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Net Investment Income: $27.9 million in Q4, up from $25.4 million in Q3.
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Distributable Income: $17.7 million or $0.21 per share, up from $15 million or $0.18 per share in Q3.
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Payout Ratio: 80.8% in Q4; 88% on a full-year basis.
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Portfolio Growth: Increased by $72 million from Q3; total portfolio approximately $1.1 billion.
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Net Income Before ECL: $17.4 million in Q4, compared to $14.1 million in Q3.
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Net Income: $2.4 million in Q4, impacted by a $15.1 million ECL reserve.
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Weighted Average Loan to Value (LTV): 63.3% for 2024.
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Weighted Average Interest Rate: 8.9% in Q4, down from 9.3% in Q3.
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Credit Facility Balance: $396 million at the end of Q4, up from $324 million at the end of Q3.
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Net Real Estate Held for Sale: $65.3 million at quarter end.
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Dividend Yield: Approximately 10%, with a 7% premium over short-term bond yields.
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Timbercreek Financial Corp (TBCRF) reported strong fourth quarter originations, growing the portfolio to approximately $1.1 billion.
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The company generated a net investment income of $27.9 million and distributable income of $0.21 per share with a healthy payout ratio of 81%.
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The dividend yield is approximately 10%, which is more than a 7% premium over short-term bond yields.
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The company has made significant progress in resolving stage loans, with a notable $3.4 million reversal from an earlier reserve.
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Timbercreek Financial Corp (TBCRF) is benefiting from an improved market environment, driven by interest rate reductions and a new real estate cycle.
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The company recorded a larger ECL reserve at year-end, impacting reported EPS, primarily due to two Calgary office loans.
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The Calgary office market remains challenging, with valuation issues leading to an $11.1 million credit loss provision.
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There is a risk of prolonged exposure to Calgary office loans, potentially remaining on the books for up to two more years.
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The weighted average interest rate decreased from 9.3% in Q3 to 8.9% in Q4, reflecting higher interest rate loans repaying.
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The company faces potential risks from the Canada-US trade relationship and possible tariffs, which could impact various sectors.
Q: Can you explain the impact of ECLs on your covenants and the buffer you have against potential breaches? A: Tracy Johnston, CFO, explained that the covenants on the credit facility are primarily cash flow and leverage-based. Despite the ECLs, the company remains well-covered on its covenants. The staging covenants have been in place since late 2023, and there are no concerns regarding cash flow covenants. The shareholders’ equity covenant is tested with the full principal of loans removed, so ECLs do not impact it significantly.
