TORONTO, Nov. 8, 2016 /CNW/ - Equity Financial Holdings Inc. (TSX: EQI) ("EQI" or the "Corporation"), which offers residential mortgage loans through its wholly-owned subsidiary, Equity Financial Trust Company ("Equity Trust"), today reported its interim consolidated financial results for the quarter ended September 30, 2016.
(dollar amounts, except per-share, are in $000s)
Third Quarter 2016 Financial Highlights
Year to date 2016 Financial Highlights
Equity Financial Holdings CEO Michael R. Jones said,
"For the third quarter we earned net income of $423 or $0.04 per share and annualized return on equity of 1.8%, solidifying our return to profitability established earlier in 2016. Our mortgage loan portfolio has doubled in size over the last twelve months, including growth of $124 million in the third quarter on the strength of record mortgage originations.
As we look forward to the fourth quarter we anticipate finishing 2016 with solid results for mortgage originations and loan book growth. We continue to balance trade-offs between credit quality, net interest margin and portfolio duration as we build the foundation for long run sustainable profitability. Our management team remains focused on growing key broker relationships, launching new mortgage systems and moving to new office space.
Equity Trust remains focused on uninsured non-prime and near-prime residential mortgage lending and we fund mortgages through the issuance of CDIC insured deposits. We are not active in the insured residential mortgage business and so the changes to mortgage insurance rules recently announced by the Department of Finance do not directly impact our business. We will continue to monitor the market place and individual borrower behaviour to ascertain the extent of any indirect effect."
| Financial Highlights (unaudited) |
|||||||||||
| For the three months ended |
For the nine months ended |
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| ($000s, except per share and percentage amounts) |
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
||||||
| OPERATIONS |
|||||||||||
| Net interest income |
$ |
4,563 |
$ |
3,671 |
$ |
2,553 |
$ |
11,392 |
$ |
7,483 |
|
| Provision for credit losses |
(350) |
(359) |
(106) |
(876) |
(266) |
||||||
| Non‑interest income |
711 |
591 |
465 |
1,797 |
1,219 |
||||||
| Net interest income and other income, including provision |
4,924 |
3,903 |
2,912 |
12,313 |
8,436 |
||||||
| Net interest margin |
2.87% |
2.81% |
2.81% |
2.85% |
2.90% |
||||||
| Net income (loss) |
$ |
423 |
$ |
46 |
$ |
(601) |
$ |
618 |
$ |
(1,853) |
|
| Earnings (loss) per share ‑ basic/diluted |
0.04 / 0.04 |
‑ / ‑ |
(0.06) / (0.06) |
0.06 / 0.06 |
(0.19) / (0.19) |
||||||
| ROE (annualized) 1 |
1.8% |
0.2% |
(2.5)% |
0.9% |
(2.6)% |
||||||
| ADJUSTED INCOME (LOSS) AND EPS |
|||||||||||
| Adjusted income (loss) 2 |
$ |
423 |
$ |
46 |
$ |
(254) |
$ |
618 |
$ |
(986) |
|
| Adjusted earnings (loss) per share ‑ basic/diluted 2 |
0.04 / 0.04 |
‑ / ‑ |
(0.03) / (0.03) |
0.06 / 0.06 |
(0.10) / (0.10) |
||||||
| As at |
September 30, |
June 30, |
December 31, |
||||||||
| BALANCE SHEET |
|||||||||||
| Total Assets |
$ |
737,363 |
$ |
605,280 |
$ |
431,429 |
|||||
| Mortgages receivable, net |
663,157 |
538,616 |
383,282 |
||||||||
| Deposits |
636,226 |
506,607 |
332,197 |
||||||||
| Shareholders' equity |
94,531 |
93,917 |
93,455 |
||||||||
| FINANCIAL STRENGTH |
|||||||||||
| Capital Measures 3 |
|||||||||||
| Regulatory capital (all‑in basis) |
$ |
84,815 |
$ |
84,523 |
$ |
84,200 |
|||||
| Leverage ratio |
11.2% |
13.6% |
19.1% |
||||||||
| Common equity tier 1 ratio (all‑in basis) |
30.9% |
36.9% |
49.8% |
||||||||
| Share Information |
|||||||||||
| Book value per common share |
$ |
9.91 |
$ |
9.85 |
$ |
9.80 |
|||||
| Common share price ‑ close |
10.18 |
10.45 |
8.06 |
||||||||
| Common shares outstanding |
9,543,508 |
9,539,508 |
9,539,508 |
||||||||
| Market capitalization |
$ |
97,153 |
$ |
99,688 |
$ |
76,888 |
|||||
| 1 See definition of ROE ("return on equity") under Non‑IFRS Financial Measures section of our MD&A for the quarter ended September 30, 2016. |
|||||||||||
| 2 Adjusted net income (loss), adjusted basic earnings (loss) per share, adjusted diluted earnings (loss) per share are defined in the Non‑IFRS Financial Measures section of our MD&A for the quarter ended September 30, 2016. |
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| 3 These figures relate to the Corporation's operating subsidiary, Equity Trust, and are calculated under Basel III. |
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Interim Consolidated Financial Statements and Management's Discussion and Analysis for the quarter ended September 30, 2016 can be found on SEDAR at www.sedar.com and on our website at www.equityfinancialtrust.com.
