Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Q3 2024 Earnings Presentation
26 slides from Firm Capital Mortgage Investment's earnings presentation, Nov 1, 2024
Slide 1: Firm Capital Mortgage Investment Corporation Investor Presentation Q3 2024
TSX: FC (Listed 10/1999) Diversified Mortgage & Credit Investments Firm Capital Mortgage Investment Corporation INVESTOR PRESENTATION – Q3 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 TRADING DISCOUNT TO NAV 7 CONTACT INFORMATION 25 TRADING DISCOUNT TO NAV (CON’D) 8 DISCLAIMER 26 STABLE MONTHLY
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 • 8.76%* 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: Trading Discount to Net Asset Value (NAV)
Trading Discount to Net Asset Value (“NAV”) Rare opportunity to acquire FC shares at approximately NAV while yielding 8.76%. 12.00% $14.50 10.11% 10.00% $13.50 32.9% 26.0% 7.6% 13.0% 8.76% Premium Premium Discount Discount 8.00% to NAV to NAV to NAV to NAV 0.8% $12.50 35.4% 28.6% 5.1% Discount 6.00%
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 Mar-20 Firm Capital Mortgage Investment Corporation Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Note: Average NAV of $11.17/unit
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% 8.76% 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 8.97% 10% 8% Q3/2024 ROE Spread 510 bps 6% Average Yield on Gov’t of Canada 1-yr. T-bill 3.87% 4% 2% % 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3/24 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: Q3/2024 • 90.0% 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 (in $MM)
Capital Stack (in $MM) Current Capital Stack Convertible Debentures (1) Q3/2024 Q3/2024 $612.5MM $139.7 MM Millions Millions $140 $600 $54.5 Credit Facility and Bank Indebtedness $120 $43.7M Series L 5.00% $500 Due Mar/2029 $139.7 (1) Convertible Debentures $100 $400 $80 $46.0M Series K 5.00% Equity
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: Q3/2024 Financial Highlights
Q3/2024 Financial Highlights Quarter Ended Quarter Ended Quarter Ended Sept. 30, 2024 Jun. 30, 2024 Sept. 30, 2023 Mortgage Portfolio (millions)(1) $637.9 $660.4 $578.9 Basic Profit Per Share $0.250 $0.247 $0.249 Dividends Per Share $0.234 $0.234 $0.234 Return on Equity 8.97% 8.51% 8.53% Impairment
Slide 16: Q3/2024 Results of Operations
Q3/2024 Results of Operations Quarter Ended Quarter Ended Quarter Ended ($ in millions) Sept. 30, 2024 Jun. 30, 2024 Sept. 30, 2023 Interest and Fees Earned $19.08 $17.07 $17.24 Interest and Operating Expenses $5.13 $5.30 $8.65 Profit $8.96 $8.54 $8.59 Dividends to Shareholders $8.25 $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, 99% of Investment Portfolio revolved ($442M new investments vs. $448M repayments ) in the past 18 months •
Slide 18: Increasing Mortgage Portfolio
Increasing Mortgage Portfolio (in $MM) 289 Investments in September 30, 2024 $661 $643 $638 $589 $562 $559 $516 $521 $481 $462 $443 $449 $432 $399 $403 $375 $375 $345 $340 $343 $322 $312 $311 $307 $300 $291 $287 $297 $285 $262 $274 $260 $256 $254 $250 $236 $234 $235 $226 $205 $213 $204 $187 $180 $17
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 $43.7M $550 Series L Convert 5.00% $500 $46.0M $25.3M Series K Equity Convert Offering $450 5.00% $11.30/share $28.76M Equity $400 $25.0M Offering Series J $14.85/share $25.0M Convert Series I $350
Slide 21: Average Share Price & Trading Volume
$- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 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 Mar-20 Apr-20 Firm Capital Mortgage Investment Corporation May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Average Share Price & Trading Vo
Slide 22: An Attractive Investment
An Attractive Investment A $100 FC investment in 1999 would be worth $962 today! Firm Capital Mortgage Investment Corp. S&P/TSX Index $1,400 $1,200 $962 $1,000 9.44% Annualized Return $800 $664 $600 $400 $200 Since October 6, 1999 to October 31, 2024 $- 1999 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 23: 2024 Outlook
2024 Outlook • The Corporation’s investment portfolio (the “Investment Portfolio”) for the nine months ended September 30, 2024, continued to revolve, with new fundings and discharges of investments being $234.3 million and $186.5 million respectively (nine months ended September 30, 2023 – $162.9 m
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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