Xceed Mortgage Corporation Reports Fiscal 2011 Third-Quarter Financial Results

TORONTO, Sept. 8, 2011 /CNW/ - Xceed Mortgage Corporation [TSX: XMC], a Canadian provider of residential mortgages, today announced its financial results for the third quarter of fiscal 2011 ended July 31, 2011.

  • The company reported $1.7 million net loss for the current quarter, as compared with net income of $0.7 million in the second quarter of 2011, net income of $0.05 million in the first quarter of 2011 and net income of $1.4 million in the third quarter of 2010.

  • Results included a $1.7 million one-time pre-tax expense reflecting the company's settlement agreement with HSBC Financial Corporation Limited and its related parties ending all outstanding litigation between the two companies.

  • The company also announced that as at August 5, 2011, an agreement was reached between the QSPE-XCD Trust and its note holders to provide the company an opportunity to invest in senior subordinated  notes of the trust.  On August 17, 2011, the company invested $8.3 million, previously held in an escrow account, and an additional $2.3 million in these notes.  In the current quarter, Xceed has accrued a one-time expense of $0.4 million pre-tax for a payment to the trust in part exchange for finalizing this transaction.

  • The company also reported an overall increase in liquidity this quarter.  Cash and cash equivalents as at July 31, 2011 was $10.6 million increased from $6.0 million as at October 31, 2010 and $4.0 million as at July 31, 2010.  This liquidity improvement is consistent with the company's strategic objective of maximizing value to shareholders through the ongoing pay down of legacy securitized portfolios into other more liquid assets.

  • In the quarter, the company launched its Registered Education Savings Plan PREP mortgage which offers a reduced rate on funds borrowed towards a contribution to an existing Registered Education Savings Plan promoting saving for post-secondary education.

  • In the current quarter, the company launched a balance sheet renewal program on a 1 year term with open prepayment options providing clients the opportunity to transition to new mortgage products.

  • The company continues to originate through its Internal Sales group to offer renewals, refinancings, and originations to both existing clients and the company's "friends and family program."

  • Mortgage and other assets under administration are $1.2 billion as at July 31, 2011.

"While this quarter's results include the noted one-time items, we believe the company is now well-positioned financially to capitalize on new future opportunities" said Michael Jones, President and CEO.

Xceed has filed its financial statements and management's discussion and analysis for the third quarter of 2011 with SEDAR and they are also posted on the company's website.  These filings provide additional details on the above noted items along with additional information regarding results for the quarter and cautions regarding forward-looking statements.  The materials can be accessed by clicking here.

Investor Inquiries

Michael Jones, President and Chief Executive Officer, and Jeff Bouganim, Chief Financial Officer will be available from Thursday, September 8 onwards to respond to investor inquiries regarding these results.

Transfer Agent Change

Effective September 26, 2011, the company will change its share transfer agent to Equity Financial Trust. Shareholders with questions regarding their shares may contact them by e-mail at investor@equityfinancialtrust.com or by telephone at 416-361-0152 and ask for Investor Services.

About Xceed Mortgage

Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of residential mortgages that it originates in Canada.  The company has approximately $1.2 billion of mortgages and other assets under administration.  Xceed's shares are traded on the Toronto Stock Exchange (TSX: XMC).  To find out more about Xceed Mortgage Corporation, visit our website at www.xceedmortgage.com.

SOURCE Xceed Mortgage Corporation

For further information:

Michael Jones can be reached at:
  Telephone: (416) 364-7944 Ext.3434 
  E-mail: MJones@XceedMortgage.com
Jeff Bouganim can be reached at:
  Telephone: (416) 364-7944 Ext.3335 
  E-mail: JBouganim@XceedMortgage.com


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Xceed Mortgage Corporation

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