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Disclosure: Bullpen receives compensation from Timbercreek Financial for research coverage. Timbercreek is also a current IR client of LodeRock Advisors, an affiliate of Bullpen.
Timbercreek Financial
TSX: TF
YTD: 9% 3Y: 8% 5Y: 7%
Last updated: 09/04/2026
$480M
Market Cap.
$1.1B
Net Mortgages
7.6%
WAIR
68%
Loan-to-Value
48%
Leverage Ratio
11.9%
Dividend Yield
A proven mortgage investor…
Timbercreek Financial is an alternative lender focused on providing shorter-term bridge financing (typically around two years) to real estate investors in a transitional phase (property redevelopment, repairs, etc.). The company has a $1.1B net mortgage portfolio today, with the following characteristics:
Multi-residential focus
Multi-residential lending represents over 60% of the book, with retail and industrial sitting at roughly 10% each. The company has limited exposure to more challenging categories like office.
Core market exposure
Nearly all the company’s mortgage investments are in Ontario, Quebec, British Columbia, and Alberta.
Conservative underwriting
Timbercreek takes a conservative approach to underwriting with 94% of its book in the first mortgage, 81% tied to income-producing assets, and a 68% loan-to-value ratio (LTV).
… trading at an attractive valuation…
Stemming from the rapid rise in interest rates post-pandemic, Timbercreek is working through abnormally high staged loan balances. We believe the market has mispriced this risk, creating a compelling opportunity on two fronts:
Book value discount
Timbercreek currently trades at below 0.8x book value, reflecting a market expectation for over $150M of loan impairments. We believe that expectation is far too pessimistic and will correct as staged loans are resolved through the year.
Elevated dividend yield
At its current 11.9% dividend yield, TF pays a ~9% spread over two-year GoC bonds and is competitive with less liquid private real estate funds. TF has shown distributable income consistency through the cycle.
… with upside from capital recycling.
Because the current staged loan balance is underearning, there should be upside in earnings and DI as resolutions are reached and capital gets redeployed – potentially creating conditions for special dividends in the future.
Capital returned
Assuming a return to 7% staged loans (long-term average) we expect TF to get back $150M+, based on a recovery rate of ~80%.
Redeployment impact
Assuming a delta of 500 bps between the effective equity yield of staged loans and the equity yield of performing loans, we expect an EPS tailwind of $0.05+, all else equal.
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