MFP Reports 1st Quarter Fiscal 2003 Results.

Business Editors

MISSISSAUGA, Ontario--(BUSINESS WIRE)--July 24, 2002

MFP Financial Services Ltd. (TSX: MFP) today reported results for its first quarter of operations in Fiscal 2003. MFP's performance in the quarter, traditionally a period of modest activity, continues to reflect

economic conditions and uncertainty in the technology market. As previously announced, MFP is responding to the new realities in the technology sector with a more focused leasing strategy and reduced infrastructure while exploring new business or investment opportunities. Current results reflect this plan in transition.

Net income for the quarter was $1.4 million or $0.15 per share, down from the $3.6 million or $0.36 per share reported during the same period last year. All per share values are fully diluted. The reduction in net income, year over year, is primarily the result of a reduced lease portfolio. Over the past year, the lease portfolio has declined by approximately 20%, as the slowdown in technology has significantly reduced new business activities. This reduction has been partially offset by higher residual realizations. Residual realizations in the quarter were 150% up significantly from the 139% generated in the first quarter of Fiscal 2002 and MFP's long term realization rate of approximately 120%. Improved realizations generally indicate that equipment is being retained longer and replaced less frequently.

New business volumes at $41 million were down from $68 million in the corresponding quarter last year but at a level consistent with the past two quarters. Both of these events continue to reflect customer responses to economic and technology uncertainty. As a result of the reduced activity levels, the Corporation has reduced SG&A by approximately 15% in the quarter to $4.6 million with further reductions expected during the year.

No bank line utilization occurred in the quarter although cash reduced from $21.7 million to $15.3 million reflecting the buildup of leases prior to funding. Net book value per share at June 30, 2002 approximates $13.00.

MFP Financial Services Ltd. is a leading provider in innovative financial solutions in technology and equipment leasing, and equipment trading. Based in Mississauga, Ontario, MFP operates throughout North America and Europe.

MFP FINANCIAL SERVICES LTD.
Consolidated Balance Sheets
(in thousands of dollars)


                                     June 30,     March 31,
                                         2002          2002
ASSETS                            (Unaudited)     (Audited)

                                  -----------    ----------
CASH                                $  15,350     $  21,742

LEASES                                449,334       474,411

EQUIPMENT HELD FOR LEASING OR SALE      7,249         5,443

RECEIVABLES                            31,026        30,634

LONG TERM TAXES RECOVERABLE            13,000        13,000

CAPITAL ASSETS                            880         1,142
                                  -----------    ----------

                                    $ 516,839     $ 546,372
                                  ===========    ==========

LIABILITIES

DEBT                                $ 270,124     $ 303,663

ACCOUNTS PAYABLE AND ACCRUED CHARGES   59,125        55,953

FUTURE INCOME TAX LIABILITIES          58,860        59,076

SUBORDINATED DEBT                       5,000         5,000
                                  -----------    ----------



                                      393,109       423,692
                                  -----------    ----------

SHAREHOLDERS' EQUITY

SHARE CAPITAL                          51,257        51,382

FOREIGN CURRENCY TRANSLATION ADJUSTMENT 1,916         2,130

RETAINED EARNINGS                      70,557        69,168
                                  -----------    ----------

                                      123,730       122,680
                                  -----------    ----------

                                    $ 516,839     $ 546,372
                                  -----------    ----------


MFP FINANCIAL SERVICES LTD.
Consolidated Statements of Operations and Retained Earnings
(in thousands of dollars except per share data)


                                 Three Months  Three Months
                                        Ended         Ended
                                     June 30,      June 30,
                                         2002          2001
                                  (Unaudited)   (Unaudited)
                                  -----------    ----------

REVENUE
LEASING                             $  38,289     $  50,499
EQUIPMENT TRADING                      16,869        20,799
                                  -----------    ----------

