With respect to the release issued November, 07, 2008 at 6:00am
Eastern Time, the MD&A and Interim Financial statements for
Quest Capital's third quarter results were not included in the
original release. A corrected release follows which includes both
the MD&A and Interim Financial statements as hyperlinks at the
end of the release:
Quest Capital Corp. ("Quest" or the "Company")(TSX: QC)(AMEX:
QCC)(AIM: QCC), a Canadian Mortgage Investment Corporation ("MIC")
benefiting from special Canadian tax rules, today reported its
unaudited financial results for the three and nine months ended
September 30, 2008. All references to dollar amounts are in
Canadian dollars.
POSITIVE THIRD QUARTER 2008 RESULTS
- Net earnings grew 21% to $6.4 million ($0.043 diluted per
share) from $5.3 million ($0.035 diluted per share) a year earlier
on growth in the Company's loan portfolio, reduction of
non-interest expenses and utilization of MIC tax rules. Quest
became a MIC effective January 1, 2008. These factors more than
offset total specific loan loss provisions of $2.3 million.
- The loan portfolio grew 5% during the third quarter to $368.7
million from $350.4 million at June 30, 2008. As part of the
Company's increasing focus on credit quality, first mortgages
comprised 96% of the portfolio compared to 87% a year ago.
- Loans funded during the third quarter rose 1% to $73 million
compared to the same period a year ago.
- A quarterly dividend of $0.045 per share was declared, payable
December 31, 2008 to shareholders of record December 15, 2008. This
represents a 99% payout ratio of 3rd quarter 2008 income before
taxes, and will serve to reduce taxable income as a result of
Quest's MIC status. Based on yesterday's closing QC share price on
the TSX, this represents an annualized yield of over 13%.
- Total assets at September 30, 2008 were $381.7 million up from
$304.3 million a year ago. Book value per share was $2.01 compared
to $1.99 per share a year ago.
IMPROVED NINE MONTH 2008 RESULTS
- Net earnings were $21.0 million ($0.143 diluted per share)
compared to $20.0 million ($0.135 diluted per share) for the nine
months ended September 30, 2007, despite specific loan loss
provisions taken of $2.3 million in the third quarter of 2008.
- Loans funded over the first nine months of 2008 amounted to
$222 million, a 42% or $65 million increase over fundings a year
ago.
- Total dividends paid to date in 2008 aggregated $16.9 million
representing a payout ratio of approximately 76% of the company's
nine month earnings before taxes.
- As planned, the Company used its revolving debt facility to
profitably grow its loan portfolio. At September 30, 2008 Quest had
utilized $78.5 million of its $88.0 million facility.
"Quest remained solidly profitable in the third quarter, 2008
and selectively expanded its loan portfolio within the guidelines
we've set for credit quality in this rapidly changing economic
environment," said Stephen Coffey, President and CEO. "Like all
Canadian mortgage market participants, Quest has been challenged
this year, due to the impact on our customers of credit market
tightening and a slowing Canadian real estate market. This was
clearly evident in the third quarter as we took specific provisions
on three loan exposures. Excluding these provisions, earnings
before taxes would have been 16% or $1.2 million higher than a year
ago - instead of the $6.7 million of earnings before taxes recorded
in the third quarter. Despite these challenges, Quest continued to
position itself to meet our three priorities: capital preservation,
earn an attractive yield on lending activities and achieve
profitable growth."
To reflect these priorities, Jim Grosdanis, Chief Financial
Officer said: "The Company has continued to primarily fund first
mortgages, has 63 loans outstanding - the largest of which
represents just 8% of the loan portfolio - and has steadily
increased its Canadian geographic diversification. We've also
created a general allowance for loan losses, consistent with other
financial institutions. Additionally, we continued to take
advantage of liquidity opportunities through syndication. In fact,
$36 million of loans were syndicated in the third quarter. As a
result of our risk management practices, we believe we've improved
our risk profile."
At September 30, 2008, Quest had enhanced the geographic
distribution of its mortgage portfolio, with 42% of principal
outstanding in British Columbia, 45% in the Prairies and 13% in
Ontario. This compares with the December 31, 2007 distribution (58%
British Columbia, 34% Prairies, 8% Ontario and other) and reflects
Quest's successful recent expansion to selected regions of the
Ontario real estate market."
