TORONTO,
Nov. 13, 2012 /CNW/ - Equitable Group
Inc. (TSX: ETC and ETC.PR.A) ("Equitable" or the "Company")
today reported record third quarter earnings for the three months
ended September 30, 2012 on a
$1 billion year-over-year increase in
Core Lending mortgage principal.
THIRD QUARTER SUMMARY
- Net income grew 58% to $21
million from $13 million in
the third quarter of 2011; net income growth was 24% adjusted for
an operational loss provision taken in Q3 2011
- Diluted earnings per share ("EPS") increased 62% to
$1.33 from $0.82 in the third quarter of 2011, or 25% on an
adjusted basis
- Return on equity ("ROE") increased to 18.9% from 13.7% a year
ago (adjusted ROE in 2011 was 17.6%)
- Core Lending mortgage principal reached $5 billion at the end of the third quarter, up by
25% over the prior year
- Book value per share increased 19% to $28.69 from $24.02
at September 30, 2011
- Equitable Trust's period-end total capital ratio was 15.5%
"This was another excellent period of
performance punctuated by a 50% or $952
million year-over-year increase in Single Family mortgage
principal, which Equitable delivered while keeping investment
returns high, portfolio losses low and our capital ratios strong,"
said Andrew Moor, President and CEO.
"Our mounting competitive strength on a national basis and
responsiveness to market dynamics put us in an enviable position at
this point in the real estate cycle."
THIRD QUARTER OPERATING HIGHLIGHTS
- Single Family Lending Services mortgage principal grew
50% to a record $2.8 billion at
September 30 and represented 57% of
Core Lending mortgage principal compared to 47% a year ago
- Single Family Lending Services third quarter production
of $494 million represented an
increase of 27% over the third quarter of 2011, as Equitable's
strategic emphasis on this core lending activity and changes in the
competitive landscape combined to drive strong growth
- Commercial Lending Services mortgage principal was
unchanged year over year at $2.2
billion at September 30. Third
quarter production was $224 million,
up from $156 million in the second
quarter of 2012 and down 16% or $44
million from an exceptionally strong third quarter in
2011
- Core Lending mortgage principal (comprised of Single
Family and Commercial Lending) amounted to $5 billion, up 25% or $1
billion year-over-year, while third quarter Core Lending
production increased 9% year over year to $718 million
- Securitization Financing mortgage principal was
$5.1 billion, 3% lower than a year
ago, reflecting the Company's strategy to emphasize core lending
activity over the past several quarters. In the third quarter, the
Company originated $288 million and
securitized $263 million of insured
residential mortgages. Included in that amount, the Company
successfully securitized $164 million
of mortgages using a transaction structure that transferred the
risks and rewards of the securitized assets to third parties. The
Company was able to recognize $0.9
million of related gains on the securitizations that used
this new structure for origination and sale.
The Company continues to experience a low level of loan losses
(net realized loan losses were $0.2
million in the third quarter of 2012) and posted solid
credit metrics:
- Mortgages in arrears 90 days or more were 0.31% of total
principal outstanding at quarter end compared to 0.24% a year
earlier while early stage delinquencies - a leading indicator of
losses - were the same as a year ago at 0.30% of total
principal
- Net impaired mortgages were just 0.35% of total mortgage assets
compared to 0.23% a year ago
DIVIDEND DECLARATIONS
The Company's Board of Directors today declared
a quarterly dividend in the amount of $0.14 per common share, payable January 3, 2013, to common shareholders of record
at the close of business on December 14,
2012. This amount is consistent with the dividend increase
announced last quarter and is 17% higher than the dividends
declared in the third quarter of 2011. The Board also declared a
quarterly dividend in the amount of $0.453125 per preferred share, payable
December 31, 2012, to preferred
shareholders of record at the close of business on December 14, 2012.
NINE MONTH SUMMARY
- Net income increased 35% to a record $61.1 million from $45.2
million in the same nine month period of 2011
- Diluted EPS increased 37% to $3.85 from $2.81 in
the same period of 2011
- ROE increased to 19.2% from 16.4% a year ago
Adjusted for certain non-recurring items in 2011
and 2012, diluted EPS increased by 18% year-over-year. Similarly,
adjusted ROE was 18.1% in the first nine months of 2012, compared
with 17.7% for 2011.
