News
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.
Andrew Moor
President and CEO
416-513-7000
Tim Wilson
Vice President and CFO
416-513-7000