Home Capital Reports Strong Fourth Quarter Results, 14.3% Dividend Increase, and Stock Dividend Effecting a Two-for-One Split
- Net income up 15.6% year over year and earnings per share up 14.7%
- Dividend increased 14.3% to $0.32 quarterly, for a total dividend increase of 23% year over year
- Stock dividend declared of one common share per each issued and outstanding common share, providing a two-for-one split
TORONTO, Feb. 12, 2014 /CNW/ - Home Capital Group Inc. (TSX: HCG) today reported positive results for the fourth quarter and for the year, meeting the Company's targets for growth in net income, earnings per share and loans under administration, and recording an annual return on equity surpassing 20% for the 16th consecutive year.
"We are very pleased with our results for the fourth quarter and the year," commented CEO Gerald Soloway. "The growth of revenue and earnings reflect the continued strength of our business model, the commitment of the Home Capital team, and our consistent success in growing our market share."
The Company's Annual and Fourth Quarter Consolidated Financial Report, including Management's Discussion and Analysis, for each of the three- and twelve-month periods ended December 31, 2013 is available at www.homecapital.com and on the Canadian Securities Administrators' website at www.sedar.com.
Financial Highlights | ||||||||||
For the three months ended | For the year ended | |||||||||
(000s, except Per Share and Percentage Amounts) | December 31 | September 30 | December 31 | December 31 | December 31 | |||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||
OPERATING RESULTS | ||||||||||
Net Income | $ | 68,827 | $ | 66,417 | $ | 58,965 | $ | 256,542 | $ | 221,983 |
Total Revenue | 246,365 | 239,433 | 227,649 | 949,547 | 887,685 | |||||
Diluted Earnings per Share | $ | 1.97 | $ | 1.90 | $ | 1.70 | $ | 7.32 | $ | 6.38 |
Return on Shareholders' Equity | 23.9% | 24.3% | 25.0% | 23.9% | 25.5% | |||||
Return on Average Assets | 1.4% | 1.3% | 1.2% | 1.3% | 1.2% | |||||
Net Interest Margin (TEB)1 | 2.22% | 2.16% | 2.13% | 2.17% | 2.09% | |||||
Provision as a Percentage of Gross Loans (annualized) | 0.09% | 0.06% | 0.09% | 0.09% | 0.09% | |||||
Efficiency Ratio (TEB)1 | 28.3% | 29.6% | 27.3% | 28.7% | 27.7% | |||||
As at | ||||||||||
December 31 | September 30 | December 31 | ||||||||
2013 | 2013 | 2012 | ||||||||
BALANCE SHEET HIGHLIGHTS | ||||||||||
Total Assets | $ | 20,075,850 | $ | 19,840,797 | $ | 18,800,079 | ||||
Total Assets Under Administration2 | 21,997,781 | 21,287,095 | 19,681,750 | |||||||
Total Loans3,4 | 18,019,901 | 18,084,382 | 17,159,913 | |||||||
Securitized Loans On-Balance Sheet3 | 5,210,021 | 6,164,544 | 6,706,160 | |||||||
Total Loans Under Administration3,4,5 | 19,941,832 | 19,530,680 | 18,041,584 | |||||||
Liquid Assets | 1,492,977 | 1,097,429 | 771,772 | |||||||
Deposits | 12,765,954 | 11,936,647 | 10,136,599 | |||||||
Shareholders' Equity | 1,177,697 | 1,121,362 | 968,213 | |||||||
FINANCIAL STRENGTH | ||||||||||
Capital Measures6 | ||||||||||
Risk-Weighted Assets | $ | 6,495,767 | $ | 6,240,690 | $ | 5,491,513 | ||||
Common Equity Tier 1 Capital Ratio | 16.80% | 16.72% | N/A | |||||||
Tier 1 Capital Ratio | 16.80% | 16.72% | 17.01% | |||||||
Total Capital Ratio | 19.69% | 19.72% | 20.68% | |||||||
Assets to Regulatory Capital Multiple7 | 13.19 | 13.34 | 13.39 | |||||||
Credit Quality | ||||||||||
Net Non-Performing Loans as a Percentage of Gross Loans | 0.35% | 0.32% | 0.33% | |||||||
Allowance as a Percentage of Gross Non-Performing Loans | 52.4% | 57.0% | 57.0% | |||||||
Share Information | ||||||||||
Book Value per Common Share | $ | 33.90 | $ | 32.27 | $ | 27.96 | ||||
Common Share Price - Close | $ | 80.93 | $ | 72.03 | $ | 59.07 | ||||
Market Capitalization | $ | 2,811,832 | $ | 2,502,754 | $ | 2,045,594 | ||||
Number of Common Shares Outstanding | 34,744 | 34,746 | 34,630 |
1 See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report.
2 Total assets under administration include total on-balance sheet assets and off-balance sheet loans.
3 In 2013 the Company classified Home Trust mortgages used as CMB replacement assets as securitized mortgages. In 2012 these were classified as pledged securities. Prior periods in 2012 have been restated to reflect the current classification.
4 Total loans include loans held for sale.
5 Loans under administration includes total loans and off-balance sheet loans.
6 These figures relate to the Company's operating subsidiary, Home Trust Company and are calculated under Basel III for 2013 and Basel II for 2012.
7 Commencing in Q3 2013, the Company excluded from its assets, for the purposes of calculating the Assets to Regulatory Capital Multiple, mortgages that are off-balance sheet as a result of sales of residual interests in light of regulatory communications confirming this treatment. The comparative multiples have been restated to reflect this treatment.
2013 Targets and Performance | ||||||
For the year ended December 31, 2013 | ||||||
2013 Targets | Actual Results | Amount | Increase over 2012 | |||
Growth in net income | 13%-18% | 15.6% | $ | 256,542 | $ | 34,559 |
Growth in diluted earnings per share | 13%-18% | 14.7% | 7.32 | 0.94 | ||
Growth in total loans under administration1 | 10%-15% | 10.5% | 19,941,832 | 1,900,248 | ||
Return on shareholders' equity | 20.0% | 23.9% | ||||
Efficiency ratio (TEB)2 | 28.0% - 34.0% | 28.7% | ||||
Provision as a percentage of gross loans | 0.10%-0.18% | 0.09% |
1 Includes loans held for sale.
2 See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures in the Management's Discussion and Analysis included in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report.
Key assumptions underlying the Company's targets are related to interest rates, unemployment levels, inflation, economic growth, and consumer debt levels. These assumptions are set out in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report. Developments within the general Canadian economy and the real estate market have been, and are expected to be, consistent with these assumptions. The Company was successful in meeting or exceeding all of its performance targets in 2013.
FOURTH QUARTER AND 2013 HIGHLIGHTS
The Company recorded another period of solid performance in the fourth quarter of 2013 and for the year. Key results and accomplishments for the fourth quarter of 2013 and the year are as follows:
- Net income was $68.8 million in the fourth quarter and $256.5 million for the year, increasing 16.7% over the comparable quarter of 2012 and 15.6% over 2012. Sequentially in 2013, fourth quarter net income increased by 3.6% over third quarter net income. The annual results were well within the Company's 2013 objective of 13% to 18% growth in net income over 2012, and reflect the continued strong loan growth in the traditional portfolio, strengthening total net interest margin, continued low provisions for credit losses and a low efficiency ratio.
