MUA GROWS TO $19.3B
TORONTO, Aug. 14, 2014 /CNW/ - Counsel Corporation ("Counsel" or the "Company") (TSX: CXS), a financial services company, today announced financial results for the three months ended June 30, 2014. All amounts are stated in Canadian dollars unless otherwise noted.
Second Quarter 2014 Highlights
- Mortgages under administration grew to $19.3 billion.
- $1.9 billion of mortgages sold in Q2 2014 compared to $1.4 billion in Q1 2014 and $2.5 billion in Q2 2013.
- $36.1 million of revenue in Q2 2014 compared to $29.8 million in Q1 2014 and $46.4 million in Q2 2013.
- Pre-tax income from continuing operations increased to $12.3 million in Q2 2014 from $8.9 million in Q1 2014 and $9.5 million in Q2 2013.
- Diluted earnings per share from continuing operations were $0.06, in line with Q2 2013.
"I am pleased to report our first full quarter as a financial services focused business," said Allan Silber, Chairman and CEO of Counsel Corporation. "We are on track with the implementation and execution of our strategy as evidenced by our solid bottom-line results."
Income before income taxes and discontinued operations for the quarter was $12.3 million, an increase of over 29% from $9.5 million in the same period one year ago.
Net income attributable to shareholders in the second quarter 2014 was $6.2 million, compared with net income of $4.5 million for the same period one year ago reflecting the increase in the fair value of the Company's private equity portfolio. In the second quarter 2014, diluted earnings per share from continuing operations were $0.06 in line from one year ago.
Mr. Silber added "The pace and success of the monetization of our private equity investments will further enhance the Company's financial position and ability to focus on its financial services operations."
Mortgage Lending Business
Counsel carries on its residential mortgage lending business through its wholly owned subsidiary Street Capital (www.streetcapital.ca). The company sources its mortgages solely through a network of independent, high quality mortgage brokers across Canada with whom it has built relationships. The company offers a broad lineup of high ratio and conventional mortgages, predominantly to prime borrowers, and sells the mortgages it underwrites to top-tier financial institutions. Business revenues are almost entirely from the gain on sale of mortgages.
In the second quarter 2014, the business generated $35.8 million in mortgage lending revenues compared to $46.3 million in the same period one year ago. Mortgages sold experienced a decrease as management focused on credit quality over volume.
Operating expenses, consisting of the cost to source and underwrite mortgages sold by Street Capital, totaled $20.7 million in the second quarter 2014, down 30%, compared with $29.5 million recorded in the same period last year.
During the second quarter, Street Capital sold $1.9 billion of mortgages, compared with $2.5 billion recorded in the same period one year ago. The business continued to experience growth in its portfolio of mortgages under administration to $19.3 billion at June 30, 2014 compared to $15.0 billion at June 30, 2013.
Street Capital's bank license application is proceeding in accordance with expectations and management is pleased with the progress to date.