The company saw significant strength in the growth for its mortgages under administration
First National Financial Corporation has announced its financial results for the three and six months ending June 30.
A significant part of the company’s strength stemmed from its mortgages under administration, which is the source of most of First National’s earnings. This reading grew by 5% annually to reach a record high of $127.3 billion, with single-family mortgages representing the majority of these gains (up by nearly 3% to $86.7 billion) and commercial mortgages posting a strong performance (up by 10% to $40.6 billion).
“First National’s second quarter performance, including steady growth in MUA, was delivered in competitive markets that are now adjusting rapidly to the reality of much higher interest rates,” said Jason Ellis, the company’s president and CEO. “As an early sign of this adjustment, Q2 single-family volumes were 10% lower than last year and are likely to soften further as rising mortgage rates reduce affordability for Canadians and dampen housing activity.”
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With renewals included, First National had a total Q2 mortgage production of $12.2 billion, 6% lower compared to the same time last year although remaining ahead of pre-pandemic levels.
Revenue went up by 14% annually to $416.8 million, while net income was at $61.3 million ($1.01 per share).
“The quarter’s operating income, excluding gains on financial instruments, reflected higher workforce and operating costs incurred to meet the requirements of MUA growth, service commitments to customers, and to retain skilled people in a competitive job market,” Ellis added.
“With the increase in MUA over the past year, First National has positioned itself for future earnings from mortgage administration, net securitization margin and renewal opportunities – and for this next challenging phase of the market cycle.”
