Strategic growth in commercial mortgages fuel revenue
First National Financial Corporation has revealed its first-quarter and 2023 full-year financial results, with growth in key areas underpinned by its mortgage under management hitting a new high of $143.5 billion.
Throughout 2023, the company raked in revenues of $2 billion, marking a notable increase from $1.6 billion in 2022. Net income for the year jumped to $252.8 million compared to $197.7 million in the previous year. The fourth quarter alone contributed significantly to these numbers, with revenue hitting $503.4 million and net income standing at $44.2 million.
The company's financial upturn was partly driven by a 10% growth in its mortgages under administration and a robust performance in the commercial mortgage sector, where originations reached $13 billion for the year.
"First National had a very successful year in 2023. Despite challenging market conditions brought on by the cumulative effect of higher interest rates, total originations including renewals came close to equalling our previous record set in 2022. In the case of our commercial business, annual volumes were best-ever at over $13 billion. With much higher MUA, revenue increased 29% and operating profitability was up 54%,” the company’s CEO Jason Ellis said.
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Although there was a dip in single-family mortgage origination due to the higher interest rates dampening residential real estate activities, the increase in interest rates overall proved beneficial. This led to a spike in net interest revenue and mortgage investment income.
First National also announced a dividend payout for 2023, including a special dividend, underscoring its financial health and excess capital situation.
Looking forward, the company remains optimistic. Even with expectations of challenges in single-family origination, the demand in the housing market and a strong foothold in the commercial segment continue to paint a promising picture for First National's future.
First National Financial was awarded as the Best Mortgage Lenders in Canada. Read the full winners here.
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