Q3 results highlight growth in mortgage originations and key investment returns
MCAN Mortgage Corporation (dba MCAN Financial Group) posted a boost in net income for the third quarter of 2024, driven by favourable market conditions and strong investment returns.
Net income climbed to $26.9 million ($0.70 per share) compared to $18.5 million ($0.53 per share) in the same quarter last year.
"We had a strong quarter, with total assets surpassing $5.2 billion and net income exceeding last year's figures,” said CEO Don Coulter, adding that the company leveraged “various levers” to capitalize on a lower interest rate environment.
“We also successfully raised additional capital in the quarter through our at-the-market program to help us grow."
The company’s total assets rose 10% year-to-date, reaching $5.21 billion by the end of September. Growth was fuelled by increased securitized mortgages and stronger performance from MCAN’s REIT investments, which saw unrealized fair value gains.
MCAN also benefited from its investment in MCAP, which contributed a notable $6.7 million in equity income for the quarter, a 55% increase over last year.
Mortgage originations
MCAN’s mortgage origination volumes reflect the impacts of lower interest rates. Uninsured residential mortgages grew by 14% to $1.11 billion year-to-date, with $311 million in originations, a 9% increase from 2023.
Additionally, insured residential mortgage originations reached $528 million, marking a 41% rise, while securitized mortgage holdings saw a substantial 19% increase to $2.29 billion.
The company reported a decline in commercial and construction mortgage originations, partly due to construction delays and permitting issues, but overall portfolio stability remains strong. The trend of borrowers choosing to renew their existing loans contributed to MCAN’s sustained renewal rate, with $350 million in uninsured mortgage renewals so far this year.
Read next: What are the private lending space's prospects in 2025?
While mortgage arrears edged up slightly, MCAN’s credit quality stayed solid. Most arrears were resolved within 30 days, with the company’s uninsured residential portfolio maintaining an average loan-to-value (LTV) of 63.5%.
"In this environment, we are continuing to see solid origination and renewal volumes across the entire loan book as well as good credit quality,” Coulter said in a press release. “Looking ahead, we are focused on MCAN's strategic growth and positioning in the Canadian mortgage market."
The Toronto-based mortgage investment corporation declared a fourth-quarter cash dividend of $0.39 per share, payable in early January 2025.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
