TORONTO, Sept. 6, 2012 /CNW/ - Xceed Mortgage Corporation [TSX: XMC] ("Xceed" or the "Company") today reported its third quarter results for the three and nine month period ended July 31, 2012.
The results of the quarter were prepared using International Financial Reporting Standards ("IFRS"), with a transition date of November 1, 2011. Consequently, prior period comparative results, the information contained in this news release, the Company's Management Discussion & Analysis and financial statements have all been restated to conform with IFRS requirements.
The following are highlights of the third quarter:
- Net income after tax of $8.3 million for both the 3 month and 9 month periods ended July 31, 2012.
- Results include a one-time gain of $8.6 million recognized as a result of the early clean-up call of Xceed Mortgage Trust ("XMT 2") announced on July 17, 2012.
- Basic and diluted earnings per share of $0.31 and $0.29 for the third quarter of fiscal 2012.
- Basic book value per share of $2.26 as at July 31, 2012, increased from $1.96 as at April 30, 2012, primarily due to the above noted one-time gain. Diluted book value per share of $2.10 as at July 31, 2012.
- The Company's primary source of revenue continues to be from the sale of pools of insured mortgages to third parties. In Q3, 2012, the Company sold $21.8 million of insured mortgages for a net gain of $0.4 million (compared to selling $15.4 million for a net gain of $0.2 million in Q3, 2011). The Company continues to expand its broker channel presence and insured product offerings in those channels.
Management Comments on Results
Mr. Michael Jones, President and CEO, commented that "during the third quarter, we executed an early clean-up of XMT 2 trust as part of the Company's objective of winding down its legacy securitized mortgage portfolio."
"The XMT 2 clean-up call, resulted in a return of cash to the Company of $4.5 million, $3.1 million of which was used to repurchase existing mortgages from the trust. Additionally, D-note holders of XMT 2 were repaid approximately $4.4 million and E-note holders were repaid approximately $10.7 million using proceeds from the mortgages purchased by the Company and funds in the cash collateral account of the Trust," Mr. Jones commented.
"As a result of the conversion to IFRS effective November 1, 2010, the Company was required to consolidate the financial results of the trust including a deficit in the amount of $8.2 million that represented losses on E notes. It was always anticipated that the effect of this consolidation would be reversed at the point the trust was wound up with no economic effect on Xceed, either positive or negative.
The Company's basic book value per share was $2.26 as at July 31, 2012 compared with $1.96 as at April 30, 2012.
In its operations this quarter, the Company continued to expand its broker channel presence and experienced a slight upward trend in origination volumes," Mr. Jones noted.
The Company has filed its financial statements and management's discussion and analysis on SEDAR and they will be 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 at www.sedar.com or on the Company's website at www.xceedmortgage.com.
Michael Jones, President and Chief Executive Officer, and Jeff Bouganim, Chief Financial Officer will be available from Thursday, September 6, 2012 onwards to respond to investor inquiries regarding these results.
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 $0.8 billion of mortgages under administration. The Company'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.
Forward-looking statements in this document are based on current expectations that are subject to significant risks and uncertainties. Actual results might differ materially due to various factors such as the competitive nature of the mortgage industry, the ability of the Company to continue to execute its growth and development strategy, and the reliance of the Company on key personnel. The Company and the Company's management assume no obligation to update these forward-looking statements, or to update the reasons why actual results could differ from those reflected in these. Additional information identifying risks and uncertainties is contained in the company's regulatory filings available on its website and at www.sedar.com.
SOURCE: Xceed Mortgage Corporation
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