Home Capital Group Inc. today reported an 18% increase in profit for the fourth quarter ended Dec. 31, 2007.

Net income for the quarter was $24.2 million, an increase of 18.1% over $20.5 million for the same period last year. Earnings for the year were $90.2 million, a rise of 33.1% over the $67.8 million recorded at December 31, 2006.

Basic earnings per share were 70¢, 16.7% above 60¢for the fourth quarter of 2006, and $2.62 for the 12 months, or a 31.7% rise over the $1.99 recorded last year.

Return on equity was 28.9% for both the fourth quarter and 12 month period, compared to 30.5% for the same quarter ending December 2006, and 27.4% during the prior year.

Total assets at Dec. 31, 2007 reached $4.97 billion, 27.4% higher than the $3.9 billion reported one year earlier.

Total mortgage originations were $899.8 million during the fourth quarter, an increase of 73.1% over the $519.8 million advanced during the same period in 2006.

In a statement, Home Capital said “The company’s core business activities, including residential and commercial mortgage lending, CMHC-insured Mortgage-Backed Securities, and VISA all generated exceptional results,” despite challenging conditions throughout the North American financial services sector, especially in the United States.

The efficiency ratio (TEB; the lower the better) was 28.5% in the fourth quarter, compared to 26.8% during the same period one year earlier. The ratio was 27.1% for 2007, versus 29.9% over the year ended 2006.

The board of directors has declared a quarterly cash dividend of 12¢ per common share, up 9% from the previous quarter and an increase of 33% over the same quarter last year, payable on March 1.

Gerald Soloway, CEO of Home Capital stated, “This dividend increase is indicative of Home Capital’s continued strong performance in 2007 and our confidence in the future earnings growth of the company in 2008 and
beyond.”

Home Capital has set the following targets for 2008: 20% growth in each of total earnings, earnings per share, and total assets (including MBS); and provide at least 25% return on shareholders’ equity.

Toronto-based Home Capital operaties through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering deposit, mortgage lending, retail credit and payment card services.