Mcan Mortgage Corporation · TSX:MKP
Mcan Mortgage — Q4 2021 Earnings Presentation
30 slides from Mcan Mortgage's earnings presentation, Feb 23, 2022
Slide 1: Investor Presentation | Q4 2021
INVESTOR PRESENTATION | Q4 2021 February 23, 2022
Slide 2: MCAN at-a-glance: December 31, 2021
MCAN at-a-glance: December 31, 2021 $3.8B Total Assets $510M Market Capitalization 50% Net Income Increase YoY Residential Single-Family Commercial and Lending Construction Lending 16.9%1 Return on Average Shareholders’ Equity $783M Total Uninsured portfolio* $777M Total portfolio $1.6B Total Insure
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: Senior Leadership Team
Senior Leadership Team The Senior Executive Leadership team has over 100 years in collective experience in financial services and real estate. On average, the team has over 5 years of experience at MCAN. Carl Brown Karen Weaver VP Investments President and Chief Executive Officer Since joining MCAN
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 MCAN’s purpose is to provide sustainable growth and returns for all our shareholders by leveraging our real estate expertise and providing our shareholders with unique access to investments in the Canadian real estate market. Also, uniquely structured as a flow-through Mortgage Invest
Slide 7: Diversified Quality Mortgages and Other Investments
Diversified Quality Mortgages and Other Investments Mortgage Portfolio and Other Investments $2.2B Total Corporate Assets (incl. $2B Mortgage Portfolio and Other Investments) $3.8B Total Assets (incl. $1.6B Securitization Portfolio) • 13 months average term to maturity of the corporate mortgage port
Slide 8: Residential Single-Family Lending
Residential Single-Family Lending PRODUCTS • Purchases, refinances and renewals Residential Single-Family Mortgages1 • Insured mortgages (typically 5-year term) ($1B) ⚬ Strategy of securitizing insured mortgages ⚬ Fixed and adjustable-rate mortgages ⚬ Uninsured mortgages (typically 1-year term) BORR
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 KingSett High Equity inve
Slide 11: Liability Funding
Liability Funding TERM DEPOSITS • Since 1993 • $1.66 billion at December 31, 2021 • Non-redeemable prior to maturity1 • 18.5 months average term to maturity • Eligible for CDIC insurance coverage OTHER FUNDING SOURCES AND CAPITAL • Securitization of insured single-family mortgages via CMHC securitiz
Slide 12: 10-Year History
10-YEAR HISTORY
Slide 13: Net Income and Earnings Per Share
Net Income and Earnings Per Share $64.4M 2021 Net Income $2.40 2021 EPS
Slide 14: Capital History
Capital History $14.63 1 Q4 2021 Book Value per Common Share 1 1Considered to be a non-GAAP and other financial measure. For further details, refer to the "Non-GAAP and Other Financial Measures" section of this investor presentation. Non-GAAP and other financial measures and ratios used in this docu
Slide 15: Dividends
Declared Q1 2022 Dividends $0.36/share cash dividend and $0.97/share Paying dividends since 1992 special stock dividend 0.85 0.33 $0.85 0.03 1.43 1.36 1.36 1.31 1.28 1.09 1.12 1.12 1.13 1.17 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Regular Dividend per Share Special Stock Dividend per Share
Slide 16: Historical ROE
Historical ROE In the last 10 years, we have delivered a return on average shareholders’ equity1 of almost 14%. Total shareholder return1 CAGR for 2021 (dividends plus share price appreciation) was 24% and for the last 5 years was 14%. $0.85 1 1Considered to be a non-GAAP and other financial measure
Slide 17: Q4 2021
Q4 2021
Slide 18: Key Performance Indicators
Key Performance Indicators 1 1 1Considered to be a non-GAAP and other financial measure. For further details, refer to the "Non-GAAP and Other Financial Measures" section of this investor presentation. Non-GAAP and other financial measures and ratios used in this document are not defined terms under
Slide 19: Mortgage Portfolio
Mortgage Portfolio Focused on growth Mortgages - Corporate and Securitization ($M)
Slide 20: Balance Sheet Highlights
Balance Sheet Highlights Trend YoY FY 2021 FY 2020 Trend QoQ Q4 2021 Q4 2020 Uninsured Originations* $575 million $283 million $159 million $113 million Insured Originations $801 million $616 million $166 million $218 million Residential Construction Originations $681 million $474 million $150 milli
Slide 21: Earnings Highlights
Earnings Highlights The Board declared a Q1 2022 cash dividend of $0.36 per share and special stock dividend of $0.97 per share. Trend QoQ Q4 2021 Q4 2020 Trend YoY FY 2021 FY 2020 Spread of Corporate Mortgages over Term 2.70% 2.76% 2.80% 2.62% Deposit Interest and Expense1 Mortgage Interest - Corpo
Slide 22: Portfolio Credit Quality
Portfolio Credit Quality Our realized loan losses on our construction portfolio has been negligible in the last 10 years, which is a testament to our approach to lending. Impaired Mortgage Ratios1 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 2
Slide 23: Portfolio Quality and Lending Criteria
Portfolio Quality and Lending Criteria Corporate Mortgage Portfolio Geographic Distribution Average corporate Average LTV at mortgage term to maturity Origination (months) 13 66% • Prudent risk management practices are the foundation of the quality and diversification of our lending activities • Con
Slide 24: Environmental, Social, Governance
ENVIRONMENTAL, SOCIAL, GOVERNANCE
Slide 25: ESG Highlights
ESG Highlights Our values and culture are rooted in our people, and we are committed to responsible environmental, social and governance practices, with focus on: Providing capital and loans to real estate developers and investment funds who are committed to community E and climate-based responsible
Slide 26: 2021 ESG Achievements
2021 ESG Achievements >90% Percentage of total capital committed in our construction and commercial businesses that is focused on density development >90% Employee engagement score in our 2021 annual team member survey 87% Percentage of Board members who are independent $15 million Amount committed
Slide 27: Recent Announcements
Recent Announcements Dec 13, 2021 MCAN Mortgage Corporation Announces Closing of Rights Offering Nov 08, 2021 MCAN Mortgage Corporation Announces $33 Million Rights Offering Oct 06, 2021 MCAN Mortgage Corporation Establishes At-The-Market Program Aug 24, 2021 MCAN Subsidiary XMC Mortgage Corporation
Slide 28: Board of Directors
Board of Directors Glenn Doré Derek Sutherland Karen Weaver Brian W. Chu Mr. Chu has been a Founding Partner of Mr. Doré has been President of Teff Mr. Sutherland was appointed Chair of the Prior to being appointed CEO of MCAN, Ms. Bogart Robertson & Chu LLP since 1991. Mr. Administration Inc., (an
Slide 29: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures This investor presentation references a number of non-GAAP and other financial measures and ratios to assess our performance such as return on average shareholders' equity, book value per common share, total shareholder return, spread of corporate mortgages over
Slide 30: Contact
CONTACT MCAN Mortgage Corporation 200 King Street West, Suite 600 Toronto, ON M5H 3T4 (416) 572-4880 | mcanexecutive@mcanmortgage.com | mcanmortgage.com