TSX Symbol FC.UN
TORONTO, Dec. 18 /CNW/ - Firm Capital Mortgage Investment Trust (the "Trust") (TSX: FC.UN) announced its monthly distribution for December in the amount of $0.078 per unit. The Trust also announced an estimated special year-end distribution (the "Special Distribution") of $0.17 per unit. These distributions, totaling an estimated $0.248, are payable on January 15, 2009, to Unitholders of record on December 31, 2008.
The precise amount of the Special Distribution will be announced prior to the payment date. The estimated Special Distribution recognizes that income generated exceeds year-to-date distributions earned on the Trust's mortgage investments. Accordingly, as the Trust's Declaration of Trust requires that it distribute all taxable income earned in its fiscal year, a special year-end distribution is necessary to meet this requirement for the year ended December 31, 2008. The Special Distribution is not indicative of future performance.
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DISTRIBUTION OVERVIEW 2008:
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Monthly distributions for 2008 equalled $.078 per month, for a total
$0.936 per unit, which, together with the year end Special Distribution of
$0.17, represents total distributions for 2008 of $1.106 per unit.
INVESTMENT PORTFOLIO TURNS:
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As at December 16, 2008, year to date mortgage discharges equated to $130
million. This represents a significant turn of the portfolio enabling
management to re-invest the funds in evolving market conditions. As the
portfolio revolves, the Trust is able to manage the portfolio size and return
on equity based on the pricing of new investments.
MORTGAGE PORTFOLIO HIGHLIGHTS:
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As the year end approaches, the Trust is pleased to provide the following
information with respect to its mortgage investment portfolio, as at December
16, 2008;
- Total Gross Mortgage Portfolio equals $229,751,296
- Conventional first mortgages, being those mortgages with loan to
values less than 75%, comprise 80% of our total portfolio, and total
Conventional mortgages with loan to values under 75% comprise 97% of
our total portfolio.
- Special Profit Mortgage Investments, which include 13 investments,
total 7.70% of the portfolio, comprised of Conventional investments
of 4.88% and non-conventional and related investments of 2.82% of the
portfolio.
- The Portfolio's average loan to value on Conventional investments,
excluding, special profit transactions, is 63.1%.
- Approximately 86% of the portfolio matures within 12 months. This
results in a continuously revolving portfolio, allowing management to
assess market conditions.
- The Average Face Interest Rate on the portfolio is 9.70% per annum.
- Regionally, the portfolio is diversified approximately as follows:
Ontario 76.74%, Quebec 3.49%, Alberta 12.80%, British Columbia 2.93%,
Manitoba 2.48%, with the balance being in multiple provinces.
LOAN LOSS PROVISION ALLOWANCE UPDATE:
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Management has always taken a proactive approach to allowance provision reserves. This is a prudent approach to protecting our Unitholders equity. Loan loss provisions at the start of the fiscal year amounted to $1,725,000. During the second and third quarters of 2008 a further $350,000 was added to the provision, and it is estimated that approximately a further $150,000 will be added by the fiscal year end, for a total of $2,225,000, representing 0.968% of the gross loan portfolio.
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FINANCING UPDATE:
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The Trust is pleased to announce that at the end of September 2008 its
principal banker renewed its warehousing credit facility for a further year
with a right at maturity to lock in any balance outstanding for a second year
term, should a renewal not be concluded at the end of the first year renewal.
UNRECOGNIZED INCOME COLLECTED:
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As at November 30, 2008, the Trust has banked non-refundable fee income of
$448,000, which will be recognized as income over the term of the
corresponding investments and, in one circumstance, as a specific investment
is repaid.
DISTRIBUTION AND UNIT PURCHASE PLAN:
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The Trust has in place a Distribution Reinvestment Plan (DRIP) and Unit
Purchase Plan that is available to its Unitholders. The plans allows
participants to have their monthly cash distributions reinvested in additional
Trust units and grants participants the right to purchase, without commission,
additional units, up to a maximum of $12,000 per annum.
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The Trust, through its Mortgage Banker, Firm Capital Corporation, is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The Trust's investment objective is the preservation of Unitholders' equity, while providing Unitholders with a stable stream of monthly distributions from investments. The Trust achieves its investment objectives by pursuing a strategy of growth through investments in selected niche markets that are under-serviced by large lending institutions. Lending activities to date continue to develop a diversified mortgage portfolio, producing a stable return to Unitholders.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, our performance, our mortgage portfolio and our distributions, as well as statements with respect to management's beliefs, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intent", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.
These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described in our Annual Information Form under "Risk Factors" (a copy of which can be obtained at www.sedar.com), which could cause our actual results and performance to differ materially from the forward-looking statements contained in this circular. Those risks and uncertainties include, among others, risks associated with mortgage lending, dependence on the Trust's trust manager and mortgage banker, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters, Unitholder liability and the introduction of new tax rules (Trust to confirm list of material risks.). Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include, among others, that the Trust is able to invest in mortgages at rates consistent with rates historically achieved; adequate mortgage investment opportunities are presented to the Trust; and adequate bank indebtedness and bank loans are available to the Trust (Trust to confirm material factors/assumptions.). Although the forward-looking information continued in this new release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results and performance will be consistent with these forward-looking statements.
All forward-looking statements in this news release are qualified by these cautionary statements. Except as required by applicable law, the Trust undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For further information: Eli Dadouch, President & Chief Executive Officer, (416) 635-0221, www.firmcapital.com
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