Firm Capital Mortgage Investment Corporation: Q4/2024 Results and the Path to Financial Stability

In the ever-evolving landscape of mortgage investment, Firm Capital Mortgage Investment Corporation (FCMIC) has once again demonstrated its prowess by announcing its Q4/2024 results. The Corporation, through its mortgage banker Firm Capital Corporation, has continued to deliver on its investment objectives, focusing on the preservation of shareholders' equity while providing a stable stream of monthly dividends. Let's dive into the details and understand how FCMIC has navigated the market to achieve these impressive results.

A Closer Look at the Q4/2024 Results

For the three months ended December 31, 2024, FCMIC reported a net income of $9,164,362, marking a 9.9% increase from the $8,335,525 reported for the same period in 2023. This growth is a testament to the Corporation's strategic investments and prudent management. The basic weighted average earnings per share for the quarter stood at $0.249, up from $0.242 in the previous year. This consistent growth in earnings per share is a positive indicator for income-seeking investors.

Investment Portfolio Growth

One of the key drivers of FCMIC's financial performance is its investment portfolio, which increased by 9.3% to $653.8 million as of December 31, 2024. This growth was fueled by new investment funding of $329.0 million for the year, compared to $249.5 million in 2023. The portfolio now comprises 285 investments, with an average gross investment size of approximately $2.3 million. This diversification and growth strategy have helped FCMIC maintain a stable return on investment.

Dividend Policy and Shareholder Value

FCMIC's commitment to its shareholders is evident in its dividend policy. For the year ended December 31, 2024, the Corporation declared dividends on its common shares totaling $35,215,038 or $0.9920 per share, compared to $34,142,921 or $0.9900 per share for the year ended December 31, 2023. This stability in dividends ensures that shareholders continue to receive a consistent return on their investment.

Prudent Impairment Allowance

FCMIC's prudent impairment allowance is another indicator of its financial health. As of December 31, 2024, the allowance for impairment and fair value adjustment stood at $29.6 million, up from $22.7 million in the previous year. This increase reflects the Corporation's conservative approach to managing risks and ensuring the stability of its investment portfolio.

Regional Diversification

The Corporation's investment portfolio is diversified across various regions, with Ontario accounting for 90.0% of the total, followed by Quebec (4.9%), Western Canada (2.7%), USA (2.2%), and Nova Scotia (0.2%). This regional diversification helps mitigate risks associated with any single market and ensures a steady flow of investments.

Interest Rates and Portfolio Maturity

The average face interest rate on the total gross carrying amount of the investment portfolio is 10.07% per annum, slightly lower than the 10.99% at December 31, 2023. However, this rate still provides a healthy return on investment. Approximately 83.1% of the total gross carrying amount of the investment portfolio matures by December 31, 2025, ensuring a steady stream of income in the near future.

Conclusion

FCMIC's Q4/2024 results demonstrate the Corporation's ability to navigate the market and achieve financial stability. The 9.3% increase in the investment portfolio, coupled with a 9.9% increase in net income, reflects the Corporation's strategic investments and prudent management. The stability in dividends and the prudent impairment allowance further underscore FCMIC's commitment to its shareholders. As the Corporation continues to grow and diversify its investment portfolio, it remains a reliable choice for income-seeking investors.