Mr. Eli Dadouch reports

FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION ANNOUNCES Q3/2023 RESULTS

Firm Capital Mortgage investment Corp. has released its financial statements for the three and nine months ended Sept. 30, 2023.

Net asset value

The corporation has an adjusted NAV (net asset value) of $11.37/share. This represents a 13-per-cent discount to the closing price as of Nov. 6, 2023, of $9.89/share.

Net income

For the three months ended Sept. 30, 2023, net income increased by 5.1 per cent to $8,594,640 as compared with $8,179,541 for the same period in 2022. Net income for the nine months ended Sept. 30, 2023, increased by 6.4 per cent to $25,828,891, as compared with $24,278,981 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 Sept. 30, 2023, was 24.9 cents (Sept. 30, 2022 -- 23.7 cents). Basic weighted average earnings per share for the nine months ended Sept. 30, 2023, was 74.9 cents (Sept. 30, 2022 -- 70.8 cents).

Portfolio

The corporation's investment portfolio decreased by $82-million to $578,929,118 as at Sept. 30, 2023, in comparison to $661,003,596 as at Dec. 31, 2022 (in each case, gross of impairment allowance, fair value adjustment and unamortized fees). During the nine months ended Sept. 30, 2023, new investment funding was $162.9-million (nine months ended Sept. 30, 2022 -- $326.8-million), and repayments were $244.8-million (nine months ended Sept. 30, 2022 -- $332.9-million). On Sept. 30, 2023, the investment portfolio consisted of 241 investments (Dec. 31, 2022 -- 252). The average gross investment size was approximately $2.4-million, with 13 investments individually exceeding $7.5-million.

The corporation specializes in providing bridge mortgage financing that entails seeing the portfolio revolve and redeployed into new investments based on current market rates. Of the $578-million investment portfolio as at Sept. 30, 2023, approximately 88 per cent was either underwritten or newly financed during 2023 and 2022. Only approximately 12 per cent of the investment portfolio is associated with investments that were underwritten, or newly financed prior to 2022. The investment portfolio's revolving nature demonstrates the successful implementation of the corporation's bridge financing strategy.

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 Sept. 30, 2023, was $19.16-million (Dec. 31, 2022 -- $10.16-million), comprising (i) $6.20-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) $10.46-million (2022 -- $4.70-million) representing the total amount of management's estimate of fair value adjustment on two investments stated at fair value through profit or loss; and (iii) a collective allowance balance of $2.50-million (2022 -- $1.76-million).

Investment portfolio details

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

• Total gross investment portfolio of $578,929,118 a 12.4-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 86.0 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 92.5 per cent of the total portfolio (88.6 per cent as at December, 2022).
• Approximately 85 per cent of the portfolio matures by Dec. 31, 2024, of which 29 per cent matures by Dec. 31, 2023.
• The average face interest rate on the portfolio is 11.10 per cent per annum, as compared with 10.99 per cent on Dec. 30, 2022.
• Regionally, the mortgage investment portfolio is primarily diversified as follows: Ontario (87.5 per cent), Quebec (6.1 per cent) and Western Canada (3.1 per cent).
• 95 per cent of the portfolio have variable interest rates and are priced to be the greater of: (i) bank prime plus spread (base rate), and (ii) a fixed floor rate.

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 nine months ended Sept. 30, 2023, the corporation declared dividends on its common shares totalling $24,210,051, or 70.2 cents per share, versus $24,079,389, or 70.2 cents per share for the nine months ended Sept. 30, 2022. The number of common shares outstanding on Sept. 30, 2023, was 34,488,577, compared with 34,485,001 at Sept. 30, 2022.

About Firm Capital Mortgage Investment Corp.

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. The corporation is a mortgage investment corporation (MIC) as defined in the Income Tax Act (Canada). Accordingly, the corporation is not taxed on income provided that its taxable income is paid to its shareholders in the form of dividends within 90 days after Dec. 31 each year. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same position as if the mortgage investments made by the corporation had been made directly by the shareholder. Full reports of the financial results of the corporation are outlined in the financial statements and the related management's discussion and analysis of the corporation, available on the SEDAR+ website. In addition, supplemental information is available on the corporation's website.

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