Canadians want to age in place at home, eh? HOMEQ Corporation, which originates and services Canada’s largest portfolio of reverse mortgages, posted record origination volume during the first quarter of 2010 with volume $47 million. The growth has exceeded Q1 2009 numbers by over 200% and HOMEQ said that its sales cycle has become noticeably shorter, thus improving efficiency and enabling HOMEQ to provide funds to new customers faster than previously experienced.
“We believe that volumes of this magnitude affirm the transition of a formerly niche product into one of more widespread acceptance”, said President and Chief Executive Officer, Mr. Steven Ranson. “At the core of HOMEQ is a trusted brand, a valued product line, and effective customer and partner relationships”.
Net income for the quarter was $0.1 million ($0.01 per share) compared to net income of $3.1 million ($0.22 per share) in Q1, 2009. The increased origination volume is having a corresponding positive effect on the value of the portfolio which grew by 10% over Q1 2009. The larger portfolio, together with an improvement in spread percentage, resulted in growth of net interest income of 16%. HOMEQ’s ability to maintain its adjusted net income at the current level was achieved despite a 5.2% increase in non-interest expenditure relating primarily to additional overhead incurred in operating a bank. Adjusted return on equity (annualized) was 7.0% in comparison to 6.8% in 2009.
“The future looks bright”, continued Mr. Steven Ranson. “It is based on an intersection of demographics, product alternatives and expertise. It is estimated that the number of Canadian seniors will grow by 20% in the next six years and increasingly they will rely on HOMEQ for flexible and innovative solutions to meet their retirement needs”.