- Diluted earnings per share reached $1.97 for the fourth quarter and $7.32 for the year. This represents an increase of 15.9% from the $1.70 diluted earnings per share in the fourth quarter of 2012 and an increase of 14.7% over the $6.38 diluted earnings per share earned in 2012. These results are well within the Company's 2013 annual objective of 13% to 18% growth in diluted earnings per share.
- Adjusted net income, as defined in the Non-GAAP Measures section of the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report, was $68.2 million in the quarter and $257.7 million for the year, representing increases of 10.8% and 14.8% over the comparable periods of 2012.
- Return on equity was 23.9% and for the year, well in excess of the Company's minimum performance objective of 20% for the sixteenth consecutive year.
- The Company recorded $3.5 million in gains on the sale of residual interests in Q4 2013 and $5.4 million for the year compared to $4.8 million in gains in Q4 2012 and for 2012. In Q3 2013, the Company received a favourable regulatory ruling confirming that the underlying mortgages in these transactions can be excluded from the regulatory Assets to Capital Multiple (ACM) allowing the Company to continue generating stable income from this source going forward. The Company also recorded gains on the securitization of multi-unit residential mortgages of $1.2 million in the quarter and $5.7 million for the year, compared to $0.9 million and $3.3 million in the same periods last year. The Company expects these transactions to provide ongoing income.
- Net interest income rose to $111.0 million in Q4 2013 and to $422.0 million for the year. This represents an increase of 11.1% over $99.9 million recorded in Q4 2012 and 10.6% over $381.5 million recorded in 2012. Net interest income increased 4.1% over the $106.6 million recorded in Q3 2013. Net interest income growth is lower than net income growth as the gain on sale of retained interest replaces net interest income on certain securitized assets.
- Net interest margin (TEB) continued strong at 2.22% in the quarter and 2.17% for 2013 up from 2.13% Q4 2012 and 2.09% for 2012 and up from 2.16% in Q3 2013. Total net interest margin has been positively influenced by the mix of the loan portfolio between non-securitized and securitized mortgages and the net interest margin on each of these portfolios. Beginning in 2011 and continuing through 2013, the weighting of lower-yielding securitized mortgages in the total portfolio declined, generally leading to higher total net interest margins. The net interest margin on the non-securitized portfolio also generally remained strong over that period, with some fluctuations quarter to quarter with relatively stable interest rate spreads. Net interest margin for non-securitized assets was 2.94% for Q4 2013, a decline from 2.99% in the third quarter, primarily reflecting a larger proportion of lower yielding insured mortgages awaiting securitization as the Company began to increase originations of insured mortgages, while spreads of the traditional portfolio over deposits rates improved marginally in Q4 2013 compared to Q3 2013.
- The credit performance of the loans portfolio remained strong in the quarter and for the year and was better than the Company's objectives. The annualized credit provision as percentage of gross loans (PCL ratio) was 0.09% in the quarter and for the year, consistent with the comparable periods of 2012. The Company's objective was a PCL ratio of between 0.10% and 0.18% for 2013. Net non-performing loans ended 2013 at 0.35% of the total loans portfolio compared to 0.33% at the end of 2012 and 0.32% at the end Q3 2013, with the marginal increase primarily reflecting a specific larger commercial loan where no losses are expected. Excluding this commercial loan would result in net non-performing loans ending 2013 at 0.31% of the total loans portfolio. The ratio has remained stable despite the relatively higher proportion of uninsured mortgages in the total portfolio.
- The efficiency ratio declined to 28.5% in Q4 2013, as expenses were relatively flat quarter over quarter. The Company has been reducing consulting costs, while increasing permanent employees leading to increased efficiencies.
- Home Trust's Common Equity Tier 1 (CET 1) and Total capital ratios remained very strong at 16.80% and 19.69%, respectively, at December 31, 2013, and well above Company and regulatory minimum targets. Home Trust's ACM was 13.19 at December 31, 2013 compared to 13.39 at December 31, 2012 and 13.34 at September 30, 2013. ACM declined from one year ago as the Company completed sales of residual interests and removed underlying mortgage loans from the calculation of the ACM.
- Total loans under administration, including off-balance sheet mortgages, increased by almost $2 billion in 2013 to $19.94 billion, an increase of 10.5% from $18.04 billion one year ago and up $411.2 million from Q3 2013. Annual growth met the Company's 2013 target range of 10-15% despite a slower start than planned for Accelerator (insured) originations as the Company awaited the ruling on the residual interest regulatory treatment.
- Total Q4 2013 mortgage originations were $1.91 billion and $6.92 billion for the year, compared to $1.47 billion and $6.01 billion in the same periods of 2012. Total originations were $1.99 billion in the third quarter of 2013. The year-over-year increase in originations reflects increased focus on and increased demand for the Company's traditional mortgage products and an increase in Accelerator originations later in 2013. Compared to the third quarter, a decline in originations reflects normal and expected seasonal factors. The Company has generally observed stable credit quality on new originations over 2013 and improved credit quality compared to 2012.
- Traditional mortgage originations were $1.23 billion in Q4 2013 and $4.77 billion for the year, compared to $1.16 billion and $4.49 billion in the comparative periods of 2012 and $1.31 billion in Q3 2013.
- Accelerator (insured) mortgage originations were $357.1 million in Q4 2013, more than double the $174.2 million originated in Q4 2012 and up from $272.6 million originated last quarter, reflecting the Company's renewed focus on this product. Accelerator originations were $1.01 billion for the year, up 25.7% from $804.7 million in 2012. The Company is pleased with the positive market response to its renewed focus in the product and expects increasing originations in 2014.
- Multi-unit residential originations were $239.9 million in Q4 2013 and $823.2 million for the year, up from $57.2 million and $286.9 million in the same periods of 2012 and down from $326.6 million in the third quarter of 2013. A significant portion of multi-unit residential mortgages originated in 2013 and 2012 were insured and securitized through programs that qualified for off-balance sheet accounting.
- Commercial mortgage advances were $56.1 million in Q4 2013 and $180.1 million for the year, compared to $52.4 million and $238.7 million in the same periods of 2012, and $49.3 million in the third quarter of 2013. The Company continues to maintain a cautious approach to increases in this portfolio.
- Store and apartment advances were $24.5 million for the quarter and $100.0 million for the year, compared to $24.8 million and $118.7 million in the same periods in 2012, and $24.3 million in the third quarter of 2013.
- The consumer retail portfolio, which includes durable household good, such as water heaters and larger ticket home improvement items, reached $340.0 million in Q4 2013, up 25.0% from $272.0 million one year ago and 3.7% from $328.0 million last quarter.
- In Q4 2013, Home Trust launched a new direct to consumer brand, Oaken Financial, offering a line of consumer deposit products, including Guaranteed Investment Certificates (GICs) and a new Oaken Savings Account as part of its strategy to continue to diversify funding sources and to provide customers with a secure alternative to managing their savings independently.
- In Q4 2013, Home Trust successfully closed its inaugural issuance of institutional five-year deposit notes. Given strong investor demand, the transaction was upsized from $250 million to $300 million and priced at the tight end of initial guidance. The Company expects that it will become a regular issuer of wholesale deposit notes, likely on a semi-annual basis.
