TORONTO,
Aug. 14, 2013 /CNW/ - Equitable Group
Inc. (TSX: ETC and ETC.PR.A) ("Equitable" or the "Company")
today reported record earnings for the three and six month periods
ended June 30, 2013.
SECOND QUARTER HIGHLIGHTS
- Net income increased 4% to an all-time high of $23 million, from $22
million in 2012. Excluding an unusual investment gain
of $3.6 million in 2012, net income
was up 24%.
- Diluted earnings per share increased 2% (23% excluding last
year's gain) to $1.43 from
$1.40 in 2012.
- Return on Equity ("ROE") was 18.2% compared to 17.5% in the
first quarter of 2013, 21.1% in the second quarter of 2012 and
17.5% in the second quarter of 2012 excluding the gain.
- Book value per share increased 19% to $32.55 from $27.46
at June 30, 2012 and was up 5% from
March 31, 2013.
"Growth in our mortgage portfolio and
Equitable's disciplined approach to capital management drove record
financial results in the second quarter," said Andrew Moor, President and CEO. "In the current
Canadian housing market environment, we consider the 33%
year-over-year increase in our Single Family mortgage portfolio to
be particularly strong and indicative of Equitable's growing
national presence and ability to deliver competitive solutions to
our mortgage brokers and borrowing clients. We are particularly
pleased to report that second quarter ROE exceeded our 5-year
average of 17.2% by a full percentage point. These results further
validate our approach of retaining earnings to fund our growth and,
in turn, deploying capital in a disciplined way that optimizes
returns."
SECOND QUARTER OPERATING HIGHLIGHTS
- Core Lending mortgage principal (comprised of Single
Family and Commercial Lending) amounted to $5.6 billion, up 18% from $4.7 billion a year ago, while second quarter
Core Lending production increased 5% year-over-year to $611 million from $583
million.
- Single Family Lending Services mortgage principal grew
33% or $848 million to a record
$3.4 billion on strong mortgage
production and renewals. Production was down by 7% over Q2
2012, reflecting market conditions and Equitable's approach to
implementing recent regulatory changes.
- Commercial Lending Services mortgage principal was
$2.2 billion, up 1% from a year
ago. Production increased 37% year over year to $211 million from $153
million.
- Securitization Financing mortgage principal was
$5.2 billion, flat to June 30, 2012, as $605
million of mortgages have been derecognized over the past
year.
Equitable's strategy of employing best in class
underwriting and collection practices allowed it to maintain its
low-risk profile and credit losses in the quarter. At June 30, 2013:
- The loan-to-value ratio was 69% on its Core Lending
portfolio.
- Mortgages in arrears 90 days or more were just 0.23% of total
principal, an improvement from 0.36% at the end of the prior
quarter.
- Early-stage delinquencies were consistent with the prior
quarter at 0.25% of total principal.
- Realized net loan losses were $0.9
million compared to a recovery of $0.02 million a year ago, and the majority of the
$0.9 million was provided for in
prior periods.
DIVIDEND DECLARATIONS
The Company's Board of Directors today declared
a quarterly dividend in the amount of $0.15 per common share, payable October 3, 2013, to common shareholders of record
at the close of business September 13,
2013. This represents a 7% increase over dividends declared
in August of 2012.
The Board declared a quarterly dividend in the
amount of $0.453125 per preferred
share, payable September 30, 2013, to
preferred shareholders of record at the close of business
September 13, 2013.
CAPITAL
All of Equitable's capital ratios, including the
newly prescribed Common Equity Tier 1 ("CET1") ratio, continued to
exceed minimum regulatory standards at June
30, 2013:
- CET1 was 12.4% compared to 12.2% at March 31, 2013 and 12.0% a year ago, well ahead
of Basel III guidelines of 7.0% and most competitive
benchmarks.
- The total capital ratio was 16.5% compared to 16.4% at
March 31, 2013 and 15.6% a year ago
due to the net effect of a $65
million Series 10 subordinated debenture issuance in the
fourth quarter of 2012 and $38
million of subordinated debenture redemptions in the first
quarter of 2013.
