First National Financial (FN) Q1 2025 earnings summary

Executive summary

• Mortgages under administration reached a record $155.4 billion, up 7% year-over-year, driven by strong origination and renewals in both single-family and commercial segments.

• Total mortgage origination, including renewals, rose 27% year-over-year to $8.3 billion, with single-family originations up 34% and commercial up 18%.

• Revenue increased 2% to $528.9 million, but net income fell 51% to $24.6 million ($0.39/share) from $49.9 million ($0.82/share), reflecting lower servicing revenue, falling interest rates, and higher technology investments.

• Pre-fair market value income (adjusted earnings) declined 16% to $52.6 million, mainly due to lower revenues and higher costs.

• Management expects continued year-over-year growth in originations into the next two quarters, supported by a strong commitment pipeline and lower mortgage rates.

Financial highlights

• MUA increased 7% year-over-year to $155.4 billion, with annualized Q1 growth at 4%.

• Revenue rose 2% year-over-year to $528.9 million; net interest revenue on securitized mortgages declined 2% to $53.1 million due to NIM compression.

• Net income was $24.6 million, down from $49.9 million a year ago.

• Dividend payout ratio was 158% of net income (98% of after-tax pre-fair market value income), with annualized dividends at $2.50 per share.

• Total assets at quarter-end were $52.2 billion, up from $45.8 billion a year ago.

Outlook and guidance

• Year-over-year growth in single-family originations is expected to continue into the next two quarters, supported by a robust pipeline and lower mortgage rates.

• Commercial segment originations are anticipated to remain steady, aided by government incentives and increased Canada Mortgage Bonds program funding.

• Multi-unit residential market expected to remain resilient due to rental demand, despite evolving CMHC underwriting and increased competition.

• Uncertainty remains due to potential negative impacts from new U.S. tariffs, which could affect the Canadian economy and employment.