Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Q4 2022 Earnings Presentation
23 slides from Firm Capital Mortgage Investment's earnings presentation, 2023
Slide 1: Firm Capital Mortgage Investment Corporation Investor Presentation Q4 2022
TSX: FC Diversified Mortgage & Credit Investments Inception Date: October 1999 Firm Capital Mortgage Investment Corporation INVESTOR PRESENTATION – Q4 2022
Slide 2: Contents
Contents INTRODUCTION 3 BOARD OF DIRECTORS 21 HISTORY 4 CONTACT INFORMATION 22 FIRM CAPITAL ADVANTAGE 5 DISCLAIMER 23 INVESTMENT HIGHLIGHTS 6 ALIGNED MANAGEMENT INTERESTS 7 LENDING APPROACH 8 CAPITAL STACK 9 OPERATING STANDARDS 10 Q4/2022 FINANCIAL HIGHLIGHTS 11 Q4/2022 RESULTS OF OPERATIONS 12 ANNU
Slide 3: Introduction
Introduction Firm Capital 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 of the U.S. Operating in the same industry for over 35 years
Slide 4: History
History Since inception in 1988, Firm Capital Organization has established an exceptional track record demonstrated by past performance, and prides itself on its risk management abilities to protect and preserve capital, while acting as a disciplined investor. PROFICIENT SERVICES PROVIDED BY FIRM CA
Slide 5: Firm Capital Advantage
Firm Capital Advantage Investing Integrity EXPERIENCE MATTERS Experienced team managing debt and real estate throughout a real estate cycle 35+ year track record with management industry experience in excess of 100 years 01 DIRECT INVESTMENTS DISCIPLINED INVESTING Strong alignment of interest Discip
Slide 6: Investment Highlights
Investment Highlights Underlying Assets • Portfolio comprised of 252 investments • Management Team & Board Members co-invested alongside investors $62M with the Corporation in its Investment Portfolio as at December 31, 2022 Alignment of Interests • 802,967 shares are held by Directors and Officers
Slide 7: Aligned Management Interests
Aligned Management Interests Performance Based Compensation Substantial Co-Investment • FCMIC Manager receives 0.75% per annum on performing • Management, directors and/or their respective associates investments (not cash balances) invest on a pari-passu basis in all non-conventional mortgages • Mor
Slide 8: Conservative Lending Approach
Conservative Lending Approach Date: Q4/2022 • 83.5% 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*** Quebec Conventional
Slide 9: Capital Stack
Capital Stack (in $MM) Current Capital Stack Convertible Debentures (1) Q4/2022 Q4/2022 $650.3MM $188.7MM Millions Millions $73.0 $180 Credit Facility and Bank $600 Indebtedness $160 $43.7MM Series L 5.00% Due Mar/2029 $500 $188.7 (1) $140 Convertible Debentures $120 $46.0MM $400 Series K 5.00% Due
Slide 10: Rigid Operating Standards
Rigid Operating Standards Investment Restrictions Independent Approval Risk Diversification • Maximum single conventional first • Independent director approval for • Co-investment by management mortgage restricted to 5%-10% of every investment: • Syndicated portfolio to diversify risk capital(1) dep
Slide 11: Q4/2022 Financial Highlights
Q4/2022 Financial Highlights Quarter Ended Quarter Ended Quarter Ended Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2021 Mortgage Portfolio (millions)(1) $661.0 $636.0 $642.5 Basic Profit Per Share $0.231 $0.237 $0.234 Dividends Per Share $0.248 $0.234 $0.246 Return on Equity 8.12% 8.20% 8.46% Impairment a
Slide 12: Q4/2022 Results of Operations
Q4/2022 Results of Operations Quarter Ended Quarter Ended Quarter Ended ($ in millions) Dec. 31, 2022 Sept. 30, 2022 Dec. 31, 2021 Interest and Fees Earned $17.26 $16.37 $13.05 Interest and Operating Expenses $5.95 $6.60 $5.31 Profit $7.96 $8.18 $7.74 Dividends to Shareholders $8.55 $8.07 $8.15 W.A.