Analyst Conference Call
EQI will hold a conference call on November 10, 2016 at 11 a.m. Eastern Time to discuss its operating results and to answer questions. Participants can dial in locally at 647.427.7450 or toll free at 1.888.231.8191 and use Conference ID 5372530.
Conference Call Archive
A telephone replay of the call will be available between 2:00 p.m. Eastern Time November 10, 2016 and midnight December 8, 2016 by calling 416.849.0833 or toll free at 1.855.859.2056 (enter passcode 5372530).
Forward Looking Information
Certain portions of this press release as well as other public statements by the Corporation contain "forward-looking information" within the meaning of applicable Canadian securities legislation, which is also referred to as "forward-looking statements", which may not be based on historical fact. Wherever possible, words such as "will", "plans," "expects," "targets," "continues", "estimates," "scheduled," "anticipates," "believes," "intends," "may," "could," "would" or might, and the negative of such expressions or statements that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, have been used to identify forward-looking information. Such forward-looking statements include, without limitation, the Corporation's expectations in respect of earnings, fee income, expense levels, future loans and originations, repayment by borrowers, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets activities, the Corporation's expected need for equity or debt financing, business competition, technological change, changes in government regulations and regulatory guidelines, unexpected judicial or regulatory proceedings, catastrophic events, and the Corporation's ability to complete strategic transactions and integrate acquisitions and other factors. Forward looking statements should not be read as guarantees of future events, future performance or results, and will not necessarily be accurate indicators of the times at, or by which, such events, performance or results will be achieved, if achieved at all.
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 Corporation and the Canadian economy, retail mortgage markets, housing sales and capital markets. Certain material factors or assumptions are applied by the Corporation in making forward-looking statements, including without limitation, factors and assumptions regarding interest rates, availability of key personnel, the effect of competition, government regulation of its business, computer failure or security breaches, future capital requirements, its ability to fund its mortgage business, the value of mortgage originations, the competitive nature of the alternative mortgage market, the expected margin between the interest earned on its mortgage portfolio and the interest to be paid on its deposits, the relative continued health of real estate markets, acceptance of its products in the marketplace, as well as its operating cost structure and the current tax regime.
Forward-looking statements reflect the Corporation's current views with respect to future events and are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. Readers should not place undue reliance on such forward-looking statements, as they reflect the Corporation's current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic, regulatory, competitive, political and social uncertainties and contingencies. Many factors could cause the Corporation's actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including among others, a significant downturn in capital markets or the economy as a whole, errors or omissions by the Corporation in providing services to its customers, significant increases in the cost of complying with applicable regulatory requirements, civil unrest, economic recession, pandemics, war and acts of terrorism which may adversely impact the North American and global economic and financial markets, inability to raise funds through public or private financing significant changes in interest rates, failure by Equity Trust to meet ongoing regulatory requirements, the failure of borrowers or counterparties to honour their financial or contractual obligations to Equity Trust, failure by Equity Trust to adequately monitor and/or adjust its mortgage portfolio management practices for changing circumstances, failure by the Corporation to attract and to retain the necessary employees to meet its needs, failure by Equity Trust to adequately monitor the services provided by third party service providers or to establish alternative arrangements if required, failure by Equity Trust to secure sufficient deposits from securities dealers or a sufficient level of mortgage origination from its mortgage broker network, a failure of the computer systems of the Corporation or one or more of its service providers or the risks detailed from time-to-time in the Corporation's quarterly filings, annual information forms, annual reports and annual filings with securities regulators. The preceding list is not exhaustive of possible factors. The Corporation disclaims any intent or obligation to update or revise publicly any forward-looking statements whether as a result of new information, estimates, future events or results, or otherwise, unless required to do so by applicable laws. The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
About Equity Financial Holdings Inc.
The Corporation is a financial services company operating through its wholly-owned subsidiary, Equity Trust, a federally regulated deposit-taking institution. Equity Trust serves the Canadian alternative mortgage market by offering residential mortgage loans to non and near-prime customers who do not meet the conventional underwriting standards of the major Canadian banks. Learn more at www.equityfinancialtrust.com.
SOURCE Equity Financial Holdings Inc.
Image with caption: "Figure 1: Quarterly Mortgage Loan Originations and Portfolio Balance 2015 and 2016 ($ millions) (CNW Group/Equity Financial Holdings Inc.)". Image available at: http://photos.newswire.ca/images/download/20161108_C4264_PHOTO_EN_814167.jpg
Equity Financial Holdings Inc., Michael R. Jones, President & CEO, 647.277.0106, www.equityfinancialtrust.com
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