- Subsequent to the end of the quarter, and in light of the Company's solid performance, profitability and strong financial position, the Board of Directors declared an increase in the quarterly dividend by $0.04 to $0.32 per Common share, payable on March 1, 2014 to shareholders of record at the close of business on February 24, 2014, representing an increase of 14.3%. In addition, the Board approved a stock dividend of one share per each issued and outstanding common share, effecting a two-for-one stock split.
2014 Overall Outlook
Supported by the stable Canadian economy and healthy real estate market in 2013, the Company continued to grow its traditional mortgage loan portfolio and market share, taking advantage of the attractive returns available in the alternative mortgage space. This business, which is the Company's historical core business, provides superior returns on the allocated capital. The continued expansion of the traditional business was accompanied by commensurate strengthening of governance, risk management and control processes through further investment in tools, technology and people. The Company maintained very low loss ratios, even with a continued shift to the traditional portfolio which carries inherently higher credit risk than the insured Accelerator products. The Company expects continued growth of the traditional mortgage loan portfolio and will continue to strengthen risk management and control processes to manage the business within its risk appetite.
In the third quarter of 2013, the Company received a favourable ruling from the Office of the Superintendent of Financial Institutions Canada (OSFI) with respect to the Company's initiative to structure its Accelerator lending and securitization activity in a manner that allows off-balance sheet treatment of securitized loans and effectively expands the Company's capacity and appetite for prime insured single-family mortgage lending. In this connection, the Company will increase its efforts and focus on Accelerator lending and anticipates renewed growth of this portfolio, which will be included in assets under administration and will reinforce the Company's "one-stop" and "flexible lending solutions" strategies. The Company will also continue to increase its presence in suitable urban and suburban markets across Canada. Additional focus will be placed on growth of the Company's high-margin non-residential and consumer lending portfolios within the Company's risk tolerance.
The Company expects supply and demand in the real estate market to remain balanced in 2014, with moderating conditions in most markets when compared to the activity levels of recent years. The tightening of mortgage underwriting requirements and changes in mortgage insurance qualification that have occurred over the past few years can be expected to continue to dampen the level of new and resale residential transaction activity in 2014, reducing the risk of a major disruption of the real estate market. The Company believes that slowing housing activity will lead to healthier real estate markets overall that are supported by continued low interest rates, stable to improving employment and stable net immigration. Should interest rates increase modestly over the next year, there will be no disruption to the Company's business plans. The Company expects continued strong demand for its traditional mortgage and other retail products, reflecting the balanced real estate markets and an increasing market share.
The Company will continue to maintain relatively high levels of liquidity and low overall leverage, as measured by the assets to capital multiple (ACM), to provide safety and soundness for depositors. The Company expects that the rate of growth in the Company's non-securitized loan portfolio in 2014 will be relatively consistent with the growth rate experienced in 2013.
The Company expects that loans under administration will grow in the range of 15% to 20% in 2014. The relative growth of the traditional mortgage portfolio will moderate compared to 2013 as the Company achieves the balance in the portfolios to support sustained growth in earnings and returns on equity. The Company will expand offerings of insured mortgages through the Accelerator insured mortgage program, supporting the "one-stop" and "flexible lending solutions" lender strategies.
The traditional mortgage business is expected to maintain strong net interest margin and net interest income levels, while net interest margins on securitized assets continue to decline as older securitization programs reach maturity. The securitized portfolio carried on-balance sheet will decline as older portfolios mature and are replaced by portfolios that qualify for off-balance sheet accounting treatment. Consequently, the contribution to net interest income from these portfolios will become less significant and the Company will record more gains as securitized portfolios are sold. The Company will also record increased revenue from the servicing of such portfolios. The Company will increase its marketing and sales activities related to the development of more diversified sources of deposits, including its Oaken Financial business which will include an e-banking platform for direct to consumer business and additional costs will be incurred in connection to this. Increases in net interest income and gains on sales of securitized portfolios will tend to mitigate these increases in costs, and the Company expects that its efficiency ratio for 2014 will be in the target range of 28% to 32%.
Conference Call and Webcast
Fourth Quarter Results Conference Call
The conference call will take place on Thursday, February 13, 2014, at 10:30 a.m. Participants are asked to call 5 to 15 minutes in advance, 647-427-7450 in Toronto or toll-free 1-888-231-8191 throughout North America. The call will also be accessible in listen-only mode via the Internet at www.homecapital.com.
Conference Call Archive
A telephone replay of the call will be available between 1:30 p.m. Thursday, February 13, 2014 and midnight Thursday, February 20, 2014 by calling 416-849-0833 or 1-855-859-2056 (enter passcode 35336026). The archived audio web cast will be available for 90 days on CNW Group's website at www.newswire.ca and Home Capital's website at www.homecapital.com.
Annual Meeting Notice
The Annual Meeting of Shareholders of Home Capital Group Inc. will be held at One King West, Grand Banking Hall, Toronto, Ontario, M5H 1A1, on Wednesday, May 14, 2014 at 11:00 a.m. local time. Shareholders and guests are invited to join Directors and Management for lunch and refreshments following the Annual Meeting. All shareholders are encouraged to attend.
