distances itself from its competitors, and other highlights from the channel lender’s quarterly report.
“The issues faced by our mortgage lending peers are not representative of the risk we face today at Street Capital," Ed Gettings, Street Capital CEO, told investors and reporters Wednesday during a conference call.
Gettings did not mention specific competitors but readers can infer he was speaking about Home Capital, which has faced turbulence following an OSC accusation that it misled investors and has led to declining deposits.
The lender is eyeing opportunities, including within the uninsured mortgage market, in which it plans to expand this month.
In its quarterly release as well, Street Capital endeavoured to distance itself from its competitors.
“In the 10 years since Street Capital Bank’s founding, its management team and board of directors have built its reputation as a prudent lender, with a conservative approach to growth. Street Capital Bank has designed its business with a relentless focus on credit quality and a conservative funding approach,” Street Capital said. “These elements have ensured that Street Capital Bank is well-positioned to capitalize on opportunities that may be generated by market changes.
“The Bank has not been affected by the recent funding and liquidity challenges experienced by some of the other regulated financial institutions in recent weeks.”
Regarding Street’s performance in Q1 2017, revenue fell from $13.2 million to $10.8 million year-over-year. Net gain on the sale of mortgages was $10.7 million, down from Q1 2016’s total of $12.6 million.
Street also recorded shareholders’ loss per share of $0.02, compared to earnings per share of $0.02. And mortgages under administration were up to $27.81 billion from $25.02 billion.
The lender claims an adjustment period following last year’s mortgage rule changes was a major roadblock in Q1.
“Street Capital Bank continued to generate robust mortgage originations in Q1, while facing sustained margin pressure on new insured volumes into Q1 2017,” said Ed Gettings, Chief Executive Officer of Street Capital Group Inc. “We view these challenges as temporary, as the market adjusts to the mortgage insurance rules announced by the Department of Finance in October 2016.
“We are an established participant in the insured segment and are set for measured growth in the uninsured segment of the market. The events in our industry over the past few weeks will present Street with several opportunities in the coming months and years,” Gettings continued. “We plan to approach these opportunities with the prudence that has always been a hallmark of our strategy. As a well-capitalized Schedule I bank with a track record of industry-leading credit quality, Street Capital Bank is strongly positioned to generate significant shareholder value over the long term.”
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