Home Capital Group Inc.’s financial performance for both the second quarter and the first six months of 2006 improved over the same periods of 2005, it announced on Thursday. The company experienced strong residential mortgage origination and Equityline VISA portfolio growth, and ended the quarter with a return on equity of 27.6%.

Key results from the second quarter and first six months included:

– Net income during the second quarter was $16.5 million, an increase of 12.7% over the $14.6 million recorded last year. Earnings for the first six months of 2006 rose by 8.7% to $30.7 million from the $28.2 million reported for the first half of 2005.

– Basic earnings per share were $0.48, a rise of 11.6% compared to $0.43 in the second quarter of 2005. Diluted earnings per share were $0.47, 14.6% higher than the $0.41 recorded for the second quarter last year. Basic income per share for the first six months rose from $0.83 to $0.90, and on a fully-diluted basis from $0.80 to $0.88.

– Return on equity was 27.6% for the second quarter, and 26.4% for the first six months of 2006, compared to 32.2% for the second quarter of 2005 and 32.1% during the first six months.

– Total assets at June 30, reached $3.55 billion, 22.7% higher than the $2.89 billion reached at June 30, 2005, and 7.9% higher than the $3.28 billion at December 2005. Total assets, including Mortgage-Backed Securities originated and administered by the company, grew 28.2% to $4.51 billion, compared to $3.51 billion one year earlier.

– Total mortgage originations amounted to $504.6 million during the quarter, an increase of 16.3% from the $433.9 million advanced in the same period last year. Originations for the first six months amounted to $931.3 million, an increase of 21.6% from the $765.7 million advanced over the first half of 2005.

Early in the quarter the company recommenced the hedging program, entering into a swap transaction, in order to hedge against the effect of interest rate changes between mortgage commitment dates and when those mortgages are securitized under its MBS program. These swaps may result in unrealized gains or losses to income on a mark-to-market basis, depending on actual interest rate changes. In the second quarter, $0.9 million in unrealized gains were reported as a result of interest rate swaps.

Subsequent to the end of the quarter, the company’s board of directors declared a quarterly dividend increase, to $0.07 per share, payable on Sept. 1 to shareholders of record at the close of business on Aug. 15, 2006.

This dividend increase represents the second one this year, reflecting the company’s solid financial performance and the confidence of the board in its continued prospects going forward.

The company also announces that W. Roy Vincent, senior vice president and chief operating officer of Home Capital Group will be retiring effective Dec. 31. Nick Kyprianou, senior vice president and head of the company’s mortgage lending business will be assuming the role of COO at that time.

Looking ahead to the second half of 2006, the company’s strong mortgage origination pipeline, the expansion of the Equityline VISA program, a talented group of employees and an outstanding risk management track-record are among the key elements that it says will sustain and build further on its past successes.