Consolidated Balance Sheets | ||||||
As at | ||||||
December 31 | September 30 | December 31 | ||||
thousands of Canadian dollars | 2013 | 2013 | 2012 | |||
ASSETS | ||||||
Cash and Cash Equivalents | $ | 728,469 | $ | 774,591 | $ | 301,863 |
Available for Sale Securities | 424,272 | 441,689 | 414,344 | |||
Loans Held for Sale | 137,975 | 77,655 | 21,921 | |||
Loans | ||||||
Securitized mortgages | 5,210,021 | 6,164,544 | 6,706,160 | |||
Non-securitized mortgages and loans | 12,671,905 | 11,842,183 | 10,431,832 | |||
17,881,926 | 18,006,727 | 17,137,992 | ||||
Collective allowance for credit losses | (31,500) | (30,900) | (30,000) | |||
17,850,426 | 17,975,827 | 17,107,992 | ||||
Other | ||||||
Restricted assets | 652,986 | 303,410 | 725,493 | |||
Derivative assets | 29,886 | 32,731 | 45,388 | |||
Other assets | 162,679 | 148,548 | 100,983 | |||
Goodwill and intangible assets | 89,157 | 86,346 | 82,095 | |||
934,708 | 571,035 | 953,959 | ||||
$ | 20,075,850 | $ | 19,840,797 | $ | 18,800,079 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Liabilities | ||||||
Deposits | ||||||
Deposits payable on demand | $ | 429,269 | $ | 281,348 | $ | 105,923 |
Deposits payable on a fixed date | 12,336,685 | 11,655,299 | 10,030,676 | |||
12,765,954 | 11,936,647 | 10,136,599 | ||||
Senior Debt | 147,343 | 149,822 | 150,684 | |||
Securitization Liabilities | ||||||
Mortgage-backed security liabilities | 660,964 | 913,103 | 1,301,693 | |||
Canada Mortgage Bond liabilities | 5,112,100 | 5,495,144 | 6,034,202 | |||
5,773,064 | 6,408,247 | 7,335,895 | ||||
Other | ||||||
Derivative liabilities | 3,809 | 2,378 | 2,386 | |||
Other liabilities | 173,558 | 187,301 | 170,502 | |||
Deferred tax liabilities | 34,425 | 35,040 | 35,800 | |||
211,792 | 224,719 | 208,688 | ||||
18,898,153 | 18,719,435 | 17,831,866 | ||||
Shareholders' Equity | ||||||
Capital stock | 70,233 | 70,237 | 61,903 | |||
Contributed surplus | 5,984 | 5,412 | 6,224 | |||
Retained earnings | 1,119,959 | 1,061,015 | 903,831 | |||
Accumulated other comprehensive loss | (18,479) | (15,302) | (3,745) | |||
1,177,697 | 1,121,362 | 968,213 | ||||
$ | 20,075,850 | $ | 19,840,797 | $ | 18,800,079 |
Consolidated Statements of Income | ||||||||||
For the three months ended | For the year ended | |||||||||
December 31 | September 30 | December 31 | December 31 | December 31 | ||||||
thousands of Canadian dollars, except per share amounts | 2013 | 2013 | 2012 | 2013 | 2012 | |||||
Net Interest Income Non-Securitized Assets | ||||||||||
Interest from loans | $ | 168,045 | $ | 159,573 | $ | 144,310 | $ | 629,247 | $ | 525,722 |
Dividends from securities | 2,556 | 2,621 | 3,502 | 11,165 | 14,171 | |||||
Other interest | 2,663 | 2,386 | 949 | 8,283 | 4,019 | |||||
173,264 | 164,580 | 148,761 | 648,695 | 543,912 | ||||||
Interest on deposits | 71,744 | 67,911 | 61,873 | 268,233 | 230,006 | |||||
Interest on senior debt | 1,793 | 1,635 | 1,825 | 6,612 | 6,831 | |||||
Net interest income non-securitized assets | 99,727 | 95,034 | 85,063 | 373,850 | 307,075 | |||||
Net Interest Income Securitized Loans and Assets | ||||||||||
Interest income from securitized loans and assets | 51,274 | 55,229 | 64,351 | 225,793 | 287,871 | |||||
Interest expense on securitization liabilities | 40,034 | 43,669 | 49,506 | 177,664 | 213,474 | |||||
Net interest income securitized loans and assets | 11,240 | 11,560 | 14,845 | 48,129 | 74,397 | |||||
Total Net Interest Income | 110,967 | 106,594 | 99,908 | 421,979 | 381,472 | |||||
Provision for credit losses | 4,004 | 2,768 | 3,685 | 15,868 | 14,720 | |||||
106,963 | 103,826 | 96,223 | 406,111 | 366,752 | ||||||
Non-Interest Income | ||||||||||
Fees and other income | 15,402 | 15,472 | 10,928 | 61,252 | 43,863 | |||||
Securitization income | 5,770 | 4,864 | 5,761 | 12,648 | 8,306 | |||||
Net realized and unrealized gains (losses) on securities | 148 | (668) | (457) | 2,589 | (55) | |||||
Net realized and unrealized gain (loss) on derivatives | 507 | (44) | (1,695) | (1,430) | 3,788 | |||||
21,827 | 19,624 | 14,537 | 75,059 | 55,902 | ||||||
128,790 | 123,450 | 110,760 | 481,170 | 422,654 | ||||||
Non-Interest Expenses | ||||||||||
Salaries and benefits | 19,563 | 17,768 | 14,991 | 70,954 | 58,956 | |||||
Premises | 2,610 | 2,407 | 2,562 | 9,901 | 8,833 | |||||
Other operating expenses | 15,689 | 17,460 | 14,067 | 62,883 | 54,946 | |||||
37,862 | 37,635 | 31,620 | 143,738 | 122,735 | ||||||
Income Before Income Taxes | 90,928 | 85,815 | 79,140 | 337,432 | 299,919 | |||||
Income taxes | ||||||||||
Current | 22,337 | 20,258 | 22,649 | 82,128 | 82,176 | |||||
Deferred | (236) | (860) | (2,474) | (1,238) | (4,240) | |||||
22,101 | 19,398 | 20,175 | 80,890 | 77,936 | ||||||
NET INCOME | $ | 68,827 | $ | 66,417 | $ | 58,965 | $ | 256,542 | $ | 221,983 |
NET INCOME PER COMMON SHARE | ||||||||||
Basic | $ | 1.98 | $ | 1.91 | $ | 1.70 | $ | 7.40 | $ | 6.40 |
Diluted | $ | 1.97 | $ | 1.90 | $ | 1.70 | $ | 7.32 | $ | 6.38 |
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||
Basic | 34,745 | 34,703 | 34,655 | 34,670 | 34,692 | |||||
Diluted | 34,969 | 34,953 | 34,779 | 35,023 | 34,820 | |||||
Total number of outstanding common shares | 34,744 | 34,746 | 34,630 | 34,744 | 34,630 | |||||
Book value per common share | $ | 33.90 | $ | 32.27 | $ | 27.96 | $ | 33.90 | $ | 27.96 |
Consolidated Statements of Comprehensive Income | ||||||||||
For the three months ended | For the year ended | |||||||||
December 31 | September 30 | December 31 | December 31 | December 31 | ||||||
thousands of Canadian dollars | 2013 | 2013 | 2012 | 2013 | 2012 | |||||
NET INCOME | $ | 68,827 | $ | 66,417 | $ | 58,965 | $ | 256,542 | $ | 221,983 |
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||
Available for Sale Securities and Retained Interests | ||||||||||
Net unrealized (losses) gains | (5,320) | (10,638) | 1,471 | (19,530) | 6,462 | |||||
Net (gains) losses reclassified to net income | (147) | 671 | 457 | (2,584) | (114) | |||||
(5,467) | (9,967) | 1,928 | (22,114) | 6,348 | ||||||
Income tax (recovery) expense | (1,449) | (2,640) | 509 | (5,859) | 1,775 | |||||
(4,018) | (7,327) | 1,419 | (16,255) | 4,573 | ||||||
Cash Flow Hedges | ||||||||||
Net unrealized gains (losses) | 897 | (195) | - | 702 | (370) | |||||
Net losses reclassified to net income | 247 | 376 | 376 | 1,362 | 1,462 | |||||
1,144 | 181 | 376 | 2,064 | 1,092 | ||||||
Income tax expense | 303 | 48 | 99 | 543 | 219 | |||||