LOOKING AHEAD
Equitable is on track for another year of record
earnings based on recent growth in the mortgage portfolio,
relatively stable interest rate spreads (total NIM was 1.49% in the
third quarter) and expectations of low realized loan losses. While
it continues to closely monitor economic and credit market
conditions and has prepared for softening in residential real
estate prices through its responsive loan-to-value approach and
other risk mitigation strategies, Equitable's outlook remains
positive.
"In addition to new opportunities we've created
for ourselves through our focus on customer and mortgage broker
service leadership, we foresee added growth potential from two
other developments," said Mr. Moor. "One, recent changes in the
single family mortgage market may result in more self-employed
borrowers seeking mortgages in the alternative lending channel. And
two, we have developed a new approach to originate insured
mortgages and securitize them. The new approach will allow us to
resume growth in this part of our business. Combined, we expect to
continue to capitalize on the expanded market available to us as a
financially strong alternative mortgage lender."
Subsequent to third quarter end, Equitable
closed a private placement offering of $65
million of Series 10 5.399% debentures due October 23, 2017. As a result, the Company has
secured capital in anticipation of upcoming maturities and in
advance of new rules for capital instruments coming into effect for
most Canadian financial institutions in 2013.
"This successful offering served to reinforce
our already strong capital base," said Tim
Wilson, Vice President and CFO, "and will deliver interest
expense savings as existing debt is redeemed due to the 118 basis
point lower coupon rate on this debt compared to the average of our
existing debt. We are very confident that our current capital
position combined with future earnings will provide us with the
means to fully support our strategic objectives and ongoing
growth."
Q3 CONFERENCE CALL
The Company will hold its third quarter
conference call and webcast at 10:00 a.m. ET
Wednesday, November 14, 2012. To access the call live,
please dial in five minutes prior to 416-644-3414. To access a
listen-only version of the webcast, please log on to
www.equitabletrust.com under Investor Relations. A replay of the
call will be available until November 28,
2012 and it can be accessed by dialing 416-640-1917 and
entering passcode 4566190 followed by the number sign. The webcast
will also be archived on the Company's website for three
months.
INTERIM CONSOLIDATED FINANCIAL
STATEMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
(unaudited) |
|
|
|
|
|
|
AS AT SEPTEMBER 30, 2012 |
|
|
|
|
|
|
With comparative figures as at
December 31, 2011, September 30, 2011 |
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012 |
December 31, 2011 |
September 30, 2011 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
356,082 |
$ |
170,845 |
$ |
173,122 |
Restricted assets |
|
99,874 |
|
83,156 |
|
80,050 |
Securities purchased under reverse repurchase
agreements |
|
59,827 |
|
9,967 |
|
151,268 |
Investments |
|
467,108 |
|
390,340 |
|
398,736 |
Mortgages receivable |
|
5,063,558 |
|
4,262,147 |
|
4,121,858 |
Mortgages receivable - securitized |
|
5,157,960 |
|
5,314,940 |
|
5,301,081 |
Securitization retained interests |
|
2,199 |
|
- |
|
- |
Other assets |
|
21,422 |
|
25,618 |
|
28,276 |
|
$ |
11,228,030 |
