Net income steady despite interest rates dropping from prior year highs
TORONTO, Feb. 23, 2026 /CNW/ – MCAN Mortgage Corporation d/b/a MCAN Financial Group (“MCAN”, the “Company” or “we”) (TSX:MKP), a leading Canadian mortgage investment corporation, today announced its financial results for the three and twelve months ended December 31, 2025. The results compared to the prior year periods mainly reflected significant growth in our assets under management slightly offset by the impact of lower net interest margin from a decline in interest rates. We also had higher income from our investment in MCAP and higher fair value on our securities partially offset by provisions for credit losses due to uncertainty in the forecasted economic and geopolitical environment.
Q4 2025 highlights compared to Q4 2024
- Net interest income: $24.7 million, –% y/y
- Net income: $17.6 million, +128% y/y
- ROE1: 11.02%
- EPS: $0.44
- Book value per share: $15.93
- Total assets under management1: $7.8 billion, +30% y/y
- Cash dividends declared: $0.41
2025 highlights compared to 2024
- Net interest income: $95.8 million, -1% y/y
- Net income: $74.9 million, -3% y/y
- ROE1: 12.07%
- EPS: $1.89
- Total Capital and CET1 ratio2: 18.82%
- Income tax assets to capital ratio3: 5.10
“We achieved steady results for the year despite the decline in interest rates from recent highs as we grew our assets under management by 30% y/y and utilized our hedging strategies to minimize interest rate volatility. We achieved strong growth in all our main portfolios including record growth in our uninsured residential mortgage originations – up 33% y/y. We also successfully diversified our funding base by launching our uninsured residential mortgage securitization program this year. MCAP continues to remain a key strategic partner and a driver of our returns for our shareholders,” said Derek Sutherland, CEO of MCAN. “While we recorded higher provisions for credit losses than in the prior year, our credit quality remains resilient, as strong underwriting has been an area of strength since our founding. Looking ahead, we will invest in new products and infrastructure with a multi-year focus on delivering sustainable and profitable growth.”
Record mortgage originations bringing total residential mortgage assets to $4.6 billion, +26% in 2025, including uninsured residential mortgage assets of $1.3 billion, +16% in 2025, and insured residential mortgage assets of $3.3 billion, +30% in 2025
- Uninsured residential mortgage originations increased +33% and insured residential mortgage originations increased +38% in 2025, along with strong renewal volumes.
- This performance during the year reflects our outstanding service to our brokers and customers despite a challenging and competitive market.
- This growth was supported by the successful launch of our uninsured residential mortgage securitization program this year. We look to continue to grow this portfolio as part of our funding diversification and capital optimization strategy.
Construction and commercial mortgages balances grew to $1.2 billion, +5% in 2025
- Loan advances of $631.4 million for the year despite market conditions
- Originations have been steady this year with some extensions of projects due to normal construction delays or normal delays relating to the permitting and zoning process as well as the current economic environment.
MCAP continued to perform ahead of expectations
- Income from MCAP in 2025 of $33.4 million, +16% y/y, driven by higher securitization income from a higher average portfolio balance and lower non-securitized interest expenses as interest rates declined.
- Our investment in and strategic partnership with MCAP continues to remain a key driver of returns for our shareholders.
Provisions for credit losses reflected uncertain market conditions; however, credit quality continues to remain resilient
- Provision for credit losses were $13.5 million for the year mainly due to interest provisioning on our impaired residential construction loans, growth in our uninsured residential mortgages and worsening macroeconomic forecasts.
- Impaired non-securitized mortgage ratio1 was 1.69% at December 31, 2025 compared to 2.46% at December 31, 2024. At December 31, 2025, impaired mortgages represent certain impaired construction loans as well as uninsured residential mortgages where asset recovery programs have been initiated or we expect the loans to be brought current. The decrease in the quarter is mainly due to successful resolution in our impaired construction loans.
- We believe overall that we have a quality loan portfolio with average LTVs at December 31, 2025 of (i) 66.3% for our uninsured residential mortgages based on an industry index of current real estate values; and (ii) 60.7% for our construction loans based on appraisal values.
MCAN quarterly dividend declared
- The Board of Directors declared a first quarter regular cash dividend of $0.43 per share (an increase of 5% from our fourth quarter 2025 dividend) to be paid March 31, 2026 to shareholders of record on March 13, 2026.
Annual And Special Meeting of Shareholders
- The Company’s Annual And Special Meeting of Shareholders will be held at 4:30pm EST on April 30, 2026.
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1 Considered to be a non-GAAP and other financial measure. For further details, refer to the “Non-GAAP and Other Financial Measures” section of this new release. Non-GAAP and other financial measures and ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers. |
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2 These measures have been calculated in accordance with OSFI’s Capital Adequacy Requirements guidelines. |
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3 Tax balances are calculated in accordance with the Tax Act. |
Consolidated Financial Statements
Consolidated balance sheets
(in thousands of Canadian dollars)
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At December 31 |
2025 |
2024 |
|
Assets |
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Non-securitized Assets |
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|
Cash and cash equivalents |
$ 79,828 |
$ 61,703 |
|
Marketable securities |
54,146 |
66,345 |
|
Mortgages |
2,479,588 |
2,464,091 |
|
Non-marketable securities |
126,592 |
117,428 |
|
Equity investment in MCAP Commercial LP |
133,995 |
122,265 |
|
Derivative financial instruments |
1,907 |
2,508 |
|
Deferred tax assets |
1,650 |
1,430 |
|
Other assets |
27,144 |
24,547 |
|
2,904,850 |
2,860,317 |
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Securitization Assets |
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Cash held in trust |
71,856 |
47,249 |
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Mortgages |
3,458,671 |
2,419,871 |
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Other assets |
42,093 |
20,128 |
|
3,572,620 |
2,487,248 |
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|
$ 6,477,470 |
$ 5,347,565 |
|
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Liabilities and Shareholders’ Equity |
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Liabilities |
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Non-securitized Liabilities |
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Term deposits |
$ 2,340,483 |
$ 2,288,226 |
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Demand loans payable |
19,438 |
107 |
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Derivative financial instruments |
46 |
— |
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Other liabilities |
38,772 |
36,807 |
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2,398,739 |
2,325,140 |
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Securitization Liabilities |
||
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Financial liabilities from securitization |
3,433,883 |
2,423,236 |
|
3,433,883 |
2,423,236 |
|
|
5,832,622 |
4,748,376 |
|
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Shareholders’ Equity |
||
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Share capital |
491,015 |
456,683 |
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Contributed surplus |