2024 income driven by residential mortgage growth
MCAN Mortgage (d/b/a MCAN Financial Group) closed out 2024 with net income of $77.6 million, reflecting a modest improvement over the previous year’s results despite facing a challenging interest rate environment. Earnings per share were $2.06, a slight decrease from $2.22 in 2023.
The company attributed its stable performance to higher income from its investment in MCAP, growth in securitized mortgage spread income, and lower short-term interest expenses. However, these gains were tempered by rising operating costs and fair value losses in their securities portfolio.
For the fourth quarter of 2024, MCAN reported a net income of $7.7 million, down significantly from $19.9 million in the same period of 2023. The company noted that losses in its REIT and non-marketable securities portfolios, along with rising operational expenses, contributed to the dip in quarterly earnings.
The company highlighted a $12.4 million swing in net unrealized losses on its securities portfolios, compared to a $2 million gain during Q4 2023. This decline was coupled with higher costs related to employee termination benefits.
Despite headwinds, MCAN’s uninsured residential mortgage portfolio reached a record $1.1 billion, a 15% increase from 2023. Originations in this category totalled $430 million, while renewals remained robust at $449 million.
“Our results for the year were solid. We performed within our long-term targets despite a challenging interest rate environment. Our investment in MCAP remains a key driver of our success,” MCAN interim CEO Derek Sutherland in a Press release.
MCAN saw growth in its securitized mortgage portfolio, which reached $2.4 billion by the end of 2024, marking a 25% increase over the previous year. Insured residential mortgage originations climbed 22% to $638 million, while securitizations in this segment surged by 123% to $803 million.
The company’s total assets reached $5.3 billion, up 12.8% year over year. Corporate assets grew to $2.9 billion, reflecting a 3.8% increase over 2023 levels.
MCAN maintained a focus on credit quality, reporting an overall arrears total mortgage ratio of 2.06% at the end of 2024, an improvement from 3.06% in the previous quarter. The company’s impaired corporate mortgage ratio stood at 2.46%, down from 3.26% a year earlier.
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MCAN’s board of directors declared a first-quarter cash dividend of $0.41 per share, representing a 5% increase from the previous quarter. The dividend is payable on March 31, 2025, to shareholders of record as of March 14, 2025.
“We enter 2025 in a position of strength, focused on strategic opportunities in the Canadian residential mortgage market and preserving long-term value for our shareholders,” said Sutherland.
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