Stock Name: ETC
Amount: CAD 0.14
Announcement Date: 09/08/2012
Record Date: 13/09/2012
Dividend Detail:
TORONTO, Aug. 9, 2012 /CNW/ - Equitable Group Inc. (TSX: ETC and ETC.PR.A) ("Equitable" or the "Company") today reported record financial
performance for the six months ended June 30, 2012 and announced a 17%
increase in its common share dividend in recognition of its strong
growth prospects and capital position.
As a result of strong long-term growth, the Company also noted that its
mortgage portfolio has doubled in size in the past five years, reaching
the $10 billion milestone at June 30, 2012.
SECOND QUARTER HIGHLIGHTS
Net income increased 40% to $22.1 million from $15.7 million in the
second quarter of 2011
Diluted earnings per share ("EPS") increased 43% to $1.40 from $0.98 in
the second quarter of 2011
Return on equity ("ROE") increased to 21.1% from 16.8% a year ago
Equitable Trust's period-end total capital ratio was 15.6%
"Equitable's outstanding performance in the second quarter reflected our
growing marketplace advantages as a national, service-oriented mortgage
lender," said Andrew Moor, President and Chief Executive Officer. "Once
again, we grew mortgage principal in every one of our lending
businesses compared to a year ago, led by a 37% increase in Single
Family, which also generated 65% growth in production in the quarter
year over year. Our ability to expand at low cost without compromising
credit quality is a demonstration of the strength of our value creation
strategies and great execution by our dedicated team."
Consistent with previous disclosures, results in the second quarter of
2012 included a $0.24 per share [diluted] gain related to one of the
Company's securities portfolio holdings. The gain was reflected in a
lower effective tax rate of 13.1% in the second quarter.�� Adjusted for
this gain, second quarter net income increased 17% to $18.5 million
from $15.7 million a year ago, EPS increased 18% to $1.16 from $0.98 a
year ago and ROE increased to 17.5% from 16.8% a year ago.
OTHER SECOND QUARTER HIGHLIGHTS
Equitable continued to capitalize on its strong competitive position and
expanding national presence to drive growth in mortgage balances across
its lending lines:
Single Family Lending Services mortgage principal was a record $2.5 billion at June 30, up 37% from a
year earlier
Single Family Lending Services second quarter production of $483 million was up 65% or $189 million
from a year ago, reflecting the strength of Equitable's relationships
with its mortgage broker network, strong activity in real estate
markets and changes in the competitive environment
Commercial Lending Services mortgage principal was $2.2 billion at June 30, $224 million or 12%
higher than at the end of the second quarter of 2011.�� Second quarter
production was $157 million, up 32% or $38 million from a year ago
Securitization Financing mortgage principal increased $261 million or 5% year over year to $5.2
billion at June 30, a rate of growth that reflects the Company's focus
on achieving attractive risk-adjusted returns from Core Lending
activities and placing less emphasis on securitized multi-unit
residential mortgages
As a result of the rigorous application of its underwriting policies and
the availability of high quality lending opportunities, Equitable
posted excellent credit metrics in the second quarter:
Mortgage principal in arrears 90 days or more was 0.22% of total
mortgage principal, an improvement from 0.27% a year ago
Net impaired mortgages improved to 0.27% of total mortgage assets from
0.29% a year ago
The Company also recognized a net recovery of $20 thousand during the
second quarter of 2012, continuing a long-term trend of realizing
minimal or no loan losses.
DIVIDEND DECLARATIONS
The Company's Board of Directors today declared a quarterly dividend in
the amount of $0.14 per common share, payable October 4, 2012, to
common shareholders of record at the close of business on September 15,
2012. This represents a 17% increase in the Company's quarterly common
share dividend - the third dividend increase since the beginning of
2011.�� The Board also declared a quarterly dividend in the amount of
$0.453125 per preferred share, payable September 30, 2012, to preferred
shareholders of record at the close of business on September 15, 2012.
SIX MONTH HIGHLIGHTS
Net income increased 26% to $40.0 million from $31.8 million in the
first six months of 2011
EPS increased 27% to $2.52 from $1.99 in the same period of 2011
ROE increased to 19.4% from 17.4% a year ago
Book value per share increased 14% to $27.46 from $24.05 at June 30,
2011
LOOKING AHEAD
Equitable's positive outlook includes expectations of strong earnings
and ROE, healthy capital levels in the second half of 2012, and
continued consumer demand for its mortgage solutions.
