MCAN Financial Group has announced its financial results for the third quarter of 2024, showcasing a strong performance despite a challenging economic environment. The Company reported a return on average shareholders' equity of 18.16% for the quarter, indicating a solid improvement from 14.20% in the same quarter of the previous year. This achievement reflects the impact of higher unrealized fair value gains on MCAN's Real Estate Investment Trust (REIT) portfolio and increased earnings from its investment in MCAP.
MCAN Financial Group's net income reached $26.9 million, translating to earnings of $0.70 per share. This represents a significant rise from $18.5 million or $0.53 per share in Q3 2023. Year-to-date figures show net income at $69.9 million ($1.87 per share), up from $57.6 million ($1.66 per share) in the same period of 2023. The overall improved performance was largely driven by enhanced earnings from various business segments including securitized mortgage spread income and a favorable market environment for REIT prices.
As a mortgage investment corporation, MCAN is obligated to distribute all its taxable income in the form of dividends. For Q4 2024, the Board of Directors declared a regular cash dividend of $0.39 per share, scheduled for payment on January 2, 2025. In managing its portfolio amid falling interest rates, MCAN remains committed to optimizing controllable factors to safeguard profitability while seizing market opportunities. CEO Don Coulter expressed optimism in the Company's strategic growth and positioning in the Canadian mortgage market.
He highlighted that MCAN continues to witness strong origination and renewal volumes across its loan portfolio with stable credit quality. As of September 30, 2024, MCAN's total assets surged to $5.21 billion, marking an increase of $474 million from the end of the previous year. Notably, corporate assets grew to $2.88 billion, and uninsured residential mortgage originations also saw an uptrend compared to last year. In its construction and commercial mortgage segment, the Company encountered a net decrease due to project completions but maintained positive origination figures.
The economic climate, marked by expectations of further interest rate cuts, has somewhat ameliorated conditions for the housing market and borrowers, contributing to robust renewal rates in the uninsured residential mortgage category. MCAN's approach to securitization has yielded favorable results, enhancing the earnings profile of its mortgage portfolio. Amid a widening spread between bond yields and mortgage rates, the Company successfully focused on securitizing its insured residential mortgages.
In the recent quarter, MCAN reported significant financial gains from its association with MCAP Commercial LP, contributing to increased equity income. Despite enjoying these gains, the Company faced higher interest expenses which slightly offset the benefits. Moreover, MCAN experienced a notable turnaround in its marketable securities, with a net unrealized fair value gain compared to a loss in the prior year. Looking at credit quality, the Company's mortgage arrears ratio showed stability, while impaired corporate mortgage ratios demonstrated improvement as MCAN effectively managed its portfolio recovery processes.
The Company remains a strong player in the market owing to its strategic asset management and financing approaches including its At-The-Market (ATM) program and Dividend Reinvestment Plan (DRIP), which provide essential capital to support growth. In conclusion, MCAN Financial Group's third-quarter performance in 2024 underscores its resilient business model, bolstered by smart asset management and favorable market conditions. The Company continues to emphasize disciplined execution of its strategic initiatives while maintaining shareholder value through regular dividends and robust credit quality management.
For further insights, detailed information is available in the Company's 2024 Third Quarter Report.
