Business
MCAN Mortgage Corporation reports fourth quarter earnings
Stock market symbol TSX: MKP TORONTO, March 1, 2013 /CNW/ - MCAN Mortgage Corporatio...
About this update from Mcan Mortgage Corporation
[{"type":"text","content":"\n\n\n\n\n\nStock market symbol\nTSX: MKP\n\n\nTORONTO, March 1, 2013 /CNW/ - MCAN Mortgage Corporation's (\"MCAN\", the\n \"Company\" or \"we\") net income for the fourth quarter of 2012 was $7.3\n million, up from $5.2 million in the prior year. Earnings per share\n were $0.40 compared to $0.30 during the same quarter in the prior year.\n The increase from the prior year was due to increases in equity income\n from MCAP Commercial LP (\"MCAP\"), income from securitization assets and\n a higher recovery of income taxes, partially offset by an increase in\n operating expenses.\n\n\nNet income for the year ended December 31, 2012 decreased to $21.5\n million from $27.1 million in 2011, while earnings per share were $1.22\n in the current year compared to $1.68 in the prior year.  Return on\n equity for the year was 13.0% compared to 18.5% in 2011.\n\n\nTaxable income for the quarter decreased significantly in the current\n year to $1.4 million ($0.06 per share) from $8.5 million ($0.51 per\n share) in the prior year.  Further details regarding current quarter\n taxable income are discussed below.  Taxable income for the year ended\n December 31, 2012 was $20.5 million ($1.17 per share), down from $22.9\n million ($1.42 per share) in 2011.\n\n\nThe key differences between taxable income and pre-tax net income for\n accounting purposes include the non-deductibility of fair market value\n adjustments, collective provisions for credit losses and the\n amortization of upfront Canada Mortgage Bonds (\"CMB\") program costs for\n tax purposes, the treatment of capital gains income, and differences\n between equity income from MCAP for accounting and tax purposes.  As a\n mortgage investment corporation (\"MIC\"), we typically pay out all of\n our taxable income to shareholders through dividends.\n\n\nWe earned $4.3 million of equity income from our investment in MCAP\n during the fourth quarter, primarily due to a high volume of mortgage\n securitization by MCAP during that period and increases to income\n resulting from mortgages measured at fair value.  For tax purposes,\n equity income from MCAP related to mortgage securitizations is\n recognized in line with actual cash flows, such that a tax loss is\n incurred up front as program costs are paid while interest income is\n earned over the term of the mortgage ...