"We hope to set new earnings records in 2012 and have calibrated our
strategies to ensure we capitalize on our recent momentum without
deviating from our underwriting comfort zone," said Mr. Moor. "We are
cognizant of heightened marketplace risk but by continuing to channel
our expansion into real estate property types in urban centres that are
backstopped by strong fundamentals, including population growth and
diversified economic drivers, we believe we can grow at a very
attractive pace while maintaining our traditional risk profile and
exceptionally low arrears. All things considered, the future has never
looked brighter for Equitable."
Included in the Company's immediate term outlook are expectations that
net interest margins (1.49% in the second quarter) will remain stable
this year, its productivity ratio (30.6% in the second quarter) will
continue to reflect efficient operations, and that recent marketplace
developments may create opportunities for growing the business and
expanding interest rate spreads in the single family business.
Management is also hopeful that new transaction structures under
discussion will allow the Company to increase its multi-unit
residential originations well beyond current levels.
"The Company is well capitalized and we believe our earnings in future
periods will generate adequate capital to support our strategic
objectives including ongoing expansion of mortgage principal.�� The
Company will remain open to raising non-dilutive capital in the future
to replace maturing obligations and to fund incremental growth
opportunities if they arise, and our recent investment grade debt
rating from DBRS would help us to do so at a lower cost," said Tim
Wilson, Vice President and CFO.
Q2 CONFERENCE CALL
The Company will hold its second quarter conference call and webcast at
10:00 a.m. ET Friday August 10, 2012. To access the call live, please
dial in five minutes prior to 416-644-3418. 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
August 17, 2012 and it can be accessed by dialing 416-640-1917 and
entering passcode 4551299 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, 2012 | �� | �� | �� | �� | �� | �� | |
With comparative figures as at December 31, 2011, June 30, 2011 | |||||||
($ THOUSANDS) | �� | �� | �� | �� | �� | �� | |
�� �� | �� | �� | �� | �� | �� | �� | |
�� | �� | June 30, 2012 | �� | December 31, 2011 | �� | June 30, 2011 | |
�� | �� | �� | �� | �� | �� | �� | |
Assets | �� | �� | �� | �� | �� | �� | |
Cash and cash equivalents | $ | 305,037 | $ | 170,845 | $ | 264,724 | |
Restricted cash | �� | 66,537 | �� | 83,156 | �� | 48,346 | |
Securities purchased under reverse repurchase agreements | �� | 101,351 | �� | 9,967 | �� | 5,115 | |
Investments | �� | 391,169 | �� | 390,340 | �� | 372,045 | |
Mortgages receivable | �� | 4,723,293 | �� | 4,262,147 | �� | 3,865,669 | |
Mortgages receivable - securitized | �� | 5,255,425 | �� | 5,314,940 | �� | 4,998,688 | |
Other assets | �� | 24,719 | �� | 25,618 | �� | 12,768 | |
�� | $ | 10,867,531 | $ | 10,257,013 | $ | 9,567,355 | |
�� | �� | �� | �� | �� | �� | �� | |
Liabilities and Shareholders' Equity | �� | �� | �� | �� | �� | �� | |
Liabilities: | �� | �� | �� | �� | �� | �� | |
| �� | Deposits | $ | 5,231,603 | $ | 4,627,904 | $ | 4,254,271 |
| �� | Securitization liabilities | �� | 5,076,323 | �� | 5,100,921 | �� | 4,776,241 |
| �� | Obligations related to securities sold short | �� | 1,515 | �� | -�� | �� | -�� |
| �� | Obligations related to securities sold under repurchase agreements | �� | -���� | �� | -�� | �� | 34,298 |
| �� | Deferred tax liabilities | �� | 5,666 | �� | 7,790 | �� | 7,457 |
