(May 2) – Home Capital Group Inc. is reporting improved earnings for the first quarter ending March 31.

Net income is up 38.6% from the quarter last year to $3.2 million. Revenue grew 33.9% year over year, and return on equity is up to 25.3%. The company says its results also represent the 23rd consecutive quarter in which earnings exceeded those of the previous three months.

In a letter to shareholders, president and CEO Gerald Soloway says, “Each element of the company’s business has performed very well during the period under review. Expense control was a key factor in the quarter, as our productivity ratio was an extraordinary 40.3%. Our core residential first mortgage business recorded strong and steady growth. The demand for housing remained strong, and our interest rate spreads increased.” He notes that a securitization also boosted the company’s results.

The company’s net impaired mortgage loans at March 31, 2001 represented 0.48% of loans, up from 0.39% at Dec. 31, 2000 and 0.26% at March 31, 2000. Although there has been an increase in impaired loans, the company says that actual charge-offs during the first quarter of 2001 were $41,000 compared to $135,000 at March 31, 2000.

The company expects to maintain its results through the slowdown. Soloway says, “Canada is experiencing somewhat softer economic conditions and we are managing our business with this in mind. However, we have not seen any negative effects on the growth or profitability of the company to date. We remain vigilant and are confident that our well regarded underwriting techniques and risk management procedures will serve us well in any downturn. We expect our robust earnings momentum in the first quarter to continue throughout the balance of 2001. It is clear that there is a strong demand in the marketplace for a national alternative to traditional financial institutions and our continued success reflects this marketplace need. We are on track to meet or exceed our stated goals for the year.”

The firm will be holding its Annual General Meeting at the Design Exchange in Toronto on June 6.