Builders Capital Mortgage Corp. Reports First Quarter 2022 Results

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Trend of Increasing Profits Continues with Strong and Expanding Mortgage Portfolio

Calgary, Alberta–(Newsfile Corp. – May 19, 2022) – Builders Capital Mortgage Corp. (TSXV: BCF) (“Builders Capital” or “the Company”) announced the release of its first quarter financial results for the period ending March 31, 2022.

Highlights include:

  • Consistent with our targeted distribution, dividends of $0.2016 per share were paid to Class A public shareholders representing an 8% annualized return on the original $10.00 issue price for the thirty-third consecutive quarter since inception.
  • Total comprehensive income grew to $665,000, up 18% year-over-year.
  • Earnings per share increased to $0.23, up 21% year-over-year.
  • Assets held for sale were successfully reduced by 61% to represent a mere 4.6% of shareholders’ equity.
  • Geographic diversity of our portfolio was further enhanced with continued growth in the BC market and our recent expansion into Nova Scotia.
  • We achieved an approximate weighted average loan-to-value ratio of 73% on our mortgage portfolio, in line with our 75% target level.

In commenting on these results, Sandy Loutitt, President of Builders Capital, stated:

“Our earnings at Builders Capital have been on an upward trend for the last ten quarters with our earnings per share hitting its highest level since March, 2017. This improvement has been the direct result of management’s success in strengthening and growing the Company’s mortgage portfolio and in substantially reducing any loan losses. We have been experiencing robust real estate markets recently and have made concerted efforts to capitalize on the opportunity that such market conditions create. In particular, these conditions have afforded us with the ability to both source new mortgage investments and to divest ourselves of the bulk of any remaining foreclosed assets. At the same time, and with an eye to a future that may entail a cooling of these market conditions, we continue to prudently assess the value of any new projects we finance as we strive to ensure an adequate margin for error in our loans-to-value calculations.

“Despite any challenges experienced over the last few years, we have successfully managed and grown the mortgage portfolio of Builders Capital to be larger, better diversified, more current and to exhibit a lower approximate weighted average loan-to-value ratio. We expect these improvements to continue to pay dividends for the Company and shareholders in the future. At this time, demand for our financing is very strong with builders working hard to bring projects forward in these robust real estate markets. We expect this demand to stay strong for some time to come, even if property values retreat somewhat from the historically high levels we’ve seen recently.”

The Company’s view of market potential is born out in the Housing Market Outlook-Spring 2022 report from the Canada Mortgage and Housing Corporation that states: “We expect the growth in prices, sales levels, and housing starts to moderate from recent highs, but remain elevated in 2022. Robust GDP growth, higher employment and net migration will support demand.” Accordingly, management believes that conditions in the residential construction sector will continue to be robust and expects to be able to capitalize on this strength to continue to provide strong returns to investors over the near and mid-terms.

Financial Overview

Quarter ended March 31, 2022 $ Quarter ended March 31, 2021 $ Quarter ended March 31, 2020 $
Revenues 844,516 704,149 703,638
Total comprehensive earnings 664,861 564,021 475,731
Net mortgages receivable, end of period 29,426,045 19,003,776 25,678,648
Total assets 30,682,037 27,454,925 31,725,932
Shareholders’ equity 26,951,410 26,894,699 26,997,126
Basic and Diluted Earnings per share 0.23 0.19 0.16
Cash dividends declared 624,450 485,880 466,880
Cash dividends declared per Class A share 0.1972 0.1972 0.1972
Cash dividends declared per Class B share 0.2521 0.1008 0.0756

 

A more detailed discussion of the Company’s financial results can be found in Builders Capital’s First Quarter 2022 Management’s Discussion and Analysis, which has been posted along with condensed consolidated interim financial statements for the quarter on the Company’s website (www.builderscapital.ca) and filed on SEDAR (www.sedar.com).

About Builders Capital

Builders Capital is a mortgage lender providing short-term course-of-construction financing to builders of residential, wood-frame properties in Western Canada. The Company commenced active operations on December 12, 2013, on the closing of its initial public offering, whereupon it acquired a portfolio of mortgages from two predecessor companies.

Builders Capital’s investment objective is to generate attractive returns, relative to risk, in order to provide stable and consistent distributions to shareholders while remaining focused on capital preservation and satisfying the criteria mandated for mortgage investment corporations (“MIC”) as defined in the Income Tax Act.

As an MIC, Builders Capital is not subject to income tax provided that it distributes all of its taxable income as dividends to shareholders within 90 days of its December 31st year-end. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same tax position as if their proportionate share of mortgage investments made by the company had been made directly by the shareholder.

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities legislation, including 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 estimates and assumptions that are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements contained in this news release. These include, among other things, risks associated with mortgage lending, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters and the general economic environment. The company cautions that the foregoing list is not exhaustive, as other factors could adversely affect its results, performance or achievements. Readers are cautioned against undue reliance on any forward-looking statements. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Builders Capital undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

For more information, please contact:

John Strangway CPA, CA, Chief Financial Officer
Telephone: (403) 685-9888 Email: [email protected]
Website: www.builderscapital.ca

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/124706