Saxon Financial Inc., today released its financial results for the second quarter ended June 30, 2005.

Net income slipped to $2.2 million in the quarter, or 18¢ per diluted share, compared with $2.3 million, or 18¢, per diluted share a year ago.

The second quarter results include a charge related to Saxon issuing employees shares in the company as an incentive. The shares are worth approximately $800,000, which was fully charged against earnings in June 2005.

Saxon’s quarterly revenue reached a record $9.1 million. Revenue grew 31% over the second quarter of 2004, and earnings grew 28% before the unique provision of the shares to Saxon employees.

“In going public last month, we put Saxon on a track for growth, and our second quarter shows that Saxon’s growth is on track,” said Allan Smith, Saxon’s president and CEO.

Total assets under management were $9.99 billion as at June 30, and exceeded the $10 billion milestone in early July. This represents growth of 11% since June 30, 2004.

The company’s core mutual fund business continued to perform very strongly, with Saxon Mutual Funds’ assets under management growing by 50% from $949 million a year ago to $1.46 billion at quarter-end.

Saxon also experienced excellent growth in its private client asset management business, with assets under management up 39% in the past year. The company’s institutional asset management business posted growth of more than 6%.

Higher expenses in 2005 related to the implementation of key elements of the company’s growth strategy, including the provision of shares to employees, increased portfolio management and marketing staffing, and higher administrative support costs to handle the company’s rapid growth.

Saxon Financial Inc. is an investment management firm with three principal lines of business: Saxon Funds Management Limited; Howson Tattersall Investment Counsel Ltd; and Howson Tattersall Private Asset Management Inc.

Shares of Saxon Financial opened 10¢, or 0.58% higher, at $17.40.