First National Financial Corporation (FNLIF) Q2 2023 Earnings Call Transcript


First National Financial Corporation (OTCPK:FNLIF) Q2 2023 Results Conference Call August 2, 2023 10:00 AM ET

Company Participants

Jason Ellis – President and CEO

Rob Inglis – CFO

Conference Call Participants

Nik Priebe – CIBC Capital Markets

Etienne Ricard – BMO Capital Markets

Geoff Kwan – RBC

Graham Ryding – TD Securities

Jaeme Gloyn – National Bank Financial

Operator

Good morning, and welcome to First National’s Second Quarter Analyst Call. This call is being recorded on Wednesday, August 2, 2023. [Operator Instructions]

Now it’s my pleasure to turn the call over to Jason Ellis, President and Chief Executive Officer of First National. Please go ahead, sir.

Jason Ellis

Thank you, operator. Good morning, everyone. Welcome to our call, and thank you for joining us. Rob Inglis, our Chief Financial Officer, joins me and will provide his commentary shortly.

Before we begin, I will remind you that our remarks and answers may contain forward-looking information about future events or the company’s future performance. This information is subject to risks and uncertainties and should be considered in conjunction with the risk factors detailed in our management discussion and analysis. Second quarter results exceeded expectations. Pre-fair market value EBITDA of $89.8 million was 61% higher than the same quarter last year. Residential origination, including renewals, while modestly stronger than expected at $7.4 billion, was still down 12% when compared to the same period last year.

Commercial originations were down just 3% with relative strength in our CMHC-insured multifamily originations. Despite lower originations overall, our business model proved its resiliency. Recurring revenue from servicing and net interest earned on our portfolio of securitized mortgages delivered expected stability to our financial results. Key to maintaining these predictable and recurring revenues is the continued growth of mortgages under administration even during periods of reduced originations. Residential MUA grew 6.1% and to $92 billion, and commercial



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