Home Capital Group Inc. says strong growth in its mortgage portfolio helped push net earnings to $6 million in the first quarter of 2003, up 27.2% over the same period last year.

The Toronto-based company, which supplies mortgages and credit to individuals who don’t meet banks standards, said it was the 31st consecutive quarter of increased earnings. Home Capital posted earnings of $4.7 million in the first-quarter 2002 and $5.5 million for the quarter ended Dec. 31, 2002.

Basic earnings per share increased by 24.1% to $0.36, compared with $0.29 for the first quarter of 2002. Fully diluted earnings per share rose to $0.35 from $0.27 in the first quarter of 2002, an increase of 29.6 %.

Total assets at March 31 jumped 33.7% to $1.51 billion from $1.13 billion at the end of the first quarter last year. The company said return on equity for the quarter “substantially exceeded” its target of 20%, coming in at 24.8%. That compares with 24.4% a year ago and 24.1% in the final quarter of 2002.

Home said the jump in income was largely attributable to the growth in the mortgage portfolio, which generated increased interest income of $1 million over the fourth quarter last year and $3.5 million over the same three months last year. In addition, its consumer lending lines of business contributed a total of $1.3 million in interest income in this quarter. That was better than a year ago at this time ($0.8 million) and better than last year’s final quarter ($1.1 million).

Home said in the first quarter this year it pooled an issued an additional $42.3 million of mortgage-backed securities, generating $1.6 million in revenues. That was a big jump from a year ago when MBS was $18.4 million, generating $0.7 million in revenue. Net impaired loans at March 31 represented 0.35% of the total portfolio, equal to the fourth quarter of 2002, and down from one-year prior at 0.51%. Its consumer lending lines of business “recorded a positive contribution” in the first quarter of 2003.

Home Capital said it is “confident of sustaining strong and profitable growth throughout 2003.”

“Inflation and interest rates both remain relatively low, although some modest rate increases are possible later this year that will support the company’s performance through the remainder of 2003. The company’s strong earnings in the core mortgage lending business, diversified revenues, and ongoing expense control measures will continue.”