C.A. Bancorp Inc.

C.A. Bancorp Inc.

May 16, 2011 20:58 ET

C.A. Bancorp Inc. Reports First Quarter 2011 Financial Results and Refiles 2010 Annual Financial Statements

TORONTO, ONTARIO--(Marketwire - May 16, 2011) - C.A. Bancorp Inc. ("C.A. Bancorp" or the "Company") (TSX:BKP) today announced its consolidated financial results for the first quarter ended March 31, 2011.

In connection with the advancement of the Company's Realization Strategy (defined below) effective October 1, 2010, the Company, in preparing its financial statements (i) applied Accounting Guideline 18 – Investment Companies ("AcG-18") and (ii) adopted the liquidation basis of accounting. As an Investment Company under AcG-18, the Company's adoption of IFRS is deferred until January 1, 2013.

First Quarter 2011 Highlights

For the three month period ended March 31, 2011, the Company reported:

  • Revenues of $0.6 million compared to $1.2 million in the first quarter 2010;
  • A net gain from results of investments of $3.0 million compared to a net gain of $0.5 million in the first quarter 2010; and
  • Net earnings of $3.0 million or $0.24 per share compared to a net loss of $1.1 million or $0.04 per share in the first quarter 2010.

As at March 31, 2011, the Company's:

  • Liquid net assets (working capital) totalled $7.0 million or $0.57 per share;
  • Investments were valued at $30.3 million or $2.47 per share;
  • Long-term debt and accrued liquidation costs were $3.3 million or $0.27 per share; and
  • Net book value(1) was $34.1 million or $2.78 per share.

Statement of Operations Highlights

First Quarter Ended March 31
In Canadian $ millions except per share amounts20112010
Net results of investments3.00.5
Expenses, taxes and non-controlling interest(0.6)(2.8)
Net earnings (loss)$3.0$(1.1)
Add back: one-time expenses-1.2
Net earnings excluding one-time expenses$3.0$0.1
Net earnings (loss) per share$0.24$(0.04)
Add back: one-time expenses per share-0.04
Net earnings per share excluding one-time expenses$0.24$0.00

Consolidated revenues declined by $0.6 million for the first quarter ended March 31, 2011 compared to the same period in 2010. The decrease was primarily driven by a decline in investment income as the Company sold certain investments and amortized discounts on its debentures in 2010. Moreover, the Company's asset management fees declined as the Company terminated its asset management agreement in connection with the sale of its interest in Charter REIT (now Partners REIT) in the second quarter 2010.

Consolidated net results of investments resulted in a gain of $3.0 million for the first quarter ended March 31, 2011 compared to a gain of $0.5 million for the same quarter ended 2010. The gain was primarily as a result of a change in unrealized gain on investments in private entities of $3.0 million.

The Company's consolidated expenses, taxes and non-controlling interests decreased by $2.2 million for the quarter ended March 31, 2011 compared to the same period in 2010. After deducting one-time expenses, taxes and non-controlling interests, the Company decreased its operating expenses year-over-year by $0.7 million as employee headcount declined throughout 2010 and other administration and corporate expenses have been reduced as the Company executes its Realization Strategy.

Balance Sheet Highlights

In Canadian $ millions except per share amountsMarch 31,
December 31,
Cash and liquid assets$8.0$8.8
Investments in private entities and CRFC30.327.2
Other assets0.10.1
Total Assets$38.4$36.1
Total Liabilities4.35.0
Total Shareholders' Equity$34.1$31.1
Number of shares outstanding (millions)12.312.3
Net book value per share$2.78$2.53
Closing market price per share$2.06$1.94
Market price discount to net book value26%23%

The Company had cash and liquid assets of approximately $8.0 million ($7.0 million net of current liabilities) at March 31, 2011. The Company believes it has sufficient working capital and will maintain sufficient financial resources to conduct any ongoing operations. As at March 31, 2011, the Company had debt of $1.3 million and accrued liquidation costs of $2.2 million. On May 12, 2011, the Company's debt was acquired by Green Tree Capital Management Corp. ("Green Tree"). See "Subsequent to Quarter-end" below.

