MCAN Financial Group Releases Q1 2025 Results and Declares 41 Cents Cash Dividend
MCAN Mortgage Corporation, operating as MCAN Financial Group, reported net income of $16.6 million ($0.43 earnings per share) for the first quarter of 2025, a decrease from net income of $23.2 million ($0.65 earnings per share) in the first quarter of 2024. According to the company, results for the first quarter of 2025 were mainly impacted by higher provisions for credit losses due to current economic forecasts and the geopolitical environment.
The company’s return on average shareholders’ equity for the first quarter of 2025 was 10.99%, compared to 17.09% in the first quarter of 2024. The Board of Directors declared a second quarter regular cash dividend of $0.41 per share, which will be paid on June 30, 2025, to shareholders of record as of June 13, 2025.
“We are committed to a strategy of managing controllable factors to protect our bottom line and taking advantage of opportunities as they arise,” said Derek Sutherland, CEO of MCAN. “With a strong liquidity and capital position, high level of credit quality, and our strategy of continued growth in our lending portfolio and diversification of our funding base, we believe we are well positioned for an uncertain economic and geopolitical environment.”
The company’s total assets reached $5.4 billion at March 31, 2025, a net increase of $96 million (1.8%) from December 31, 2024. Non-securitized assets totalled $3.0 billion at March 31, 2025, a net increase of $147 million (5.1%) from December 31, 2024.
MCAN’s uninsured residential mortgages totalled $1.1 billion at March 31, 2025, a net increase of $25 million (2%) from December 31, 2024. Uninsured residential mortgage originations totalled $97 million in Q1 2025, an increase of $12 million (15%) from Q1 2024.
The company’s construction portfolio totalled $1.1 billion at March 31, 2025, a net increase of $26 million (2%) from December 31, 2024. In Q1 2025, the increase is attributed to originations of $144 million, offset by repayments on completing projects, which increased $22 million (18%) from Q1 2024.
MCAN’s securitized mortgages totalled $2.4 billion at March 31, 2025, a net decrease of $66 million (3%) from December 31, 2024. Insured residential mortgage securitization volumes were $53 million in Q1 2025, a decrease of $161 million (75%) from Q1 2024.
The company’s net non-securitized mortgage spread income decreased by $1.7 million in Q1 2025 from Q1 2024. The net non-securitized mortgage spread income decreased 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 mortgage portfolio growth.
MCAN’s net securitized mortgage spread income increased by $0.6 million for Q1 2025 from Q1 2024 mainly due to an increase in the spread of securitized mortgages over liabilities and by a higher average securitized mortgage portfolio balance from higher securitization volumes of insured residential mortgages exceeding maturities.
The company had a provision for credit losses on its non-securitized mortgage portfolio of $3.1 million in Q1 2025, compared to a recovery of credit losses of $0.6 million in Q1 2024. The provision was mainly due to worsening economic forecasts due to the current economic and geopolitical environment mainly impacting performing loans.
MCAN’s equity income from MCAP Commercial LP totalled $5.6 million in Q1 2025, a decrease of $1.6 million (22%) from $7.2 million in Q1 2024.
The company’s arrears total mortgage ratio was 2.24% at March 31, 2025, compared to 2.06% at December 31, 2024. The majority of residential mortgage arrears activity occurs in the 1-30 day category, in which the bulk of arrears are resolved and do not migrate to arrears categories over 30 days.
MCAN’s impaired non-securitized mortgage ratio was 2.31% at March 31, 2025, compared to 2.46% at December 31, 2024. At March 31, 2025, impaired mortgages mainly represent five impaired construction mortgages where asset recovery programs have been initiated.
The company’s impaired total mortgage ratio was 1.20% at March 31, 2025, compared to 1.25% at December 31, 2024.
MCAN has a Base Shelf prospectus allowing it to make certain public offerings of debt or equity securities during the period that it is effective, through Prospectus Supplements. The company has an ATM Program, established pursuant to a Prospectus Supplement to its Base Shelf prospectus, allowing it to issue up to $30 million common shares to the public from time to time at the market prices prevailing at the time of sale.
In Q1 2025, MCAN sold 61,200 common shares at a weighted average price of $18.32 for gross proceeds of $1.1 million and net proceeds of $1.1 million including $22 thousand of agent commission paid and $1 thousand of other share issuance costs under the ATM Program.
The company issued $4.5 million in new common shares through the DRIP in Q1 2025, compared to $8.2 million in new common shares in Q1 2024. The DRIP participation rate was 15% for the Q1 2025 dividend (Q1 2024 – 29%).
MCAN’s income tax assets to capital ratio was 5.41 at March 31, 2025, compared to 5.24 at December 31, 2024.
The company’s CET 1 and Tier 1 Capital to risk-weighted assets ratios were 19.12% at March 31, 2025, compared to 19.02% at December 31, 2024. Total Capital to risk-weighted assets ratio was 19.43% at March 31, 2025, compared to 19.28% at December 31, 2024.
MCAN’s leverage ratio was 9.64% at March 31, 2025, compared to 9.72% at December 31, 2024. All of the company’s capital and leverage ratios are within its regulatory and internal risk appetite guidelines.
The information in this article was provided by MCAN Mortgage Corporation, and was obtained from a press release.
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