Builders Capital Mortgage Corp.
Posts Record Q3; Impairment Growth Signals Caution
Published: Dec 3, 2025
Author: FRC Analysts
Disclosure: Builders Capital Mortgage Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Company Details
Sector – Financial Services / Industry – Mortgage Finance
Trading Information
Ticker & Exchange – BCF.V : TSX.V
Report Highlights
- Q3 was another record quarter. Mortgage advancements rose 68% YoY to $20M, the highest Q3 on record. Net receivables grew 8% QoQ to $52M, also a record.
- Revenue grew 47% YoY and EPS rose 12% YoY, with both beating our estimates by 1% due to higher-than-anticipated lending rates.
- Annual dividend remained $0.80/share, an 8.26% yield.
- The MIC remains focused on residential construction mortgages. Stage three (impaired) mortgages rose 313% QoQ to 11% of mortgage receivables vs 5-10% for comparables. However, allowances were reduced 32 bp to 3.09% of receivables, signaling that management does not anticipate additional losses. That said, we remain cautious and will closely track portfolio quality in the coming quarters; we have raised our loan-loss provision estimates.
- Since June 2024, the BoC has cut rates nine times (275 bps) to 2.25%, with the possibility of one more cut in early 2026 amid tepid GDP growth, soft consumer confidence, elevated trade tensions, and high unemployment. While mortgage delinquencies remain a concern, we believe easing rates should support a rebound in pre-sales, lower developer financing costs, and higher transaction volumes for real estate lenders next year.
- As noted in our prior reports, declining rate environments have historically boosted MIC and financial stocks. However, in the current falling-rate environment, MICs have lagged financials (flat YoY vs. +23% YoY) and are tracking REITs, given both their exposure to residential real estate, which, as mentioned above, is undergoing a slow phase with negative sentiment. With residential real estate poised for recovery in 2026, we expect MIC stocks to experience an upswing.
- With Q3 results beating forecasts, we are raising full-year revenue and EPS estimates. Stress tests indicate BCF can comfortably sustain its $0.80/share annual dividend.
Price and Volume (1-year)
| YTD | 12M | |
| BCF | 7% | 5% |
| TSXV | 52% | 53% |
* Builders Capital has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
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