TORONTO, Nov. 5, 2025 /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 nine months ended September 30, 2025. The results reflected higher income from our investment in MCAP, while provisions for credit losses were higher and fair value on our securities were lower due to uncertainty in the forecasted economic and geopolitical environment.
Q3 2025
Net interest income: $23.8 million
Net income: $20.5 million
ROE1: 13.09%
EPS: $0.52
Book value per share: $15.85
Total assets under management1: $7.0 billion
Cash dividends declared: $0.41
YTD 2025
Net interest income: $71.2 million
Net income: $57.3 million
ROE1: 12.44%
EPS: $1.46
Total Capital and CET1 ratio2: 19.01%
Income tax assets to capital ratio3: 5.45
"We achieved good results for the quarter, with net income up 2% compared to last quarter. We achieved growth in our uninsured residential mortgage originations, up 30% from last quarter, as we successfully launched our uninsured residential mortgage securitization program. Although the forecasted economic outlook is uncertain and 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," said Derek Sutherland, CEO of MCAN. "MCAP continues to remain a key partner and a driver of our returns for our shareholders. Looking ahead, we continue to invest in new products and infrastructure with a multi-year focus on delivering sustainable and profitable growth."
Mortgage origination growth bringing total residential mortgage assets to $4.0 billion, +10% YTD, including uninsured residential mortgage assets of $1.2 billion, +10% YTD, and insured residential mortgage assets of $2.8 billion, +9% YTD
Uninsured residential mortgage originations increased YTD, +30% y/y, with a $4.4 million y/y increase in uninsured residential mortgage interest income. Insured residential mortgage originations increased YTD, +22% y/y, along with strong renewal volumes.
This performance during the year reflects our outstanding service to our brokers, originators and customers despite a challenging and competitive market.
Successful launch of our uninsured residential mortgage securitization program in the quarter. We look to continue to grow this portfolio as part of our funding diversification and capital optimization strategy.
Residential construction mortgage balances grew to $1.2 billion, +8% YTD
Residential construction loan advances increased YTD, +4% y/y.
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. This led to not as much run-off in the portfolio as expected. To date, projects continue to progress toward completion.
MCAP continues to perform ahead of expectations from growth in their AUM
MCAP income in the quarter of $10.4 million, +55% y/y, +6% q/q, and YTD of $25.7 million, +19% y/y, driven by higher securitization income from a higher average portfolio balance and lower non-securitized interest expenses as interest rates have declined. These were partially offset by lower non-securitized mortgage revenue due to lower mortgage rates and lower average portfolio balances, and lower mortgage origination fees from lower fee rates and lower commitment and whole loan sales volumes.
Our investment in and partnership with MCAP continues to remain a key driver of returns for our shareholders.
Provisions for credit losses reflective of current uncertain market outlook; however, credit quality continues to remain resilient
Provision for credit losses were $2.1 million in the quarter and $7.4 million YTD mainly due to worsening economic forecasts due to the current economic and geopolitical environment and interest provisioning on our impaired residential construction loans.
Impaired non-securitized mortgage ratio1 was 2.61% at September 30, 2025 compared to 2.34% at June 30, 2025 and 2.46% at December 31, 2024. At September 30, 2025, impaired mortgages mainly represent 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.
We believe overall that we have a quality uninsured residential mortgage loan portfolio with an average LTV of 65.4% at September 30, 2025 compared to 64.0% at June 30, 2025 and 63.7% at December 31, 2024.
MCAN quarterly dividend declared
The Board of Directors declared a fourth quarter regular cash dividend of $0.41 per share to be paid January 2, 2026 to shareholders of record on December 15, 2025.
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.
2 These measures have been calculated in accordance with OSFI's Capital Adequacy Requirements guidelines.
3 Tax balances are calculated in accordance with the Tax Act.
Interim Consolidated Financial Statements
Consolidated balance sheets (unaudited)
September 30
December 31
2025
2024
Assets
Non-securitized Assets
Cash and cash equivalents
$ 141,889
$ 61,703
Marketable securities
54,452
66,345
Mortgages
2,535,698
2,464,091
Non-marketable securities
125,443
117,428
Equity investment in MCAP Commercial LP
132,949
122,265
Derivative financial instruments
4,401
2,508
Deferred tax assets
1,115
1,430
Other assets
36,976
24,547
3,032,923
2,860,317
Securitization Assets
Cash held in trust
62,924
47,249
Mortgages
2,781,009
2,419,871
Other assets
32,395
20,128
2,876,328
2,487,248
$ 5,909,251
$ 5,347,565
Liabilities and Shareholders' Equity
Liabilities
Non-securitized Liabilities
Term deposits
$ 2,473,256
$ 2,288,226
Demand loans payable
172
107
Current taxes payable
155
—
Other liabilities
20,040
36,807
2,493,623
2,325,140
Securitization Liabilities
Financial liabilities from securitization
2,779,219
2,423,236
2,779,219
2,423,236
5,272,842
4,748,376
Shareholders' Equity
Share capital
484,355
456,683
Contributed surplus
510
510
Retained earnings
152,495
143,620
Accumulated other comprehensive income (loss)
(951)
(1,624)
636,409
599,189
$ 5,909,251
$ 5,347,565
Consolidated statements of income (unaudited)
Q3
Q3
YTD
YTD
For the Periods Ended September 30
2025
2024
2025
2024
Net interest income - non-securitized assets
Mortgage interest
$ 47,133
$ 48,067
$ 139,163
$ 144,497
Interest on cash and other
1,223
920
3,264
3,085
48,356
48,987
142,427
147,582
Term deposit interest and expenses
26,606
28,021
76,990
81,617
Interest on loans payable
1,755
153
4,242
2,578
28,361
28,174
81,232
84,195
19,995
20,813
61,195
63,387
Net interest income - securitized assets