841 | 133 | 277 | 1,521 | 873 | ||||||
Total other comprehensive (loss) income | (3,177) | (7,194) | 1,696 | (14,734) | 5,446 | |||||
COMPREHENSIVE INCOME | $ | 65,650 | $ | 59,223 | $ | 60,661 | $ | 241,808 | $ | 227,429 |
Consolidated Statements of Changes in Shareholders' Equity | ||||||||||||||
Net Unrealized | ||||||||||||||
Gains (Losses) | Net Unrealized | Total | ||||||||||||
on Securities and | Losses on | Accumulated | ||||||||||||
Retained | Cash Flow | Other | Total | |||||||||||
thousands of Canadian dollars, | Capital | Contributed | Retained | Interests Available | Hedges, | Comprehensive | Shareholders' | |||||||
except per share amounts | Stock | Surplus | Earnings | for Sale, After Tax | After Tax | Loss | Equity | |||||||
Balance at December 31, 2012 | $ | 61,903 | $ | 6,224 | $ | 903,831 | $ | 432 | $ | (4,177) | $ | (3,745) | $ | 968,213 |
Comprehensive income | - | - | 256,542 | (16,255) | 1,521 | (14,734) | 241,808 | |||||||
Stock options settled | 8,400 | (2,202) | - | - | - | - | 6,198 | |||||||
Amortization of fair value of | ||||||||||||||
employee stock options | - | 1,962 | - | - | - | - | 1,962 | |||||||
Repurchase of shares | (70) | - | (2,232) | - | - | - | (2,302) | |||||||
Dividends | ||||||||||||||
($1.08 per share) | - | - | (38,182) | - | - | - | (38,182) | |||||||
Balance at December 31, 2013 | $ | 70,233 | $ | 5,984 | $ | 1,119,959 | $ | (15,823) | $ | (2,656) | $ | (18,479) | $ | 1,177,697 |
Balance at December 31, 2011 | $ | 55,104 | $ | 5,873 | $ | 722,999 | $ | (4,141) | $ | (5,050) | $ | (9,191) | $ | 774,785 |
Comprehensive income | - | - | 221,983 | 4,573 | 873 | 5,446 | 227,429 | |||||||
Stock options settled | 7,088 | (1,408) | - | - | - | - | 5,680 | |||||||
Amortization of fair value of | ||||||||||||||
employee stock options | - | 1,759 | - | - | - | - | 1,759 | |||||||
Repurchase of shares | (289) | - | (7,828) | - | - | - | (8,117) | |||||||
Dividends | ||||||||||||||
($0.90 per share) | - | - | (33,323) | - | - | - | (33,323) | |||||||
Balance at December 31, 2012 | $ | 61,903 | $ | 6,224 | $ | 903,831 | $ | 432 | $ | (4,177) | $ | (3,745) | $ | 968,213 |
Consolidated Statements of Cash Flows | ||||||
For the year ended | ||||||
December 31 | December 31 | |||||
thousands of Canadian dollars | 2013 | 2012 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net income for the year | $ | 256,542 | $ | 221,983 | ||
Adjustments to determine cash flows relating to operating activities: | ||||||
Deferred income taxes | (1,238) | (4,240) | ||||
Amortization of capital assets | 3,504 | 3,118 | ||||
Amortization of intangible assets | 7,864 | 6,715 | ||||
Amortization of net premium on securities | 2,562 | 2,460 | ||||
Amortization of securitization and senior debt transaction costs | 18,729 | 13,396 | ||||
Provision for credit losses | 15,868 | 14,720 | ||||
Change in accrued interest payable | 13,624 | 13,519 | ||||
Change in accrued interest receivable | (1,388) | (5,434) | ||||
Net realized and unrealized (gains) losses on securities | (2,589) | 55 | ||||
Realized gain on securitization | (12,648) | (8,306) | ||||
Settlement of derivatives | 3,816 | (370) | ||||
Loss (gain) on derivatives | 1,643 | (3,788) | ||||
Net increase in mortgages | (1,980,163) | (1,943,195) | ||||
Net decrease (increase) in restricted assets | 72,507 | (252,493) | ||||
Net increase in credit card loans and other consumer retail loans | (35,002) | (40,845) | ||||
Net increase in deposits | 2,629,355 | 2,214,475 | ||||
Activity in securitization liabilities | ||||||
Proceeds from sale of mortgage-backed securities derecognized | 602,948 | 242,576 | ||||
Proceeds from sale of mortgage-backed securities | 635,101 | 407,848 | ||||
Settlement and repayment of securitization liabilities | (1,686,739) | (1,044,674) | ||||
Amortization of fair value of employee stock options | 1,962 | 1,759 | ||||
Changes in taxes payable and other | (31,475) | (7,194) | ||||
Cash flows provided by (used in) operating activities | 514,783 | (167,915) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Repurchase of shares | (2,302) | (8,117) | ||||
Exercise of employee stock options | 6,198 | 5,680 | ||||
Dividends paid to shareholders | (37,458) | (31,244) | ||||
Cash flows used in financing activities | (33,562) | (33,681) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Activity in securities | ||||||
Purchases | (182,382) | (335,218) | ||||
Proceeds from sales | 150,494 | 317,748 | ||||
Purchases of capital assets | (7,801) | (4,324) | ||||
Capitalized intangible development costs | (14,926) | (9,141) | ||||
Cash flows used in investing activities | (54,615) | (30,935) | ||||
Net increase (decrease) in cash and cash equivalents during the year | 426,606 | (232,531) | ||||
Cash and cash equivalents at beginning of the year | 301,863 | 534,394 | ||||
Cash and Cash Equivalents at End of the Year | $ | 728,469 | $ | 301,863 | ||
Supplementary Disclosure of Cash Flow Information | ||||||
Dividends received on investments | $ | 9,022 | $ | 12,626 | ||
Interest received | 853,125 | 807,870 | ||||
Interest paid | 443,646 | 438,026 | ||||
Income taxes paid | 98,724 | 79,887 |
Net Interest Margin | |||||
For the three months ended | For the year ended | ||||
December 31 | September 30 | December 31 | December 31 | December 31 | |
2013 | 2013 | 2012 | 2013 | 2012 | |
Net interest margin non-securitized interest earning assets (non-TEB) | 2.92% | 2.96% | 3.07% | 2.98% | 3.05% |
Net interest margin non-securitized interest earning assets (TEB) | 2.94% | 2.99% | 3.11% | 3.01% | 3.10% |
Net interest margin securitized assets | 0.74% | 0.69% | 0.79% | 0.73% | 0.93% |
Total net interest margin (non-TEB) | 2.20% | 2.14% | 2.11% | 2.15% | 2.07% |
Total net interest margin (TEB) | 2.22% | 2.16% | 2.13% | 2.17% | 2.09% |
Spread of non-securitized loans over deposits only | 3.11% | 3.16% | 3.13% | 3.14% | 3.13% |
Net Interest Income by Product and Average Rate | ||||||||||
For the three months ended December 31, 2013 | For the three months ended September 30, 2013 | |||||||||
(000s, except %) | Average | Income/ | Average | Average | Income/ | Average | ||||
Balance 1 | Expense | Rate 1 | Balance 1 | Expense | Rate 1 | |||||
Assets | ||||||||||
Cash resources and securities | $ | 1,292,322 | $ | 5,219 | 1.62% | $ | 1,248,482 | $ | 5,007 | 1.60% |
Traditional single-family residential mortgages | 9,819,720 | 128,659 | 5.24% | 9,331,924 | 122,329 | 5.24% | ||||
Accelerator single-family residential mortgages | 617,356 | 5,282 | 3.42% | 407,046 | 3,604 | 3.54% | ||||
