Builders Capital Mortgage Corp.
Record Results / Gradual Housing Recovery Could Lift MIC Stocks
Published: May 7, 2026
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
Trading information – Price data unavailable
Report Highlights
- 2025 Results: Revenue and EPS were broadly in line with our estimates, with small beats of 0.81% and 1.67%, respectively. Revenue rose 47% YoY, and EPS increased 15% YoY, both reaching record levels, driven by robust lending activity and higher lending rates. Loan advances rose 52% YoY, driving net mortgages outstanding up 13% YoY, to $48M.
- Macroeconomic backdrop: Following nine rate cuts totaling 275 bps since June 2024 (bringing the policy rate to 2.25%), the Bank of Canada has held rates steady over the past four meetings. We expect rates to remain unchanged through 2026, as unemployment levels have eased since peaking in September 2025, and inflation remains moderate. Supported by lower rates, we believe the sector entered 2026 with lower default risk, and improving mortgage origination momentum. That said, development and construction activity (BCF’s target market) is expected to remain sluggish, weighed down by lower immigration and international student inflows, slower GDP growth, geopolitical uncertainty, and ongoing U.S. trade tensions.
- Sector trends: We are seeing a notable increase in M&A activity among private MICs; several managers are pursuing acquisitions to scale platforms, and realize cost synergies in administration, operations, and staffing. While BCF has not indicated any acquisition plans, we would not be surprised to see either a strategic transaction, or a potential bid from a larger player.
- Market positioning: Historically, declining rates have boosted MICs and financial stocks. In the past 12 months, MICs have lagged financials (+7% vs +41%), and are tracking REITs (+8%) due to shared exposure to a soft residential real estate market. We believe a gradual rebound in residential real estate in 2026 will support MIC stocks this year.
- 2026 outlook: With Q4 results broadly in line with expectations, we are making no material changes to our 2026 estimates. Our stress testing indicates BCF can comfortably sustain its $0.80/share annual dividend.
Price and Volume (1-year)
* Builders Capital has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures are in C$.
Mortgage advancements increased 52% YoY to $65M, an all-time high
Portfolio Update
Repayments were up 100% YoY, indicating higher turnover
Net receivables grew 13% YoY, to $48M
Exposure to first mortgages remained relatively flat at 98% vs a five-year average of 94%, indicating lower risk levels
Source: FRC / Company
Improved portfolio diversification by trimming exposure to Calgary and B.C., and broadening allocation across other regions in AB
Remains focused on single-family units (construction)
Average mortgage size remained flat at ~$900K vs. the five-year average of $1.0M
Source: FRC / Company
LTV rose 2.6 pp YoY to 79%, above the five-year average of 76%, indicating higher risk
Even with declining market rates, BCF’s lending rates increased as new mortgages were priced above existing ones
Stage three (impaired) mortgages increased 155% YoY, but declined 11% QoQ, representing 10% of total mortgages
Source: FRC / Company
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