Timbercreek Financial Announces 2025 Third Quarter Results

Core Insights - Timbercreek Financial reported stable transaction volumes in Q3 2025, despite some delays due to macroeconomic volatility, with a strong investment pipeline supported by recalibrated commercial real estate valuations and a reduced interest rate environment [3][4] - The company anticipates a strong finish to the year, with portfolio growth expected to resume, although distributable income saw a slight decline this quarter [3][4] - The company maintains a targeted payout ratio for dividends, reinforcing the stability of its monthly dividend despite short-term share price volatility [3][4] Financial Performance - Net investment income for Q3 2025 was $25.4 million, unchanged from Q3 2024, while net income and comprehensive income before expected credit losses (ECL) remained at $14.3 million [4][6] - Net income and comprehensive income decreased to $8.5 million in Q3 2025 from $14.1 million in Q3 2024, with basic earnings per share dropping to $0.10 from $0.17 [4][6] - Distributable income was reported at $14.1 million ($0.17 per share) compared to $15.0 million ($0.18 per share) in Q3 2024, with a payout ratio of 101.4% [4][6] Portfolio and Investment Metrics - The net mortgage investment portfolio increased by $36.9 million (3.6%) year-over-year to $1,054.5 million, but decreased by $59.5 million from Q2 2025 due to a significant repayment [4][6] - The weighted average interest rate on the portfolio decreased by 100 basis points, while 85.8% of the portfolio consists of variable rate loans with interest rate floors [4][6] - The company recorded an expected credit loss of $5.9 million, primarily related to a revaluation of an office asset in Calgary and a retail portfolio in Vancouver [4][6] Dividends and Shareholder Returns - A total of $14.3 million in dividends was declared to shareholders, maintaining a dividend of $0.17 per share, which represents a yield of 9.5% [4][6] - The company expects to finish the year within its targeted payout ratio range of 97.2% year-to-date [4][6] - The current trading price of $7.24 reflects a 7.1% premium over the 2-year Canadian bond yield [4][6] Future Outlook - The company has a strong transaction pipeline for Q4 2025, with over $200 million in funded and committed deals [4][6] - The recent upsizing and renewal of the revolving credit facility from $510 million to $600 million will support portfolio growth in the coming quarters [4][6]