Keeping you informed: COVID-19 information for residential customers & commercial borrowers

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If you are experiencing financial hardship due to COVID-19 and need to request a mortgage payment deferral, please submit a payment deferral request through My Mortgage or fill out our online mortgage payment deferral request form.

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Your patience is appreciated, and we thank you for your understanding.

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Investor FAQ 

Performance

What financial metrics should be used to measure First National’s performance?

Investment analysts focus on a number of measures in assessing corporate performance. Among those measures are: Mortgages Under Administration (MUA); Originations; Pre-Fair Market Value EBITDA, which is a non-IFRS term; net income and net income attributable to common shareholders.

What is MUA and why is it important?

Mortgages under Administration (“MUA”) includes our mortgage servicing portfolio and our securitized mortgage portfolio. The mortgage servicing portfolio provides a significant source of stable and recurring income as we benefit from servicing fees from the mortgages. The mortgage securitization portfolio provides ongoing net interest margin. If we retain mortgages upon renewal, servicing revenue or securitization margin continues over the new term. By growing MUA, we grow revenue, lower our per unit servicing costs and create renewal opportunities for the future.

How do you originate mortgages?

Single-family mortgages are originated through independent mortgage brokers who shop the market for the best value for their borrowers. For commercial and multi-unit residential mortgages, we generally originate directly from real estate companies which need mortgage financing such as Canadian REITs.

What happens to performance if originations drop?

EBITDA. This is primarily the result of a large amount of MUA which will continue to provide revenue despite a drop in originations.

What is Pre-Fair Market Value (“FMV”) EBITDA?

This non-IFRS measure adjusts income before income taxes by adding back expenses for depreciation and amortization of capital assets (generally described as EBITDA) and eliminating the impact of certain changes in the fair value of financial instruments by adding back losses and deducting gains on the such instruments. We use this as a supplemental measure to net income to assess the performance of the business.

Markets

What mortgage markets does First National serve?

We serve residential and commercial markets across Canada through offices in Halifax, Montreal, Toronto, Calgary and Vancouver.

What is First National’s third party underwriting and fulfillment business?

In July of 2014, we announced the creation of a separate division to provide underwriting and fulfillment processing services for mortgages originated by one of Canada’s largest banks through the residential mortgage broker channel. First National accepts mortgage applications on behalf of the bank and underwrites these mortgages in accordance with the bank’s credit policies, compliance standards and controls. The bank in turn funds all the mortgages underwritten under the agreement and retains full responsibility for underwriting guidelines, mortgage servicing and the client relationship. We rolled out this service in 2015 on a national basis and it is now a regular source of income for First National.

Competition

Who are First National’s major competitors and what’s First National’s market share?

Our principal competitors are the chartered banks and other entities originating mortgages from mortgage brokers. We are the largest non-bank mortgage originator and underwriter in Canada and hold a top three position in the mortgage broker channel. Overall, we have about a 5% share of Canada’s single-family market mortgage market.

Financial Reporting and Disclosures

When is First National’s fiscal year end?

December 31.

When does First National announce financial results?

Financial results are usually announced in April, July, October and February.

How can I obtain a copy of the Annual Report or other financial documents?

You can download an electronic copy of these documents by visiting the financial reports and filing section of this website. For a printed copy of the Annual Report, please contact First National investor relations.

Who are the Company’s independent auditors?

Ernst & Young LLP, Toronto, Ontario.

Risk

How does First National manage mortgage risk?

Our strategy when First National was founded more than 25 years ago was to provide a high standard of underwriting to originate high quality mortgages and attract institutional funders. We’ve held true to that strategy as we’ve grown. Our underwriting process is detailed, thorough and compliant with the highest standards in the country. At the front end, our underwriters are responsible for reviewing every loan application to ensure it meets acceptable risk.  This involves reviewing all submitted documents and independently verifying the data and claims made in those documents. Our quality assurance operation and our internal auditors add two more layers to our defences. As well, we sell mortgages to third-party institutional investors who audit us on a regular basis, while third-party mortgage insurers review our loans against their standards. We receive periodic reports from CMHC and other mortgage default insurers on our delinquency rates and early default rates which measure how our results compare to the industry. First National consistently matches or outperforms these measurers.

Common Shares and Dividends

What is the CUSIP number for First National shares?

33564P.

Where can I find the current or historical share price?

You can find the trading price of our common and preferred shares from a number of sources, including the TSX.

Who is First National’s transfer agent, and what services do they provide?

A transfer agent is assigned by a corporation to maintain records of investors and account balances and transactions, to cancel and issue certificates, to deliver investor mailings and to help with items such as lost or stolen certificates. First National’s transfer agent is Computershare Investor Services, 1.800.564.6253.

What should I do if I have questions regarding missing dividends, lost share certificates, estate questions, address changes to the share register, eliminating duplicate mailings of shareholder materials, or to stop (or resume) receiving Annual and Quarterly Reports?

Please contact Computershare Investor Services, 1.800.564.6253.

How do I buy and sell First National’s shares?

You may buy and sell First National common or preferred shares through a stockbroker who is a member of the stock exchange where our shares are listed.

Are dividends paid considered "eligible dividends" for Canadian tax purposes?

Yes. Please consult your tax advisors for specific advice.

When are dividends scheduled to be paid in the current year?

Common share dividends are paid monthly, preferred share dividends are paid quarterly.

What is First National’s dividend history?

You may review our common share dividend history here . You may review our preferred share dividend history here.

Does First National have a Dividend Reinvestment Plan (DRIP)?

No.

General

Who are the equity analysts that cover First National?

First National is covered by several brokerage firms including:

BMO Capital Markets
National Bank Financial
RBC Capital Markets
Scotiabank
TD Securities

Where can I learn more about First National’s senior officers?

Biographies of our senior management team may be found under the Leadership section of our website.

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