Equitable Group Inc. generated record earnings for the three months ended March 31, the company said Thursday.

Net income increased 23.3% to a record $11.9 million compared to $9.7 million in the same period a year ago.

Diluted earnings per share increased 8.1% 80¢ a share compared to 74¢ per share a year ago.

Return on equity, a key measure of profitability, was 17.8% compared to 11.8% and 18.8% in the fourth and first quarters of 2008, respectively.

Net impaired mortgages were 0.94% of total mortgage assets at the end of the first quarter of 2009 — an improvement over 1.21% at the end of the fourth quarter of 2008.

“We are particularly pleased that our strategies allowed us to improve net interest margin compared to the fourth quarter — despite another three prime rate decreases in the opening months of 2009 — and that we’ve grown our securitized mortgage portfolio to over $3.2 billion with improved spreads,” says Andrew Moor, president and CEO.

“The recurring cash flows from this securitized portfolio will make a healthy contribution in future quarters and will complement the interest from our $2.9 billion on-balance sheet mortgage assets.”

Mortgage fundings in the first quarter increased 77.5% to $532.1 million from $299.8 million in the first quarter of 2008 on growth in CMHC-insured multi-unit residential mortgage production.

Equitable securitized and sold $407.6 million of CMHC-insured mortgages — at improved spreads — compared to $281 million in the fourth quarter of 2008 and $165 million in the first quarter of 2008.