First National Financial (FN) Q4 2024 earnings summary

Executive summary

• Q4 Pre-Fair Market Value income was CAD 74.8 million, down 3% year-over-year despite higher origination volume.

• Funded residential mortgages rose 43% year-over-year in Q4, reversing earlier declines.

• Total Q4 origination, including commercial and renewals, reached CAD 2.1 billion, up 26.5% year-over-year; Q4 originations (including renewals) rose 27%.

• Mortgages under administration grew 7% year-over-year to a record CAD 153.7 billion at year-end.

• Annual originations, including renewals, were flat at CAD 37.5 billion as Q4 strength offset earlier weakness.

Financial highlights

• Revenue increased 10% year-over-year and 19% in Q4, driven by higher securitization.

• Net income for Q4 2024 was $63.0 million ($1.04/share), up from $44.2 million ($0.72/share) in Q4 2023; annual net income was $203.4 million ($3.33/share), down from $252.8 million ($4.15/share) in 2023.

• Securitized mortgage portfolios grew 11% year-over-year and now deliver about 70% of revenue.

• Net interest margin (NIM) on securitized mortgages fell to 53 bps from 59 bps in Q4 last year due to higher funding costs.

• Deferred placement fees declined 57% year-over-year in Q4, reflecting tighter spreads.

Outlook and guidance

• Expect year-over-year increases in single-family fundings in the next two quarters, supported by higher commitment levels and anticipated Bank of Canada rate cuts.

• CMHC forecasts housing market growth in 2025, aided by lower rates and new mortgage rules.

• Lower rates and persistent housing demand may offset headwinds from tariffs and economic uncertainty.

• Commercial origination volumes expected to remain steady in the short term, aided by government incentives and expanded Canada Mortgage Bonds program.

• Anticipate continued investment in technology and elevated OpEx in 2025.