Timbercreek Financial Announces 2025 First Quarter Results

Timbercreek Financial

Mon, May 5, 2025, 3:09 PM 10 min read

Strong top-line income and distributable income:
- Net investment income of $28.6 million compared to $24.6 million in Q1 2024.
- Net income and comprehensive income of $14.8 million (Q1 2024 – $14.4 million) or basic earnings per share of $0.18 (Q1 2024 – $0.17).
- Distributable income of $15.4 million ($0.19 per share) compared with $15.8 million ($0.19 per share) in Q1 2024.
- Declared a total of $14.3 million in dividends to shareholders, or $0.17 per share, reflecting a distributable income payout ratio of 92.8% (Q1 2024 – 90.6%).
- The dividend remains well-covered and at the current trading price of $7.00 represent a 9.9% yield – a 7.3% premium over the 2-year Canadian bond yield (2.6% as at May 2, 2025).

The net mortgage investment portfolio increased by $101.6 million or 10.4% over the prior year and decreased modestly by $10.6 million to $1,079.2 million in Q1 2025.

The weighted average interest rate ("WAIR") on the portfolio remains resilient due to a high percentage of variable rate loans with protection of interest rate floors - as indicated by the Company's WAIR decreasing by 1.2% relative to a 2.3% drop in the Bank of Canada prime rate over the same period. At the end of Q1 2025, variable rate loans with rate floors represented 84.8% of the portfolio (Q1 2024 – 88.6%) and 87.8% of these variable rate loans with floors are currently at their floor rates.

While the Company continues to monitor developments closely with respect to tariffs and the potential impact to certain borrowers, its core asset class multi-family residential is expected to be well protected from any near-term implications and tends to perform well in periods of economic uncertainty.

In March, the Company completed the sale of a Quebec-based retirement asset. This transaction resulted in full recovery of real estate held for sale and a repayment of the Company's real estate collateral liability.

“It was a solid first quarter, with healthy income levels allowing us to build on our long-term track record of stable monthly dividends that deliver a premium yield to shareholders,” said Blair Tamblyn, CEO of Timbercreek Financial. “The transaction pipeline remains robust, with some expected delays due to broader volatility in financial markets. Periods such as this underscore the resiliency of our strategy and our core asset classes, led by multi-residential. During the quarter, our team also continued to advance the remaining staged loans and expects material progress during 2025."

Quarterly Comparison

*$ millions*	Q1 2025			Q1 2024			Q4 2024

Net Mortgage Investments¹	$	1,079.2		$	977.5		$	1,089.8
Enhanced Return Portfolio Investments¹	$	43.3		$	63.4		$	42.9
Real Estate Inventory	$	29.6		$	30.6		$	32.5
Real Estate held for sale, net of collateral liability	$	—		$	62.2		$	65.3
Joint Venture	$	18.1		$	—		$	—

Net Investment Income	$	28.6		$	24.6		$	27.9
Income from Operations	$	23.3		$	20.9		$	11.0
Net Income and comprehensive Income	$	14.8		$	14.4		$	2.4
Distributable income¹	$	15.4		$	15.8		$	17.7
Dividends declared to Shareholders	$	14.3		$	14.3		$	14.3

*$ per share*	Q1 2025			Q1 2024			Q4 2024

Dividends per share	$	0.17		$	0.17		$	0.17
Distributable income per share¹	$	0.19		$	0.19		$	0.21
Earnings per share	$	0.18		$	0.17		$	0.03

Payout Ratio on Distributable Income¹		92.8	%		90.6	%		80.8	%
Payout Ratio on Earnings per share		96.9	%		99.7	%		603.4	%

*Net Mortgage Investments*	Q1 2025			Q1 2024			Q4 2024

Weighted Average Loan-to-Value		66.2	%		64.4	%		63.3	%
Weighted Average Remaining Term to Maturity	0.9 yr			0.8 yr			1.0 yr
First Mortgages		88.3	%		85.7	%		89.6	%
Cash-Flowing Properties		79.7	%		85.7	%		81.9	%
Multi-family residential		60.2	%		54.6	%		59.8	%
Floating Rate Loans with rate floors (at quarter end)		84.8	%		88.6	%		80.4	%

Weighted Average Interest Rate
For the quarter ended		8.7	%		9.9	%		8.9	%
Weighted Average Lender Fee
New and Renewed		0.9	%		0.8	%		1.0	%
New Net Mortgage Investment Only		1.1	%		0.9	%		1.2	%

Refer to non-IFRS measures section below for net mortgages, enhanced return portfolio investments and distributable income.

Quarterly Conference Call

Interested parties are invited to participate in a conference call with management on Tuesday, May 6, 2025 at 1:00 p.m. (ET) which will be followed by a question and answer period with analysts.

To join the Zoom Webinar:

If you are a Guest, please click the link below to join:

https://us02web.zoom.us/j/81298506156?pwd=mrzLmbreCBzYqZzfvu38bVEvub7Tpj.1

Webinar ID: 812 9850 6156
Passcode: 1234

Or Telephone:

Dial (for higher quality, dial a number based on your current location):
Canada: +1 780 666 0144, +1 204 272 7920, +1 438 809 7799, +1 587 328 1099, +1 647 374 4685,
+1 647 558 0588, +1 778 907 2071
International numbers available: https://us02web.zoom.us/u/kbE03DvhIf

Speakers will receive a separate link to the Webinar.

The playback of the conference call will also be available on www.timbercreekfinancial.com following the call.

About the Company

Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to commercial real estate professionals. Our sophisticated, service-oriented approach allows us 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, we are able to meet these needs while generating strong risk-adjusted yields for investors. Further information is available on our website, www.timbercreekfinancial.com.

