Firm Capital Mortgage Investment Corporation, a non-bank lender specializing in bridge mortgage financing, has provided an update on its investment portfolio, balance sheet position, and trading metrics.
The company’s investment portfolio currently stands at approximately $587 million spread over 237 separate investments. The majority of the portfolio (95%) has variable interest rates, capturing upside in interest rate increases while never going below the base rate in a recessionary environment. The average face interest rate on the portfolio has increased to 11.16% per annum.
The portfolio has been reduced from a peak of approximately $681 million to $587 million through net repayments of approximately $94 million. This reduction confirms the corporation’s ability to be repaid upon maturity and reinvest incoming cash in the current environment.
Approximately 85% of the portfolio matures by December 31, 2024, allowing the corporation to roll the cash into new investments. In the past 12 months, the company had $291 million in new transactions and re-underwrote $110 million of existing investments while receiving $361 million in repayments.
Of the $587 million in the current portfolio, approximately 87% was either re-underwritten or newly funded during 2022 and 2023. This mitigates the risk factor regarding valuations.
The corporation has a strong balance sheet position, with approximately $15.5 million of cash on deposit and an undrawn credit facility of $180 million. Debt as a percentage of the portfolio stands at a conservative 34%. The company plans to redeem $22.5 million of convertible unsecured debentures expiring on December 31, 2023, using cash on its balance sheet.
The corporation’s shares are trading at an 11% discount to net asset value (NAV) and offer a 9.5% dividend yield.
Firm Capital Mortgage Investment Corporation, through its mortgage banker, Firm Capital Corporation, provides residential and commercial short-term bridge and conventional real estate financing. The company’s investment objective is the preservation of shareholders’ equity while providing a stable stream of monthly dividends.
The company is well positioned to take advantage of new lending opportunities in a market where credit has pulled back from major financial institutions and other alternative lenders. It has a diversified mortgage portfolio and a prudent impairment allowance to provide stability to shareholders.
Overall, Firm Capital Mortgage Investment Corporation continues to demonstrate successful implementation of its bridge financing strategy and remains confident in its ability to generate returns for shareholders.