In the fourth quarter of 2024, First National Financial Corp (FNLIF) showcased robust performance across several key metrics despite a challenging economic environment. The company's total origination volume surged by 26.5% compared to the same period last year, reflecting a significant increase in residential and commercial mortgage activities. Residential mortgage fundings witnessed an impressive 43% growth year-over-year, indicating strong demand in the housing sector. Additionally, the company managed to expand its mortgage under administration portfolio by 7%, reaching a record high of $153.7 billion.
Revenue for the fourth quarter climbed by 19%, marking a positive trend for the year with a 10% overall increase. However, pre-fair market value income experienced a slight dip of 3% year-over-year. The net interest margin (NIM) also faced pressure, decreasing from 59 basis points in Q4 2023 to 53 basis points in the recent quarter. This decline can be attributed to tighter spreads on underlying mortgages and higher funding costs. Despite these challenges, the company maintained a strong financial position, with a return on shareholders' equity of 33% after tax.
The company has demonstrated resilience in the face of competitive pressures and market uncertainties. Management remains optimistic about future prospects, particularly in the single-family mortgage segment, where they anticipate continued growth over the next two quarters. Jason Ellis, President and CEO, highlighted that while the pipeline for single-family mortgages has moderated, it still shows promising double-digit increases. Moreover, lower bond yields and potential fiscal responses could enhance affordability and stimulate housing activity. The removal of the stress test for uninsured mortgage renewals has not significantly impacted renewal rates, as most borrowers already qualify due to wage inflation since 2020.
The company's commitment to shareholder value is evident through its increased common share dividend to an annualized rate of $2.50, complemented by a special dividend of $0.50 per share. This reflects confidence in the company's long-term outlook and financial stability. Overall, First National Financial Corp continues to navigate market fluctuations with strategic foresight, positioning itself for sustained success in the evolving financial landscape.