Non-IFRS Measures

The Company prepares and releases financial statements in accordance with IFRS. As a complement to results provided in accordance with IFRS, the Company discloses certain financial measures not recognized under IFRS and that do not have standard meanings prescribed by IFRS (collectively the "non-IFRS measures"). These non-IFRS measures are further described in Management's Discussion and Analysis ("MD&A") available on SEDAR+. Certain non-IFRS measures relating to net mortgages have been shown below. The Company has presented such non-IFRS measures because the Manager believes they are relevant measures of the Company’s ability to earn and distribute cash dividends to shareholders and to evaluate its performance. The following non-IFRS financial measures should not be construed as alternatives to total net income and comprehensive income or cash flows from operating activities as determined in accordance with IFRS as indicators of the Company’s performance.

Certain statements contained in this news release may contain projections and "forward looking statements" within the meaning of that phrase under Canadian securities laws. When used in this news release, the words "may", "would", "should", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "objective" and similar expressions may be used to identify forward looking statements. By their nature, forward looking statements reflect the Company's current views, beliefs, assumptions and intentions and are subject to certain risks and uncertainties, known and unknown, including, without limitation, those risks disclosed in the Company's public filings. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward looking statements. The Company does not intend to nor assumes any obligation to update these forward looking statements whether as a result of new information, plans, events or otherwise, unless required by law.

OPERATING RESULTS¹ ^{$ thousands}		Three months ended						Year ended
OPERATING RESULTS¹ ^{$ thousands}					March 31,			December 31,
NET INCOME AND COMPREHENSIVE INCOME		2025			2024			2024
Net investment income on financial assets measured at amortized cost	$	28,573		$	24,590		$	104,344
Fair value gain and other income on financial assets measured at FVTPL		102			337			1,041
Net rental income		266			474			1,544
Net income from joint venture		17			—			—
Gain on real estate properties and real estate held for sale collateral liability		—			—			1,500
Expenses:
Management fees		(2,903	)		(2,393	)		(10,548	)
Servicing fees		(134	)		(159	)		(555	)
Expected credit loss		(1,554	)		(912	)		(16,134	)
General and administrative		(1,027	)		(1,034	)		(3,340	)
Income from operations	$	23,340		$	20,903		$	77,852
Financing costs:
Financing cost on credit facility		(5,955	)		(4,285	)		(21,664	)
Financing cost on convertible debentures		(2,613	)		(2,250	)		(10,031	)
Net income and comprehensive income	$	14,772		$	14,368		$	46,157
Payout ratio on earnings per share		96.9	%		99.7	%		124.1	%

DISTRIBUTABLE INCOME
Net income and comprehensive income	$	14,772		$	14,368		$	46,157
Less: Amortization of lender fees		(2,779	)		(1,405	)		(6,588	)
Add: Lender fees received and receivable		1,339			1,179			7,610
Add: Amortization expense, credit facility		212			416			1,030
Add: Amortization expense, convertible debentures		294			243			1,110
Add: Accretion expense, convertible debentures		160			113			569
Add: Unrealized fair value (gain) loss on DSU		(97	)		153			38
Add: Unrealized (gain) loss on FVTPL		(36	)		(166	)		304
Add: Unrealized gain on real estate held for sale		—			—			(1,500	)
Add: Expected credit loss		1,554			912			16,134
Distributable income¹	$	15,419		$	15,813		$	64,864
Payout ratio on distributable income¹		92.8	%		90.6	%		88.3	%

PER SHARE INFORMATION
Dividends declared to shareholders	$	14,307		$	14,319		$	57,277
Weighted average common shares (in thousands)		82,981			83,010			83,010
Dividends per share	$	0.17		$	0.17		$	0.69
Earnings per share (basic)	$	0.18		$	0.17		$	0.56
Earnings per share (diluted)	$	0.18		$	0.17		$	0.56
Distributable income per share¹	$	0.19		$	0.19		$	0.78

Refer to non-IFRS measures section.

Net mortgage investments
(In thousands of Canadian dollars, except units, per unit amounts and where otherwise noted)

The Company’s exposure to the financial returns is related to the net mortgage investments as mortgage syndication liabilities are non-recourse mortgages with periodic variance having no impact on Company's financial performance. Reconciliation of gross and net mortgage investments balance is as follows:

Net Mortgage Investments		March 31, 2025			December 31, 2024
Mortgage investments, excluding mortgage syndications	$	1,070,636		$	1,078,238
Mortgage syndications		613,964			427,263
Mortgage investments, including mortgage syndications		1,684,600			1,505,501
Mortgage syndication liabilities		(613,964	)		(427,263	)
		1,070,636			1,078,238
Interest receivable		(15,699	)		(15,533	)
Unamortized lender fees		5,937			6,276
Expected credit loss		18,297			20,796
Net mortgage investments	$	1,079,171		$	1,089,777

Enhanced return portfolio

As at		March 31, 2025		December 31, 2024
Other loan investments, net of expected credit loss	$	31,332	$	30,912
Finance lease receivable, measured at amortized cost		6,020		6,020
Investment in participating debentures, measured at FVTPL		766		756
Joint venture investment in indirect real estate development		2,225		2,225
Investment in equity instrument, measured at FVTPL		3,000		3,000
Total enhanced return portfolio	$	43,343	$	42,913

Real estate held for sale, net of collateral liability

As at	March 31, 2025			December 31, 2024
Real estate held for sale		—		132,635
Real estate held for sale collateral liability		—		(67,312	)
Total real estate held for sale, net of collateral liability	$	—	$	65,323