Residential commercial mortgages 2 | 327,988 | 4,043 | 4.93% | 280,565 | 3,393 | 4.84% | ||||
Non-residential commercial mortgages | 987,049 | 15,749 | 6.38% | 965,285 | 15,932 | 6.60% | ||||
Credit card loans | 295,315 | 6,934 | 9.39% | 300,776 | 7,147 | 9.50% | ||||
Other consumer retail loans | 333,521 | 7,378 | 8.85% | 318,300 | 7,168 | 9.01% | ||||
Total non-securitized loans | 12,380,949 | 168,045 | 5.43% | 11,603,896 | 159,573 | 5.50% | ||||
Taxable equivalent adjustment | - | 921 | - | - | 942 | - | ||||
Total on non-securitized interest-earning assets | 13,673,271 | 174,185 | 5.10% | 12,852,378 | 165,522 | 5.15% | ||||
Securitized single-family residential mortgages | 4,151,111 | 33,112 | 3.19% | 4,605,786 | 35,943 | 3.12% | ||||
Securitized multi-unit residential mortgages | 1,639,678 | 16,429 | 4.01% | 1,795,004 | 17,715 | 3.95% | ||||
Assets pledged as collateral for securitization | 440,539 | 1,733 | 1.57% | 379,419 | 1,571 | 1.66% | ||||
Total securitized residential mortgages | 6,231,328 | 51,274 | 3.29% | 6,780,209 | 55,229 | 3.26% | ||||
Other assets | 282,816 | - | - | 254,310 | - | - | ||||
Total Assets | $ | 20,187,415 | $ | 225,459 | 4.47% | $ | 19,886,897 | $ | 220,751 | 4.44% |
Liabilities and Shareholders' Equity | ||||||||||
Deposits | $ | 12,383,947 | $ | 71,744 | 2.32% | $ | 11,629,822 | $ | 67,911 | 2.34% |
Senior debt | 148,725 | 1,793 | 4.82% | 149,025 | 1,635 | 4.39% | ||||
Securitization liabilities | 6,271,332 | 40,034 | 2.55% | 6,785,334 | 43,669 | 2.57% | ||||
Other liabilities and shareholders' equity | 1,383,411 | - | - | 1,322,716 | - | - | ||||
Total Liabilities and Shareholders' Equity | $ | 20,187,415 | $ | 113,571 | 2.25% | $ | 19,886,897 | $ | 113,215 | 2.28% |
Net Interest Income (TEB) | $ | 111,888 | $ | 107,536 | ||||||
Tax Equivalent Adjustment | (921) | (942) | ||||||||
Net Interest Income per Financial Statements | $ | 110,967 | $ | 106,594 | ||||||
For the three months ended December 31, 2012 | ||||||||||
(000s, except %) | Average | Income/ | Average | |||||||
Balance 1 | Expense | Rate 1 | ||||||||
Assets | ||||||||||
Cash resources and securities | $ | 817,669 | $ | 4,451 | 2.18% | |||||
Traditional single-family residential mortgages | 7,919,965 | 107,692 | 5.44% | |||||||
Accelerator single-family residential mortgages | 582,728 | 4,470 | 3.07% | |||||||
Residential commercial mortgages 2 | 205,425 | 2,790 | 5.43% | |||||||
Non-residential commercial mortgages | 981,483 | 15,789 | 6.43% | |||||||
Credit card loans | 334,778 | 7,998 | 9.56% | |||||||
Other consumer retail loans | 243,338 | 5,571 | 9.16% | |||||||
Total non-securitized loans | 10,267,717 | 144,310 | 5.62% | |||||||
Taxable equivalent adjustment | - | 1,243 | - | |||||||
Total on non-securitized interest-earning assets | 11,085,386 | 150,004 | 5.41% | |||||||
Securitized single-family residential mortgages | 5,136,096 | 43,081 | 3.36% | |||||||
Securitized multi-unit residential mortgages | 1,949,071 | 19,704 | 4.04% | |||||||
Assets pledged as collateral for securitization | 541,946 | 1,566 | 1.16% | |||||||
Total securitized residential mortgages | 7,627,113 | 64,351 | 3.37% | |||||||
Other assets | 294,020 | - | - | |||||||
Total Assets | $ | 19,006,519 | $ | 214,355 | 4.51% | |||||
Liabilities and Shareholders' Equity | ||||||||||
Deposits | $ | 9,944,774 | $ | 61,873 | 2.49% | |||||
Senior debt | 152,283 | 1,825 | 4.79% | |||||||
Securitization liabilities | 7,661,311 | 49,506 | 2.58% | |||||||
Other liabilities and shareholders' equity | 1,248,151 | - | - | |||||||
Total Liabilities and Shareholders' Equity | $ | 19,006,519 | $ | 113,204 | 2.38% | |||||
Net Interest Income (TEB) | $ | 101,151 | ||||||||
Tax Equivalent Adjustment | (1,243) | |||||||||
Net Interest Income per Financial Statements | $ | 99,908 | ||||||||
For the year ended December 31, 2013 | For the year ended December 31, 2012 | |||||||||
(000s, except %) | Average | Income/ | Average | Average | Income/ | Average | ||||
Balance 1 | Expense | Rate 1 | Balance 1 | Expense | Rate 1 | |||||
Assets | ||||||||||
Cash resources and securities | $ | 1,149,994 | $ | 19,448 | 1.69% | $ | 807,022 | $ | 18,190 | 2.25% |
Traditional single-family residential mortgages | 9,116,538 | 482,491 | 5.29% | 6,961,740 | 381,971 | 5.49% | ||||
Accelerator single-family residential mortgages | 446,636 | 15,044 | 3.37% | 540,610 | 17,440 | 3.23% | ||||
Residential commercial mortgages 2 | 263,447 | 12,954 | 4.92% | 202,027 | 11,000 | 5.44% | ||||
Non-residential commercial mortgages | 975,217 | 62,681 | 6.43% | 985,089 | 61,229 | 6.22% | ||||
Credit card loans | 307,310 | 28,966 | 9.43% | 361,808 | 34,722 | 9.60% | ||||
Other consumer retail loans | 308,155 | 27,111 | 8.80% | 206,978 | 19,360 | 9.35% | ||||
Total non-securitized loans | 11,417,303 | 629,247 | 5.51% | 9,258,252 | 525,722 | 5.68% | ||||
Taxable equivalent adjustment | - | 4,016 | - | - | 5,031 | - | ||||
Total on non-securitized interest-earning assets | 12,567,297 | 652,711 | 5.19% | 10,065,274 | 548,943 | 5.45% | ||||
Securitized single-family residential mortgages | 4,559,463 | 144,702 | 3.17% | 5,651,599 | 200,679 | 3.55% | ||||
Securitized multi-unit residential mortgages | 1,780,245 | 73,712 | 4.14% | 1,985,035 | 80,757 | 4.07% | ||||
Assets pledged as collateral for securitization | 467,481 | 7,379 | 1.58% | 497,312 | 6,435 | 1.29% | ||||
Total securitized residential mortgages | 6,807,189 | 225,793 | 3.32% | 8,133,946 | 287,871 | 3.54% | ||||
Other assets | 257,386 | - | - | 260,470 | - | - | ||||
Total Assets | $ | 19,631,872 | $ | 878,504 | 4.47% | $ | 18,459,690 | $ | 836,814 | 4.53% |
Liabilities and Shareholders' Equity | ||||||||||
Deposits | $ | 11,327,983 | $ | 268,233 | 2.37% | $ | 9,004,518 | $ | 230,006 | 2.55% |
Senior debt | 149,899 | 6,612 | 4.41% | 153,285 | 6,831 | 4.46% | ||||
Securitization liabilities | 6,849,261 | 177,664 | 2.59% | 8,170,337 | 213,474 | 2.61% | ||||
Other liabilities and shareholders' equity | 1,304,729 | - | - | 1,131,550 | - | - | ||||
Total Liabilities and Shareholders' Equity | $ | 19,631,872 | $ | 452,509 | 2.30% | $ | 18,459,690 | $ | 450,311 | 2.44% |
Net Interest Income (TEB) | $ | 425,995 | $ | 386,503 | ||||||
Tax Equivalent Adjustment | (4,016) | (5,031) | ||||||||
Net Interest Income per Financial Statements | $ | 421,979 | $ | 381,472 |
1 The average is calculated with reference to opening and closing monthly asset and liability balances.
2 Residential commercial mortgages include non-securitized multi-unit residential mortgages and commercial mortgages secured by residential property types.