EQUITABLE BANK
On July 1, 2013,
Equitable's wholly owned subsidiary, The Equitable Trust Company,
converted to a Schedule I Bank called Equitable Bank. This
evolution is part of a strategy to update the Equitable brand,
established in 1970, to appeal to a new generation of financial
services customers, including Canadian depositors, borrowers and
mortgage brokers who are not familiar with the trust company
concept. The conversion is intended to improve the Company's
long-term competitiveness, simplify regulatory requirements, and
enhance the ability to attract non-common share regulatory
capital.
Equitable does not expect any changes to the
manner in which it manages capital or to target capital levels as a
result of the conversion.
TRADING SYMBOL
In order to reflect the fact that Equitable
Group is a vehicle through which investors can participate in the
earnings of Canada's 9th largest
independent Schedule I bank, the Company has applied to the TSX for
approval to change its trading symbols to EQB and EQB.PR. Trading
using these symbols is expected to begin on or about September 3rd.
LOOKING AHEAD
The Company expects to generate attractive
earnings and ROE for the remainder of 2013, anticipates that the
net interest margin ("NIM") on its mortgage portfolio will remain
relatively stable and that arrears and loan losses will remain low
given forecasts for stable employment levels in Canada.
"To date, Equitable has weathered the housing
market slowdown exceptionally well due to our competitive
positioning, including our diversified national presence," said Mr.
Moor. "Going into the final half of 2013, we expect to continue to
generate double-digit percentage growth in Single Family mortgage
balances. We will continue to focus on renewal opportunities
and also expect to benefit from refinements to our implementation
of certain regulatory guidelines earlier in the year. These
refinements should improve our responsiveness in originations and
underwriting."
"With respect to profitability, we believe that
total NIM on the mortgage portfolio will remain relatively stable
over the remaining quarters of 2013," said Tim Wilson, Vice President and CFO, "taking into
account the continued shift in volume towards our higher margin
Core Lending book. As we sustain our momentum, we will manage our
expense growth with our usual discipline and in a manner that
should allow us to maintain our productivity ratio at or near our
traditionally attractive levels."
Management believes that Canadian policymakers
will remain active in respect to housing and mortgage markets and
additional interventions, if any, could impact activity levels for
mortgage lenders.
Q2 CONFERENCE CALL
The Company will hold its second quarter conference call and
webcast at 10:00 a.m. ET,
August 15, 2013. To access the call
live, please dial in five minutes prior to 416-644-3415.
To access a listen-only version of the webcast,
please log on to www.equitablebank.ca under Investor Relations. A
replay of the call will be available until August 22, 2013 and it can be accessed by dialing
416-640-1917 and entering passcode 4626499 followed by the number
sign. Alternatively, the call will be archived on the Company's
website for three months.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
(unaudited) |
|
|
|
|
|
|
AS AT JUNE 30, 2013 |
|
|
|
|
|
|
With comparative figures as at
December 31, 2012 and June 30, 2012 |
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013 |
