Business
MCAN Mortgage Corporation reports third quarter earnings and an increase in the quarterly dividend
MCAN Mortgage Corporation reports third quarter earnings and an increase in the quarterly dividend
About this update from Mcan Mortgage Corporation
[{"type":"text","content":"\n\n\n\nNov. 4, 2009 (Canada NewsWire Group) -- TORONTO, Nov. 4 /CNW/ -- MCAN Mortgage Corporation (\"MCAN\", the \"Company\" or \"we\") reported net income of $6.6 million for the third quarter of 2009, down from $10.4 million a year earlier. Earnings per share for the quarter were $0.46 compared to $0.73 last year. Net income for the nine months ended September 30, 2009 was $18.6 million, down from $20.4 million a year earlier, while earnings per share in the same period were $1.30 compared to $1.44 in 2008.Although general economic conditions remain weak, MCAN continued its strong 2009 performance in the third quarter. Despite historically low interest rates, the yield on our mortgage portfolio increased by 0.47% over the second quarter as a result of strong management of our asset mix and increased realization of discounts embedded in our mortgage portfolio. The decreases in the prime rate since 2008 also facilitated a 0.50% decrease in our average term deposit interest rate over the second quarter, which contributed to a significant increase in spreads over last quarter.MCAN continued its participation in the Canada Mortgage Bonds (\"CMB\") program during the third quarter, which has led to significant incremental income in recent quarters.The deterioration in the economy has also led to a significant increase in impaired mortgages and total mortgage arrears during 2009. Impaired mortgages increased from 3.47% at June 30th to 5.88% at September 30th, although total mortgage arrears decreased from $43 million to $35 million during the same period. While MCAN's arrears levels are much higher than last year, we have not experienced material losses for the year to date.Although earnings per share have decreased from 2008, our results are strong by historical standards. However, it must be cautioned that the primary contributing activities are significantly more volatile than our core activities.Net Investment Income: Net investment income for the third quarter decreased from $12.5 million in 2008 to $8.0 million in 2009. The decrease in the quarter is primarily due to a one-time gain on the sale of mortgages in 2008, in addition to lower spread income in the current year.During the quarter, we realized $1.2 million (included in mortgage interest income) relating to the partial recovery of purchase price discounts on several por...