Timbercreek Financial Corp.

As a reminder, today's call is being recorded. I would now like to turn the meeting over to Blair Chamberlain. Please go ahead.

Thank you, Operator. Good afternoon, everyone. Thanks for joining us to discuss the third quarter financial results today. I'm joined as usual by Scott Rowland, CIO, Tracy Johnson, CFO, and Jack McTate, Head of Canadian Originations and Global Syndications. With respect to portfolio growth, which we've been communicating on regularly, we're up by approximately 50 million years to date, with an expectation that will increase by year end. Looking at Q3 specifically, transaction activity, while solid, was mildly behind our expected pace, as the residual effects of the macro uncertainty we discussed in recent quarters continues to play out. As Jeff will elaborate on, we're pleased with the pipeline in general, although a few material commitments expected to fund in Q3 did push into Q4. Combined with a large unexpected repayment, this brought the overall portfolio down modestly from Q2. The Q3 spillover volume, in conjunction with strong Q4 commitments and additional pipeline volume, should still generate the portfolio growth we anticipated for the full year and result in higher revenue. To put a finer point on this, we've had more than $200 million of funded and committed deals so far in Q4. Our overall optimism continues to reflect improved market conditions as recalibrated commercial real estate valuations and a reduced interest rate environment have set the foundation for a new real estate cycle. In short, the conditions are favorable for a period of sustained strong transaction activity. We upsize the credit facility with this outlook in mind. Given these factors, the third quarter financial performance was mixed. Net investment income was steady at $25.4 million. DI was modestly below last quarter at 17 cents per share, partly reflecting the constraints on new investment activity in the quarter as mentioned. This drove a higher payout ratio in this quarter. As we've said before, the payout ratio will move around during the year and then settle in our targeted range for the full year. We expect to deliver full year results in this range based on a higher activity levels in Q4. Lastly, we continue to demonstrate progress with the remaining stage loans as we return this balance back to the historical levels. In the remaining stage loan, the revaluation of two investments drove a higher ECL in this quarter, which lowered our reporting earnings in the period. Scott will expand on this in his remarks. In summary, I would reiterate our confidence in the continued ability to deliver stable monthly income through a conservative strategy grounded in income producing assets. Our core objective is to deliver strong risk adjusted returns primarily comprised of distributions for our investors, a goal we've consistently met over the long term. One key indicator of this performance is our 10-year IRR, which today stands around 7.8%. This track record reflects our disciplined approach and ability to navigate evolving market dynamics. I will now ask Scott to cover the portfolio review. Scott?

Thanks, Blair, and good afternoon. I'll quickly cover the portfolio metrics and provide a brief update on key developments with the stage loans. And Jeff will comment on the originations activity and lending environment. Looking at portfolio KPIs, most were consistent with recent periods and historical performance. At quarter end, 82% of our investments were in cash flowing properties. Multi-residential real estate assets continue to comprise the largest portion of the portfolio at roughly 57%. First mortgages represented 94% of the portfolio. The weighted average LTV for Q3 was 67.9%, which is up a bit from recent quarters. We've previously communicated that we expect LTV to tick higher in 2025 as we lean into the market with reset asset valuations. And we are seeing that. We continue to be very comfortable in this range in this economic environment. The portfolio's weighted average interest rate was 8.3% in Q3 versus 8.6% in Q2 and 9.3% in Q3 last year. The decrease reflects the Bank of Canada's policy rate cuts, bringing the where closer to a long-term average of roughly 8%. The rates coming down, we're seeing a corresponding decrease in interest expense on the credit facility, supporting a healthy net interest margin. The portfolio where is also protected by the high percentage of floating rate loans with rate floors above 85% of the portfolio at quarter end. Roughly 93% of the loans with floors are currently at the rate floors. In terms of asset allocation by region, there were no major shifts to highlight with approximately 92% of the capital invested in Ontario, BC, Quebec and Alberta and focused on urban markets. From an asset management perspective, we resolved close to 19 million in stage two loans since our last earnings call. More recently, we provided an update on the Stephen Avenue Place office asset in Calgary. As we disclosed, we applied for the court appointment of a receiver on behalf of the syndicate of secured creditors, following the termination of a forbearance period with the borrower. This is the next step on the path to realization and to protect the interest of all stakeholders in the property. As a reminder, Timber Creek holds approximately 11% interest in this loan on a peri-pursue basis with other lenders. Revaluation of this asset was the largest contributor to an ECL increase of $5.9 million in the quarter. The $3 million related to this exposure and $2.1 million related to the Vancouver retail portfolio slated for redevelopment into multifamily. Both revaluations were driven by current market appraisals reflect the overall challenges in their respective markets. We are actively working toward the resolution and monetization of the outstanding stage loans and continue to advance the remaining files. While few challenges remain, we expect to see further progress over the coming quarters with the expectation of ultimately returning this portion of the portfolio to historical norms. Ultimately, the redeployment of this capital into more profitable loans will be a significant tailwind for revenue growth. I'll now ask Jeff to comment on the transaction activity in the portfolio.