First National upbeat on second quarter results

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First National is looking up with second quarter numbers showing mortgages under administration, revenue and net income all gaining strength, despite lower single-family mortgage originations.
 
“MUAs set new records in each of the first two quarters of 2013 and was up a healthy 4 per cent (or 16 per cent annualized since March 31),” said First National chairman and president Stephen Smith. “We take this as a positive sign of our strength in the Canadian housing market, as First National continued to profitably build both its mortgages under administration and mortgages pledged under securitization during the first half of 2013.”
 
The second quarter summary, released Tuesday, shows MUAs up 12 per cent year over year to $71.2 billion; revenue up 46 per cent to $229.8 million from $157 million; and net income up a whopping 275 per cent to $67.8 million from $18.1 million.
 
“On the basis of originations, First National continued to enjoy the benefits of our broad Canadian market presence and standing with mortgage brokers,” Moray Tawse,  vice president of mortgage investments. “This allowed us to keep single-family originations at a healthy $3.5 billion level in the quarter despite government measures that have moderated housing activity.”
 
The only dip was in mortgage originations, which dropped by 6 per cent to $4.2 billion from $4.4 billion. Although a concern, Tawse does see a silver lining.
 
“While single-family originations were lower than a year ago by 9 per cent, we noted a marked improvement over the start of the year, which reflects signs of growing consumer confidence and a soft-landing scenario for real estate,” he says.
 
Tawse pointed to First National’s commercial segment as another sign of better times ahead, with originations up 7 per cent year over year to $677 million.
 

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