Yahoo Finance

• Pre-Fair Market Value Income: $75.3 million, 21% below last year.

• Single-Family Residential Originations: 20% year-over-year reduction in Q3.

• New Residential Commitments: 50% higher compared to the same period in 2023.

• Commercial Mortgage Originations: 18% lower than last year.

• Mortgage Under Administration: Grew by 6% year-over-year to $150.6 billion.

• Revenue: Down 1% from last year; excluding fair value losses, grew by about 8%.

• Net Interest Income on Securitized Mortgages: Increased 4% to $60.2 million.

• Net Interest Margin (NIM): Lower at 55.3 basis points versus 59.5% last year.

• Commercial Net Interest Income: Higher by $3.3 million due to portfolio growth of 17%.

• Single-Family Residential Net Interest Income: Lower by $800,000.

• Mortgage Servicing Income: Down 7% year-over-year to $71.1 million.

• Placement Fee Revenue: Declined 25% year-over-year to $57.1 million.

• Broker Fee Expense: Declined 35% to $29.9 million.

• Salaries and Benefit Expense: Increased 7% or $3.3 million year-over-year.

• Common Share Payout Ratio: 104% against after-tax pre-fair market value income.

• Special Dividend: $0.50 per common share approved by the Board.

• Annualized Dividend Payment: Increased to $2.50 per share.

• Warning! GuruFocus has detected 2 Warning Sign with FNLIF.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• First National Financial Corp (FNLIF) maintained its relative standing in the broker channel, ranking second in both funding and new commitment activity in the third quarter.

• The company issued new residential commitments that were 50% higher compared to the same period in 2023, indicating potential growth in Q4.

• First National surpassed $150 billion in mortgages under administration, marking a significant milestone.

• The Board approved a special dividend of $0.50 per common share, reflecting strong retained earnings.

• Mortgage under administration grew by 6% year-over-year, providing a solid foundation for future profitability.

Negative Points

• Pre-fair market value income of $75.3 million was 21% below the previous year, primarily due to lower residential origination.

• Single-family residential originations were down 20% year-over-year in Q3.

• Commercial mortgage originations were 18% lower than last year, affected by fewer renewal opportunities.

• Third quarter revenue was down 1% from last year due to changing interest rates impacting the residential commitment hedging program.

• Broker fee expense declined 35% due to a 38% decrease in single-family origination placed with institutional customers.