$ |
10,257,013 |
$ |
10,254,391 |
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Deposits |
$ |
5,546,360 |
$ |
4,627,904 |
$ |
4,671,138 |
Securitization liabilities |
|
5,100,972 |
|
5,100,921 |
|
5,077,052 |
Obligations related to securities
sold short |
|
1,964 |
|
- |
|
- |
Deferred tax liabilities |
|
6,402 |
|
7,790 |
|
7,930 |
Other liabilities |
|
25,488 |
|
28,587 |
|
24,666 |
Bank term loans |
|
12,500 |
|
12,500 |
|
12,500 |
Subordinated debentures |
|
52,671 |
|
52,671 |
|
52,671 |
|
|
10,746,357 |
|
9,830,373 |
|
9,845,957 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred shares |
|
48,494 |
|
48,494 |
|
48,494 |
Common shares |
|
131,598 |
|
129,771 |
|
129,193 |
Contributed surplus |
|
5,094 |
|
4,718 |
|
4,538 |
Retained earnings |
|
306,629 |
|
254,006 |
|
239,689 |
Accumulated other comprehensive
loss |
|
(10,142) |
|
(10,349) |
|
(13,480) |
|
|
481,673 |
|
426,640 |
|
408,434 |
|
|
|
|
|
|
|
|
$ |
11,228,030 |
$ |
10,257,013 |
$ |
10,254,391 |
CONSOLIDATED STATEMENTS OF INCOME
(unaudited) |
|
|
|
|
FOR THE THREE AND NINE MONTH PERIODS
ENDED SEPTEMBER 30, 2012 |
|
|
|
|
With comparative figures for the
three and nine month periods ended September 30, 2011 |
|
|
|
|
($ THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Nine months ended |
|
September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
Mortgages |
$ |
63,069 |
$ |
53,627 |
$ |
179,229 |
$ |
151,950 |
Mortgages -
securitized |
|
54,194 |
|
54,470 |
|
162,250 |
|
159,232 |
Investments |
|
2,274 |
|
2,624 |
|
7,400 |
|
7,551 |
Other |
|
1,445 |
|
977 |
|
4,011 |
|
3,244 |
|
|
120,982 |
|
111,698 |
|
352,890 |
|
321,977 |
Interest expense: |
|
|
|
|
|
|
|
|
Deposits |
|
33,455 |
|
29,992 |
|
95,393 |
|
84,984 |
Securitization
liabilities |
|
45,802 |
|
45,757 |
|
138,651 |
|
135,136 |
Bank term loans |
|
204 |
|
205 |
|
609 |
|
608 |
Subordinated
debentures |
|
878 |
|
880 |
|
2,615 |
|
2,612 |
Other |
|
3 |
|
105 |
|
8 |
|
212 |
|
|
80,342 |
|
76,939 |
|
237,276 |
|
223,552 |
Net interest income |
|
40,640 |
|
34,759 |
|
115,614 |
|
98,425 |
Provision for credit losses |
|
1,872 |
|
1,991 |
|
5,792 |
|
6,146 |
Net interest income after provision for credit
losses |
|
38,768 |
|
32,768 |
|
109,822 |
|
92,279 |
Other income: |
|
|
|
|
|
|
|
|
Fees and other
income |
|
983 |
|
925 |
|
2,969 |
|
2,569 |
Net gain on
investments |
|
389 |
|
121 |
|
692 |
|
108 |
Gains on securitization
activities and income from
retained
interests |
|
857 |
|
- |
|
857 |
|
- |
|
|
2,229 |
|
1,046 |
|
4,518 |
|
2,677 |
Net interest and other income |
|
40,997 |
|
33,814 |
|
114,340 |
|
94,956 |
Non-interest expenses: |
|
|
|
|
|
|
|
|
Compensation and
benefits |
|
7,298 |
|
5,849 |
|
20,833 |
|
16,862 |
Other |
|
5,401 |
|
9,895 |
|
16,093 |
|
17,746 |
|
|
12,699 |
|
15,744 |
|
36,926 |
|
34,608 |
Income before income taxes and the undernoted fair
value loss |
|
28,298 |
|
18,070 |
|
77,414 |
|
60,348 |
Fair value loss on derivative financial
instruments -
securitization activities |
|
- |
|
(368) |
|
(34) |
|
(1) |
Income before income taxes |
|
28,298 |
|
17,702 |
|
77,380 |
|
60,347 |
Income taxes: |
|
|
|
|
|
|
|
|
Current |
|
6,508 |
|
3,866 |
|
17,701 |
|
14,342 |
Deferred |
|
736 |
|
473 |
|
(1,388) |
|
844 |
|
|
7,244 |
|
4,339 |
|
16,313 |
|
15,186 |
Net income |
$ |
21,054 |
$ |
13,363 |
$ |
61,067 |
$ |
45,161 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
1.34 |
$ |
0.83 |
$ |
3.88 |
$ |
2.84 |
Diluted |
