MCAN Financial Group reveals record full-year earnings

Dividends are up by 5.4%

MCAN Financial Group reveals record full-year earnings

MCAN Financial Group has just rolled out some impressive figures for 2023, hitting the highest annual net income in its history at a whopping $77.5 million, breaking down to earnings of $2.22 per share.

This leap forward from last year's $55.4 million and $1.77 per share shows significant progress. The company was able to navigate the challenges of a high-interest rate environment, boosting its return on average shareholders' equity to 15.05% from the previous year's 12.47%.

Despite this upward trend, the last quarter of 2023 saw a bit of a hiccup, with net income dipping to $19.9 million compared to the fourth quarter of 2022's $24.1 million. This was partly because the company had to set aside more money for potential credit losses, even though its core business of lending against corporate mortgages still performed strongly.

In light of these results, MCAN's board has decided to boost its regular cash dividend to shareholders by 5.4%, setting it at $0.39 per share for the first quarter. They've also decided to skip a special dividend this time around, mainly because of some tax timing differences from their investment strategies in the second half of 2023.

"As we celebrate this remarkable achievement, we remain committed to driving sustainable growth and maximizing shareholder value in the long term,” CEO Don Coulter said, noting a 16% growth in the company's diversified assets, pushing the total close to the $5 billion mark.

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The company saw its corporate assets balloon by 21% to $2.76 billion by the end of December 2023. The construction and commercial mortgage sectors flourished, too, with a healthy 20% growth. The company did face some headwinds with a slight drop in uninsured residential mortgage originations due to the broader economic and interest rate challenges impacting the housing market.

Nevertheless, the company noticed an uptick in mortgage renewals, suggesting that many borrowers prefer to stick with their current lender in today's market.

On the credit quality front, there's been a jump in impaired mortgages, a sign of the challenging times. But MCAN stands by the quality of its mortgage loan portfolio and its approach to managing defaults.

Capital-wise, MCAN has been busy, renewing its Base Shelf prospectus and at-the-market equity program, which has allowed for the issuance of new common shares and supported the company's Dividend Reinvestment Plan.

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