Slide 13: Annualized Return on Shareholders' Equity
Annualized Return on Shareholders’ Equity 12% 10% FC 8.12% 8% Q4/2022 ROE Spread 525 bps 6% Average Yield on 4% Gov’t of Canada 1-yr. T-bill 2.87% 2% % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Firm Capital Mortgage Investment Corporation Dis
Slide 14: Stable Cash Dividends
Stable Cash Dividends • Steady ¢7.8 monthly dividend • In addition, to a “top-up” dividend at year-end 2017 2018 2019 2020 2021 2022 2023 YTD* TOTAL: $1.006 TOTAL: $0.986 TOTAL: $1.006 TOTAL: $0.944 TOTAL: $0.948 TOTAL: $0.950 TOTAL: $0.468 $0.16 0.148 0.148 0.128 $0.12 0.09 0.092 0.086 $0.08 0.078
Slide 15: Increasing Mortgage Portfolio
Increasing Mortgage Portfolio (in $MM) 252 Investments in Q4/2022 $661 $643 $562 $559 $516 $521 $481 $462 $443 $449 $432 $399 $403 $375 $375 $345 $340 $343 $322 $311 $300 $307 $297 $291 $287 $285 $274 $262 $260 $256 $254 $236 $235 $226 $213 $204 $210 $205 $170 $180 $173 $169 $167 $150 $147 $146 $140
Slide 16: Deal Flow
Deal Flow Significant Origination Capability • 35-year track record of mortgage origination • With the experience of the Mortgage Banker and strong partners, steady deal flow with excellent risk mitigation occurs • Co-investing with knowledgeable real estate partners Transaction Volume (in $MM): 201
Slide 17: Accessing The Capital Markets
Accessing The Capital Markets Accessed the capital market nineteen times since October 2010 $43.7M Total: $505M Series L Convert 5.00% $46.0M Series K Convert 5.00% $28.76M Equity $25.0M Offering Series J $14.85/share $25.0M Convert Series I 5.50% $26.0M $26.5M Convert Equity Series H 5.40% $23.1M O
Slide 18: Average Share Price & Trading Volume
Average Share Price & Trading Volume Firm Capital Mortgage Investment Corporation Disciplined Investing ● Capital Preservation 18
Slide 19: An Attractive Investment
An Attractive Investment A $100 FC investment in 1999 would be worth $821 today! Firm Capital Mortgage Investment Corporation Disciplined Investing ● Capital Preservation 19
Slide 20: 2023 Outlook
2023 Outlook • The Corporation’s investment portfolio (the “Investment Portfolio”) continued to revolve in 2022 with significant investment repayments and new fundings. During the year ended December 31, 2022, new fundings and discharges of investments were $462 million and $443 million respectively
Slide 21: Board of Directors
Board of Directors Stanley Goldfarb • CEO of Goldfarb Management Services Limited Chairman, Independent Director • Chairman & Trustee of Firm Capital Property Trust (TSX: FCD.UN) Anthony Heller • President of Plazacorp Investments Limited Independent Director Larry Shulman • Independent Trustee of F
Slide 22: Contact Information
Contact Information OUR CORE PRINCIPLES TRUST INNOVATION RELATIONSHIPS Our partners, investors and Firm Capital brings an Firm Capital builds strong, long- clients can trust Firm Capital to innovative approach to term relationships with its execute on our commitment. structuring a transaction. partn
Slide 23: Disclaimer
Disclaimer This presentation is for informational purposes only and not intended to solicit Firm Capital Mortgage Investment Corporation (“FC”, “FCMIC”, “Firm Capital MIC”, “TSX: FC”, or the “Corporation”). This presentation may not provide full disclosure of all material facts relating to the secur
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