MCAN Mortgage Corporation reports robust results for Q1 2023

The lender saw its net income grow on a yearly basis

MCAN Mortgage Corporation reports robust results for Q1 2023

MCAN Mortgage Corporation has reported net income of $23.3 million ($0.67 earnings per share) for Q1 2023, significantly higher than the net income of $15.5 million ($0.52 earnings per share) seen during the same period last year.

The group’s corporate assets totalled $2.39 billion as of the end of March, up by 4% ($102 million) from the end of Q4 2022. Construction and commercial mortgages amounted to $963 million as of the end of Q1, representing a 4% ($33 million) quarterly increase.

“In Q1 2023, the positive movement in the construction and commercial portfolios is attributed to net originations of $119 million in new construction and commercial mortgages, partially offset by maturities and repayments,” MCAN Mortgage Corporation said in its news release of the results.

The firm saw a total of $848 million in uninsured residential mortgages as of March 31, up by 2% ($20 million) from December 31, 2022.

“We actively managed origination volumes in order to protect our net interest margins and our bottom line since the second half of 2022,” MCAN Mortgage Corporation said. “Volumes were also slower in the first part of Q1 2023 as a result of general market conditions, with many Canadians electing not to participate in the housing market given higher rates and inflation, and uncertainty on further Bank of Canada rate hikes.”

However, uninsured residential mortgage renewals increased from $79 million in Q1 2022 to $112 million in Q1 2023 “as we worked with our borrowers to ease the impact on them from the current interest rate environment and mortgage stress tests,” the group said.

Securitized mortgages totalled $1.72 billion during the first quarter, falling by 2% ($27 million) from Q4 2022.

“We decreased our insured residential mortgage originations and securitization volumes in favour of selling our insured residential mortgage commitments given extremely tight and even negative securitization spreads in the market in the first part of Q1 2023,” the firm said. “Overall, total origination volumes (including commitments sold) were lower as a result of the higher interest rate environment.”

Still, this figures represented a “solid” outcome that affirms MCAN Mortgage Corporation’s strategy “of working on controllable factors to protect our net mortgage spread income and therefore our bottom line,” said Karen Weaver, president and CEO.

“While higher interest rates and inflation continue to cause uncertainty in the Canadian real estate landscape, we believe our assets are resilient through various economic cycles and, therefore, our financial performance over the long term as well. We have successfully deployed our capital from last quarter’s shareholder rights offering and we remain focused on delivering solid margins in our mortgage and lending business.”