| �� | Other liabilities | �� | 24,780 | �� | 28,587 | �� | 21,202 |
| �� | Bank term loans | �� | 12,500 | �� | 12,500 | �� | 12,500 |
| �� | Subordinated debentures | �� | 52,671 | �� | 52,671 | �� | 52,671 |
�� | �� | 10,405,058 | �� | 9,830,373 | �� | 9,158,640 | |
�� | �� | �� | �� | �� | �� | �� | |
Shareholders' equity: | �� | �� | �� | �� | �� | �� | |
| �� | Preferred shares | �� | 48,494 | �� | 48,494 | �� | 48,494 |
| �� | Common shares | �� | 131,045 | �� | 129,771 | �� | 129,054 |
| �� | Contributed surplus | �� | 4,913 | �� | 4,718 | �� | 4,292 |
| �� | Retained earnings | �� | 288,596 | �� | 254,006 | �� | 228,881 |
| �� | Accumulated other comprehensive loss | �� | (10,575) | �� | (10,349) | �� | (2,006) |
�� | �� | 462,473 | �� | 426,640 | �� | 408,715 | |
�� | �� | �� | �� | �� | �� | �� | |
�� | $ | 10,867,531 | $ | 10,257,013 | $ | 9,567,355 | |
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | �� | �� | �� | �� | |||||
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2012 | �� | �� | �� | �� | |||||
With comparative figures for the three and six month periods ended June 30, 2011 | �� | �� | �� | �� | |||||
($ THOUSANDS, EXCEPT PER SHARE AMOUNTS) | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | Three months ended | Six months ended | |||||||
�� | �� | June 30, 2012 | �� | June 30, 2011 | �� | June 30, 2012 | �� | June 30, 2011 | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
Interest income: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Mortgages | $ | 58,973 | $ | 50,474 | $ | 116,160 | $ | 98,323 |
| �� | Mortgages - securitized | �� | 53,598 | �� | 52,610 | �� | 108,057 | �� | 104,762 |
| �� | Investments | �� | 2,878 | �� | 2,648 | �� | 5,126 | �� | 4,927 |
| �� | Other | �� | 1,340 | �� | 1,242 | �� | 2,566 | �� | 2,267 |
�� | �� | 116,789 | �� | 106,974 | �� | 231,909 | �� | 210,279 | |
Interest expense: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Deposits | �� | 31,589 | �� | 28,251 | �� | 61,939 | �� | 54,991 |
| �� | Securitization liabilities | �� | 45,675 | �� | 45,111 | �� | 92,849 | �� | 89,380 |
| �� | Bank term loans | �� | 202 | �� | 203 | �� | 404 | �� | 403 |
| �� | Subordinated debentures | �� | 868 | �� | 870 | �� | 1,737 | �� | 1,732 |
| �� | Other | �� | 4 | �� | 78 | �� | 5 | �� | 107 |
�� | �� | 78,338 | �� | 74,513 | �� | 156,934 | �� | 146,613 | |
Net interest income | �� | 38,451 | �� | 32,461 | �� | 74,975 | �� | 63,666 | |
Provision for credit losses | �� | 1,693 | �� | 2,217 | �� | 3,920 | �� | 4,155 | |
Net interest income after provision for credit losses | �� | 36,758 | �� | 30,244 | �� | 71,055 | �� | 59,511 | |
Other income: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Fees and other income | �� | 981 | �� | 790 | �� | 1,986 | �� | 1,644 |
| �� | Net gain (loss) on investments | �� | 54 | �� | (311) | �� | 303 | �� | (13) |
�� | �� | 1,035 | �� | 479 | �� | 2,289 | �� | 1,631 | |
Net interest and other income | �� | 37,793 | �� | 30,723 | �� | 73,344 | �� | 61,142 | |
Non-interest expenses: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Compensation and benefits | �� | 6,965 | �� | 5,540 | �� | 13,535 | �� | 11,013 |
| �� | Other | �� | 5,354 | �� | 4,208 | �� | 10,693 | �� | 7,850 |
�� | �� | 12,319 | �� | 9,748 | �� | 24,228 | �� | 18,863 | |
Income before income taxes and the undernoted fair value (loss) gain | �� | 25,474 | �� | 20,975 | �� | 49,116 | �� | 42,279 | |
Fair value (loss) gain on derivative financial instruments - securitization activities | �� | (85) | �� | 48 | �� | (34) | �� | 367 | |
Income before income taxes | �� | 25,389 | �� | 21,023 | �� | 49,082 | �� | 42,646 | |
