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1. Company Snapshot

1.a. Company Description

Timbercreek Financial Corp., a mortgage investment company, provides shorter-duration structured financing solutions to commercial real estate investors in Canada.It focuses on lending against income-producing commercial real estate properties, such as multi-residential, office, and retail buildings located in urban markets.The company was founded in 2016 and is headquartered in Toronto, Canada.

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1.b. Last Insights on TF

Timbercreek Financial Corp.'s recent performance faces scrutiny ahead of its Q3 2025 earnings release. The company will discuss financial results for the quarter ended September 30, 2025, on October 30, 2025. Anticipation surrounding the earnings announcement may be dampened by concerns over potential challenges in the financial landscape. With no recent updates on strategic initiatives, such as share buybacks, or new product launches, investors will focus on the upcoming earnings call for insights into the company's performance.

1.c. Company Highlights

2. Timbercreek Financial's Q3 Earnings: Mixed Results, Optimistic Outlook

The company's Q3 financial performance was mixed, with net investment income steady at $25.4 million, while distributable income (DI) came in modestly below last quarter at $0.17 per share, and actual EPS was $0.1, below estimates of $0.16. The payout ratio was elevated due to market conditions, but the company expects to deliver full-year results within its targeted range. The 10-year IRR stands around 7.8%, reflecting the company's disciplined approach and ability to navigate evolving market dynamics.

Publication Date: Nov -30

📋 Highlights
  • Portfolio Composition & Financials: 82% of investments in cash-flowing properties, with multi-residential at 57%, and a weighted average LTV of 67.9% and interest rate of 8.3%.
  • Earnings Performance: Net investment income stable at $25.4 million, but distributable income fell to $0.17/share, with a 10-year IRR of 7.8% reflecting disciplined operations.
  • Stage 2 Loan Resolution: $19 million resolved since last quarter, though higher ECL due to revaluation reduced Q3 earnings, with ongoing progress expected at ~$1M/quarter.
  • Capital Facilities & Pipeline: Credit facility upsized with improved economics (25 bps spread reduction), and $200 million in Q4 funded/committed, focused on Ontario/Quebec residential and industrial assets.
  • 2026 Growth Outlook: Targeting a $1.2B–$1.3B portfolio by 2026 using existing debt, with equity raises needed for further growth, supported by resolving stage loans and potential rate cuts.

Portfolio Review

The portfolio review highlighted that most KPIs were consistent with recent periods and historical performance. At quarter-end, 82% of investments were in cash-flowing properties, with multi-residential real estate assets comprising the largest portion at roughly 57%. The weighted average LTV was 67.9%, and the weighted average interest rate was 8.3%. The company is comfortable with the current LTV range and expects it to tick higher in 2025.

Credit Facility and Transaction Activity

The company has upsized its credit facility with an outlook for sustained strong transaction activity. The Q4 transaction pipeline is strong, with approximately $200 million already funded or committed. The company's position in the market, strong client relationships, and CMHC-approved lender status continue to support its ability to deploy capital into high-quality loans and return to growth mode.

Outlook and Valuation

Looking ahead to 2026, the company believes its existing debt capacity will allow it to grow the book to around $1.2 billion to $1.3 billion. With a current dividend yield of over 9.5% and a P/B Ratio of 0.83, the stock appears to be attractively valued. Analysts estimate next year's revenue growth at 1.5%. The company's ability to resolve Stage 2 loans and interest rate cuts are expected to set the stage for positive action on the stock, allowing it to raise equity and continue growing.

Stage 2 and 3 Loans

The company expects to see improvement in Stage 2 and 3 loans starting in Q4, although it may be lumpy. The company is working towards resolving the remaining stage loans and expects to see further progress over the coming quarters, ultimately returning this portion of the portfolio to historical norms.

3. NewsRoom

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Timbercreek Financial Announces Conference Call to Discuss Third Quarter Financial Results

Oct -14

Source: globenewswire.com

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Timbercreek Financial Announces Conference Call to Discuss Third Quarter Financial Results

Oct -14

Source: globenewswire.com

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Timbercreek Financial announces Voting Results from Annual Meeting of Shareholders

May -14

Source:

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Timbercreek Financial Announces 2024 First Quarter Results

May -06

Source:

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Here's Why Timbercreek Financial Corp.'s (TSE:TF) CEO May Have Their Pay Bumped Up

May -02

Source:

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Timbercreek Financial Announces Conference Call to Discuss First Quarter Financial Results

Apr -29

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Timbercreek Financial Declares April 2024 Dividend

Apr -23

Source:

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Timbercreek Financial (TSE:TF) Has Affirmed Its Dividend Of CA$0.0575

Mar -26

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Investment and Related Activities

Expected Growth: 8.5%

Timbercreek Financial Corp's diversified portfolio of mortgages, loans, and investments is poised for growth driven by increasing demand for alternative investments, rising property values, and a strong pipeline of new investments.

7. Detailed Products

Mortgage Investment Corporation (MIC)

A type of investment vehicle that pools funds from investors to lend to borrowers seeking mortgage financing.

Syndicated Mortgages

A type of mortgage investment where multiple investors pool funds to finance a single mortgage.

Construction Financing

Short-term financing for real estate developers and builders to fund construction projects.

Commercial Mortgages

Long-term financing for commercial properties, such as office buildings, retail spaces, and apartments.

Residential Mortgages

Financing for individuals and families to purchase or refinance residential properties.

8. Timbercreek Financial Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Timbercreek Financial Corp. is medium, as there are some alternative investment options available to investors, but they may not offer the same level of returns or diversification benefits.

Bargaining Power Of Customers

The bargaining power of customers for Timbercreek Financial Corp. is low, as investors have limited negotiating power and are often reliant on the company's investment products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Timbercreek Financial Corp. is medium, as the company relies on a network of mortgage brokers and agents to originate mortgages, but has some flexibility to negotiate terms.

Threat Of New Entrants

The threat of new entrants for Timbercreek Financial Corp. is high, as the mortgage investment corporation industry is relatively easy to enter, and new competitors could potentially disrupt the market.

Intensity Of Rivalry

The intensity of rivalry for Timbercreek Financial Corp. is high, as the mortgage investment corporation industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.47%
Debt Cost 5.78%
Equity Weight 63.53%
Equity Cost 10.07%
WACC 8.51%
Leverage 57.42%

11. Quality Control: Timbercreek Financial Corp. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
MCAN Mortgage

A-Score: 7.7/10

Value: 6.2

Growth: 5.3

Quality: 7.4

Yield: 10.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Atrium Mortgage

A-Score: 6.8/10

Value: 4.0

Growth: 5.3

Quality: 7.7

Yield: 9.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
First National

A-Score: 6.8/10

Value: 4.0

Growth: 5.0

Quality: 5.2

Yield: 9.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Firm Capital Mortgage

A-Score: 6.8/10

Value: 4.3

Growth: 4.0

Quality: 7.5

Yield: 9.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Timbercreek Financial

A-Score: 6.6/10

Value: 5.8

Growth: 3.7

Quality: 5.8

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Greystone Housing Impact Investors

A-Score: 6.3/10

Value: 7.0

Growth: 4.2

Quality: 6.4

Yield: 10.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.67$

Current Price

6.67$

Potential

-0.00%

Expected Cash-Flows