HOMEQ Corporation announced its subsidiary, HomEquity Bank, saw origination of reverse mortgages grow to $52 million, up 77% from Q3 2009. The company’s mortgage portfolio balance expanded by 18% to $985 million;
During the quarter encouraging demand was experienced throughout the country and all sales regions performed at levels significantly higher than in prior years said the company. The volume of inquiries and applications continues to grow and the sales cycle is shortening, indicating the strong motivation of new customers to acquire a reverse mortgage says HOMEQ.
“We are in the midst of an exciting business evolution based on an intersection of growing demographics, enhanced product alternatives and our 25 years of business expertise”, said President and Chief Executive Officer, Mr. Steven Ranson. “It is estimated that the number of Canadian seniors will grow by 20% in the next six years and increasingly they will rely on HomEquity Bank for flexible and innovative solutions to meet their retirement needs. While the rapid origination growth currently experienced and the incremental cost of being a bank, has had the effect of suppressing net income growth this year, HOMEQ is effectively positioning itself for attractive profit growth in 2011”.
Net income for the quarter was $0.8 million ($0.06 per share) compared to net loss of $0.2 million ($0.01 per share) in Q3, 2009. Adjusted net income of $0.13 per share was lower than $0.15 per share earned in Q3, 2009 primarily due to the increase in non-interest expenditure incurred in operating a bank. Adjusted return on equity (annualized) was 8.1% in comparison to 9.7% in 2009.