The financial services giant saw mortgages under administration and revenue jump in Q2
First National Financial Corporation reported record second-quarter results this week, with mortgages under administration climbing to $159.9 billion despite mounting concerns over potential US trade disputes.
The Toronto-based mortgage originator, soon to be acquired by Brookfield and Birch Hill Equity Partners for $2.9 billion, posted revenue of $621.3 million for the three months ended June 30, up 15% from $538.4 million in the same period last year. Net income reached $63.4 million, or $1.04 per share, compared to $54.1 million, or $0.88 per share, a year earlier.
Mortgages under administration grew 8% to a record $159.9 billion from $148.2 billion at June 30, 2024, reflecting strength in both residential and commercial segments.
“A healthy pipeline of new mortgage commitments and the successful conversion of a sizeable cohort of renewing mortgages produced a record quarter of origination volume for First National,” said Jason Ellis, president and chief executive officer.
Single-family mortgage origination, including renewals, surged 42% to $8.7 billion from $6.1 billion in the second quarter of 2024. The commercial segment achieved a quarterly record of $5.1 billion in origination, up 2% from $5.0 billion a year ago.
Ellis noted that production growth was most pronounced in the single-family residential business, while the commercial segment posted its best-ever quarter with volumes surpassing $5 billion.
However, Ellis acknowledged challenges ahead, citing the current trade dispute with the US as presenting obstacles to Canada’s economic and housing market outlook.
The company’s pre-fair market value income, which excludes changes in financial instrument valuations, increased 1% to $77.9 million from $77.5 million a year ago.
Looking forward, First National expects increased year-over-year single-family originations in the next two quarters. The company issued over $3 billion of new prime residential mortgage commitments in June alone, more than double the same month in 2024.
“With five-year fixed mortgage rates about 0.65-0.85% lower than a year ago and favourable employment rates, housing activity may prove resilient,” the company stated. “This outlook, however, must be considered alongside the uncertain and potential negative impact of US tariffs.”
The company maintained its regular monthly dividend at an annualized rate of $2.50 per common share.
First National cancelled its previously scheduled earnings call following the recent announcement of its acquisition by Birch Hill and Brookfield.
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