Income taxes: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Current | �� | 4,258 | �� | 5,149 | �� | 11,193 | �� | 10,476 |
| �� | Deferred | �� | (942) | �� | 139 | �� | (2,124) | �� | 371 |
�� | �� | 3,316 | �� | 5,288 | �� | 9,069 | �� | 10,847 | |
Net income | $ | 22,073 | $ | 15,735 | $ | 40,013 | $ | 31,799 | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
Earnings per share: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Basic | $ | 1.41 | $ | 0.99 | $ | 2.54 | $ | 2.00 |
| �� | Diluted | $ | 1.40 | $ | 0.98 | $ | 2.52 | $ | 1.99 |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | �� | �� | �� | �� | �� | |||
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2012 | �� | �� | �� | �� | �� | �� | �� | �� |
With comparative figures for the three and six month periods ended June 30, 2011 | ||||||||
($ THOUSANDS) | �� | �� | �� | �� | �� | �� | �� | �� |
�� | �� | �� | �� | �� | �� | �� | �� | �� |
�� | Three months ended | Six months ended | ||||||
�� | �� | June 30, 2012 | �� | June 30, 2011 | �� | June 30, 2012 | �� | June 30, 2011 |
�� | �� | �� | �� | �� | �� | �� | �� | �� |
Net income | $ | 22,073 | $ | 15,735 | $ | 40,013 | $ | 31,799 |
�� | �� | �� | �� | �� | �� | �� | �� | �� |
Other comprehensive loss: | �� | �� | �� | �� | �� | �� | �� | �� |
�� | �� | �� | �� | �� | �� | �� | �� | �� |
Available for sale investments: | �� | �� | �� | �� | �� | �� | �� | �� |
Net unrealized (losses) gains from change in fair value | �� | (782) | �� | 1,255 | �� | 51 | �� | 2,399 |
Reclassification of net (gains) losses to income | �� | (55) | �� | 275 | �� | (1,137) | �� | 10 |
�� | �� | (837) | �� | 1,530 | �� | (1,086) | �� | 2,409 |
Income tax | �� | 219 | �� | (429) | �� | 284 | �� | (676) |
�� | �� | (618) | �� | 1,101 | �� | (802) | �� | 1,733 |
�� | �� | �� | �� | �� | �� | �� | �� | �� |
Cash flow hedges (Note 8) | �� | �� | �� | �� | �� | �� | �� | �� |
Net unrealized losses from change in fair value | �� | (1,387) | �� | (5,143) | �� | (359) | �� | (3,476) |
Reclassification of net losses (gains) to income | �� | 547 | �� | 6 | �� | 1,139 | �� | (13) |
�� | �� | (840) | �� | (5,137) | �� | 780 | �� | (3,489) |
Income tax | �� | 219 | �� | 1,441 | �� | (204) | �� | 979 |
�� | �� | (621) | �� | (3,696) | �� | 576 | �� | (2,510) |
Total other comprehensive loss | �� | (1,239) | �� | (2,595) | �� | (226) | �� | (777) |
Total comprehensive income | $ | 20,834 | $ | 13,140 | $ | 39,787 | $ | 31,022 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | �� | �� | �� | �� | �� | |||||||||
FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2012 | �� | �� | �� | �� | �� | �� | �� | |||||||
With comparative figures for the three month period ended June 30, 2011 | �� | �� | �� | �� | �� | �� | �� | |||||||
($ THOUSANDS) | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
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 loss, 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 | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
June 30, 2011 | Preferred shares | Common shares | Contributed surplus | Retained earnings | Accumulated other comprehensive income (loss) | �� | Total | �� | ||||||
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
Balance, beginning of period | $ | 48,494 | $ | 128,369 | $ | 4,169 | $ | 215,700 | $ | 589 | $ | 397,321 | �� | |
Net income | �� | -�� | �� | -�� | �� | -�� | �� | 15,735 | �� | -�� | �� | 15,735 | �� | |
Other comprehensive loss, net of tax | �� | -�� | �� | -�� | �� | -�� | �� | -�� | �� | (2,595) | �� | (2,595) | �� | |
Reinvestment of dividends | �� | -�� | �� | 149 | �� | -�� | �� | -�� | �� | -�� | �� | 149 | �� | |