$ |
1.33 |
$ |
0.82 |
$ |
3.85 |
$ |
2.81 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited) |
|
|
|
|
|
FOR THE THREE AND NINE MONTH PERIODS
ENDED SEPTEMBER 30, 2012 |
|
|
|
|
|
|
With comparative figures for the
three and nine month periods ended September 30, 2011 |
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Nine months ended |
|
September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
21,054 |
$ |
13,363 |
$ |
61,067 |
$ |
45,161 |
|
|
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale investments: |
|
|
|
|
|
|
|
|
Net unrealized gains (losses) from change in fair
value |
|
1,387 |
|
(2,474) |
|
1,438 |
|
(76) |
Reclassification of net gains to income |
|
(449) |
|
(256) |
|
(1,587) |
|
(246) |
|
|
938 |
|
(2,730) |
|
(149) |
|
(322) |
Income tax (expense) recovery |
|
(245) |
|
766 |
|
39 |
|
90 |
|
|
693 |
|
(1,964) |
|
(110) |
|
(232) |
|
|
|
|
|
|
|
|
|
Cash flow hedges (Note 8) |
|
|
|
|
|
|
|
|
Net unrealized losses from change in fair
value |
|
(952) |
|
(12,982) |
|
(1,311) |
|
(16,457) |
Reclassification of net losses (gains) to
income |
|
602 |
|
(235) |
|
1,741 |
|
(248) |
|
|
(350) |
|
(13,217) |
|
430 |
|
(16,705) |
Income tax recovery (expense) |
|
90 |
|
3,707 |
|
(113) |
|
4,686 |
|
|
(260) |
|
(9,510) |
|
317 |
|
(12,019) |
Total other comprehensive gain (loss) |
|
433 |
|
(11,474) |
|
207 |
|
(12,251) |
Total comprehensive income |
$ |
21,487 |
$ |
1,889 |
$ |
61,274 |
$ |
32,910 |
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) |
|
|
|
|
|
FOR THE THREE MONTH
PERIOD ENDED SEPTEMBER 30, 2012 |
|
|
|
|
|
|
|
With comparative
figures for the three month period ended September 30,
2011 |
|
|
|
|
|
|
|
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012 |
Preferred
shares |
Common
shares |
Contributed
surplus |
Retained
earnings |
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
131,045 |
$ |
4,913 |
$ |
288,596 |
$ |
(10,575) |
$ |
462,473 |
|
Net income |
|
- |
|
- |
|
- |
|
21,054 |
|
- |
|
21,054 |
|
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
433 |
|
433 |
|
Reinvestment of dividends |
|
- |
|
199 |
|
- |
|
- |
|
- |
|
199 |
|
Exercise of stock options |
|
- |
|
306 |
|
- |
|
- |
|
- |
|
306 |
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shares |
|
- |
|
- |
|
- |
|
(907) |
|
- |
|
(907) |
|
Common
shares |
|
- |
|
- |
|
- |
|
(2,114) |
|
- |
|
(2,114) |
|
Stock-based compensation |
|
- |
|
- |
|
229 |
|
- |
|
- |
|
229 |
|
Transfer relating to the exercise
of stock options |
|
- |
|
48 |
|
(48) |
|
- |
|
- |
|
- |
|
Balance, end of period |
$ |
48,494 |
$ |
131,598 |
$ |
5,094 |
$ |
306,629 |
$ |
(10,142) |
$ |
481,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2011 |
Preferred
shares |
Common
shares |
Contributed
surplus |
Retained
earnings |
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
129,054 |
$ |
4,292 |
$ |
228,881 |
$ |
(2,006) |
$ |
408,715 |
|
Net income |
|
- |
|
- |
|
- |
|
13,363 |
|
- |
|
13,363 |
|
Other comprehensive loss, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
(11,474) |
|
(11,474) |
|
Reinvestment of dividends |
|
- |
|
139 |
|
- |
|
- |
|
- |
|
139 |
|
Exercise of stock options |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shares |
|
- |
|
- |
|
- |
|
(907) |
|
- |
|
(907) |
|
Common
shares |
|
- |
|
- |
|
- |
|
(1,648) |
|
- |
|
(1,648) |
|
Stock-based compensation |
|
- |
|
- |
|
246 |
|
- |
|
- |
|
246 |
|
Transfer relating to the exercise