|
December 31, 2012 |
|
June 30, 2012 |
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
417,402 |
$ |
379,447 |
$ |
305,037 |
Restricted cash |
|
75,884 |
|
63,601 |
|
66,537 |
Securities purchased
under reverse repurchase agreements |
|
148,333 |
|
78,551 |
|
101,351 |
Investments |
|
332,948 |
|
439,480 |
|
391,169 |
Mortgages receivable - Core
Lending |
|
5,567,766 |
|
5,154,943 |
|
4,700,493 |
Mortgages receivable - Securitization
Financing |
|
5,238,635 |
|
5,454,529 |
|
5,278,225 |
Securitization retained interests |
|
17,359 |
|
7,263 |
|
- |
Other assets |
|
39,545 |
|
23,626 |
|
24,719 |
|
$ |
11,837,872 |
$ |
11,601,440 |
$ |
10,867,531 |
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Deposits |
$ |
6,104,508 |
$ |
5,651,717 |
$ |
5,231,603 |
|
Securitization liabilities |
|
5,033,551 |
|
5,261,670 |
|
5,076,323 |
|
Obligations related to securities sold short |
|
- |
|
- |
|
1,515 |
|
Obligations under repurchase agreements |
|
15,701 |
|
9,882 |
|
- |
|
Deferred tax liabilities |
|
8,988 |
|
5,498 |
|
5,666 |
|
Other liabilities |
|
36,722 |
|
40,931 |
|
24,780 |
|
Bank term loans |
|
- |
|
12,500 |
|
12,500 |
|
Debentures |
|
92,483 |
|
117,671 |
|
52,671 |
|
|
11,291,953 |
|
11,099,869 |
|
10,405,058 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
Preferred shares |
|
48,494 |
|
48,494 |
|
48,494 |
|
Common shares |
|
136,462 |
|
134,224 |
|
131,045 |
|
Contributed surplus |
|
5,098 |
|
5,003 |
|
4,913 |
|
Retained earnings |
|
361,314 |
|
323,737 |
|
288,596 |
|
Accumulated other comprehensive loss |
|
(5,449) |
|
(9,887) |
|
(10,575) |
|
|
545,919 |
|
501,571 |
|
462,473 |
|
|
|
|
|
|
|
|
$ |
11,837,872 |
$ |
11,601,440 |
$ |
10,867,531 |
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
(unaudited) |
|
|
|
|
FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2013 |
|
|
|
|
With comparative figures for the
three and six month periods ended June 30, 2012 |
|
|
|
|
($ THOUSANDS, EXCEPT PER SHARE
AMOUNTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Six months ended |
|
|
June 30, 2013 |
|
June 30, 2012 |
|
June 30, 2013 |
|
June 30, 2012 |
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
Mortgages - Core Lending |
$ |
67,838 |
$ |
58,655 |
$ |
132,489 |
$ |
115,763 |
|
Mortgages - Securitization Financing |
|
51,313 |
|
53,916 |
|
104,299 |
|
108,454 |
|
Investments |
|
1,720 |
|
2,878 |
|
3,756 |
|
5,126 |
|
Other |
|
2,242 |
|
1,340 |
|
4,098 |
|
2,566 |
|
|
123,113 |
|
116,789 |
|
244,642 |
|
231,909 |
Interest expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
34,756 |
|
31,589 |
|
68,469 |
|
61,939 |
|
Securitization liabilities |
|
44,526 |
|
45,675 |
|
89,776 |
|
92,849 |
|
Bank term loans |
|
- |
|
202 |
|
7 |
|
404 |
|
Debentures |
|
1,399 |
|
868 |
|
3,772 |
|
1,737 |
|
Other |
|
26 |
|
4 |
|
49 |
|
5 |
|
|
80,707 |
|
78,338 |
|
162,073 |
|
156,934 |
Net interest income |
|
42,406 |
|
38,451 |
|
82,569 |
|
74,975 |
Provision for credit losses |
|
1,650 |
|
1,693 |
|
3,750 |
|
3,920 |
Net interest income after provision
for credit losses |
|
40,756 |
|
36,758 |
|
78,819 |
|
71,055 |
Other income: |
|
|
|
|
|
|
|
|
|
Fees and other income |
|
1,237 |
|
981 |
|
2,694 |
|
1,986 |
|
Net (losses) gains on investments |
|
(1) |
|
54 |
|
644 |
|
303 |
|
Gains (losses) on securitization
activities and income from
securitization retained
interests |
|
3,031 |
|
(85) |
|
3,912 |
|
(34) |
|
|
4,267 |
|
950 |
|
7,250 |
|
2,255 |
Net interest and other income |
|
45,023 |
