Core business performing in current environment
TORONTO, Aug. 6, 2025 /CNW/ – MCAN Mortgage Corporation d/b/a MCAN Financial Group (“MCAN”, the “Company” or “we”) (TSX:MKP) reported net income of $20.2 million ($0.51 earnings per share) for the second quarter of 2025, an increase from net income of $19.7 million ($0.52 earnings per share) in the second quarter of 2024.
Second quarter 2025 return on average shareholders’ equity1 was 13.19% compared to 13.63% for the same period in the prior year.
Our Q2 results were mainly impacted by higher mortgage spread income and higher income from MCAP partially offset by higher provisions for credit losses compared to the same prior year period.
For YTD 2025, we reported net income of $36.8 million ($0.94 earnings per share), a decrease from net income of $43.0 million ($1.17 earnings per share) for the same prior year period.
Return on average shareholders’ equity1 was 12.10% for YTD 2025 compared to 15.31% for the same prior year period.
We reported lower total net income for YTD mainly as a result of higher provisions for credit losses due to the forecasted economic and geopolitical environment.
We are committed to a strategy of managing controllable factors to protect our bottom line and capital. We expect to take advantage of opportunities that arise in the current market environment. We believe that we have a quality loan portfolio with conservative loan to value ratios supporting our loans.
The Board of Directors declared a third quarter regular cash dividend of $0.41 per share to be paid on September 29, 2025 to shareholders of record as of September 15, 2025. As a mortgage investment corporation, we pay out all of our taxable income to shareholders through dividends.
“We recorded quality results for the second quarter of 2025 up 22% from Q1 2025 and 2% from Q2 2024. We continue to leverage our brand and exceptional customer service to take advantage in the marketplace, with record originations in our insured residential lending business while maintaining our spreads. Although we recorded higher provisions for credit losses than the prior year, our credit quality remains resilient as it has since our founding,” said Derek Sutherland, CEO of MCAN. “In July 2025, we launched a new uninsured residential mortgage third-party securitization program with one of the major Canadian banks which will add to our securitization income and allow us to grow our uninsured originations. Looking ahead, we are focused on tapping new growth opportunities to drive value for all our stakeholders.”
HIGHLIGHTS
- Total assets reached $5.7 billion at June 30, 2025, a net increase of $391 million (7.3%) from December 31, 2024.
- Non-securitized mortgage portfolio totalled $2.7 billion at June 30, 2025, a net increase of $277 million (11%) from December 31, 2024.
- Uninsured residential mortgages totalled $1.2 billion at June 30, 2025, a net increase of $53 million (5%) from December 31, 2024. Uninsured residential mortgage originations totalled $231 million for YTD 2025, an increase of $34 million (17%) from YTD 2024. The economic and interest rate environment and its impact on the housing market and borrowers had improved somewhat due to expectations about further interest rate cuts. We had steady uninsured residential mortgage renewal rates with renewals of $245 million for YTD 2025 compared to $259 million for YTD 2024. This business is supported by outstanding service to our brokers, originators and customers.
- Construction and commercial mortgages totalled $1.2 billion at June 30, 2025, a net increase of $77 million (7%) from December 31, 2024. In 2025, the movement in the construction and commercial portfolios is attributed to new loan advances of $323 million in construction and commercial mortgages, slightly offset by repayments from completing projects. Originations have been steady this year and some extensions of projects due to normal construction delays or normal delays relating to the permitting and zoning process meant that we have not experienced as much run-off in the portfolio as expected. To date, projects continue to progress toward completion.
- Uninsured residential mortgages totalled $1.2 billion at June 30, 2025, a net increase of $53 million (5%) from December 31, 2024. Uninsured residential mortgage originations totalled $231 million for YTD 2025, an increase of $34 million (17%) from YTD 2024. The economic and interest rate environment and its impact on the housing market and borrowers had improved somewhat due to expectations about further interest rate cuts. We had steady uninsured residential mortgage renewal rates with renewals of $245 million for YTD 2025 compared to $259 million for YTD 2024. This business is supported by outstanding service to our brokers, originators and customers.
- Securitized mortgages totalled $2.4 billion at June 30, 2025, a net increase of $9 million (0.4%) from December 31, 2024.
- Our insured residential mortgage securitization volumes were $211 million in Q2 2025, an increase of $54 million (34%) from Q2 2024 and $264 million YTD 2025, a decrease of $107 million (29%) from YTD 2024. We use various channels in funding the insured residential mortgage portfolio, in the context of market conditions and net contributions over the life of the mortgages, in order to support our overall business. We have seen better securitization spreads compared to prior year.
- Beginning in July 2025, we have an agreement with a Canadian Schedule I Chartered bank to participate in an uninsured residential mortgage third-party securitization program sponsored by the bank. Under this agreement, we can sell our uninsured residential mortgages into the program and they remain in the program until maturity. In July 2025, we sold $80.2 million into this program. This is an integral part of our diversification and capital optimization strategy.
- Our insured residential mortgage securitization volumes were $211 million in Q2 2025, an increase of $54 million (34%) from Q2 2024 and $264 million YTD 2025, a decrease of $107 million (29%) from YTD 2024. We use various channels in funding the insured residential mortgage portfolio, in the context of market conditions and net contributions over the life of the mortgages, in order to support our overall business. We have seen better securitization spreads compared to prior year.
FINANCIAL UPDATE
- Net non-securitized mortgage spread income1 increased by $0.5 million for Q2 2025 from Q2 2024 mainly due to a higher average non-securitized mortgage portfolio balance from mortgage portfolio growth, offset by a reduction in the spread of non-securitized mortgages over term deposit interest and expenses. For YTD 2025, net non-securitized mortgage spread income1 decreased by $1.2 million from YTD 2024 mainly due to a reduction in the spread of non-securitized mortgages over term deposit interest and expenses partially offset by a higher average non-securitized mortgage portfolio balance from continued originations and renewals.
- Net securitized mortgage spread income1 increased by $0.5 million for Q2 2025 from Q2 2024 and increased $1.0 million YTD 2025 from YTD 2024 due to a higher average securitized mortgage portfolio balance and an increase in the spread of securitized mortgages over liabilities.
- For Q2 2025, we had a provision for credit losses on our non-securitized mortgage portfolio of $2.2 million compared to a provision for credit losses of $1.4 million in Q2 2024. For YTD 2025, we had a provision for credit losses on our non-securitized mortgage portfolio of $5.3 million compared to a provision for credit losses of $0.8 million for 2024.
- Equity income …