xceed company profile helping canadians make it home

Xceed Company Profile

Helping Canadians Make It Home

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.

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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.

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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

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Executive TeamIvan 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*

- 5 -* Inclusive of Akemis Holdings Corp, with which Ivan Wahl and his family are involved.

Financial Performance

Revenue $1,558M $55,947M 81.6%

AUM $132MM $2,685MM 65.2%

Net Income(2) ($1,127M) $18,572M 52.0%

ROAE (2) (34.8%) 16.2%

2001 2007

(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.

(2) 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.

CAGR(1)

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Pro forma 2007(1)

$55,947M

$2,685MM

($4,543M)

16.2%(4.1%)

Revenue Growth

$1,558

$8,745

$17,865

$28,761

$46,424

$54,535 $55,947

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Re

ve

nu

e (

C$

00

0)

2001 2002 2003 2004 2005 2006 2007

CAGR 81.6%

Under Current Management

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* Xceed’s fiscal year end is October 31.

Under Previous

Management

Total Assets Under Administration Growth

$132$284

$663

$1,190

$1,841

$2,252

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000T

ota

l Ass

ets

Un

der

Ad

min

istr

atio

n (C

$mill

ion

)

2001 2002 2003 2004 2005 2006 2007

CAGR 65.2%

Under PreviousManagement after 5 years

Under Current Management

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* Xceed’s fiscal year end is October 31.

$2,685

Increasing Profitability

($1,127)

$2,289

$5,703

$10,412

$20,275

$21,974

($4,553)-$6,000

-$3,000

$0

$3,000

$6,000

$9,000

$12,000

$15,000

$18,000

$21,000

$24,000

Ne

t In

co

me

(C

$0

00

)

2001 2002 2003 2004 2005 2006 2007

Under Current Management

Under Previous

Management

Net Income Growth

CAGR 52.0% *

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* 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.

$18,572 *

Pro forma

Actual

Cash Flows from Operations

-$1,373$944 -$744

$1,482

$8,281

$18,862

$22,022

-$5,000

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Cas

h Fl

ows

from

Ope

ratio

ns (C

$000

)

2001 2002 2003 2004 2005 2006 2007

CAGR 87.8%

Under Current Management

* Xceed’s fiscal year end is October 31.

Under Previous

Management

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Cash from the Securitized Portfolio

$1,420 $1,924

$5,991

$13,176

$24,948

$38,159

$42,935

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Ca

sh

fro

m t

he

Se

cu

riti

zed

Po

rtfo

lio (

C$

00

0)

2001 2002 2003 2004 2005 2006 2007

CAGR 76.5%

Under Current Management

- 11 - * Xceed’s fiscal year end is October 31.

Under Previous

Management

Effective Use of Capital

-34.8%

14.9%

22.7% 21.9%25.5%

22.9%

-4.1%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Ret

urn

on

Ave

rag

e E

qu

ity (%

)

2001 2002 2003 2004 2005 2006 2007

Under Current Management

Under Previous

Management

Return on Equity

Average 20.7%*

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* 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.

16.2% *

Pro forma

Actual

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.

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25% 50% 75% 100%

A

B

C

Traditional Lenders(Big 6 Banks)

Home Capital / Equitable Trust

Mortgage Loan to Value (LTV) Ratio

Bo

rro

wer

Cre

dit

Rat

ing

Market Position

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XCEED

First National / GE Money / Wells Fargo

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 methods of raising capital provide opportunity for high ROE

Effective improvements in funding ratios to leverage increased volumes.

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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

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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 $176,000 with an original LTV of 83%

– On a market value basis, current credit risk exposure is 73% LTV

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Diversification

As at October 31, 2007

7.73%19.25%

1.84%

1.54%

37.23%

27.62%

0.44%

0.24%

1.72%

2.39%

SummaryLimited 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.

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Questions

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