|
37,708 |
|
86,069 |
|
73,310 |
Non-interest expenses: |
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
8,663 |
|
6,965 |
|
16,390 |
|
13,535 |
|
Other |
|
5,594 |
|
5,354 |
|
11,103 |
|
10,693 |
|
|
14,257 |
|
12,319 |
|
27,493 |
|
24,228 |
Income before income taxes |
|
30,766 |
|
25,389 |
|
58,576 |
|
49,082 |
Income taxes: |
|
|
|
|
|
|
|
|
|
Current |
|
3,948 |
|
4,258 |
|
11,273 |
|
11,193 |
|
Deferred |
|
3,920 |
|
(942) |
|
3,491 |
|
(2,124) |
|
|
7,868 |
|
3,316 |
|
14,764 |
|
9,069 |
Net income |
$ |
22,898 |
$ |
22,073 |
$ |
43,812 |
$ |
40,013 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.44 |
$ |
1.41 |
$ |
2.76 |
$ |
2.54 |
|
Diluted |
$ |
1.43 |
$ |
1.40 |
$ |
2.73 |
$ |
2.52 |
|
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited) |
|
|
|
|
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30,
2013 |
|
|
|
|
|
|
|
|
With comparative figures for the
three and six month periods ended June 30, 2013 |
|
|
|
|
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Six months ended |
|
|
June 30, 2013 |
|
June 30, 2012 |
|
June 30, 2013 |
|
June 30, 2012 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
22,898 |
$ |
22,073 |
$ |
43,812 |
$ |
40,013 |
|
|
|
|
|
|
|
|
|
Other comprehensive income - Items that may be
reclassified |
|
|
|
|
|
|
|
|
subsequently to income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale investments: |
|
|
|
|
|
|
|
|
Net unrealized (losses) gains from change in fair
value |
|
(2,848) |
|
(782) |
|
(291) |
|
51 |
Reclassification of net gains to income |
|
(12) |
|
(55) |
|
(859) |
|
(1,137) |
|
|
(2,860) |
|
(837) |
|
(1,150) |
|
(1,086) |
Income tax recovery |
|
753 |
|
219 |
|
303 |
|
284 |
|
|
(2,107) |
|
(618) |
|
(847) |
|
(802) |
|
|
|
|
|
|
|
|
|
Cash flow hedges: (Note 9) |
|
|
|
|
|
|
|
|
Net unrealized gains (losses) from change in fair
value |
|
6,661 |
|
(1,387) |
|
5,894 |
|
(359) |
Reclassification of net losses to income |
|
633 |
|
547 |
|
1,280 |
|
1,139 |
|
|
7,294 |
|
(840) |
|
7,174 |
|
780 |
Income tax (expense) recovery |
|
(1,921) |
|
219 |
|
(1,889) |
|
(204) |
|
|
5,373 |
|
(621) |
|
5,285 |
|
576 |
Total other comprehensive income (loss) |
|
3,266 |
|
(1,239) |
|
4,438 |
|
(226) |
Total comprehensive income |
$ |
26,164 |
$ |
20,834 |
$ |
48,250 |
$ |
39,787 |
|
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY (unaudited) |
|
|
|
|
FOR THE THREE MONTH PERIOD ENDED JUNE
30, 2013 |
|
|
|
|
|
|
With comparative figures for the
three month period ended June 30, 2012 |
|
|
|
|
|
|
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013 |
|
Preferred
shares |
|
Common
shares |
|
Contributed
surplus |
|
Retained
earnings |
|
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
135,408 |
$ |
5,028 |
$ |
341,614 |
$ |
(8,715) |
$ |
521,829 |
Net income |
|
- |
|
- |
|
- |
|
22,898 |
|
- |
|
22,898 |
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
3,266 |
|
3,266 |
Reinvestment of dividends |
|
- |
|
286 |
|
- |
|
- |
|
- |
|
286 |
Exercise of stock options |
|
- |
|
648 |
|
- |
|
- |
|
- |
|
648 |
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares |
|
- |
|
- |
|
- |
|
(906) |
|
- |
|
(906) |
|
Common shares |
|
- |
|
- |
|
- |
|
(2,292) |
|
- |
|
(2,292) |
Stock-based compensation |
|
- |
|
- |
|
190 |
|
- |
|
- |
|
190 |
Transfer relating to
the exercise of stock options |
|
- |
|
120 |
|
(120) |
|
- |
|
- |
|
- |
Balance, end of period |
$ |
48,494 |
$ |
136,462 |
$ |
5,098 |
$ |
361,314 |
$ |
(5,449) |
$ |
