Mortgage investment firm installs new execs, corrects 2022 accounting
Frontenac Mortgage Investment Corporation has announced several changes to its board of directors and a restatement of its 2022 audited financial statements.
At a May 27 board meeting, Ryan Seeds was appointed the new chair, while Eric Dinelle was named vice chair. Seeds and Dinelle replace outgoing directors Jody Becker, Alison Martin, Alex de Korte, and Robert Barnes, who resigned effective last week.
"FMIC wishes to thank each of Ms. Becker, Mr. Barnes, Ms. Martin and Mr. de Korte for their valuable contributions as directors and wishes them all the best," the company stated.
Seeds brings five years of prior board experience at Frontenac, while Dinelle has served for 22 years, with both having chaired the audit committee previously. The restructured board now consists of Seeds (chair), Dinelle (vice chair), Meghan Davis (audit committee chair) and Ryan Wykes (governance and nominations chair).
2022 Financial Restatement
Last month, Frontenac disclosed it was restating its 2022 audited annual financial statements related to the measurement of mortgage impairment provisions. The restatement follows an Ontario Securities Commission review.
The restatement corrected an error in applying accounting standards for expected credit losses on a package of loans made to a borrower for a large residential development property that has been impaired.
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Specifically, Frontenac is "reducing the estimated proceeds from a sale of the property, increasing the estimated expenses and liabilities associated with selling the property under FMIC's mortgage rights and increasing the estimated time that it would take to sell the Property."
As a result, Frontenac's provision for mortgage impairment losses has increased, reducing its assets, net income and carrying value per share for 2022. The carrying value per share for 2022 is now $29.44, down from the originally reported $30.00.
"Purchasers who overpaid for shares of FMIC in 2023 as a result of the Error will be reimbursed," the company said, adding that management and administration fees will also be adjusted.
The restatement was made with the agreement of the Ontario Securities Commission following its review of the matter.
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