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TORONTO, July 26, 2022 /CNW/ – First National Financial Corporation (TSX:FN) (TSX:FN) (TSX:FN) (the “Company” or “FNFC”) today announced its financial results for the three and six months ended June 30, 2022. The Company derives virtually all of its earnings from its wholly owned subsidiary, First National Financial LP (“FNFLP” or “First National”), one of Canada’s largest non-bank mortgage originators and underwriters.
- Mortgages under administration (“MUA”) increased 5% to a record $127.4 billion compared to $121.5 billion at June 30, 2021
- Revenue increased 14% to $416.8 million from $365.1 million a year ago
- Net income increased to $61.3 million ($1.01 per share) from $52.4 million ($0.86 per share) a year ago
- Pre-FMV Income(1) decreased 21% to $55.9 million from $71.2 million a year ago
“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 EllisPresident and Chief Executive Officer. “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. Commercial volume growth of 19% provided a partial offset and reflected strong demand for insured mortgages in the multi-unit market. Including renewals, total quarterly mortgage production was $12.2 billion6% below last year. However, this was still well ahead of pre-pandemic levels. 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. 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 .”
Second Quarter Review
|
Quarter Ended |
Six months ended |
|||
|
June 30, |
June 30, |
June 30, |
June 30, |
|
|
For the Period |
($000s) |
|||
|
Revenue |
416,774 |
365,118 |
767,095 |
701,610 |
|
Income before income taxes |
83,081 |
70,101 |
156,168 |
141,576 |
|
Adjust for gains on financial instruments |
(27,217) |
1,117 |
(55,117) |
(6,212) |
|
Pre-FMV Income (1) |
55,864 |
71,218 |
101,051 |
135,364 |
|
At Period End |
||||
|
Total assets |
42,927,449 |
41,727,249 |
42,927,449 |
41,727,249 |
|
Mortgages under administration |
127,334,843 |
121,537,940 |
127,334,843 |
121,537,940 |
|
1 This non-IFRS measure adjusts income before income taxes by eliminating the impact of changes in fair value by adding back losses on the valuation of financial instruments |
First National’s MUA, the source of most of its earnings, increased 5% to $127.3 billion from $121.5 billion …
Full story available on Benzinga.com
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