545,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012 |
|
Preferred
shares |
|
Common
shares |
|
Contributed
surplus |
|
Retained
earnings |
|
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
130,251 |
$ |
4,813 |
$ |
269,235 |
$ |
(9,336) |
$ |
443,457 |
Net income |
|
- |
|
- |
|
- |
|
22,073 |
|
- |
|
22,073 |
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
(1,239) |
|
(1,239) |
Reinvestment of dividends |
|
- |
|
190 |
|
- |
|
- |
|
- |
|
190 |
Exercise of stock options |
|
- |
|
491 |
|
- |
|
- |
|
- |
|
491 |
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares |
|
- |
|
- |
|
- |
|
(906) |
|
- |
|
(906) |
|
Common shares |
|
- |
|
- |
|
- |
|
(1,806) |
|
- |
|
(1,806) |
Stock-based compensation |
|
- |
|
- |
|
213 |
|
- |
|
- |
|
213 |
Transfer relating to
the exercise of stock options |
|
- |
|
113 |
|
(113) |
|
- |
|
- |
|
- |
Balance, end of period |
$ |
48,494 |
$ |
131,045 |
$ |
4,913 |
$ |
288,596 |
$ |
(10,575) |
$ |
462,473 |
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY (unaudited) |
|
|
|
|
FOR THE SIX MONTH PERIOD ENDED JUNE
30, 2013 |
|
|
|
|
|
|
With comparative figures for the
six month period ended June 30, 2012 |
|
|
|
|
|
|
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013 |
|
Preferred
shares |
|
Common
shares |
|
Contributed
surplus |
|
Retained
earnings |
|
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
134,224 |
$ |
5,003 |
$ |
323,737 |
$ |
(9,887) |
$ |
501,571 |
Net income |
|
- |
|
- |
|
- |
|
43,812 |
|
- |
|
43,812 |
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
4,438 |
|
4,438 |
Reinvestment of dividends |
|
- |
|
538 |
|
- |
|
- |
|
- |
|
538 |
Exercise of stock options |
|
- |
|
1,404 |
|
- |
|
- |
|
- |
|
1,404 |
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares |
|
- |
|
- |
|
- |
|
(1,812) |
|
- |
|
(1,812) |
|
Common shares |
|
- |
|
- |
|
- |
|
(4,423) |
|
- |
|
(4,423) |
Stock-based compensation |
|
- |
|
- |
|
391 |
|
- |
|
- |
|
391 |
Transfer relating to
the exercise of stock options |
|
- |
|
296 |
|
(296) |
|
- |
|
- |
|
- |
Balance, end of period |
$ |
48,494 |
$ |
136,462 |
$ |
5,098 |
$ |
361,314 |
$ |
(5,449) |
$ |
545,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012 |
|
Preferred
shares |
|
Common
shares |
|
Contributed
surplus |
|
Retained
earnings |
|
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
129,771 |
$ |
4,718 |
$ |
254,006 |
$ |
(10,349) |
$ |
426,640 |
Net income |
|
- |
|
- |
|
- |
|
40,013 |
|
- |
|
40,013 |
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
(226) |
|
(226) |
Reinvestment of dividends |
|
- |
|
378 |
|
- |
|
- |
|
- |
|
378 |
Exercise of stock options |
|
- |
|
728 |
|
- |
|
- |
|
- |
|
728 |
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares |
|
- |
|
- |
|
- |
|
(1,812) |
|
- |
|
(1,812) |
|
Common shares |
|
- |
|
- |
|
- |
|
(3,611) |
|
- |
|
(3,611) |
Stock-based compensation |
|
- |
|
- |
|
363 |
|
- |
|
- |
|
363 |
Transfer relating to
the exercise of stock options |
|
- |
|
168 |
|
(168) |
|
- |
|
- |
|
- |
Balance, end of period |
$ |
48,494 |
$ |
131,045 |
$ |
4,913 |
$ |
288,596 |
$ |
(10,575) |
$ |
462,473 |
CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) |
FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2013 |
With comparative figures for the
three and six month periods ended June 30, 2013 |
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Six months ended |
|
|
June 30, 2013 |
|
June 30, 2012 |
|
June 30, 2013 |
|
