First National reports record third quarter results
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S./ Sustained growth in mortgages under administration, revenue, net income and EBITDA
First National Financial LP's Q3 2009 Summary: - Annual distribution rate increased by 11% from $1.35 per unit to $1.50 per unit - Mortgages under administration up 18% year-over-year to $45.9 billion - Mortgage originations declined by only 6% from Q3 2008 to $3.4 billion - Revenue was $96.2 million, up 5% year-over-year - Net income up 33% year-over-year to $44.7 million - EBITDA* up 33% year-over-year to $45.2 million - Distributions declared to unitholders totalled $4.4 million
"First National enjoyed another record quarter as a result of stabilizing credit markets combined with the successful execution of our business strategy and prudent risk management," said
"Our confidence in the Company's continued strong performance and future growth prospects led us to increase the distribution rate by 11% during the third quarter of 2009," said Moray Tawse, Vice President, Mortgage Investments. "Greater liquidity in capital markets has increased funding opportunities for the Company and we expect to see continuing income and cash flow derived from the high level of mortgages under administration."
Selected Financial Highlights for First National Financial LP ------------------------------------------------------------------------- Quarter ended September September 30, 2009 30, 2008 ------------------------------------------------------------------------- For the Period ($ 000's) Revenue 96,161 91,266 Net income 44,730 33,649 EBITDA (1) 45,153 34,048 At Period end Total assets 1,122,651 857,273 Mortgages under administration 45,942,714 38,838,824 ------------------------------------------------------------------------- Note: (1) This non-GAAP measure adjusts income before income taxes by adding back expenses for amortization of capital assets. Q3 2009 Results ---------------
First National's mortgages under administration were
Revenue for the quarter increased 5% to
Net income for the quarter was
Distributable Cash ------------------ The Fund's distributable cash* for the quarter was $9.7 million or $0.16 per unit and distributions declared totalled $4.4 million or $0.35 per unit. The payout ratio of 219% was up significantly from 77% in the second quarter of 2009. Despite strong earnings, distributable cash was adversely affected as more working capital was needed to support the Company's Alt-A program. This was further exacerbated by the Company earning larger portions of non-cash income from gains on securitization revenue. In the third quarter of 2008, the payout ratio was 79%. The ratio of distributions to net income, which the Company believes is as important as the payout ratio, was 47% for the quarter. Statement of Distributable Cash (in $000s, except where noted) For the quarter For the nine months ended ended September September September September 30, 2009 30, 2008 30, 2009 30, 2008 First National Financial LP Distributable Cash of First National Financial LP (1) 9,686 25,129 46,655 63,023 -------------------- --------------------- First National Financial Income Fund Weighted Average Share of Distributable Cash from First National Financial LP (1) 2,049 5,305 9,867 13,016 ------------------------------------------- Distributable Cash per Unit ($/Unit) (1) 0.16 0.42 0.78 1.06 -------------------- --------------------- Distributions Declared 4,438 4,172 12,998 11,677 -------------------- --------------------- Distributions Declared per Unit ($/Unit) 0.35 0.33 1.03 0.95 -------------------- --------------------- Payout Ratio 219% 79% 132% 90% -------------------- --------------------- (1) Distributable cash and distributable cash per unit are non-GAAP measures generally used by Canadian open-ended trusts as an indicator of financial performance. They are considered key measures as they demonstrate the cash available for distributions to unit holders. For FNFLP this measure adjusts cash provided by (used in) operating activities by accounting for changes between periods of mortgages accumulated for sale and deducting capital expenditures. Conference Call and Webcast ------------------------------------------------------------- Conference Call and Webcast October 28, 2009, 10 a.m. ET ------------------------------------------------------------- Participant Numbers 416-644-3416 or 1-866-250-4892 -------------------------------------------------------------
The audio of the conference call will be webcast live and archived on First National's website at www.firstnational.ca. Following management's presentation, there will be a question and answer session for analysts and institutional investors.
A taped rebroadcast will be available to listeners following the call until
Complete consolidated financial statements for the Fund and FNFLP as well as management's discussion and analysis are available at www.sedar.com and at www.firstnational.ca
About First National Financial Income Fund
First National Financial Income Fund (TSX: FN.UN) owns a 21% interest in First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single family and multi-unit) and commercial mortgages. With more than
*Non-GAAP Measures --------------------
The selected financial information and discussion below also refers to certain measures to assist in assessing financial performance. These "non-GAAP measures" such as "EBITDA", "Distributable Cash", and "Distributable Cash per Unit" should not be construed as alternatives to net income or loss or other comparable measures determined in accordance with GAAP as an indicator of performance or as a measure of liquidity and cash flow. Non-GAAP measures do not have standard meanings prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers.
Forward-Looking Information ---------------------------
Certain information included in this news release may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will, "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding the future financial position, business strategy and strategic goals, product development activities, projected costs and capital expenditures, financial results, risk management strategies, hedging activities, geographic expansion, licensing plans, taxes and other plans and objectives of or involving the Company. Particularly, information regarding growth objectives, any future increase in mortgages under administration, future use of securitization vehicles, industry trends and future revenues is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, interest rate changes and responses to such changes, the demand for institutionally placed and securitized mortgages, the status of the applicable regulatory regime and the use of mortgage brokers for single family residential mortgages. This forward-looking information should not be read as providing guarantees of future performance or results, and will not necessarily be an accurate indication of whether or not, or the times by which, those results will be achieved. While management considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties listed under "Risk and Uncertainties Affecting the Business" in the MD&A, that could cause actual results to differ materially from what management currently expects. These factors include reliance on sources of funding, concentration of institutional investors, reliance on relationships with independent mortgage brokers and changes in interest. This forward-looking information is as of the date of this release, and is subject to change after such date. However, management and the Fund disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
For further information: Rob Inglis, Chief Financial Officer, First National Financial LP, Tel: (416) 593-1100, Email: [email protected]; Steve Wallace, Vice President, BarnesMcInerney Inc., Tel: (416) 367-5000, Email: [email protected]
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