TORONTO, March 5, 2024 /CNW/ – First National Financial Corporation (TSX:FN) (TSX:FN) (TSX:FN) (the “Company” or “FNFC”) today announced its financial results for the three and 12 months ended December 31, 2023. 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.
2023 Annual Summary
Mortgages under administration (“MUA”) were a record $143.5 billion compared to $131.0 billion at December 31, 2022
Revenue was $2.0 billion compared to $1.6 billion in 2022
Net income was $252.8 million ($4.15 per share), compared to $197.7 million ($3.25 per share) in 2022
Pre-FMV Income(1) was $322.1 million compared to $208.8 million in 2022
Fourth Quarter 2023 Summary
Revenue was $503.4 million compared to $414.8 million a year ago
Net income was $44.2 million ($0.72 per share), compared to $42.7 million ($0.70 per share) a year ago
Pre-FMV Income(1) was $77.1 million compared to $59.5 million a year ago
Management Commentary
“First National had a very successful year in 2023,” said Jason Ellis, President and Chief Executive Officer. “Despite challenging market conditions brought on by the cumulative effect of higher interest rates, total originations including renewals came close to equaling our previous record set in 2022. In the case of our commercial business, annual volumes were best-ever at over $13 billion, fueled by customer demand for high-quality insured multi-unit mortgage products. With much higher MUA, revenue increased 29% and operating profitability was up 54%. 2023 was a good example of the efficiency of our business model as well as the team’s dedication to supporting customers and partners in both good times and bad. I thank all members of the team for working tirelessly to deliver these strong results. Although we expect lower single family mortgage origination to start 2024 compared to this time last year due to a market slowdown that was evident in the final quarter, First National is well positioned to compete, serve and execute our business plan. We can also look forward to generating income and cashflow from our expanded servicing and securitization portfolio.”
Performance Review
Quarter Ended
Year ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
For the Period
($000s)
Revenue
503,441
414,785
2,024,285
1,574,293
Income before income taxes
59,895
58,269
343,907
269,082
Pre-FMV Income (1)
77,125
59,492
322,183
208,762
At Period End
Total assets
45,957,399
43,763,672
45,957,399
43,763,672
Mortgages under administration
143,546,966
131,000,635
143,546,966
131,000,635
(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 (except those on mortgage investments) and deducting gains on the valuation of financial instruments (except those on mortgage investments).
First National’s MUA increased 10% to $143.5 billion at December 31, 2023 from $131.0 billion a year earlier and at an annualized rate of 5% since September 30, 2023. At December 31, 2023, single-family MUA was $94.5 billion, up 7% from $88.6 billion at December 31, 2022, while commercial MUA was $49.0 billion, up 16% from $42.4 billion a year ago.
For the fourth quarter of 2023, single-family mortgage origination was $4.4 billion compared to $5.5 billion for the comparative quarter of 2022, a decrease of 20%. For 2023, single-family mortgage origination was $24.4 billion compared to $26.3 billion in 2022 or 7% lower. In both periods, originations reflected the impact of higher Bank of Canada interest rates on residential real estate activity. First National’s MERLIN technology and operating systems continued to support efficient and effective mortgage underwriting across the country.
Fourth quarter 2023 commercial mortgage originations were $3.8 billion, 27% or $874 million higher than in the same period of 2022. For all of 2023, commercial mortgage originations were $13.0 billion, 11% or $1.2 billion higher than a year ago. Volumes in both 2023 periods reflected strong demand for insured mortgages and First National’s …