June 30, 2012 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
Net income for the period |
$ |
22,898 |
$ |
22,073 |
$ |
43,812 |
$ |
40,013 |
Adjustments to determine cash flows
relating to operating activities: |
|
|
|
|
|
|
|
|
|
Financial instruments at fair value through
income |
|
(3,622) |
|
12,153 |
|
(2,181) |
|
13,989 |
|
Securitization gains |
|
(1,494) |
|
- |
|
(2,620) |
|
- |
|
Depreciation of capital assets |
|
322 |
|
238 |
|
564 |
|
469 |
|
Provision for credit losses |
|
1,650 |
|
1,693 |
|
3,750 |
|
3,920 |
|
Net gain on sale or redemption of investments |
|
(113) |
|
(11) |
|
(644) |
|
(260) |
|
Income taxes |
|
7,869 |
|
3,315 |
|
14,764 |
|
9,140 |
|
Income taxes paid |
|
(6,269) |
|
(5,454) |
|
(17,136) |
|
(10,255) |
|
Stock-based compensation |
|
190 |
|
213 |
|
391 |
|
363 |
|
Amortization of premiums/discount on
investments |
|
615 |
|
(108) |
|
1,124 |
|
676 |
|
Net increase in mortgages receivable |
|
(223,105) |
|
(291,926) |
|
(474,483) |
|
(405,903) |
|
Net increase in deposits |
|
455,829 |
|
371,056 |
|
452,791 |
|
603,699 |
|
Change in obligations related to investments sold
under
repurchase agreements |
|
8,709 |
|
1,515 |
|
5,819 |
|
1,515 |
|
Net change in securities purchased and sold under
reverse
repurchase agreements |
|
(63,652) |
|
(61,429) |
|
(69,782) |
|
(91,384) |
|
Net change in securitization liability |
|
(255,623) |
|
6,471 |
|
(228,119) |
|
(24,597) |
|
Change in restricted cash |
|
21,602 |
|
23,710 |
|
(12,283) |
|
16,619 |
|
Proceeds from loan securitization |
|
149,803 |
|
- |
|
268,346 |
|
- |
|
Securitization retained interest |
|
543 |
|
- |
|
875 |
|
- |
|
Net interest income, excluding non-cash items |
|
(41,871) |
|
(52,573) |
|
(87,149) |
|
(107,324) |
|
Interest received |
|
126,201 |
|
115,493 |
|
248,392 |
|
231,427 |
|
Interest paid |
|
(85,477) |
|
(78,947) |
|
(163,865) |
|
(142,639) |
|
Other assets |
|
(5,420) |
|
250 |
|
(5,255) |
|
59 |
|
Other liabilities |
|
322 |
|
(601) |
|
(4,271) |
|
(3,856) |
|
Dividends received |
|
1,147 |
|
16,027 |
|
2,622 |
|
18,536 |
Cash flows from (used in) operating
activities |
|
111,054 |
|
83,158 |
|
(24,538) |
|
154,207 |
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
Repayment of bank term loan |
|
- |
|
- |
|
(12,500) |
|
- |
|
Redemption of debentures |
|
- |
|
- |
|
(25,188) |
|
- |
|
Dividends paid on preferred shares |
|
(906) |
|
(906) |
|
(1,812) |
|
(1,812) |
|
Dividends paid on common shares |
|
(1,846) |
|
(1,616) |
|
(3,720) |
|
(3,233) |
|
Proceeds from issuance of common shares |
|
648 |
|
491 |
|
1,404 |
|
728 |
Cash flows used in financing
activities |
|
(2,104) |
|
(2,031) |
|
(41,816) |
|
(4,317) |
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
Purchase of investments |
|
(33,133) |
|
(47,532) |
|
(35,553) |
|
(67,532) |
|
Proceeds on sale or redemption of investments |
|
72,143 |
|
12,789 |
|
136,281 |
|
59,519 |
|
Net change in Canada Housing Trust re-investment
accounts |
|
5,110 |
|
19,227 |
|
4,681 |
|
(7,444) |
|
Purchase of capital assets |
|
(799) |
|
(91) |
|
(1,100) |
|
(241) |
Cash flows from (used in) investing
activities |
|
43,321 |
|
(15,607) |
|
104,309 |
|
(15,698) |
Net increase in cash and cash
equivalents |
|
152,271 |
|
65,520 |
|
37,955 |
|
134,192 |
Cash and cash equivalents, beginning
of period |
|
265,131 |
|
239,517 |
|
379,447 |
|
170,845 |
Cash and cash equivalents, end of
period |
$ |
417,402 |
$ |
305,037 |
$ |
417,402 |
$ |
305,037 |
ABOUT EQUITABLE GROUP INC.
