UESDAY UNE Register to listen to the FCMIC Annual General ...firmcapital.com/wp-content/uploads/2020/06/FCMIC... · 6 DISCIPLINED INVESTING • CAPITAL PRESERVATION Diversification

Firm Capital Mortgage Investment Corporation

DISCIPLINED INVESTING ● CAPITAL PRESERVATION

Firm Capital Mortgage Investment Corporation is a non-bank lender providing residential and commercial real estate financing.

ANNUAL GENERAL MEETING OF SHAREHOLDERSTUESDAY, JUNE 23, 2020

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2DISCIPLINED INVESTING • CAPITAL PRESERVATION

ELI DADOUCHPRESIDENT & CEO

INTRODUCTION


Formal Part of the Meeting led by:

STANLEY GOLDFARBCHAIRMAN

• Notice of Meeting

• Election of Directors

• Re-Appointment of Auditors


Corporations’ Financial Performance led by:

BORIS BARILCHIEF FINANCIAL OFFICER


Financial Highlights - 2019

Year Ended

Dec. 31, 2019

Year Ended

Dec. 31, 2018

Investment Portfolio (millions) $481 $521

Dividends (per share) $1.006 $0.986

Return on Equity 9.09% 9.01%

Loan Losses none none


Diversification in terms of investments and geographies• 196 investments as of December 31, 2019• 76% mature by December 31, 2020

High Quality Portfolio

Investment Portfolio Geographic Diversification

Conventional First Mortgages

69%

Conventional Non-First Mortgages

9%

Related Investments

20%

Other2%

Ontario93%

Quebec2.7%

Western Canada

3.7%

Other0.6%

*(excluding 17 Related Investments totaling $96 million)


Annualized Return on Shareholders’ Equity

Yield(%)

%

2%

4%

6%

8%

10%

12%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

*2019 ROE Spread733 bps

FC 9.09%

Gov’t of Canada1-yr. T-bill 1.76%


An Attractive Investment

A $100 investment in 1999 would be worth $688

$688

$364

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

1999 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020

FC CT Equity SPTSX Index

Data taken from Bloomberg, date range October 6th 1999 to May 29th, 2020


Results of Operations - 2019

Year Ended

Dec. 31 2019

Year Ended

Dec. 31 2018

Interest and Fees Earned (millions) $47.3 $47.3

Interest and Operating Expenses (millions) $19.3 $21.5

Profit (millions) $28.0 $25.8

Profit per Share $1.008 $0.986

Dividends per Share $1.006 $0.986

Loan Loss Provision (% of gross portfolio) 1.14% 0.95%


0.078

0.133

0.078

0.108

0.078

0.148

0.078

0.128

0.078

0.148

0.078

$0.00

$0.04

$0.08

$0.12

$0.16

Jan Jun Nov Apr Sep Feb Jul Dec May Oct Mar Aug Jan June

Stable Cash Dividends

2015TOTAL : $0.991

2016TOTAL : $0.966

2018 TOTAL : $0.986

2017TOTAL : $1.006

• Consistent $0.078 dividend • Additional special “top up” dividend at year end

2019 TOTAL : $1.006

2020 YTD

$0.468


Financial Highlights – Q1 2020

Qtr. EndedMar. 31 2020

Qtr. EndedMar. 31 2019 Change

Investment Portfolio (millions) (1) $521 $550 (5.3%)

Profit (millions) $6.24 $6.59 (5.3%)

Profit / Share $0.218 $0.246 (11.4%)

Portfolio Face Rate 8.05% 8.58% -53 bps

Return on Equity 7.88% 8.97% -109 bps

Loan Losses none none

(1) Gross of impairment provision


Highlights and General Overview led by:

ELI DADOUCHPRESIDENT & CEO


• Top off dividend of 7 cents and total 2019 dividend of $1.006• Diversified and well managed investment portfolio that produces

a stable stream of dividends• Key focus on preservation of shareholder’s equity• Focus on lending in large liquid markets and source strong

transactions• Specialize in short term bridge financings with clear exit

strategies ,and ability to revolve our portfolio to a safer asset base

• Focused on managing the investment portfolio not for the sake of growth

• Twenty-one years of stable dividends with yearly special top ups

Highlights


• Firm Capital Corporation has been in operation for 32 years.• Provides innovative real estate financing for all types of

properties • Focuses on long term investors and borrower relationships• Focuses on risk management and diversification• Deep value lenders and investors

• Continue to be original “out of the box” thinkers looking for niche, safe investments.

