The firm’s mortgages under administration reach a new high
First National Financial Corporation reported that its Q3 2021 new originations grew by 10% annually, pushing up its mortgages under administration by 4% year over year to a record high of $122.3 billion.
The quarter also saw the firm facilitate the renewal of $2.3 billion in mortgages, according to Stephen Smith, CEO, chairman, and co-founder of First National Financial.
“Profitability measures were solid but came in below last year when high levels of home purchases and abnormally wide mortgage spreads created an ideal environment for earnings,” Smith said. “Spreads are now as narrow as they were before the 2008 financial crisis. Even so, quarterly net income was $47.6 million ($0.78 per common share).”
First National’s common share dividend payout ratio during the quarter was 75%, “reflecting the dividend increase in June 2021 that brought the annualized payout to $2.35 per share,” the company said.
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Strong growth in both revenue and earnings on a year-to-date basis also allowed First National to generate capital beyond what it needs, Smith said. The firm’s board has authorized the payment of a special dividend of $1.25 per share, scheduled on Dec. 15. This will mark the fifth special dividend declared in as many years.
“Coupled with the recent increase in the regular monthly dividend, First National has further entrenched its standing as a high-yielding, dividend-paying company,” Smith said.
First National expressed optimism towards its prospects for the rest of the year and well into 2022.
“Underpinning this outlook is our confidence in First National’s relationships with mortgage brokers, strong institutional investor demand for the company's mortgages and robust securitization markets that continue to provide consistent and reliable funding,” Smith said. “The company will also continue to generate income and cash flow from its $33-billion portfolio of mortgages pledged under securitization and $87-billion servicing portfolio, and focus on the value inherent in its significant single-family renewal book.”
