Xceed Mortgage Corporation Reports First Quarter 2012 Results

    




 TORONTO, March 8, 2012 /CNW/ - Xceed Mortgage Corporation [TSX: XMC]  ("Xceed" or the "Company") today reported its first quarter results for  the three month period ended January 31, 2012. 

 THE RESULTS OF THE FIRST 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 first quarter: 




        --  Net income of $0.3 million for the 3 months ended January 31,
            2012.
        --  Basic and diluted earnings per share of $0.01.
        --  Return on equity of 2.6%.
        --  Book value per share of $1.97 as at January 31, 2012.

        --  Net income before tax from ongoing operations (ie. excluding
            the Company's legacy trust operations that are in wind down)
            was $0.9 million demonstrating profitability within Xceed's
            core operating business.
        --  In Q1, 2012, the Company entered into a sale agreement with a
            financial partner for uninsured mortgages.  This arrangement
            enables the Company to renew uninsured mortgages, and then sell
            them to the financial partner, for onward sale to third party
            investors.  These mortgages are sold on a whole loan basis by
            the Company with ultimate proceeds of sale shared equally with
            the financial partner.  In Q1, 2012, the Company originated and
            sold $3.1 million of mortgages under this new arrangement.
        --  The Company's primary source of revenue continues from the sale
            of pools of insured mortgages to third parties.  In Q1, 2012,
            the company sold $29.7 million of insured mortgages for a net
            gain of $1.2 million and the Company continues to develop its
            presence in the broker channel for this asset class signing new
            brokers on a daily basis.




 One of the impacts, as at January 31, 2012, of converting the Company's  financial reporting to IFRS is the consolidation of the financial  results of Xceed Mortgage Trust 2 ("XMT2") to which the Company sold  mortgages. 

 Because XMT2 trust has a deficit of $7.3 million as at January 31, 2012  (which deficit will be borne by the trust's subordinated note holder  once the trust is finally dissolved), the consolidation of the trust  results in Xceed reducing its consolidated equity by the amount of the  trust's deficit.  This reduction will reverse in the quarter XMT2 is  finally dissolved and the loss taken by the note holder. 

 The Company has filed its financial statements and management's  discussion and analysis for 2011 with 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. 

 Management Comments on Results 

 "During the first quarter of fiscal 2012, management continued to focus  on the ongoing repayment and refinancing of its legacy uninsured  mortgage portfolios", said Michael Jones, President & CEO. 

 "To assist with this, we entered into a sale agreement with a third  party financial institution, whereby maturing mortgages can be renewed  for terms up to three years and then sold to an investor", Mr. Jones  continued. 

 "The Company also continued to redevelop its presence in the mortgage  broker channel for insured residential mortgages." he concluded. 

 Annual General Meeting 

 As a reminder, the Company will be holding its Annual General Meeting of  shareholders today at 2pm at the Novotel Hotel Toronto (located at 45  The Esplanade). 

 Investor Inquiries  

 Michael Jones, President and Chief Executive Officer, and Jeff Bouganim,  Chief Financial Officer will be available from Thursday, March 8, 2012  onwards to respond to investor inquiries regarding these results. 

  





    Michael Jones can be reached at:

            Telephone: [phone] Ext.3434 
            E-mail: [e-mail]

     

    Jeff Bouganim can be reached at:

            Telephone: [phone] Ext.3335 
            E-mail: [e-mail]






  

 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 $1.0 billion of mortgages and other assets under  administration.  The company's shares are traded on the Toronto Stock  Exchange .  To find out more about Xceed Mortgage  Corporation, visit our website at www.xceedmortgage.com. 

 Forward-Looking Statements 

 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. 


   

Xceed Mortgage Corporation


CONTACT:  Michael Jones can be reached at:Telephone: [phone] Ext.3434 E-mail: [e-mail] Bouganim can be reached at:Telephone: [phone] Ext.3335 E-mail: [e-mail] 


    

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