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Terra Firma Capital Corporation Reports Results for the First Quarter Ended March 31, 2014

-- 62% Increase in Top Line Revenue Over Last Year

TORONTO, ONTARIO -- (Marketwired) -- 05/21/14 -- All amounts are stated in Canadian dollars -

Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the "Company"), a real estate finance company, today released its financial results for the three months ended March 31, 2014.

FIRST QUARTER 2014 HIGHLIGHTS:

--  Total revenue in the first quarter is $2.7 million, an increase of $1.0
    million or 62%, as compared to the same period in the prior year. 
    
--  Net income and comprehensive income in the first quarter is $618,000, an
    increase of $353,000 or 133%, compared to the first quarter of 2013. 
    
--  Earnings per share is $0.02 per basic and diluted share, compared to
    $0.01 per basic and diluted share, an increase of 100% from the same
    quarter in the prior year. 
    
--  Total assets increased by 28% to $73.0 million from $57.1 million at
    March 31, 2013. 

"I am pleased to report another strong quarter of growth as we begin 2014 on a solid footing," commented Y. Dov Meyer, President and Chief Executive Officer. "Loan originations for Q1 2014 and our current pipeline eclipse our investment activity for the same period last year. As a result we anticipate continued growth in revenue and earnings through the balance of 2014. I am encouraged that subsequent to quarter end, our capital markets initiatives resulted in analyst coverage on the company," concluded Mr. Meyer.

Results of operations - three months ended March 31, 2014

Net income in the first quarter ended March 31, 2014 was $618,000 or $0.02 per basic and diluted share, compared to $265,000, or $0.01 per basic and diluted share, in the first quarter ended March 31, 2013.

Interest and fee income for the first quarter ended March 31, 2014 aggregated $2.6 million, an increase of 65% over the $1.6 million in the same period in the previous year, and slightly down from the $3.0 million in the fourth quarter ended December 31, 2013 due to timing of certain income recorded in 2013. Interest and fees in the fourth quarter ended December 31, 2013 included prepayment penalty, which resulted a $92,000 increase in fee income.

Interest expense for the first quarter ended March 31, 2014 was $1.5 million, compared to $937,000 for the comparative period last year and $1.6 million for the fourth quarter ended December 31, 2013.The Company's loan and mortgage investments increased from $55.3 million at December 31, 2013 to $56.3 million at March 31, 2014, an increase of 2%. The total value of loan and mortgage investments originated in the first quarter ended March 31, 2014 was $9.4 million compared to $13.4 million originated in the first quarter ended March 31, 2013.The average interest rate in the mortgage portfolio at March 31, 2014 was 18.8% compared to 18.6% at December 31, 2013.

The Company's Management's Discussion & Analysis and Financial Statements as at and for the three months ended March 31, 2014 have been filed and are available on SEDAR (www.sedar.com).

About Terra Firma

Terra Firma is a full service, publicly traded real estate finance company that provides customized equity and debt solutions to the real estate industry. Our focus is to arrange and provide financing with flexible terms to property owners looking to improve or add to their existing real estate assets but who may be limited by conventional bank financing, as well as to invest in quality commercial and residential developments by proven real estate developers. Terra Firma offers a full spectrum of real estate financing under the guidance of strict corporate governance, clarity and transparency. For further information please visit Terra Firma's website at www.tfcc.ca.

The TSXV has neither approved nor disapproved the contents of this press release. The TSXV does not accept responsibility for the adequacy or accuracy of this press release.

This Press Release contains forward-looking statements with respect matters concerning the business, operations, strategy and financial performance of Terra Firma. These statements generally can be identified by use of forward looking word such as "may", "will", "expects", "estimates", "anticipates", "intends", "believe" or "could" or the negative thereof or similar variations. The future business, operations and performance of Terra Firma could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Additional, important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, local real estate conditions, competition, changes in government regulation, dependence on tenants' financial conditions, interest rates, the availability of equity and debt financing, environmental and tax related matters, and reliance on key personnel. There can be no assurances that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The cautionary statements qualify all forward-looking statements attributable to Terra Firma and persons acting on its behalf. Unless otherwise stated, all forward looking statements speak only as of the date of this Press Release and Terra Firma has no obligation to update such statements except as required by law.

                                                                            
Terra Firma Capital Corporation                                             
Consolidated Statements of Income and Comprehensive Income                  
For the three months ended March 31, 2014 and 2013                          
(Unaudited)                                                                 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                          Three months ended
                                                    March 31,      March 31,
                                                         2014           2013
----------------------------------------------------------------------------
Revenue                                                                     
  Interest and fees                             $   2,620,540  $   1,586,215
  Rental                                              115,437        107,096
----------------------------------------------------------------------------
                                                    2,735,977      1,693,311
Expenses                                                                    
  Property operating costs                             42,076         47,615
  General and administrative                          354,517        367,163
  Share based compensation                             12,608              -
  Interest                                          1,478,919        937,412
----------------------------------------------------------------------------
                                                    1,888,120      1,352,190
                                                                            
Income from operations before income taxes            847,857        341,121
                                                                            
Income taxes                                          229,648         75,776
                                                                            
----------------------------------------------------------------------------
Net income and comprehensive income             $     618,209  $     265,345
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Earnings per share                                                          
  Basic                                         $        0.02  $        0.01
  Diluted                                       $        0.02  $        0.01
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
Terra Firma Capital Corporation                                             
Consolidated Statements of Financial Position                               
As at March 31, 2014 and December 31, 2013                                  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                    March 31,   December 31,
                                                         2014           2013
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
                                                                            
Cash and cash equivalents                       $   5,684,469  $   7,721,115
Funds held in trust                                   486,336        383,526
Amounts receivable and prepaid expenses             1,844,161      1,661,352
Loan and mortgage investments                      56,338,050     55,278,303
Investment properties                               7,686,666      7,671,452
Portfolio investment                                  954,073        954,073
----------------------------------------------------------------------------
Total assets                                    $  72,993,755  $  73,669,821
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities                                                                 
                                                                            
Accounts payable and accrued liabilities        $   1,678,788  $   1,366,708
Provision for discontinued operations                 290,155        321,490
Unearned income                                       372,145        472,924
Income taxes payable                                  182,576         82,375
Deferred income taxes                                  12,786          6,348
Loans and mortgages payable                        44,968,242     46,569,921
Convertible debentures                             10,133,265     10,125,074
----------------------------------------------------------------------------
Total liabilities                                  57,637,957     58,944,840
----------------------------------------------------------------------------
                                                                            
Shareholders' Equity                                                        
                                                                            
Share capital                                   $  10,795,790  $  10,795,790
Contributed surplus                                   603,962        603,962
Retained earnings                                   3,756,046      3,125,229
----------------------------------------------------------------------------
Total shareholders' equity                         15,155,798     14,524,981
----------------------------------------------------------------------------
                                                                            
Non-controlling interest                              200,000        200,000
                                                                            
----------------------------------------------------------------------------
Total liabilities and Shareholders' Equity      $  72,993,755  $  73,669,821
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Contacts:
Terra Firma Capital Corporation
Y. Dov Meyer
President and Chief Executive Officer
416.792.4709
[email protected]

Spinnaker Capital Markets Inc.
Ali Mahdavi
Managing Partner
416.962.3300
[email protected]

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