Business
MCAN Mortgage Corporation Reports Third Quarter Earnings and an Increase in the Quarterly Dividend
TSX: MKP TORONTO, Nov. 8, 2012 /CNW/ - MCAN Mortgage Corporation's ("MCAN", the "Com...
About this update from Mcan Mortgage Corporation
[{"type":"text","content":"\n\n\n\n\n\nTSX: MKP \n\n\nTORONTO, Nov. 8, 2012 /CNW/ - MCAN Mortgage Corporation's (\"MCAN\", the\n \"Company\" or \"we\") net income for the third quarter of 2012 decreased\n to $3.5 million from $7.6 million in 2011, although estimated taxable\n income for the quarter was $4.8 million ($0.27 per share) compared to\n $4.5 million ($0.27 per share) in the prior year.  The decrease in net\n income was primarily due to a significant negative fair market value\n adjustment to derivative financial instruments in the current quarter,\n partially offset by a recovery of income taxes. Earnings per share were\n $0.19 for the quarter compared to $0.45 in the prior year.\n\n\nFor the year to date, net income was $14.2 million, down from $21.9\n million in the prior year as a result of the reasons noted above for\n the quarter.  However, estimated taxable income for the year to date\n was $19.1 million ($1.11 per share) compared to $14.4 million ($0.91\n per share) in the prior year. For the year to date, earnings per share\n were $0.82 compared to $1.38 in the prior year.\n\n\nThe key differences between estimated taxable income and pre-tax net\n income for accounting purposes include the non-deductibility of fair\n market value adjustments, collective provisions for credit losses and\n the amortization of upfront Canada Mortgage Bonds (\"CMB\") program costs\n for tax purposes, the treatment of capital gains income, and\n differences between equity income from MCAP Commercial LP (\"MCAP\") for\n accounting and tax purposes.  As a mortgage investment corporation\n (\"MIC\"), we typically pay out all of our taxable income to shareholders\n through dividends.\n\n\nDuring the quarter, the Company successfully completed a fully\n subscribed rights offering that raised net proceeds of $20 million with\n 1,699,157 new common shares issued. This resulted in additional asset\n capacity of $115 million based on our target assets to capital ratio of\n 5.75, which is measured on a tax basis. As at September 30, 2012, we\n had remaining asset capacity of $95 million.\n\n\nWe separate our assets into corporate and securitization portfolios for\n reporting purposes.  Corporate assets represent our core strategic\n investments, and are funded by term deposits and share capital. \n Securitization assets consist primarily of mor...