Exercise of stock options | �� | -�� | �� | 455 | �� | -�� | �� | -�� | �� | -�� | �� | 455 | �� | |
Dividends: | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Preferred shares | �� | -�� | �� | -�� | �� | -�� | �� | (906) | �� | -�� | �� | (906) | �� |
| �� | Common shares | �� | -�� | �� | -�� | �� | -�� | �� | (1,648) | �� | -�� | �� | (1,648) | �� |
Stock-based compensation | �� | -�� | �� | -�� | �� | 204 | �� | -�� | �� | -�� | �� | 204 | �� | |
Transfer relating to the exercise of stock options | �� | -�� | �� | 81 | �� | (81) | �� | -�� | �� | -�� | �� | -�� | �� | |
Balance, end of period | $ | 48,494 | $ | 129,054 | $ | 4,292 | $ | 228,881 | $ | (2,006) | $ | 408,715 | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | �� | �� | �� | �� | �� | |||||||||
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2012 | �� | �� | �� | �� | �� | �� | �� | |||||||
With comparative figures for the six month period ended June 30, 2011 | �� | �� | �� | �� | �� | �� | �� | |||||||
($ THOUSANDS) | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
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 loss, 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 | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
June 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 | �� | -�� | �� | -�� | �� | -�� | �� | 31,799 | �� | -�� | �� | 31,799 | �� | |
Other comprehensive loss, net of tax | �� | -�� | �� | -�� | �� | -�� | �� | -�� | �� | (777) | �� | (777) | �� | |
Reinvestment of dividends | �� | -�� | �� | 276 | �� | -�� | �� | -�� | �� | -�� | �� | 276 | �� | |
Exercise of stock options | �� | -�� | �� | 599 | �� | -�� | �� | -�� | �� | -�� | �� | 599 | �� | |
Dividends: | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Preferred shares | �� | -�� | �� | -�� | �� | -�� | �� | (1,812) | �� | -�� | �� | (1,812) | �� |
| �� | Common shares | �� | -�� | �� | -�� | �� | -�� | �� | (3,293) | �� | -�� | �� | (3,293) | �� |
Stock-based compensation | �� | -�� | �� | -�� | �� | 468 | �� | -�� | �� | -�� | �� | 468 | �� | |
Transfer relating to the exercise of stock options | �� | -�� | �� | 111 | �� | (111) | �� | -�� | �� | -�� | �� | -�� | �� | |
Balance, end of period | $ | 48,494 | $ | 129,054 | $ | 4,292 | $ | 228,881 | $ | (2,006) | $ | 408,715 | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||||
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2012 | |||||||||
With comparative figures for the three and six month periods ended June 30, 2011 | |||||||||
($ THOUSANDS) | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | Three months ended | Six months ended | |||||||
�� | June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | �� | �� | �� | �� | �� | �� | �� | �� | |
Net income for the period | $ | 22,073�� | $ | 15,735 | $ | 40,013�� | $ | 31,798 | |
Adjustments to determine cash flows relating to operating activities: | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Financial instruments at fair value through income | �� | 12,153�� | �� | 1,000 | �� | 13,989�� | �� | 1,099 |
| �� | Depreciation of capital assets | �� | 238�� | �� | 173 | �� | 469�� | �� | 237 |
| �� | Provision for credit losses | �� | 1,693�� | �� | 2,217 | �� | 3,920�� | �� | 4,155 |
| �� | Net loss (gain) on sale or redemption of investments | �� | (11)�� | �� | 311 | �� | (260)�� | �� | 13 |
| �� | Income taxes | �� | 3,315�� | �� | 5,288 | �� | 9,140�� | �� | 10,847 |
| �� | Income taxes paid | �� | (5,454)�� | �� | (4,770) | �� | (10,255)�� | �� | (9,541) |
| �� | Stock-based compensation | �� | 213�� | �� | 204 | �� | 363�� | �� | 468 |
| �� | Amortization of premiums/discount on investments | �� | (108)�� | �� | 887 | �� | 676�� | �� | 1,672 |
