Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Q2 2024 Earnings Presentation
26 slides from Firm Capital Mortgage Investment's earnings presentation, August 2024
Slide 1: Firm Capital Mortgage Investment Corporation Investor Presentation Q2 2024
TSX: FC Diversified Mortgage & Credit Investments Inception Date: October 1999 Firm Capital Mortgage Investment Corporation INVESTOR PRESENTATION – Q2 2024
Slide 2: Contents
Contents INTRODUCTION 3 AVERAGE SHARE PRICE & TRADING VOLUME 21 HISTORY 4 AN ATTRACTIVE INVESTMENT 22 FIRM CAPITAL ADVANTAGE 5 2024 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 • 8.40%* dividend yield Strong Stable Dividend • CAD$0.99/Share annual dividends for 2023 (includes “top-up” dividend of CAD$0.054/Share as at year- Trading at a Significant end Dec. 31/23), a 4.2% increase over 2022 Discount to NAV • Market-to-market portfolio that revolves ev
Slide 7: Trade History & Net Asset Value (NAV)
Trade History & Net Asset Value (“NAV”) 12.00% $14.50 10.24% 10.00% $13.50 8.40% 8.00% 3.3% $12.50 Premium 35.4% 28.6% 5.1% to NAV 6.00% Premium Premium Discount $11.78 $11.50 to NAV to NAV to NAV $11.40 4.00% $11.34 $10.50 $11.27 2.00% $10.99 $11.16 $10.87 $9.50 0.00% 2019 2020 2021 2022 2023 2024
Slide 8: Trading Price Premium Beginning to Increase Vs. Net Asset Value
$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 Feb-20 Firm Capital Mortgage Investment Corporation Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-
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% 8.40% 10.0% $1.05 8.0% $1.00 6.0% $0.95 T.B.D. 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
Slide 10: Annualized Return on Shareholders' Equity
Annualized Return on Shareholders’ Equity 14% 12% TSX: FC 8.51% 10% 8% Q2/2024 ROE Spread 408 bps 6% Average Yield on Gov’t of Canada 1-yr. T-bill 4.43% 4% 2% % 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2/24 Firm Capital Mortgage Investment Corpo
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: Q2/2024 • 92.7% 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 5.9% Convent
Slide 13: Capital Stack
Capital Stack (in $MM) Current Capital Stack Convertible Debentures (1) Q2/2024 Q2/2024 $628.2MM $166.2MM Millions Millions $180 $600 $68.8 Credit Facility and Bank $160 Indebtedness $43.7M Series L 5.00% $500 $140 Due Mar/2029 $166.2 (1) Convertible Debentures $120 $400 $46.0M $100 Series K 5.00% D
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: Q2/2024 Financial Highlights
Q2/2024 Financial Highlights Quarter Ended Quarter Ended Quarter Ended Jun. 30, 2024 Mar. 31, 2023 Jun. 30, 2023 Mortgage Portfolio (millions)(1) $660.4 $613.1 $617.9 Basic Profit Per Share $0.247 $0.248 $0.245 Dividends Per Share $0.234 $0.234 $0.234 Return on Equity 8.51% 8.55% 8.49% Impairment Al
Slide 16: Q2/2024 Results of Operations
Q2/2024 Results of Operations Quarter Ended Quarter Ended Quarter Ended ($ in millions) Jun. 30, 2024 Mar. 31, 2023 Jun. 30, 2023 Interest and Fees Earned $17.07 $16.29 $17.52 Interest and Operating Expenses $5.30 $4.94 $5.70 Profit $8.54 $8.57 $8.52 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, 100% of Investment Portfolio revolved ($423M new investments vs. $423M repayments ) in the past 18 months •
Slide 18: Increasing Mortgage Portfolio
Increasing Mortgage Portfolio (in $MM) 283 Investments in June 30, 2024 $661 $660 $643 $589 $562 $559 $516 $521 $481 $462 $443 $449 $432 $399 $403 $375 $375 $345 $340 $343 $322 $312 $311 $307 $300 $291 $297 $287 $274 $285 $262 $260 $256 $254 $250 $236 $235 $226 $205 $213 $204 $180 $170 $173 $173 $16
Slide 19: Deal Flow
Deal Flow Significant Origination Capability • Over 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)
Slide 20: Accessing The Capital Markets
Accessing The Capital Markets Accessed the capital market twenty times since October 2010 Total: $530M $550 $43.7M Series L Convert $500 5.00% $46.0M $25.3M Series K Equity $450 Convert Offering 5.00% $11.30/share $28.76M $400 Equity $25.0M Offering Series J $14.85/share $25.0M $350 Series I Convert
Slide 21: Average Share Price & Trading Volume
$- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 Jan-18 $18.00 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 May-19 Jun-19 Firm Capital Mortgage Investment Corporation Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Aver
Slide 22: An Attractive Investment
An Attractive Investment A $100 FC investment in 1999 would be worth $983 today! Firm Capital Mortgage Investment Corporation Disciplined Investing ● Capital Preservation 22
Slide 23: 2024 Outlook
2024 Outlook • The Corporation’s investment portfolio (the “Investment Portfolio”) for the six months ended June 30, 2024, continued to revolve, with new fundings and discharges of investments being $173.4 million and $111.2 million respectively (six months ended June 30, 2023 – $89.5 million and $1
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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