• Our principal focus is to;

Our Legacy

KEEP IT SIMPLE; LEND ON GENERIC REAL ESTATE; STICK TO LIQUID MARKETS;

FOCUS ON THE RETURNS; WATCH FOR EXIT STRATEGIES; AND

DO PROPER CREDIT RISK ADJUDICATION


• Mortgage Banker (FCC) 32-year track record

• 32 years of building client relationships

• 2019 transaction volume – $759 million

• 2020 YTD transaction volume – $150 million

• Experienced real estate syndicate partners

• Investing in niche markets and opportunities

Deal Flow

$768

mm

$793

mm

$735

mm $1

,000

mm

$731

mm

$759

mm

$150

mm

2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 Y T D 2 0 2 0

TRANSACTION VOLUME


Accessing the Capital Markets / Capital Management

Accessed the capital market sixteen times since October 2010

for a total proceeds of $363 million

Mill

ions

Wide Investment Dealer Distribution Network

Convertibles

Equity

Convertibles fully redeemed at par

Equity Offering

$13.45/shareSeries B Convert 5.40%

Series C Convert 5.25%

Series D Convert 4.75%

Equity Offering

$12.10/share

Series E Convert 5.30%

Series F Convert 5.50%

Equity Offering

$12.90/share

Series G Convert 5.20%

Equity Offering

$14.10/share

Series H Convert 5.30%

Series I Convert 5.40%

$31.4MMSeries A Convert 5.75%

$25.7MM

$20.5MM

$20.0MM

$23.6MM

$25.0MM

$25.0MM

$23.0MM

$25.3MM

$22.5MM

$23.0MM

$26.5MM

$20.7MM

$25.0MM

Series J Convert 5.50%

$23.1MM

Equity Offering

$13.20/share

$2.8MM

Equity Offering

$13.20/share


$210 $235 $226

$170 $205

$274 $297

$340 $343

$403 $449

$562 $521

$481 $521

$96

$147

$146

$133

$167

$180

$213

$307

$285

$254

$262

$375

$300

$101

$140

$173

$136

$94

$169

$236

$204

$256

$311

$345

$291

$375

$287

$260

$141

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020-Q1

Mortgage Portfolio Repayments New Investments

Mortgage Portfolio, Repayments & New Investments

181 Investments as at Q1/2020

78% of the portfolio revolved in 15 months


Prudent Loan Loss Provisions

$1.73M

$2.40M$2.70M

$2.98M $2.98M$3.18M $3.33M $3.36M

$4.23M$4.46M $4.40M

$4.95M

$5.48M $5.51M

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-2020

Prudent Loan Loss Provisions (principle only)

1% of the portfolio size


• We see the rest of 2020 as being a solid, yet simple, year for us.

• We do not bet on the real estate market appreciating, so caution and risk management comes first.

• Focusing on liquid and solid assets and secure good and well priced investments

• A contrarian approach. Be fearful when others are greedy and greedy when others are fearful

2020 Outlook


Conclusion & Operating Philosophy

OUR OPERATING PHILOSOPHY IS SIMPLE;BE SMARTBE ENTREPRENEURIALBUT ABOVE ALL DON’T LOSE CAPITAL

• Honoring our commitments;

• Holding our borrower clients to their commitments;

• Providing straight, clear and concise communication in what we can deliver on;

• Experienced Board and Management team.


TRUST • INNOVATION • RELATIONSHIPS

BOUTIQUE MORTGAGE LENDERS®

WHERE MORTGARE DEALS GET DONE®

DISCIPLINED INVESTMENTCAPITAL PRESERVATION

THANK YOU!TO OUR SHAREHOLDERS,

OUR BONDHOLDERS,OUR BORROWER PARTNERS,OUR INVESTMENT BANKERS, OUR INVESTMENT PARTNERS

Firm Capital Mortgage Investment Corporation

DISCIPLINED INVESTING ● CAPITAL PRESERVATION

Firm Capital Mortgage Investment Corporation is a non-bank lender providing residential and commercial real estate financing.

Q&A

ANNUAL GENERAL MEETING OF SHAREHOLDERSTUESDAY, JUNE 23, 2020

Documents

UESDAY UNE Register to listen to the FCMIC Annual General ...firmcapital.com/wp-content/uploads/2020/06/FCMIC... · 6 DISCIPLINED INVESTING • CAPITAL PRESERVATION Diversification