Mortgage Production | |||||||||||
For the three months ended | For the year ended | ||||||||||
December 31 | September 30 | December 31 | December 31 | December 31 | |||||||
(000s) | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||
Single-family residential mortgages | |||||||||||
Traditional | $ | 1,227,462 | $ | 1,312,648 | $ | 1,159,387 | $ | 4,770,773 | $ | 4,487,473 | |
Accelerator | 357,125 | 272,576 | 174,214 | 1,011,650 | 804,692 | ||||||
Residential commercial mortgages | |||||||||||
Multi-unit uninsured residential mortgages | 62,276 | 19,475 | 7,786 | 129,738 | 30,605 | ||||||
Multi-unit insured residential mortgages | 177,632 | 306,863 | 49,459 | 693,461 | 256,274 | ||||||
Other1 | 4,411 | 9,000 | 4,650 | 31,479 | 68,906 | ||||||
Non-residential commercial mortgages | |||||||||||
Stores and apartments | 24,514 | 24,347 | 24,835 | 99,951 | 118,689 | ||||||
Commercial | 56,134 | 49,320 | 52,417 | 180,131 | 238,728 | ||||||
Total mortgage advances | $ | 1,909,554 | $ | 1,994,229 | $ | 1,472,748 | $ | 6,917,183 | $ | 6,005,367 |
1 Other residential commercial mortgages include mortgages such as builders' inventory.
Provision for Credit Losses | |||||||||
As at December 31, 2013 | For the three months ended December 31, 2013 | ||||||||
(000s, except %) | Net Non-Performing Loans | Provision 1 | Net Write-Offs | ||||||
Annualized | Annualized | ||||||||
% of Gross | % of Gross | % of Gross | |||||||
Amount | Loans | Amount | Loans | Amount | Loans | ||||
Single-family residential mortgages | $ | 51,636 | 0.48% | $ | 3,560 | 0.13% | $ | 3,135 | 0.12% |
Residential commercial mortgages | 1,836 2 | 0.93% | 49 | 0.10% | 168 | 0.34% | |||
Non-residential commercial mortgages | 7,189 3 | 0.72% | 99 | 0.04% | 79 | 0.03% | |||
Credit card loans | 2,584 | 0.88% | 183 | 0.25% | 293 | 0.40% | |||
Other consumer retail loans | - | - | 113 | 0.13% | 94 | 0.11% | |||
Securitized single-family residential mortgages | - | - | - | - | - | - | |||
Securitized multi-unit residential mortgages | - | - | - | - | - | - | |||
Total | $ | 63,245 | 0.35% | $ | 4,004 | 0.09% | $ | 3,769 | 0.08% |
As at September 30, 2013 | For the three months ended September 30, 2013 | ||||||||
(000s, except %) | Net Non-Performing Loans | Provision 1 | Net Write-Offs | ||||||
Annualized | Annualized | ||||||||
% of Gross | % of Gross | % of Gross | |||||||
Amount | Loans | Amount | Loans | Amount | Loans | ||||
Single-family residential mortgages | $ | 50,224 | 0.50% | $ | 2,704 | 0.11% | $ | 1,734 | 0.07% |
Residential commercial mortgages | 1,836 2 | 0.71% | 152 | 0.24% | - | - | |||
Non-residential commercial mortgages | 1,576 | 0.16% | (38) | (0.02)% | 153 | 0.06% | |||
Credit card loans | 3,603 | 1.21% | (99) | (0.13)% | 96 | 0.13% | |||
Other consumer retail loans | - | - | 49 | 0.06% | 96 | 0.12% | |||
Securitized single-family residential mortgages | - | - | - | - | - | - | |||
Securitized multi-unit residential mortgages | - | - | - | - | - | - | |||
Total | $ | 57,239 | 0.32% | $ | 2,768 | 0.06% | $ | 2,079 | 0.05% |
As at December 31, 2012 | For the three months ended December 31, 2012 | ||||||||
(000s, except %) | Net Non-Performing Loans | Provision 1 | Net Write-Offs | ||||||
Annualized | Annualized | ||||||||
% of Gross | % of Gross | % of Gross | |||||||
Amount | Loans | Amount | Loans | Amount | Loans | ||||
Single-family residential mortgages | $ | 47,788 | 0.55% | $ | 3,470 | 0.16% | $ | 2,546 | 0.12% |
Residential commercial mortgages | 4,527 | 2.93% | 48 | 0.12% | - | - | |||
Non-residential commercial mortgages | 501 | 0.05% | 146 | 0.06% | 146 | 0.06% | |||
Credit card loans | 3,505 | 1.07% | (5) | (0.01)% | 512 | 0.63% | |||
Other consumer retail loans | - | - | 26 | 0.04% | 90 | 0.13% | |||
Securitized single-family residential mortgages | - | - | - | - | - | - | |||
Securitized multi-unit residential mortgages | - | - | - | - | - | - | |||
Total | $ | 56,321 | 0.33% | $ | 3,685 | 0.09% | $ | 3,294 | 0.08% |
For the year ended December 31, 2013 | |||||||||
(000s, except %) | Provision 1 | Net Write-Offs | |||||||
% of Gross | % of Gross | ||||||||
Amount | Loans | Amount | Loans | ||||||
Single-family residential mortgages | $ | 11,766 | 0.11% | $ | 11,165 | 0.10% | |||
Residential commercial mortgages | 2,783 | 1.41% | 3,199 | 1.62% | |||||
Non-residential commercial mortgages | 274 | 0.03% | 230 | 0.02% | |||||
Credit card loans | 679 | 0.23% | 589 | 0.20% | |||||
Other consumer retail loans | 366 | 0.11% | 345 | 0.10% | |||||
Securitized single-family residential mortgages | - | - | - | - | |||||
Securitized multi-unit residential mortgages | - | - | - | - | |||||
Total | $ | 15,868 | 0.09% | $ | 15,528 | 0.09% | |||
For the year ended December 31, 2012 | |||||||||
(000s, except %) | Provision 1 | Net Write-Offs | |||||||
% of Gross | % of Gross | ||||||||
Amount | Loans | Amount | Loans | ||||||
Single-family residential mortgages | $ | 12,581 | 0.14% | $ | 10,148 | 0.12% | |||
Residential commercial mortgages | 340 | 0.22% | - | - | |||||
Non-residential commercial mortgages | 241 | 0.02% | 319 | 0.03% | |||||
Credit card loans | 1,291 | 0.39% | 1,572 | 0.48% | |||||
Other consumer retail loans | 267 | 0.10% | 342 | 0.13% | |||||
Securitized single-family residential mortgages | - | - | - | - | |||||
Securitized multi-unit residential mortgages | - | - | - | - | |||||
Total | $ | 14,720 | 0.09% | $ | 12,381 | 0.07% |
1 Provisions include both individual and collective provisions. |
2 The non-performing residential commercial amount comprises one loan. |
3 The non-performing non-residential commercial amount includes $6.4 million related to one loan. |
Loans by Geographic Region and Type (net of individual allowances for credit losses) | ||||||||||||
(000s, except %) | As at December 31, 2013 | |||||||||||
