUITY 12 STABLE CASH DIVIDENDS 13
Slide 3: Introduction
INTRODUCTION Firm Capital with approximately $3.5 Billion of assets under management operates as a boutique real estate and financial services equity investment company deploying capital opportunistically between debt and equity in the real estate private and public markets across Canada and parts o
Slide 4: Firm Capital Advantage
FIRM CAPITAL ADVANTAGE • Experienced • Disciplined • Long term • Strong • Public entities Team investing track record alignment provide managing focused on creating value interest transparency, debt and real capital with attractive through direct safety & estate preservation yields for investment in
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS Underlying Assets • Portfolio comprised of 204 syndicated mortgage loans • Management Team & Board Members co-invested ~$65M alongside investors as at September 30, 2019 Alignment of • Approximately 542,587 shares held by Directors & Officers as at September 30, 2019 Interests
Slide 6: Aligned Management Interests
ALIGNED MANAGEMENT INTERESTS Performance Based Compensation Substantial Personal Investment • FCMIC Manager receives 0.75% per annum on • Management, directors and/or their respective performing investments (not cash balances) associates maintain 25% pari-passu investment • Mortgage Banker receives
Slide 7: Conservative Lending Approach
CONSERVATIVE LENDING APPROACH • 70.5% conventional first mortgages • Experienced borrowers in proven markets • Conservative lending guidelines restricting investment exposure on loan size and related borrower groups Investment Portfolio Geographic Diversification** Conventional Non-First Mortgages Q
Slide 8: Capital Stack (in $MM)
CAPITAL STACK (IN $MM) Current Capital Stack Convertible Debentures (1) Q3/2019 Q3/2019 $170.0 $501MM Millions $500 $15 Series J 5.50% Bank Indebtedness $153.0 $25.0 Millions Due Jan/2026 $450 $136.0 Series I 5.40% $400 $167 (1) Due Jun/2025 $25.0 Convertible Debentures $119.0 $350 Series H 5.30% $1
Slide 9: Rigid Operating Standards
RIGID OPERATING STANDARDS Investment Restrictions Independent Approval Risk Diversification • Maximum single conventional • Independent director approval • Co-investment by management first mortgage restricted to of every investment: • Syndicated portfolio to 5%-10% of capital(1), depending on LTV •
Slide 10: Q3/2019 Financial Highlights
Q3/2019 FINANCIAL HIGHLIGHTS Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended Sept 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Mortgage Portfolio $467 $539 $550 $521 $535 (millions)(1) Basic Profit Per Share $0.273 $0.251 $0.246 $0.233 $0.265 Dividends Per Share
Slide 11: Q3/2019 Results of Operations
Q3/2019 RESULTS OF OPERATIONS Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended ($ in millions) Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Interest and Fees $12.23 $12.21 $11.86 $11.53 $12.39 Earned Interest and Operating Expenses $4.54 $5.16 $5.27 $5.43 $5.
Slide 12: Annualized Return on Shareholders' Equity
ANNUALIZED RETURN ON SHAREHOLDERS’ EQUITY FC 9.82% 12% 10% 8% 6% *Q3/2019 ROE Spread 808 bps 4% Gov’t of Canada 1-yr. T-bill 1.74% 2% % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 DISCIPLINED INVESTING • CAPITAL PRESERVATION 12
Slide 13: Stable Cash Dividends
STABLE CASH DIVIDENDS • Steady 7.8¢ dividend • In addition, spend “top up” dividend at year end 2015 2016 2017 2018 0.16 TOTAL : $0.991 TOTAL : $0.966 TOTAL : $1.006 TOTAL : $0.986 0.148 0.14 0.133 0.128 0.12 0.108 2019 YTD 0.1 $0.702 0.08 0.06 0.04 0.02 0 Jan. May. Sep. Jan. May. Sep. Jan. May. Sep
Slide 14: Increasing Mortgage Portfolio (in $MM)
INCREASING MORTGAGE PORTFOLIO (IN $MM) 204 Investments in Q3/2019 $562 $521 $467 $449 $403 $375 $375 $345 $340 $343 $311 $307 $291 $287 $285 $297 $262 $274 $256 $254 $236 $221 $235 $226 $213 $204 $210 $205 $180 $173 $170 $169 $167 $167 $147 $146 $140 $136 $150 $133 $96 $94 2006 2007 2008 2009 2010 2
Slide 15: Deal Flow
DEAL FLOW • Significant Origination Capability • 30 year track record of mortgage origination • The mortgage bank experience and strong partners provide steady deal flow with excellent risk mitigation • Co-investing with knowledgeable real estate partners Transaction Volume (in $MM): 2012 – 2019 $1,
Slide 16: Accessing the Capital Markets
ACCESSING THE CAPITAL MARKETS Accessed the capital market fifteen times since October 2010 Millions Convertibles Equity $23.1MM $25.0MM Convertibles fully redeemed at par $25.0MM Equity Offering Series J $13.20/share $26.5MM Convert 5.50% Series I $23.0MM Convert Series H 5.40% $22.5MM Convert Equit
Slide 17: Average Share Price & Trading Volume
AVERAGE SHARE PRICE & TRADING VOLUME $14.50 1200 Thousands $14.00 1000 $13.50 800 600 $13.00 400 $12.50 200 $12.00 0 $11.50 2013 2014 2015 2016 2017 2018 2019 Volume Traded Trading Price DISCIPLINED INVESTING • CAPITAL PRESERVATION 17
Slide 18: An Attractive Investment
AN ATTRACTIVE INVESTMENT A $100 FC investment in 1999 would be worth $795 today! $795 $399 $100 Since Oct. 15th, 1999 till Sept. 30th, 2019 S&P/TSX Composite Index Firm Capital Mortgage Investment Corp. DISCIPLINED INVESTING • CAPITAL PRESERVATION 18
Slide 19: 2019 Outlook
2019 OUTLOOK MARKET TREND SINCE 2017:. • Housing and land values outside the Greater Toronto Area (“GTA”) have declined as a result of slower home sales, whereas infill building lots and housing declined in value within various areas of GTA; • In various areas, custom built homes stay on the market
Slide 20: Board of Directors
BOARD OF DIRECTORS Stanley Goldfarb • CEO of Goldfarb Management Services Limited Chairman, Independent Director • Chairman & Trustee of Firm Capital Property Trust (TSXV: FCD.UN) Anthony Heller • President of Plazacorp Investments Limited Independent Director Independent Directors Larry Shulman • R
Slide 21: Contact Information
CONTACT INFORMATION OUR CORE PRINCIPLES TRUST INNOVATION RELATIONSHIPS Our partners, investors and clients can Firm Capital brings an Firm Capital builds strong, long term trust FirmCapital to execute on our innovative approach to relationships with its partners, commitment. structuring a transactio
Slide 22: Disclaimer
DISCLAIMER This presentation is for informational purposes only and not intended to solicit Firm Capital Mortgage Investment Corporation (“FC”, “FCMIC” or the “Corporation”). This presentation may not provide full disclosure of all material facts relating to the securities offered. Investors should
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