Subsequent to Quarter-end

On May 12, 2011, the Company completed the sale of all of its interests in C.A. Bancorp Canadian Realty Finance Corporation (now NorRock Realty Finance Corporation) ("CRFC") to Green Tree for an aggregate purchase price of $6.4 million. The purchase price was satisfied by (i) a cash payment in the amount of approximately $4.1 million; (ii) a promissory note from Green Tree to the Company in the amount of $1.0 million; and (iii) Green Tree acquiring a note payable to CRFC in the amount of approximately $1.3 million. In addition, Green Tree assumed C.A. Bancorp's obligations under the commitment agreement dated January 31, 2008 between C.A. Bancorp and CRFC.

2010 Annual Financial Statements Re-filed

The Company announced that it has refiled its audited consolidated annual financial statements for the financial year ended December 31, 2010. The consolidated financial statements have been refiled to clearly present and disclose the application of AcG-18 including disclosure that all of the Company's investments were measured at fair value effective October 1, 2010.

The Company does not believe that the revisions to the financial statements are material. The revisions were made to certain note disclosures and no changes were made to the measurement of the Company's financial assets and liabilities in the December 31, 2010 consolidated financial statements. The refiled financial statements which include the above-noted revisions and the new auditors' report have been filed with Canadian securities regulators on SEDAR and may be viewed at www.sedar.com.

Realization Strategy

As previously disclosed, the Board of Directors of C.A. Bancorp determined that C.A. Bancorp's interests would be best served through the realization of C.A. Bancorp's assets and the distribution of the proceeds to its shareholders (the "Realization Strategy").

Financial Information

C.A. Bancorp's First Quarter 2011 consolidated financial statements and Management's Discussion and Analysis of the results and its refiled 2010 Annual consolidated financial statements will be available on its website at www.cabancorp.com and on SEDAR at www.sedar.com.

C.A. BancorpInc.

C.A. Bancorp is a publicly traded Canadian merchant bank and alternative asset manager that provides investors with access to a range of private equity and other alternative asset class investment opportunities. C.A. Bancorp has historically focused on investments in small- and middle-capitalization public and private companies, with emphasis on the industrials, real estate, infrastructure and financial services sectors. The Company is currently executing its Realization Strategy.

This release includes certain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue" or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Without limiting the generality of the foregoing, there can be no assurance of any kind that the Realization Strategy will yield a value equal or close to the net book value per Company common share. These forward-looking statements are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. Reference should be made to the risk factors in the Company's Annual Information Form, in the Management's Discussion and Analysis for the year ended December 31, 2010 and in the Directors' Circular dated June 4, 2010 and in our other filings with Canadian securities regulators. Additional important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, interest rates, tax related matters, loss of personnel, reliance on key personnel, ability of the Company to generate positive future returns for investors, Company's success in preserving capital, managing debt, maintaining liquidity and managing operating costs. This news release makes reference to the net book value per share which is a non-GAAP financial measure. The Company calculates the net book value per share as it believes it to be an important metric that shareholders use and frequently request and refer to because shareholders often view the Company as an holding company of investments in private entities. Net book value is a non-GAAP financial measure that does not have any standardized meaning prescribed by Canadian GAAP and therefore it is unlikely to be comparable to similar measures presented by other issuers. This classification is not a Canadian GAAP measure and should not be considered either in isolation of, or as a substitute for, measures prepared in accordance with Canadian GAAP.

(1)Net book value per share is a non-GAAP financial measure and is calculated as total shareholders' equity under GAAP divided by the number of common shares outstanding at March 31, 2011. See the cautionary statement regarding use of Non-GAAP financial measures at the bottom of this release.
C.A. Bancorp Inc.
401 Bay Street, Suite 1600
Toronto, Ontario M5H 2Y4
Telephone: (416) 214-5985
Fax: (416) 861-8166

Contact Information