                                       55,158        71,298
                                  -----------    ----------

EXPENSES
LEASING - AMORTIZATION AND
 OTHER COSTS                           26,224        34,245
INTEREST                                5,613         6,301
EQUIPMENT TRADING                      16,345        19,544
                                  -----------    ----------
                                       48,182        60,090
                                  -----------    ----------

GROSS MARGIN                            6,976        11,208

SELLING, GENERAL AND ADMINISTRATION     4,696         5,538
                                  -----------    ----------

INCOME FROM OPERATIONS BEFORE
 INCOME TAXES                           2,280         5,670

PROVISION FOR INCOME TAXES                844         2,098
                                  -----------    ----------

NET INCOME FOR THE PERIOD            $  1,436      $  3,572

RETAINED EARNINGS,
 BEGINNING OF PERIOD                   69,168        77,411

DIVIDENDS PAID                              -       (1,467)

PREMIUM ON REDEMPTION OF COMMON SHARES   (47)         (233)
                                  -----------    ----------

RETAINED EARNINGS , END OF PERIOD    $ 70,557      $ 79,283
                                  ===========    ==========


EARNINGS PER COMMON SHARE DATA
BASIC                                $   0.15      $   0.36
                                  ===========    ==========
FULLY DILUTED                        $   0.15      $   0.36
                                  ===========    ==========
SHARES OUTSTANDING
BASIC                               9,466,193     9,790,293
                                  ===========    ==========
FULLY DILUTED                       9,493,392     9,848,358
                                  ===========    ==========


MFP FINANCIAL SERVICES LTD.
Consolidated Statements of Cash Flow
(in thousands of dollars)


                                 Three Months  Three Months
                                        Ended         Ended
                                      June 30       June 30
                                         2002          2001
                                  (Unaudited)   (Unaudited)
                                  -----------    ----------

NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES


OPERATING
NET INCOME FOR THE PERIOD            $  1,436      $  3,572
ITEMS NOT AFFECTING CASH
AMORTIZATION OF LEASING AND
 OTHER ASSETS                          11,999        19,873
PARTICIPATION IN LIMITED
 PARTNERSHIP INCOME                     (630)       (4,027)
GAIN ON SALE OF LEASED ASSETS         (1,627)       (2,273)
FUTURE INCOME TAX EXPENSE                  44         1,007
                                  -----------    ----------
                                       11,222        18,152

NET (INCREASE) DECREASE IN
 EQUIPMENT HELD
FOR LEASING OR SALE, RECEIVABLES,
 ACCOUNTS
PAYABLE AND ACCRUED CHARGES             3,663       (7,314)
                                  -----------    ----------

                                       14,885        10,838
                                  -----------    ----------

FINANCING
INCREASE IN DEBT                       16,550        38,470
REPAYMENT OF DEBT                    (44,605)      (49,373)
REPURCHASE OF SHARES                    (172)         (567)
DIVIDENDS PAID                              -       (1,467)
                                  -----------    ----------
                                     (28,227)      (12,937)
                                  -----------    ----------

INVESTING
ADDITIONS AND INVESTMENTS IN LEASES  (48,453)      (42,414)
REDUCTIONS AND DISPOSALS OF LEASES     54,892        56,122
DISTRIBUTION FROM LIMITED PARTNERSHIPS,
 NET                                       56
ADDITIONS TO OTHER ASSETS, NET           (57)          (88)
                                  -----------    ----------
                                        6,438        13,620
                                  -----------    ----------


EFFECT OF EXCHANGE RATE CHANGES
                                          512           557
                                  -----------    ----------


NET CASH INFLOW (OUTFLOW)             (6,392)        12,078


CASH (BANK INDEBTEDNESS),
 BEGINNING OF PERIOD                   21,742       (2,648)
                                  -----------    ----------

CASH, END OF PERIOD                 $  15,350      $  9,430

                                  ===========    ==========

SUPPLEMENTAL CASH FLOW DATA:
CASH PAID DURING THE YEAR FOR:
INTEREST                            $   5,587      $  6,797
INCOME TAXES                        $     452      $  1,018