Canada's Firm Capital Mortgage Q4 net income falls, investment portfolio decreases

Overview

• Canadian mortgage lender's Q4 net income fell 4.7% yr/yr, EPS also declined

• Investment portfolio decreased 6.5% yr/yr amid higher repayments and lower new funding

• Company declared monthly cash dividend, unchanged from prior periods

Outlook

• Firm Capital Mortgage did not provide specific financial guidance for the current or future periods

Result Drivers

• PORTFOLIO CONTRACTION - Co said investment portfolio decreased 6.5% yr/yr as repayments exceeded new funding

• CREDIT LOSS ALLOWANCES - Allowance for expected credit losses and fair value adjustment rose to C$36.8 mln from C$29.6 mln yr/yr

• LOWER PORTFOLIO YIELD - Average face interest rate on investment portfolio fell to 9.50% from 10.07% yr/yr

Company press release: ID:nGNX7K4nMg

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Firm Capital Mortgage Investment Corp is C$13.00, about 11.8% above its March 12 closing price of C$11.63

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

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