of stock options |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Balance, end of period |
$ |
48,494 |
$ |
129,193 |
$ |
4,538 |
$ |
239,689 |
$ |
(13,480) |
$ |
408,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) |
|
|
|
|
|
FOR THE NINE MONTH
PERIOD ENDED SEPTEMBER 30, 2012 |
|
|
|
|
|
|
|
With comparative
figures for the nine month period ended September 30, 2011 |
|
|
|
|
|
|
|
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 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 |
|
- |
|
- |
|
- |
|
61,067 |
|
- |
|
61,067 |
|
Other comprehensive income, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
207 |
|
207 |
|
Reinvestment of dividends |
|
- |
|
577 |
|
- |
|
- |
|
- |
|
577 |
|
Exercise of stock options |
|
- |
|
1,034 |
|
- |
|
- |
|
- |
|
1,034 |
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shares |
|
- |
|
- |
|
- |
|
(2,719) |
|
- |
|
(2,719) |
|
Common
shares |
|
- |
|
- |
|
- |
|
(5,725) |
|
- |
|
(5,725) |
|
Stock-based compensation |
|
- |
|
- |
|
592 |
|
- |
|
- |
|
592 |
|
Transfer relating to the exercise
of stock options |
|
- |
|
216 |
|
(216) |
|
- |
|
- |
|
- |
|
Balance, end of period |
$ |
48,494 |
$ |
131,598 |
$ |
5,094 |
$ |
306,629 |
$ |
(10,142) |
$ |
481,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2011 |
Preferred
shares |
Common
shares |
Contributed
surplus |
Retained
earnings |
Accumulated
other
comprehensive
income (loss) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
48,494 |
$ |
128,068 |
$ |
3,935 |
$ |
202,187 |
$ |
(1,229) |
$ |
381,455 |
|
Net income |
|
- |
|
- |
|
- |
|
45,161 |
|
- |
|
45,161 |
|
Other comprehensive loss, net of
tax |
|
- |
|
- |
|
- |
|
- |
|
(12,251) |
|
(12,251) |
|
Reinvestment of dividends |
|
- |
|
415 |
|
- |
|
- |
|
- |
|
415 |
|
Exercise of stock options |
|
- |
|
599 |
|
- |
|
- |
|
- |
|
599 |
|
Dividends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shares |
|
- |
|
- |
|
- |
|
(2,719) |
|
- |
|
(2,719) |
|
Common
shares |
|
- |
|
- |
|
- |
|
(4,940) |
|
- |
|
(4,940) |
|
Stock-based compensation |
|
- |
|
- |
|
714 |
|
- |
|
- |
|
714 |
|
Transfer relating to the exercise
of stock options |
|
- |
|
111 |
|
(111) |
|
- |
|
- |
|
- |
|
Balance, end of period |
$ |
48,494 |
$ |
129,193 |
$ |
4,538 |
$ |
239,689 |
$ |
(13,480) |
$ |
408,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) |
FOR THE THREE AND NINE MONTH PERIODS
ENDED SEPTEMBER 30, 2012 |
With comparative figures for the
three and nine month periods ended September 30, 2011 |
($ THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Nine months ended |
|
September 30,
2012 |
September 30,
2011 |
September 30,
2012 |
September 30,
2011 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income for the period |
$ |
21,054 |
$ |
13,363 |
$ |
61,067 |
$ |
45,161 |
Adjustments to determine cash flows relating to
operating activities: |
|
|
|
|
|
|
|
|
Financial instruments at fair
value through income |
|
358 |
|
3,537 |
|
14,347 |
|
4,636 |
Securitization gains |
|
(846) |
|
- |
|
(846) |
|
- |
Depreciation of capital
assets |
|
249 |
|
256 |
|
718 |
|
493 |
Provision for credit
losses |
|
1,872 |
|
1,991 |
|
5,792 |
|
6,146 |
Net loss (gain) on sale or
redemption of investments |
|
120 |
|
(105) |
|
(141) |
|
(92) |
Income taxes |
|
7,244 |
|
4,339 |
|
16,384 |
|
15,186 |
Income taxes paid |
|
(3,883) |
|
(4,861) |
|
(14,138) |
|
(14,402) |
Stock-based compensation |
|
229 |
|
246 |
|
592 |
|
714 |
Amortization of
premiums/discount on investments |
