Stock Name: ETC
Amount: CAD 0.14
Announcement Date: 13/11/2012
Record Date: 12/12/2012
Dividend Detail:
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.
For further information:
Andrew Moor
President and CEO
416-513-7000����������
Tim Wilson
Vice President and CFO
416-513-7000
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