Mcan Mortgage Corporation · TSX:MKP
Mcan Mortgage — Q3 2021 Earnings Presentation
27 slides from Mcan Mortgage's earnings presentation, Nov 5, 2021
Slide 1: Investor Presentation | Q3 2021
INVESTOR PRESENTATION | Q3 2021 November 5, 2021
Slide 2: MCAN at-a-glance: September 30, 2021
MCAN at-a-glance: September 30, 2021 $3.6B Total Assets $498M Market Capitalization* Net Income 132% Increase YoY Residential Single-Family Commercial and Lending Construction Lending Return on 17.4% Equity* YTD $714M Total Uninsured portfolio** $740M Total portfolio $1.5B Total Insured securitized
Slide 3: Forward-looking Information
Forward-looking Information This presentation may contain forward-looking information within the meaning of applicable Canadian securities laws, including statements regarding the business and anticipated financial performance of MCAN Mortgage Corporation and its subsidiaries. These statements are b
Slide 4: Leadership Team
Leadership Team The Senior Executive Leadership team has 120 years in collective experience in financial services and real estate. On average, the team has 8 years of experience at MCAN. Karen Weaver President and Chief Executive Officer Floriana Cipollone Carl Brown Avish Buck VP and Chief Financia
Slide 5: Our vision and mission
Our vision is to be the preferred mortgage lender and investor within our chosen real estate markets in Canada. Our mission every day is to provide sustainable growth and returns for all our stakeholders • through relationship-driven mortgage lending and investing; • by delivering quality work throu
Slide 6: Business Model
Business Model Established 1991, regulated by OSFI, and structured as a flow-through MIC1 which enables the deduction of dividends from taxable income. Being a MIC requires (1) 67% of non-consolidated tax assets to be held in residential mortgages and cash and (2) maintaining an income tax asset to
Slide 7: Diversified Quality Mortgages and Other Investments
Diversified Quality Mortgages and Other Investments Mortgage Portfolio and Other Investments $2.0B Total Residential Single-Family Corporate Mortgages Assets (incl. $1.9B Mortgage Portfolio and Other Investments) $3.6B Total Assets (incl. $1.5B Securitization Portfolio) • 13.9 months average term to
Slide 8: Residential Single-Family Lending
Residential Single-Family Lending Products Residential Single-Family • Purchases, refinances and renewals Mortgages ($917M) • Insured mortgages (typically 5-year term) ⚬ Strategy of securitizing insured mortgages ⚬ Uninsured mortgages (typically 1-year term) Borrower Profile • Focus on first time/ f
Slide 9: Commercial and Construction Lending
Commercial and Construction Lending Products • Lending on the construction of affordable housing in urban/suburban growth markets with a preference for proximity to transit • Select commercial term and inventory loans • Primarily first mortgage positions • Presales and other prudent loan structuring
Slide 10: Investments
Investments Marketable Securities • Diversified REIT portfolio held for investment and capital appreciation, with periodic recycling of capital Non-Marketable Securities • Non-marketable securities in various real estate development and mortgage funds/instruments, including ($95M) KingSett High Yiel
Slide 11: Liability Funding
Liability Funding TERM DEPOSITS • Since 1993 • $1.61 billion at September 30, 2021 • Non-redeemable prior to maturity1 • 19.9 months average term to maturity • Eligible for CDIC insurance coverage OTHER FUNDING SOURCES AND CAPITAL • Securitization of insured single-family mortgages via CMHC securiti
Slide 12: 10-Year History
10-YEAR HISTORY
Slide 13: Net Income and Earnings Per Share
Net Income and Earnings Per Share $48.3M Net Income YTD 2021 1.84 $1.84 EPS YTD 2021 • Data presented at September 30, 2021
Slide 14: Capital History
Capital History $14.26 Q3 2021 book value per share* * Non IFRS measure as defined in MCAN’s Q3 2021 MD&A
Slide 15: Dividends
Dividends 0.85 Paying 0.33 dividends 0.03 $0.85 since 1992 1.43 1.36 1.31 1.28 1.09 1.12 1.12 1.13 1.17 1.02 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD Q3 2021 Regular Dividend per Share Special Stock Dividend per Share Extra Cash Dividend per Share
Slide 16: Q3 2021
Q3 2021
Slide 17: Key Performance Indicators
Key Performance Indicators * Non-IFRS measure as defined in MCAN’s Q3 2021 MD&A
Slide 18: Mortgage Portfolio
Mortgage Portfolio Mortgages - Corporate and Securitization ($M)
Slide 19: Q3 2021 Balance Sheet Highlights
Q3 2021 Balance Sheet Highlights QoQ Q3 2021 Q2 2021 Q1 2021 Q4 2020 Uninsured Originations $165 million $147 million $105 million $113 million Insured Originations $202 million (+$56 million $157 million $210 million $218 million sold) Uninsured Balance** $714 million $617 million $533 million $483
Slide 20: Earnings Highlights
Earnings Highlights The board declared a third-quarter cash dividend of $0.34 per share and conforms with OSFI's current restriction on increasing cash dividends in effect since March 2020. Trend QoQ Q3 2021 Q3 2020 Trend YoY YTD Q3 2021 YTD Q3 2020 Spread of Corporate Mortgages over Term 2.77% 2.63
Slide 21: Portfolio Credit Quality
Portfolio Credit Quality No cash losses have been taken on MCAN’s Construction Lending portfolio during this time period, which is a testament to our approach to lending. Impaired Mortgages* 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2014 2015 2016 2017 2018 2019 2020 Q3 2021
Slide 22: Portfolio Quality and Lending Criteria
Portfolio Quality and Lending Criteria Corporate Mortgage Portfolio Geographic • Prudent risk management Distribution Average practices emphasize the quality corporate mortgage term to and diversification of our maturity (months) lending activities 13.9 • Concentration by asset class, geographic reg
Slide 23: Environmental, Social, Governance
ENVIRONMENTAL, SOCIAL, GOVERNANCE
Slide 24: ESG Strategic Highlights
ESG Strategic Highlights Our values and culture are rooted in our people, and we are committed to responsible environmental, social and governance practices, with focus on: • Partnering with real estate developments committed to responsible corporate citizenship • Sourcing lending opportunities supp
Slide 25: Recent Announcements
Recent Announcements Rights Offering oversubscribed by 2.96 times
Slide 26: Board of Directors
Board of Directors Brian W. Chu John E. Coke Glenn Doré Philip Gillin Gordon Herridge Gaelen J. Morphet Derek Sutherland Karen Weaver
Slide 27: Contact
CONTACT MCAN Mortgage Corporation 200 King Street West, Suite 600 Toronto, ON M5H 3T4 (416) 572-4880 | mcanexecutive@mcanmortgage.com | mcanmortgage.com