TORONTO, May 15, 2018 – Trez Capital Mortgage Investment Corporation (TSX: TZZ) (the "Company") today released its financial results for the quarter ended March 31, 2018. The financial statements and MD&A can be found at www.sedar.com or www.trezcapitalmic.com.
Financial Highlights & Business Update
On June 16, 2016 the shareholders of the Company approved the orderly wind-up of the Company (“Orderly Wind-Up”). As such, the financial results reflect the ongoing reduction in the size of the portfolio as capital is returned to shareholders.
Towards the objective of an Orderly Wind-Up, principal repayments, sales or write offs totaled $12.5 million for the quarter ($6.0 million for the comparable period in 2017). During the quarter the Company announced a special distribution payable on April 20th totaling $17.9 million, and paid monthly return of capital distributions at the rate of $0.0583 per share. The total of all paid distributions is $2.1 million for the quarter ended March 31, 2018 ($2.6 million for the comparable period in 2017). In addition, $21 thousand of shares were repurchased during the quarter ($4.2 million for the comparable period in 2017).
For the three months ended March 31, 2018, net income and income from operations both totaled $137 thousand compared to net income of $1.0 million and income from operations of $0.9 million in Q1 of 2017. Basic and diluted income per share were $0.01. During the first quarter, as compared to the same period in 2017, revenue decreased by $1.1 as a result of reduced interest income. The reductions in interest income resulted from a decrease in the average mortgage portfolio by $61.9 million for the three months ended March 31, 2018 compared to the same period in 2017.
At March 31, 2018 the Company had 5 mortgages remaining to be liquidated, down from 9 as at December 31, 2017. Of the 5 remaining mortgages expected to mature or be sold, 4 mortgages totaling $34.2 million are expected to do so prior to the end of 2018 and 1 mortgage totaling $5.0 million prior to the end of the first half of 2019.
The Board anticipates making further special distributions as the mortgages in the portfolio mature or are sold and subject to reasonable expected operating expenditures.
Regular Monthly & Special Distributions
In the first quarter of 2018, the Board made a decision to suspend regular monthly distributions until further notice. This decision was premised on a review of the last remaining mortgages and cash requirements. The Company also announced that its Board of Directors had declared a special distribution of $1.52 per Class A share. Pursuant to the Orderly Wind-up Plan, the distribution constituted a return of capital and was paid on April 20, 2018 to holders of Class A shares of record at the close of business on April 9, 2018. The distribution was approximately $17.9 million.
The Board anticipates making further special distributions as the mortgages in the portfolio mature or are sold, and subject to reasonable expected operating expenditures. As the wind-up of the Company progresses, it is expected that there will be some variance in the timing and quantum of special distributions.
Forward Looking Statements
Certain statements in this news release about the Company, and its business, operations, investments and strategies, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, “forward looking statements”). The forward-looking statements are stated as of the date of this news release and are based on estimates and assumptions made by Trez Capital Fund Management LP (“Trez”) in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Trez believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Past performance is not an indication of future returns, and there can be no guarantee that targeted returns or yields can be achieved. Trez refers you to the Company’s public disclosure for information regarding these forward-looking statements, including the assumptions made in preparing forward-looking statements and management’s expectations, and the risk factors that could cause the Company’s actual results, yield, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. Such public disclosure is available on SEDAR and at the request of Trez. This news release does not represent an offer or solicitation to sell securities of the Company.
About the Company
Trez Capital Fund Management Limited Partnership is the manager of and portfolio advisor to the Company. On June 16, 2016 the Shareholders of the Company approved the orderly wind-up of the Company. Under the orderly wind-up plan the Company will distribute the net proceeds through special distributions, the repurchase of shares pursuant to the normal course issuer bid, or otherwise.
For further information:
Chief Executive Officer & Chief Financial Officer
Tel: (604) 630-0775