|
945 |
|
834 |
|
1,621 |
|
2,506 |
Net increase in mortgages
receivable |
|
(411,409) |
|
(558,341) |
|
(817,312) |
|
(1,208,823) |
Net increase in deposits |
|
314,757 |
|
416,867 |
|
918,456 |
|
792,285 |
Change in obligations related
to securities under repurchase agreements |
|
448 |
|
(34,298) |
|
1,964 |
|
- |
Net change in securitization
liabilities |
|
24,649 |
|
300,811 |
|
51 |
|
545,372 |
Net interest income, excluding
non-cash items |
|
(47,197) |
|
(44,862) |
|
(154,521) |
|
(135,840) |
Interest paid |
|
(76,298) |
|
(66,088) |
|
(218,937) |
|
(184,246) |
Other assets |
|
961 |
|
(22,374) |
|
1,019 |
|
(27,467) |
Other liabilities |
|
(959) |
|
(2,200) |
|
(4,815) |
|
(2,235) |
Interest received |
|
121,352 |
|
108,356 |
|
352,779 |
|
312,609 |
Dividends received |
|
2,143 |
|
2,594 |
|
20,683 |
|
7,477 |
Cash flows (used in) from operating
activities |
|
(44,211) |
|
120,065 |
|
184,763 |
|
159,480 |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Dividends paid on preferred
shares |
|
(907) |
|
(907) |
|
(2,719) |
|
(2,719) |
Dividends paid on common
shares |
|
(1,915) |
|
(1,509) |
|
(5,148) |
|
(4,527) |
Proceeds from issuance of
common shares |
|
306 |
|
- |
|
1,034 |
|
599 |
Cash flows used in financing activities |
|
(2,516) |
|
(2,416) |
|
(6,833) |
|
(6,647) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchase of investments |
|
(112,331) |
|
(66,260) |
|
(179,863) |
|
(125,982) |
Proceeds on sale or redemption
of investments |
|
53,303 |
|
49,538 |
|
112,822 |
|
83,887 |
Net change in Canada Housing
Trust re-investment accounts |
|
(16,467) |
|
(13,430) |
|
(23,913) |
|
(20,961) |
Purchase of securities under
reverse repurchase agreements |
|
(59,827) |
|
(151,268) |
|
(201,100) |
|
(181,376) |
Proceeds on sale or redemption
of securities under reverse repurchase agreements |
|
101,351 |
|
5,115 |
|
151,240 |
|
105,016 |
Change in restricted cash |
|
(33,337) |
|
(31,704) |
|
(16,718) |
|
6,520 |
Proceeds from loan
securitizations |
|
165,187 |
|
- |
|
165,187 |
|
- |
Securitization retained
interest |
|
38 |
|
- |
|
38 |
|
- |
Purchase of capital assets |
|
(145) |
|
(1,242) |
|
(386) |
|
(2,057) |
Cash flows from (used in) investing
activities |
|
97,772 |
|
(209,251) |
|
7,307 |
|
(134,953) |
Net increase (decrease) in cash and cash
equivalents |
|
51,045 |
|
(91,602) |
|
185,238 |
|
17,880 |
Cash and cash equivalents, beginning of
period |
|
305,037 |
|
264,724 |
|
170,845 |
|
155,242 |
Cash and cash equivalents, end of period |
$ |
356,082 |
$ |
173,122 |
$ |
356,082 |
$ |
173,122 |
|
|
|
|
|
|
|
|
|
ABOUT EQUITABLE GROUP INC.
Equitable Group Inc. is a niche mortgage lender.
Our primary business is first charge mortgage financing, which we
offer through our wholly owned subsidiary, The Equitable Trust
Company. Founded in 1970, Equitable Trust is a federally
incorporated trust company. It actively originates mortgages across
Canada. It serves single family,
small and large commercial borrowers and their mortgage advisors.
It also serves the investing public as a provider of insured
Guaranteed Investment Certificates. Equitable Trust is active in
providing GICs across all Canadian provinces and territories.
Equitable Group's shares are traded on the Toronto Stock Exchange
under the symbols ETC and ETC.PR.A respectively. Visit the Company
on line at www.equitabletrust.com 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.
SOURCE Equitable Group Inc.