First National mortgage volumes fall 12% as housing activity slows
First National Financial reported lower mortgage volumes and earnings in the second quarter as slower housing activity and increased competition weighed on new originations.
Total mortgage originations and renewals reached $12.2 billion, down 12% from $13.8 billion in the same quarter last year.
Single-family residential volume declined 11% to $7.7 billion, while multi-unit residential and commercial volume fell 12% to $4.5 billion.
First National attributed the decline in single-family activity to a slower Canadian housing market and increased competition. Higher renewal volumes, including mortgages originated during the elevated activity of 2021, partially offset the decline in new business.
The company expects new single-family originations to remain below year-ago levels over the next two quarters, while renewal activity is expected to exceed year-ago levels.
Mortgages under administration continue to grow
Despite lower quarterly originations, First National’s mortgages under administration increased to $169.8 billion at the end of June, up approximately 6% from $159.9 billion a year earlier.
The single-family portion of the portfolio was little changed at $98.6 billion. Multi-unit residential and commercial mortgages increased to $71.2 billion from $61.9 billion.
Mortgage servicing income rose 6% year over year to $73.7 million, reflecting the larger portfolio and growth in First National’s third-party underwriting business. Its portfolio of mortgages pledged under securitization increased 3% to $47.7 billion.
Revenue declined 9% to $565.2 million, partly because of lower placement fees associated with weaker origination volumes. Placement-fee revenue fell 36% to $51.9 million as new single-family placement activity declined and renewals accounted for a larger share of volume. First National said placement fees on renewed mortgages are generally lower than those earned on new originations.
Net income was $3.6 million, compared with $63.4 million a year earlier. The latest quarter included approximately $42.5 million in amortization and $3.6 million in other costs related to First National’s 2025 acquisition and privatization.
Excluding acquisition-related accounting charges and other items, underlying pre-tax income fell 35% to $50.9 million. First National attributed the decline primarily to $12.5 million in additional interest costs associated with higher debt following the acquisition, along with lower placement fees, higher credit-loss provisions and increased employee costs.
First National recorded a $2-million provision for credit losses during the quarter. Mortgages more than 90 days in arrears totalled $24.1 million at the end of June, representing approximately 0.05% of its securitized mortgage portfolio.
First National also announced that it has applied to cease being a reporting issuer following its $2.9-billion acquisition by Birch Hill Equity Partners and Brookfield last year and the subsequent redemption of its preferred shares. If approved, the company would no longer be subject to Canada’s continuous public disclosure requirements, although it would continue providing annual and interim financial statements to holders of its privately placed senior notes.
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Last modified: July 31, 2026
