Mr. Eli Dadouch reports

FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION ANNOUNCES YEAR ENDED AND Q4/2023 RESULTS, AS WELL AS THE DECLARATION OF APRIL, MAY, AND JUNE MONTHLY CASH DIVIDENDS

Firm Capital Mortgage Investment Corp. has released its financial statements for the three and 12 months ended Dec. 31, 2023.

Net income

For the three months ended Dec. 31, 2023, net income increased by 4.8 per cent to $8,335,525 as compared with $7,955,086 for the same period in 2022. For the year ended Dec. 31, 2023, net income increased by 6.0 per cent to $34,164,416 as compared with $32,234,067 for the year ended Dec. 31, 2022.

The increase is primarily a result of higher interest income due to a higher weighted average interest rate (2023 weighted average interest rate -- 11.15 per cent versus 2022 weighted average interest rate -- 9.28 per cent) offset by a reduction in overall portfolio size.

Earnings per share

Basic weighted average profit per share for the three months ended Dec. 31, 2023, was 24.2 cents, as compared with the 23.1 cents per share reported for the three months ended Dec. 31, 2022. Basic weighted average profit per share for the year ended Dec. 31, 2023, was 99.1 cents, compared with the 93.9 cents per share reported for the year ended Dec. 31, 2022.

Portfolio

The corporation's investment portfolio decreased by $63-million to $598.1 as at Dec. 31, 2023, in comparison with $661.0-million as at Dec. 31, 2022 (in each case, gross of impairment allowance, fair value adjustment and unamortized fees). During 2023, new investment funding was $249.5-million (2022 -- $461.8-million), and repayments were $312.3-million (2022 -- $443.0-million). On Dec. 31, 2023, the investment portfolio comprised 243 investments (2022 -- 252). The average gross investment size was approximately $2.4-million, with 14 investments exceeding $7.5-million.

Prudent impairment allowance

The allowance for impairment and fair value adjustment as of Dec. 31, 2023, was $22.7-million (2022 -- $10.16-million), comprising (i) $10.65-million (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) $10.38-million (2022 -- $4.70) 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 $1.7-million (2022 -- $1.76-million).

Investment portfolio details

Details on the corporation's investment portfolio as at Dec. 31, 2023, are as follows:

• Total gross investment portfolio of $598,059,570, which is lower by 9.5 per cent than 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 87.5 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 94.1 per cent of the total portfolio (88.6 per cent as at December, 2022).
• The weighted average face interest rate on the corporation's investment portfolio as at Dec. 31, 2023, and as at Dec. 31, 2022, was 10.99 per cent per annum.
• Regionally, the mortgage investment portfolio is diversified as follows: Ontario (86.8 per cent), Quebec (7.1 per cent), Western Canada (3.0 per cent) and United States (3.1 per cent).
• Ninety-six per cent of the portfolio consists of investments with variable interest rates. These rates are calculated to be the higher of (i) bank prime plus a spread (known as the base rate), or (ii) a fixed floor rate.
• Approximately 80 per cent of the portfolio matures by Dec. 31, 2024.
• Of the 243 investments, 90 per cent were underwritten (as part of a renewal process or for a new fundings) between 2022 and 2023, while only 10 per cent were underwritten in 2021 or prior to that.

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 below to holders of common shares of record at the close of business on each record date set out in the attached 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 year ended Dec. 31, 2023, the corporation declared dividends on its common shares totaling $34,142,921 or 99 cents per share, versus $32,631,802 or 95 cents, respectively, per share for the year ended Dec. 31, 2022. The number of common shares outstanding at Dec. 31, 2023, was 34,489,308, as compared with 34,485,740 at Dec. 31, 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. 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 the SEDAR+ website. In addition, supplemental information is available on the corporation's website.

We seek Safe Harbor.