Uninsured residential mortgage portfolio reaches record $1 billion TORONTO, May 6, 2024 /CNW/ - MCAN Mortgage Corporation d/b/a MCAN Financial Group ("MCAN", the "Company" or "we") (TSX: MKP) reported net income of $23.2 million ($0.65 earnings per share) for the first quarter of 2024, relatively consistent with net income of $23.3 million ($0.67 earnings per share) in the first quarter of 2023.  First quarter 2024 return on average shareholders' equity1 was 17.09% compared to 18.60% in the first quarter of 2023. While our net income was relatively consistent to the same period last year, our net corporate mortgage spread income1 increased by 4% or $0.9 million from Q1 2023.    We closed a successful overnight marketed offering on March 28, 2024 for aggregate gross proceeds of $28.8 million. Due to strong investor demand, we were able to upsize the base offering by 25% from $20 million to $25 million, plus receive the full exercise of the over-allotment option of an additional $3.8 million. This offering allowed us to expand our shareholder base and shows the support our shareholders have for our business and strategy. These proceeds will allow us to grow our residential mortgage lending and residential construction lending business. The Board of Directors declared a second quarter regular cash dividend of $0.39 per share. The dividend will be paid on June 28, 2024 to shareholders of record as of June 14, 2024. "Our first quarter results were solid with continued growth in our net mortgage interest and originations volumes in our residential lending portfolio. We grew our uninsured residential mortgage portfolio to over $1 billion in the quarter - a record high - with strong renewal volumes. With our successful overnight marketed offering raising $28.8 million, we look to continue growing our business as we have consistently done over many years," said CEO Don Coulter. "During the quarter, we were also recognized as one of Canada's Top Small and Medium Employers. We believe in our team members' well-being and professional growth because that builds a stronger MCAN.  As we celebrate our achievements this quarter, we remain committed to driving sustainable growth and maximizing shareholder value in the long term."  HIGHLIGHTS Corporate assets totalled $2.75 billion at March 31, 2024, a net decrease of $5 million (0.2%) from December 31, 2023. Construction and commercial mortgages totalled $1.09 billion at March 31, 2024, a net decrease of $26 million (2%) from December 31, 2023. In Q1 2024, the movement in the construction and commercial portfolios is attributed to net originations of $122 million in new construction and commercial mortgages, offset by maturities and repayments. Originations in the first quarter were 2% higher compared to the same period in 2023 and we have seen some extensions of projects due to normal construction delays or normal delays relating to the permitting and zoning process. To date, projects continue to progress toward completion. Uninsured residential mortgages reached $1.01 billion at March 31, 2024, a net increase of $41 million (4%) from December 31, 2023. Uninsured residential mortgage originations totalled $84 million in the first quarter of 2024, an increase of $21 million (34%) from the same period in 2023. The economic and interest rate environment and its impact on the housing market and borrowers has improved due to expectations about future interest rate cuts. Canadian housing resale activity was strong in Q1 2024, creating demand for mortgages. We have also seen an increase in our uninsured residential mortgage renewal rates with renewals of $127 million in the first quarter of 2024 compared to $112 million for the same period in 2023 as borrowers find it more convenient to stay with their existing lender in the current market environment. Non-marketable securities totalled $113 million at March 31, 2024, an increase of $3 million (2%) from December 31, 2023 with $76 million of remaining commitments expected to fund over the next five years. Marketable securities totalled $50 million at March 31, 2024, relatively consistent with December 31, 2023. Securitized mortgages totalled $2.09 billion at March 31, 2024, a net increase of $165 million (9%) from December 31, 2023, due to higher securitization volumes being ahead of maturities. Overall, total insured residential mortgage origination volumes, including an increase in our adjustable rate mortgage originations compared to last quarter, are higher due to expectations about future interest rate cuts and improved economic forecasts. Insured residential mortgage originations totalled $171 million in the first quarter of 2024, an increase of $103 million (151%) from the same period in 2023. Insured residential mortgage securitizations totalled $214 million in the first quarter of 2024, an increase of $203 million (1,845%) from the same period in 2023. Insured residential mortgages being held for upcoming securitizations totalled $240 million at March 31, 2024, a net decrease of $37 million (13%) from December 31, 2023. We use various channels in funding the insured residential mortgage portfolio, in the context of market conditions and net contributions over the life of the mortgages, in order to support our overall business. As we have seen favourable securitization spreads, we opted to securitize our insured residential mortgages as opposed to selling them at the commitment stage. FINANCIAL UPDATE Net corporate mortgage spread income1 increased by $0.9 million for Q1 2024 from Q1 2023 mainly due to a higher average corporate mortgage portfolio balance from continued net mortgage originations partially offset by a reduction in the spread of corporate mortgages over term deposit interest and expenses. The decrease in the spread of corporate mortgages over term deposit interest and expenses is mainly due to higher effective interest rates on our term deposits and unrealized fair value hedge losses. This was partially offset by higher average mortgage rates primarily due to the impact of the higher rate environment on our floating rate residential construction loans. Net securitized mortgage spread income1 increased by $0.6 million for Q1 2024 from Q1 2023 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. We have seen better economics on securitizations as the spread of ...