Company saw a significant increase in net income and record total assets
MCAN Mortgage Corporation (MCAN), operating as MCAN Financial Group, announced a robust financial performance for the second quarter of 2024, marked by a significant increase in net income and total assets reaching a record $5 billion.
MCAN reported a net income of $19.7 million, or $0.52 per share, for Q2 2024, up from $15.9 million, or $0.46 per share, in the same quarter last year. The company’s return on average shareholders’ equity for the quarter was 13.63%, an improvement from 12.47% in Q2 2023.
Improved performance
Key drivers of the improved financial performance included higher income from the company’s investment in MCAP Commercial LP and increased net corporate mortgage spread income. The quarter also saw a higher provision for credit losses and lower unrealized fair value losses on the company’s REIT portfolio compared to the prior year.
For the first half of 2024, MCAN reported a net income of $43.0 million, or $1.17 per share, up from $39.2 million, or $1.13 per share, in the same period in 2023. The return on average shareholders’ equity for the year to date was 15.31%, slightly down from 15.51% in the previous year.
MCAN’s total assets rose to $5.10 billion as of June 30, 2024, a 7.5% increase from December 31, 2023. Corporate assets increased by 3.9% to $2.86 billion, while uninsured residential mortgages grew by 9% to $1.05 billion, reflecting higher origination volumes and renewals.
Construction and commercial mortgages, however, decreased slightly by 3% to $1.08 billion due to project completions and repayments, though origination volumes were 3% higher than in Q2 2023. Insured residential mortgage origination volumes increased significantly by 69% to $356 million, driven by declining interest rates and favourable market conditions.
CEO Don Coulter emphasized the company’s strategy of proactive management and capital deployment, stating, “As rates begin to decline, our embedded culture of being vigilant and proactively managing our business through market cycles forms the roots of our exceptional performance. Our driven and committed team members are focused on MCAN’s strategic growth and positioning in the Canadian mortgage market.”
Boosted dividends and credit quality
The Board of Directors declared a third-quarter cash dividend of $0.39 per share, payable on September 27, 2024, to shareholders of record as of September 13, 2024. According to a news release, this dividend reflects MCAN’s commitment to distributing its taxable income to shareholders, consistent with its status as a mortgage investment corporation.
MCAN also reported strong credit quality with an impaired total mortgage ratio of 1.90% as of June 30, 2024, and a stable arrears total mortgage ratio of 3.04%.
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