| �� | Net increase in mortgages receivable | �� | (291,926)�� | �� | (304,697) | �� | (405,903)�� | �� | (650,482) |
| �� | Net increase in deposits | �� | 371,056�� | �� | 221,880 | �� | 603,699�� | �� | 375,418 |
| �� | Change in obligations related to securities sold | �� | 1,515�� | �� | - | �� | 1,515�� | �� | - |
| �� | Change in obligations related to securities under repurchase agreements | �� | -������ | �� | 34,298 | �� | - | �� | 34,298 |
| �� | Net change in securitization liabilities | �� | 6,471�� | �� | 122,759 | �� | (24,597)�� | �� | 244,561 |
| �� | Net interest income, excluding non-cash items | �� | (52,573)�� | �� | (43,732) | �� | (107,324)�� | �� | (90,975) |
| �� | Interest paid | �� | (78,947)�� | �� | (62,371) | �� | (142,639)�� | �� | (118,161) |
| �� | Other assets | �� | 250�� | �� | (3,663) | �� | 59�� | �� | (5,093) |
| �� | Other liabilities | �� | (601)�� | �� | 2,158 | �� | (3,856)�� | �� | (35) |
| �� | Interest received | �� | 115,493�� | �� | 103,570 | �� | 231,427�� | �� | 204,253 |
| �� | Dividends received | �� | 16,027�� | �� | 2,533 | �� | 18,536�� | �� | 4,883 |
Cash flows from operating activities | �� | 120,877�� | �� | 93,780 | �� | 228,972�� | �� | 39,415 | |
CASH FLOWS FROM FINANCING ACTIVITIES | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Dividends paid on preferred shares | �� | (906)�� | �� | (906) | �� | (1,812)�� | �� | (1,812) |
| �� | Dividends paid on common shares | �� | (1,616)�� | �� | (1,499) | �� | (3,233)�� | �� | (3,018) |
| �� | Proceeds from issuance of common shares | �� | 491�� | �� | 455 | �� | 728�� | �� | 599 |
Cash flows used in financing activities | �� | (2,031)�� | �� | (1,950) | �� | (4,317)�� | �� | (4,231) | |
CASH FLOWS FROM INVESTING ACTIVITIES | �� | �� | �� | �� | �� | �� | �� | �� | |
| �� | Purchase of investments | �� | (47,532)�� | �� | (20,071) | �� | (67,532)�� | �� | (59,722) |
| �� | Proceeds on sale or redemption of investments | �� | 12,789�� | �� | 13,406 | �� | 59,519�� | �� | 34,349 |
| �� | Net change in Canada Housing Trust re-investment accounts | �� | 19,227�� | �� | (4,893) | �� | (7,444)�� | �� | (7,531) |
| �� | Purchase of securities under reverse repurchase agreements | �� | (101,351)�� | �� | (5,115) | �� | (141,273)�� | �� | (30,108) |
| �� | Proceeds on sale or redemption of securities under reverse repurchase agreements | �� | 39,922�� | �� | 24,993 | �� | 49,889�� | �� | 99,901 |
| �� | Change in restricted cash | �� | 23,710�� | �� | (11,942) | �� | 16,619�� | �� | 38,224 |
| �� | Purchase of capital assets | �� | (91)�� | �� | (735) | �� | (241)�� | �� | (815) |
Cash flows (used in) from investing activities | �� | (53,326)�� | �� | (4,357) | �� | (90,463)�� | �� | 74,298 | |
Net increase in cash and cash equivalents | �� | 65,520�� | �� | 87,473 | �� | 134,192�� | �� | 109,482 | |
Cash and cash equivalents, beginning of period | �� | 239,517�� | �� | 177,251 | �� | 170,845�� | �� | 155,242 | |
Cash and cash equivalents, end of period | $ | 305,037�� | $ | 264,724 | $ | 305,037�� | $ | 264,724 | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | |
2011 ANNUAL REPORT
The Company wishes to clarify and correct the figure reported in its
2011 Annual Report, on page 25, Table 1: Selected Financial Information
where Total liquid assets for 2011 were reported as "84,386" and the
figure should have been "784,386".
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.
For further information:
Andrew Moor
President and CEO
416-513-7000
Tim Wilson
Vice President and CFO
416-513-7000
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