Business
MCAN Mortgage Corporation reports second quarter earnings and an increase in the quarterly dividend
Stock market symbol TSX: MKP TORONTO, Aug. 8 /CNW/ - MCAN Mortgage Corporation ("MCAN", the "Comp...
About this update from Mcan Mortgage Corporation
[{"type":"text","content":"\n\n\n\nStock market symbol TSX: MKP\n\n\nTORONTO, Aug. 8 /CNW/ - MCAN Mortgage Corporation ("MCAN", the "Company"\nor "we") reported net income of $4.9 million for the second quarter of 2008,\nup from $4.2 million a year earlier. Earnings per share for the quarter were\n$0.35 compared to $0.33 last year. Net income for the six months ended June\n30, 2008 was $10.0 million, up from $8.6 million a year earlier, while\nearnings per share in the same period were $0.71 compared to $0.68 in 2007.\nThe 2007 year-to-date earnings per share have been restated from $0.69 to\n$0.68 and 2007 second quarter earnings per share have been restated from $0.34\nto $0.33 to reflect the dilutive impact of the rights offering that we\ncompleted in July 2007.\n\n\nNet Investment Income: Net investment income for the second quarter\nincreased from $5.1 million in 2007 to $6.1 million in 2008. The increase is\nprimarily due to increases in securitization income and equity income from\nMCAP Commercial LP ("MCLP") and a decrease in provisions, partially offset by\nlower marketable securities income in 2008.\n\n\nMortgage interest income increased from $6.5 million to $7.5 million. The\naverage portfolio increased by $58 million as our additional capacity from the\nrights offering was deployed. This increase was partially offset by a decrease\nin the average mortgage yield from 7.14% in 2007 to 6.81% in 2008.\nApproximately 45% of our mortgages are floating rate (prime-based) loans, down\nfrom 52% at March 31, 2008, and the prime rate has dropped by 1.25% over the\npast twelve months. During the quarter, we increased our fixed rate mortgage\nportfolio and decreased our floating rate mortgage portfolio to minimize the\nreduction to net investment income due to compressed spreads.\n\n\nInterest on loans and investments decreased from $1.5 million to $1.2\nmillion as a result of decreases in the prime rate.\n\n\nEquity income from our ownership in MCLP increased from $460,000 to\n$707,000. MCLP earned origination fees from large construction projects and\nsignificant income from its single-family operations in the quarter.\n\n\nWe recognized securitization income of $1.3 million during the quarter\nrelating to the securitization of insured mortgages through the Canada\nMortgage Bonds program, an increase of $812,000 f...