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Xceed Company Profile

Xceed Company Profile. Helping Canadians Make It Home. Forward-Looking And Other Statements.

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Xceed Company Profile

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  1. Xceed Company Profile Helping Canadians Make It Home

  2. Forward-Looking And Other Statements • This presentation may contain forward-looking statements which reflect management’s expectations regarding Xceed Mortgage Corporation’s future growth, performance (both operational and financial), and business prospects and opportunities. Past results do not constitute a guarantee of future performance. A number of factors could cause actual results, performance, or achievements to differ materially from the results expressed or implied in these materials. Business prospects and opportunities considered are based on approximation and extrapolation of past market indicators. These factors should be considered carefully and prospective investors should not place undue reliance on any forward-looking statements. - 2 -

  3. Corporate Overview • Established in Canada in 1997 as a subsidiary of IMC Mortgage Corporation. • Current investor group purchased 90% of common stock from BMO in April 2002 and recapitalized firm with $22.2MM. • IPO of June 2004 raised additional $24.34MM. - 3 -

  4. Value Proposition • Focused Origination • Established mortgage broker relationships • Financial Institution channel • Direct business • Risk-Reward Management • Credit risk • Market risk • Business Model • Access to Canada Mortgage Bond Program and securitization funding • Entrepreneurial culture • Structured management processes • Technology - 4 -

  5. Executive Team • Ivan Wahl – Chairman, CEO & Director • 30 years of experience in the Canadian mortgage finance industry. • Played a leading role in the development of the mortgage-backed securitization industry in Canada. • Founded FirstLine Trust Company in 1985, grew and sold the business to CIBC in 1995. • Vice-Chairman and Director of CIBC Mortgages Inc. from 1995 to 2001. • Recipient of the Ernst & Young Financial Services Entrepreneur of the Year award for 2005. • Michael Jones – President & COO • Previously Vice President, Commercial Mortgages for CIBC Mortgages Inc. where he also oversaw the CIBC Access Program. • Joined FirstLine Trust in 1992. • John Ayanoglou – CFO & Corporate Secretary • Previously the Chief Financial Officer of publicly-listed Cartier Partners Financial Group. • Practiced within Financial Services Group of PricewaterhouseCoopers LLP from 1996 to 2000. • Karen Martin – VP, Securitization and Capital Markets • Previously the Treasurer of Amicus Holdings (division of CIBC), Director of Balance Sheet Management, and General Manager of Securitization for CIBC. • Manager, Financial Analysis and Manager, Financial Reporting for FirstLine Trust Co. from 1988 to 1996. • Majority of Board consists of non-related independent directors • Approximately 30% control by management* * Inclusive of Akemis Holdings Corp, with which Ivan Wahl and his family are involved. - 5 -

  6. Financial Performance Pro forma 2007(1) 2007 2001 CAGR(1) $55,947M Revenue $1,558M 81.6% $55,947M $2,685MM AUM $132MM 65.2% $2,685MM ($4,543M) Net Income(2) ($1,127M) $18,572M 52.0% ROAE (2) (34.8%) 16.2% 16.2% (4.1%) • The pro forma 2007 net income, ROAE and CAGR figures have been computed after removing the negative one-time after-tax effects of infrastructure write-offs and financial instruments valuation adjustment. • The CAGR figure for Net Income and percentage presented for the average ROAE are calculated from fiscal year 2002 as net income was negative in 2001. - 6 -

  7. Revenue Growth CAGR 81.6% Under Previous Management Under Current Management * Xceed’s fiscal year end is October 31. - 7 -

  8. Total Assets Under Administration Growth $2,685 CAGR 65.2% Under Previous Management after 5 years Under Current Management * Xceed’s fiscal year end is October 31. - 8 -

  9. Increasing Profitability Net Income Growth CAGR 52.0% * $18,572 * Pro forma Under Previous Management Actual Under Current Management * Xceed’s fiscal year end is October 31. The 2007 net income figure has been computed after removing the negative one-time after-tax effects of infrastructure write-offs and financial instruments valuation adjustment. - 9 -

  10. Cash Flows from Operations * * CAGR 87.8% Under Previous Management Under Current Management * Xceed’s fiscal year end is October 31. For fiscal 2007 and 2006, cash flows from operations has been calculated after removing the negative one-time after-tax effect of infrastructure and other write-offs and one-time non-operating after-tax cash-based expense effects related to Xceed Mortgage Trust. - 10 -

  11. Cash from the Securitized Portfolio CAGR 76.5% Under Previous Management Under Current Management * Xceed’s fiscal year end is October 31. - 11 -

  12. Effective Use of Capital Return on Equity Average 20.7%* 16.2% * Under Previous Management Pro forma Actual Under Current Management * Xceed’s fiscal year end is October 31. The 2007 net income figure has been computed after removing the negative one-time after-tax effects of infrastructure write-offs and financial instruments valuation adjustment. - 12 -

  13. Non-Traditional Market Growth Potential • Potential size of Canadian non-traditional market is estimated at 10% of the total residential mortgage financing market (approximately $700 billion) • Total outstandings of the non-conforming market in Canada are approximately $12 billion • Over $55 billion in untapped potential!! • This represents 300,000 families living in apartments who may meet our underwriting requirements and would love to own their own homes. - 13 -

  14. Market Niche • Traditional: • CMHC Insured • Genworth Insured • Non traditional: • Non Conforming Credit • High Loan to Value Uninsured - 14 -

  15. Market Position Traditional Lenders (Big 6 Banks) XCEED A B C Borrower Credit Rating Home Capital / Equitable Trust 25% 50% 75% 100% Mortgage Loan to Value (LTV) Ratio - 15-

  16. Fundamentals • Opportunity for product innovation beyond vanilla offerings. • Low variable cost business model provides significant operating leverage: electronic approval / funding system, with locations in Toronto and Montreal. • Efficient methodsof raising capital provide opportunity for high ROE • Effective improvements in funding ratios to leverage increased volumes. - 16 -

  17. Funding Methodology • $350 million warehouse facility • Securitization of mortgages thru non-recourse sales • Trust senior notes funded with AAA/or R-1 (High) rated floating rate notes • Trust credit enhancement provided by third party investors and Xceed • New term structure established in 2006 • Two transactions, valued at a combined $1.1 billion, have provided non-recourse funding in the term markets • Rated AAA by Standard & Poor’s and DBRS • Access to Canada Mortgage Bond Program - 17 -

  18. Solid Risk Control • Interest Risk immunization thru swaps and other hedging mechanisms. • Credit Risk control thru frequent asset quality and compliance reviews by Standard & Poor’s, DBRS and Trusts’ securitization agents • First charge, residential mortgages only, regionally diversified, in pre-approved locales • Historical average mortgage size is $160,000 with a LTV of 83% - 18 -

  19. Diversification As at October 31, 2007 7.73% 19.25% 1.84% 0.44% 1.54% 27.62% 0.24% 37.23% 1.72% 2.39% - 19 -

  20. Summary • Limited competition. • Nascent, rapidly growing niche. • Strong experienced management. • Capital markets proprietary funding models. • Performance based culture. • Focused multi-channel origination. • Disciplined underwriting. • Disciplined default management. • Risk adjusted pricing model. • Flexible, scalable technology with comprehensive relevant reporting capability. - 20 -

  21. Questions - 21 -

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