Mr. Blair Tamblyn reports

TIMBERCREEK FINANCIAL ANNOUNCES 2023 FIRST QUARTER RESULTS

Timbercreek Financial Corp. has released its financial results for the three months ended March 31, 2023 (Q1 2023).

Q1 2023 highlights

• Record quarterly net investment income of $32.7-million (up 44.2 per cent from Q1 2022).
• Record net income and comprehensive income of $18.1-million, up from $13.8-million in the same period last year. Basic and diluted earnings per share were 22 cents and 21 cents, respectively.
• Delivered distributable income and adjusted distributable income of $18.3-million, or 22 cents per share (Q1 2022 -- $15.2-million, 18 cents per share) representing a payout ratio of 79.1 per cent on both distributable income and adjusted distributable income which continues to be ahead of management's target payout range.
• Declared $14.5-million in dividends to shareholders, or 17 cents per share, reflecting an earnings per share payout ratio of 80.1 per cent (Q1 2022 -- 103.2 per cent) on an adjusted net income basis.
• Q1 2023 results were highlighted by strong interest income and a healthy mortgage portfolio. Net new mortgage fundings were $39.3-million and advances on existing mortgages were $12.8-million, offset by net mortgage repayments of $61.3-million and net syndications of $37.5-million. Mortgage repayment activity slowed down in the first quarter as expected given the pick-up in Q4 of last year. Portfolio turnover was 8.4 per cent.
• At the end of the period, net mortgage investments were $1,149.1-million (versus $1,263.3-million at Q1 2022) bearing interest at an average rate of 9.7 per cent (versus 6.6 per cent at Q1 2022 and 9.7 per cent at Q4 2022) and a weighted-average LTV (loan to value) of 68.5 per cent (versus 71.3 per cent at Q1 2022 and 68.3 per cent at Q4 2022).
• A portfolio of loans were moved into Stage II in the quarter for a total of $119.0-million in carrying value. The loans were moved into Stage II due to liquidity concerns at the sponsorship level however the assets, newer build, urban multifamily assets, are considered highly attractive in the market. The company does not expect principal losses on these loans.
• Maintained conservative portfolio risk composition focused on income-producing commercial real estate:
  • 68.5 per cent weighted average loan to value;
  • 92.0 per cent first mortgages in mortgage investment portfolio;
  • 89.0 per cent of mortgage investment portfolio is invested in cash-flowing properties.

"In Q1 2023, we reported another quarter of strong financial performance, highlighted by a 44-per-cent increase in net investment income on financial assets measured at amortized cost and 38-per-cent increase in earnings per share. Importantly, distributable income grew significantly to $18.3-million, or 22 cents per share, at a very comfortable payout ratio of 79.1 per cent," said Blair Tamblyn, chief executive officer of Timbercreek Financial. "Generally, the portfolio performed well in the first quarter, reflecting the ongoing focus on high-quality, income-producing assets in urban markets. In select situations, the company's borrowers are experiencing challenges in the current macroeconomic environment, and our investment team continues to actively manage these loans. We remain confident in the quality and value of the underlying assets in each instance. While transaction activity was lighter in the first quarter, we continue to see healthy borrower demand and anticipate higher new funding activity in the coming quarters."

There are no adjustments for the periods presented.

Quarterly conference call

Interested parties are invited to participate in a conference call with management on Tuesday, May 9, 2023, at 1 p.m. ET, which will be followed by a question and answer period with analysts.

Webinar ID:  894 7800 4545

Pass code:   1234

Or telephone:

Dial (for higher quality, dial a number based on your current location):

Canada:   1-438-809-7799 or 1-587-328-1099 or 1-647-374-4685 or 1-647-558-0588 or 1-778-907-2071

International numbers available on-line

Speakers will receive a separate link to the webinar. The playback of the conference call will also be available on the company's website following the call.

About Timbercreek Financial Corp.

Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to commercial real estate investors. The company's sophisticated, service-oriented approach allows it to meet the needs of borrowers, including faster execution and more flexible terms that are not typically provided by Canadian financial institutions. By employing thorough underwriting, active management and strong governance, Timbercreek is able to meet these needs while targeting strong risk-adjusted returns for investors.

We seek Safe Harbor.