Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Q3 2023 Earnings Presentation
26 slides from Firm Capital Mortgage Investment's earnings presentation, December 2023
Slide 1: Firm Capital Mortgage Investment Corporation Investor Presentation – Q3 2023
TSX: FC Diversified Mortgage & Credit Investments Inception Date: October 1999 Firm Capital Mortgage Investment Corporation INVESTOR PRESENTATION – Q3 2023
Slide 2: Contents
Contents INTRODUCTION 3 AVERAGE SHARE PRICE & TRADING VOLUME 21 HISTORY 4 AN ATTRACTIVE INVESTMENT 22 FIRM CAPITAL ADVANTAGE 5 2023 OUTLOOK 23 INVESTMENT HIGHLIGHTS 6 BOARD OF DIRECTORS 24 SIGNIFICANT TRADING DISCOUNT TO NAV 7 CONTACT INFORMATION 25 SIGNIFICANT TRADING DISCOUNT TO NAV (CON’D) 8 DISC
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. Operating in the same industry for over 35 years Firm Capital Discipl
Slide 4: History
History Since inception in 1988, Firm Capital 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 CAPITAL: Mortgag
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 • 9.35%* dividend yield Strong Stable Dividend • Trading at a 11%* discount to NAV of $11.37/Share • CAD$0.99/Share total estimated annual dividends declared for 2023 (includes “top-up” dividend of Trading at a Significant CAD$0.054/Share at year-end Dec. 31/23), a 4.2% increas
Slide 7: Significant Trading Discount to Net Asset Value (NAV)
Significant Trading Discount to Net Asset Value (“NAV”) Rare opportunity to acquire FC shares at a discount to NAV while yielding 9.35%. 12.00% $14.50 11.03% 10.00% 9.35% $13.50 32.9% 26.0% 7.6% 13.0% Premium Premium Discount Discount 8.00% to NAV to NAV to NAV to NAV $12.50 35.4% 28.6% 5.1% 10.6% 6
Slide 8: Significant Trading Discount to Net Asset Value (NAV) (Con'd)
$9.50 $10.50 $11.50 $12.50 $13.50 $14.50 $15.50 $16.50 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Firm Capital Mortgage Investment Corporation Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Trading Price Mar-
Slide 9: Stable Monthly Dividends Plus Top-Up Dividend Since 2000
Stable Monthly Dividends Plus Top-Up Dividend Since 2000 Regular Dividend (LHS) Top-Up Dividend (LHS) Dividend Yield (RHS) $1.15 14.0% $1.10 12.0% 9.35% 10.0% $1.05 8.0% $1.00 6.0% $0.95 4.0% $0.90 2.0% $0.85 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 10: Annualized Return on Shareholders' Equity
Annualized Return on Shareholders’ Equity 12% 10% TSX: FC 8.53% 8% Q3/2023 ROE Spread 337 bps 6% Average Yield on Gov’t of Canada 1-yr. T-bill 5.16% 4% 2% % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 Firm Capital Mortgage Investment Co
Slide 11: 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 12: Conservative Lending Approach
Conservative Lending Approach Date: Q3/2023 • 86% 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 6.1% Conventio
Slide 13: Capital Stack (in $MM)
Capital Stack (in $MM) Current Capital Stack Convertible Debentures (1) Q3/2023 Q3/2023 Millions $607.5MM $188.7MM Millions $180 $600 $25.2 Credit Facility and Bank Indebtedness $43.7M $160 Series L 5.00% Due Mar/2029 $500 $140 $188.7 (1) Convertible Debentures $120 $46.0M $400 Series K 5.00% Due Se
Slide 14: 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 15: Q3/2023 Financial Highlights
Q3/2023 Financial Highlights Quarter Ended Quarter Ended Quarter Ended Sept. 30, 2023 Jun. 30, 2023 Sept. 30, 2022 Mortgage Portfolio (millions)(1) $578.9 $617.9 $636.0 Basic Profit Per Share $0.249 $0.245 $0.237 Dividends Per Share $0.234 $0.234 $0.234 Return on Equity 8.53% 8.49% 8.20% Impairment
Slide 16: Q3/2023 Results of Operations
Q3/2023 Results of Operations Quarter Ended Quarter Ended Quarter Ended ($ in millions) Sept. 30, 2023 Jun. 30, 2023 Sept. 30, 2022 Interest and Fees Earned $17.24 $17.52 $16.37 Interest and Operating Expenses $8.65 $9.00 $7.56 Profit $8.59 $8.52 $8.18 Dividends to Shareholders $8.07 $8.07 $8.07 W.A
Slide 17: Solid Underwriting: Revolving & Floating Rate Investment Feature
Solid Underwriting: Revolving & Floating Rate Investment Feature • Mark-to-market portfolio that revolves every 18-24 months capturing upside on the rising interest rate environment • In fact, 94% of Investment Portfolio revolved ($508M new investments vs. $543M repayments ) in the past 18 months •
Slide 18: Increasing Mortgage Portfolio (in $MM)
Increasing Mortgage Portfolio (in $MM) 241 Investments in September 30, 2023 $661 $643 $579 $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 $245 $236 $235 $226 $213 $204 $210 $205 $170 $180 $173 $169 $16
Slide 19: 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 20: 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 21: Average Share Price & Trading Volume
$- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Firm Capital Mortgage Investment Corporation May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Average Share Price & Tra
Slide 22: An Attractive Investment
An Attractive Investment A $100 FC investment in 1999 would be worth $799 today! Firm Capital Mortgage Investment Corp. S&P/TSX Index $1,200 $799 $1,000 8.98% Annualized Return $800 $600 $537 $400 $200 Since October 6, 1999 to November 30, 2023 $- 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20
Slide 23: 2023 Outlook
2023 Outlook • Through the remainder of 2023, the Corporation expects to revolve the Investment Portfolio selectively, with there being no assurances on maintaining the current portfolio size as the Corporation’s primary focus is on security and preservation of capital. • The Mortgage Banker continu
Slide 24: 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 25: 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 26: Disclaimer
Disclaimer This presentation is for informational purposes only and not intended for solicitation. This presentation may not provide full disclosure of all material facts relating to the investment and or security being offered. If applicable, Investors should read the most recent Financial Reports
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