Builders Capital Mortgage Corp.
Record Reenue, Strong Loan Growth, and Resilient Portfolio
Published: 9/3/2025
Author: FRC Analysts
Sector: Financial Services | Industry: Mortgage Finance
Ticker Symbols:BCF - TSX 🔹
Rating and Key Data
| Metrics | Value |
|---|---|
| Current Price | CAD $9.78 |
| Fair Value | CAD $10.93 |
| Risk | 3 |
| 52 Week Range | CAD $7.99-9.97 |
| Shares O/S (M) | 3.14 |
| Market Cap. (M) | CAD $31 |
| Current Yield (%) | 8.2 |
| P/E (forward) | 8.2 |
| P/B | 1.0 |
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Report Highlights
- BCF reported record Q2 revenue and EPS. Mortgage advancements rose 46% YoY to $15M, the highest Q2 on record, while repayments increased 70% YoY. As a result, revenue grew 67% YoY and EPS rose 15%.
- While the BoC has cut rates 225 bps since May 2024, BCF’s lending rate fell only 40 bps, reflecting lower elasticity. Consequently, revenue exceeded our estimate by 7%, and EPS beat by 13%.
- Annual dividend remained $0.80/share, representing an 8.18% yield.
- Portfolio quality remained stable, with 99% first mortgages and an LTV of 76%. Stage 3 (impaired) mortgages rose 3% QoQ to 2.8%, still well below the sector average of 5%. No material realized losses in Q2.
- Loan growth remained surprisingly strong, despite weak development and construction activity due to high rates, affordability pressures, and macro uncertainty.
- BCF is up 11% since our previous report. Sector outlook has improved since June, with multiples up 5% (10% YoY). Industry revenue growth is forecast at 4% in 2025 vs 1% in 2024, supported by falling rates, which historically benefit MICs and financials.
- We expect two additional BoC rate cuts over the next six months amid slowing GDP growth, elevated trade tensions, high unemployment, and easing inflation. While mortgage delinquencies remain a concern, falling rates should help mitigate risks. We anticipate a rebound in pre-sales, lower financing costs for developers, and higher transaction volumes for real estate lenders next year.
- With Q2 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)
Portfolio Update
Mortgage advancements increased 46% YoY to $15M, the highest Q2 on record, while repayments rose 70% YoY
Mortgage receivables (net) declined 6% QoQ to $48M, as the MIC sold $6M of mortgages to a related party. Excluding this sale, receivables would have increased 5% QoQ
Most of the key portfolio metrics (presented below) remained largely unchanged. First mortgages were 99% vs a five-year average of 91%, with the portfolio remaining focused on AB and B.C
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