Equitable Group (TSX: ETC and ETC.PR.A) is a
growing Canadian financial services business that serves the market
through its wholly-owned subsidiary, Equitable Bank. Equitable Bank
is a federally regulated Schedule I Bank with total assets of
approximately $12 billion, 290
skilled employees and proven capabilities in lending and
deposit-taking. The Company's integrated operations are organized
according to specialty. Within Equitable Bank's Core Lending
business, Single Family Lending Services funds mortgages for
owner-occupied and investment properties across Canada while Commercial Lending Services
provides mortgages on a variety of commercial properties on a
national basis. Equitable's Securitization Financing business
originates and securitizes insured residential mortgages under the
Canada Mortgage and Housing ("CMHC") administered National Housing
Act. Equitable Bank provides savings products including Guaranteed
Investment Certificates and savings accounts. Equitable Bank was
founded in 1970 as The Equitable Trust Company. For more
information, visit the Company's website at www.equitablebank.ca
and click on Investor Relations.
Cautionary NOTE Regarding FORWARD-LOOKING
STATEMENTS
Statements made by the Company in the sections
of this report including those entitled "Looking Ahead", in other
filings with Canadian securities regulators and in other
communications include forward-looking statements within the
meaning of applicable securities laws ("forward-looking
statements"). These statements include, but are not limited to,
statements about the Company's objectives, strategies and
initiatives, financial result expectations and other statements
made herein, whether with respect to the Company's businesses or
the Canadian economy. Generally, forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "planned", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases which state that certain
actions, events or results "may" , "could", "would", "might" or
"will be taken", "occur" or "be achieved." Forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, closing of transactions, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to risks related to capital markets and additional funding
requirements, fluctuating interest rates and general economic
conditions, legislative and regulatory developments, the nature of
our customers and rates of default, and competition as well as
those factors discussed under the heading "Risk Management" in the
Management's Discussion and Analysis and in the Company's documents
filed on SEDAR at www.sedar.com. All material assumptions used in
making forward-looking statements are based on management's
knowledge of current business conditions and expectations of future
business conditions and trends, including their knowledge of the
current credit, interest rate and liquidity conditions affecting
the Company and the Canadian economy. Although the Company believes
the assumptions used to make such statements are reasonable at this
time and has attempted to identify in its continuous disclosure
documents important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. Certain material assumptions
are applied by the Company in making forward-looking statements,
including without limitation, assumptions regarding its continued
ability to fund its mortgage business at current levels, a
continuation of the current level of economic uncertainty that
affects real estate market conditions, continued acceptance of its
products in the marketplace, as well as no material changes in its
operating cost structure and the current tax regime. There can be
no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company
does not undertake to update any forward-looking statements that
are contained herein, except in accordance with applicable
securities laws.
NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
("GAAP") FINANCIAL MEASURES
This press release references certain non-GAAP
measures such as Return on Equity ("ROE"), net interest margin
("NIM"), capital ratios, book value per share, and productivity
ratios that management believes provide useful information to
investors regarding the Company's financial condition and results
of operations. The "Non-Generally Accepted Accounting Principles
("GAAP") Financial Measures" section of the Company's Management
Discussion and Analysis provides a detailed description of each
non-GAAP measure and should be read in conjunction with this
report. The Management Discussion and Analysis also provides
a reconciliation between all non-GAAP measures and the most
directly comparable GAAP measure, where applicable. Readers
are cautioned that non-GAAP measures do not have any standardized
meaning, and therefore, may not be comparable to similar measures
presented by other companies.
SOURCE Equitable Group Inc.