LOOKING FORWARD
"Until markets stabilize, we have decided to place even more
emphasis on capital preservation," said Mr. Coffey. "While we will
remain mindful of the need for profitable growth, and attractive
yield generation, as fellow shareholders we believe this stance is
prudent under current market conditions and will create an even
better foundation for attractive returns in future. Our commitment,
as always, is to closely monitor our loan portfolio and take quick
remedial action if we perceive there is a problem and to follow our
enhanced risk management practices, including loan diversification,
to avoid losses."
Mr. Coffey said the Company still has room for growth through
additional leverage, and solid liquidity options through
syndications, "but we are reaching the upper end of our existing
credit facilities and this will moderate growth in our loan
portfolio. We believe, however, that this moderation will be
temporary. As previously stated, we are working diligently on our
application to become a deposit-taking institution. Our general
timetable has not changed in this regard, and if we are successful,
we hope to begin accepting customer term deposits to fuel our
growth towards the end of 2009. "
THIRD QUARTER CONFERENCE CALL
Quest Capital will host a conference call at 11 a.m. Eastern
Standard Time today to discuss its third quarter performance. To
access the call live, please dial (416) 644-3415. The call will be
recorded and a replay made available for one week ending Friday,
November 14, 2008 at midnight. The replay may be accessed
approximately one hour after the call by dialing (416) 640-1917 and
entering passcode 21284493 followed by the number sign (#).
ABOUT QUEST
Quest Capital Corp. is a leading Mortgage Investment Corporation
serving Canadian real estate markets. Quest's objective is to
become Canada's largest Mortgage Investment Corporation in terms of
equity, loans generated and profitability. Quest's strategy is to
deploy its financial capital at superior rates of return while
minimizing risk. The three principles of Quest's investment
strategy are capital preservation, obtaining an attractive yield on
lending activities and generating profitable growth.
For more information about Quest, please visit our website
(www.questcapcorp.com) or SEDAR (www.sedar.com).
This news release includes certain statements that constitute
"forward-looking statements", and "forward-looking information"
within the meaning of applicable securities laws ("forward-looking
statements" and "forward-looking information" are collectively
referred to as "forward-looking statements", unless otherwise
stated). Such forward-looking statements involve known and unknown
risks and uncertainties that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Forward-looking statements may
relate to the Company's future outlook and anticipated events or
results and may include statements regarding the Company's future
financial position, business strategy, budgets, litigation,
projected costs, financial results, taxes, plans and objectives. We
have based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends affecting the financial condition of our business. These
forward-looking statements were derived utilizing numerous
assumptions regarding expected growth, results of operations,
performance and business prospects and opportunities that could
cause our actual results to differ materially from those in the
forward-looking statements. While the Company considers these
assumptions to be reasonable, based on information currently
available, they may prove to be incorrect. Forward-looking
statements should not be read as a guarantee of future performance
or results.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events, and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. To the extent any
forward-looking statements constitute future-oriented financial
information or financial outlooks, as those terms are defined under
applicable Canadian securities laws, such statements are being
provided to describe the current potential of the Company and
readers are cautioned that these statements may not be appropriate
for any other purpose, including investment decisions.
Forward-looking statements speak only as of the date those
statements are made. Except as required by applicable law, we
assume no obligation to update or to publicly announce the results
of any change to any forward-looking statement contained or
incorporated by reference herein to reflect actual results, future
events or developments, changes in assumptions or changes in other
factors affecting the forward-looking statements. If we update any
one or more forward-looking statements, no inference should be
drawn that we will make additional updates with respect to those or
other forward-looking statements. You should not place undue
importance on forward-looking statements and should not rely upon
these statements as of any other date. All forward-looking
statements contained in this press release are expressly qualified
in their entirety by this cautionary statement.
To view Quest Capital Corp.'s Management Discussion and Analysis
for the Third Quarter Ended September 30, 2008 please visit the
link below:
http://media3.marketwire.com/docs/questcapital1107mda.pdf.
To view Quest Capital Corp.'s Unaudited Interim Consolidated
Financial Statements September 30, 2008, please visit the link
below:
http://media3.marketwire.com/docs/questcap1107ifs.pdf.
Contacts: Quest Capital Corp. - Contact in Canada Stephen Coffey
President & CEO (416) 367-8383 (416) 367-4624 (FAX) Quest
Capital Corp. - Contact in Canada A. Murray Sinclair Co-Chairman
(604) 687-8378 or Toll Free: 1-800-318-3094 Website:
www.questcapcorp.com AIM NOMAD: Canaccord Adams Limited Ryan
Gaffney 011 44 20 7050 6500 AIM NOMAD: Canaccord Adams Limited
Robert Finlay 011 44 20 7050 6500
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