Mr. Eli Dadouch reports

FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION ANNOUNCES Q2/2023 RESULTS, AS WELL AS THE DECLARATION OF OCTOBER, AND NOVEMBER MONTHLY CASH DIVIDENDS

Firm Capital Mortgage Investment Corp. has released its financial statements for the three and six months ended June 30, 2023.

Net asset value

Including the full amount of debt obligations, the corporation has an adjusted NAV of $11.33 per share.

Net income

For the three months ended June 30, 2023, net income increased by 3.5 per cent to $8,522,355, as compared with $8,237,900 for the same period in 2022. Net income for the six months ended June 30, 2023, increased by 7.0 per cent to $17,234,251, as compared with $16,099,440 reported for the same period in 2022. The increase is primarily a result of a higher interest income.

Earnings per share

Basic weighted average earnings per share for the three months ended June 30, 2023, were 24.5 cents (June 30, 2022 -- 23.9 cents). Basic weighted average earnings per share for the six months ended June 30, 2023, were 50.0 cents (June 30, 2022 -- 47.1 cents).

Portfolio

The corporation's investment portfolio decreased by $43-million to $617,904,998 as at June 30, 2023, in comparison with $661,003,596 as at Dec. 31, 2022 (in each case, gross of impairment allowance, fair value adjustment and unamortized fees). During the six months ended June 30, 2023, new investment financing was $89.5-million (six months ended June 30, 2022 -- $273.9-million) and repayments were $132.3-million (six months ended June 30, 2022 -- $235.1-million). On June 30, 2023, the investment portfolio consisted of 239 investments (Dec. 31, 2022 -- 252). The average gross investment size was approximately $2.6-million, with 14 investments individually exceeding $7.5-million.

Prudent impairment allowance

Management has always taken a pro-active approach to the corporation's loan impairment allowance. This is a prudent approach that provides stability of dividends to the company's shareholders in the event there are any future issues with any of the loans within the corporation's investment portfolio. The allowance for impairment and fair value adjustment as of June 30, 2023, was $16.45-million (Dec. 31, 2022 -- $10.16-million), comprising: (i) $4.20-million (Dec. 31, 2022 -- $3.70-million) representing the total amount of management's estimate of the shortfall between the investment balances and the estimated recoverable amount from the security under the specific loans; (ii) $6.70-million (2022 -- $4.70-million) representing the total amount of management's estimate of fair value adjustment on an investment stated at fair value through profit or loss; and (iii) a collective allowance balance of $5.55-million (2022 -- $1.76-million).

Investment portfolio details

Details on the corporation's investment portfolio as at June 30, 2023, are as follows:

• Total gross investment portfolio of $617,904,998, a 6.5-per-cent decrease from the $661,003,596 reported at Dec. 31, 2022;
• Conventional first mortgages, being those first mortgages with loan to values less than 75 per cent, comprise 82.0 per cent of the total portfolio (83.5 per cent as at December, 2022), and total conventional mortgages with loan to values less than 75 per cent, comprise 87.7 per cent of the total portfolio (88.6 per cent as at December, 2022);
• Approximately 52.2 per cent of the portfolio matures by Dec. 31, 2023;
• The average face interest rate on the portfolio is 11.25 per cent per annum, as compared with 8.78 per cent at June 30, 2022;
• Regionally, the mortgage investment portfolio is diversified as follows: Ontario (86.2 per cent), Quebec (7.1 per cent), Western Canada (3.5 per cent) and USA (3.2 per cent).

Cash dividend distribution

The corporation is pleased to announce that its board of directors has declared a monthly cash dividend of 7.8 cents per common share (subject to adjustment at the discretion of the board of directors), payable on each dividend payment date set out in the attached table to holders of common shares of record at the close of business on each record date set out in the table.

Dividend and share purchase plan

The corporation has in place a dividend reinvestment plan (DRIP) and share purchase plan that is available to its shareholders. The DRIP allows participants to have their monthly cash dividends reinvested in additional shares. The price paid per share is 97 per cent (if the share price is higher than $14.85) of the weighted average trading price calculated five trading days immediately preceding each dividend date with no commission cost. Once registered with the share purchase plan, participants have the right to purchase additional shares, totalling no greater than $12,000 per year and no less than $250 per month. Shareholders participating pay no commission.

For the six months ended June 30, 2023, the corporation declared dividends on the shares totalling $16,139,799 or 23.4 cents per share, versus $16,010,029 or 23.4 cents per share for the six months ended June 30, 2022. The number of shares outstanding at June 30, 2023, was 34,487,464, compared with 34,483,717 at June 30, 2022.

The corporation, through its mortgage banker, Firm Capital Corp., is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The corporation's investment objective is the preservation of shareholders' equity, while providing shareholders with a stable stream of monthly dividends from investments. The corporation achieves its investment objectives through investments in selected niche markets that are underserviced by large lending institutions. Lending activities to date continue to develop a diversified mortgage portfolio, producing a stable return to shareholders. Full reports of the financial results of the corporation for the year are outlined in the audited consolidated financial statements and the related management discussion and analysis of the corporation, available on SEDAR. In addition, supplemental information is available on the corporation's website.

We seek Safe Harbor.