British | ||||||||||||
Columbia | Alberta | Ontario | Quebec | Other | Total | |||||||
Securitized single-family residential mortgages | $ | 334,511 | $ | 256,770 | $ | 2,835,878 | $ | 192,751 | $ | 100,187 | $ | 3,720,097 |
Securitized multi-unit residential mortgages | 201,181 | 191,910 | 706,883 | 186,521 | 203,429 | 1,489,924 | ||||||
Total securitized mortgages | 535,692 | 448,680 | 3,542,761 | 379,272 | 303,616 | 5,210,021 | ||||||
Single-family residential mortgages | 536,228 | 367,291 | 9,391,586 | 360,684 | 191,578 | 10,847,367 | ||||||
Residential commercial mortgages1 | 8,897 | 16,192 | 135,133 | 28,689 | 7,969 | 196,880 | ||||||
Non-residential commercial mortgages | 7,753 | 38,660 | 881,702 | 16,234 | 49,861 | 994,210 | ||||||
Credit card loans | 7,230 | 19,324 | 262,016 | 1,260 | 3,655 | 293,485 | ||||||
Other consumer retail loans | 899 | 1,256 | 334,652 | 2,900 | 256 | 339,963 | ||||||
Total non-securitized mortgages and loans2 | 561,007 | 442,723 | 11,005,089 | 409,767 | 253,319 | 12,671,905 | ||||||
$ | 1,096,699 | $ | 891,403 | $ | 14,547,850 | $ | 789,039 | $ | 556,935 | $ | 17,881,926 | |
As a % of portfolio | 6.1% | 5.0% | 81.4% | 4.4% | 3.1% | 100.0% | ||||||
(000s, except % ) | As at September 30, 2012 | |||||||||||
British | ||||||||||||
Columbia | Alberta | Ontario | Quebec | Other | Total | |||||||
Securitized single-family residential mortgages | $ | 382,042 | $ | 298,719 | $ | 3,409,845 | $ | 229,049 | $ | 114,187 | $ | 4,433,842 |
Securitized multi-unit residential mortgages | 239,146 | 198,938 | 849,537 | 215,291 | 227,790 | 1,730,702 | ||||||
Total securitized mortgages | 621,188 | 497,657 | 4,259,382 | 444,340 | 341,977 | 6,164,544 | ||||||
Single-family residential mortgages | 475,002 | 336,318 | 8,686,457 | 323,892 | 164,964 | 9,986,633 | ||||||
Residential commercial mortgages1 | 20,319 | 20,810 | 159,334 | 52,788 | 3,739 | 256,990 | ||||||
Non-residential commercial mortgages | 3,851 | 37,745 | 867,132 | 16,071 | 47,313 | 972,112 | ||||||
Credit card loans | 7,550 | 21,322 | 264,691 | 1,274 | 3,632 | 298,469 | ||||||
Other consumer retail loans | 946 | 1,103 | 325,616 | - | 314 | 327,979 | ||||||
Total non-securitized mortgages and loans2 | 507,668 | 417,298 | 10,303,230 | 394,025 | 219,962 | 11,842,183 | ||||||
$ | 1,128,856 | $ | 914,955 | $ | 14,562,612 | $ | 838,365 | $ | 561,939 | $ | 18,006,727 | |
As a % of portfolio | 6.3% | 5.1% | 80.8% | 4.7% | 3.1% | 100.0% | ||||||
(000s, except % ) | As at December 31, 2012 | |||||||||||
British | ||||||||||||
Columbia | Alberta | Ontario | Quebec | Other | Total | |||||||
Securitized single-family residential mortgages | $ | 433,529 | $ | 343,318 | $ | 3,616,877 | $ | 256,953 | $ | 113,080 | $ | 4,763,757 |
Securitized multi-unit residential mortgages | 258,757 | 203,081 | 908,513 | 339,477 | 232,575 | 1,942,403 | ||||||
Total securitized mortgages | 692,286 | 546,399 | 4,525,390 | 596,430 | 345,655 | 6,706,160 | ||||||
Single-family residential mortgages | 420,953 | 342,841 | 7,499,242 | 278,671 | 147,739 | 8,689,446 | ||||||
Residential commercial mortgages1 | 5,642 | 19,380 | 102,674 | 25,201 | 1,580 | 154,477 | ||||||
Non-residential commercial mortgages | 3,521 | 25,953 | 860,703 | 61,691 | 36,548 | 988,416 | ||||||
Credit card loans | 9,104 | 25,062 | 287,877 | 1,532 | 3,941 | 327,516 | ||||||
Other consumer retail loans | 975 | 787 | 269,594 | - | 621 | 271,977 | ||||||
Total non-securitized mortgages and loans2 | 440,195 | 414,023 | 9,020,090 | 367,095 | 190,429 | 10,431,832 | ||||||
$ | 1,132,481 | $ | 960,422 | $ | 13,545,480 | $ | 963,525 | $ | 536,084 | $ | 17,137,992 | |
As a % of portfolio | 6.6% | 5.6% | 79.1% | 5.6% | 3.1% | 100.0% |
1 | Residential commercial mortgages include non-securitized multi-unit residential mortgages and commercial mortgages secured by residential property types. |
2 | Loans exclude mortgages held for sale. |
Impaired Loans | ||||||||||||
(000s) | As at December 31, 2013 | |||||||||||
Single-Family | Residential | Non-Residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Gross amount of impaired loans | $ | 52,837 | $ | 1,836 | $ | 7,189 | $ | 2,785 | $ | 236 | $ | 64,883 |
Individual allowances on principal | (1,201) | - | - | (201) | (236) | (1,638) | ||||||
Net amount of impaired loans | $ | 51,636 | $ | 1,836 | $ | 7,189 | $ | 2,584 | $ | - | $ | 63,245 |
(000s) | As at September 30, 2013 | |||||||||||
Single-Family | Residential | Non-Residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Gross amount of impaired loans | $ | 51,665 | $ | 1,836 | $ | 1,576 | $ | 3,914 | $ | 219 | $ | 59,210 |
Individual allowances on principal | (1,441) | - | - | (311) | (219) | (1,971) | ||||||
Net amount of impaired loans | $ | 50,224 | $ | 1,836 | $ | 1,576 | $ | 3,603 | $ | - | $ | 57,239 |
(000s) | As at December 31, 2012 | |||||||||||
Single-Family | Residential | Non-Residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Gross amount of impaired loans | $ | 50,169 | $ | 4,527 | $ | 501 | $ | 3,616 | $ | 214 | $ | 59,027 |
Individual allowances on principal | (2,381) | - | - | (111) | (214) | (2,706) | ||||||
Net amount of impaired loans | $ | 47,788 | $ | 4,527 | $ | 501 | $ | 3,505 | $ | - | $ | 56,321 |
Allowance for Credit Losses | ||||||||||||
(000s) | For the three months ended December 31, 2013 | |||||||||||
Single-family | Residential | Non-residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Individual allowances | ||||||||||||
Allowance on loan principal | ||||||||||||
Balance at the beginning of the period | $ | 1,441 | $ | - | $ | - | $ | 311 | $ | 219 | $ | 1,971 |
Provision for credit losses | 2,895 | 168 | 79 | 183 | 111 | 3,436 | ||||||
Write-offs | (3,259) | (376) | (87) | (314) | (118) | (4,154) | ||||||
Recoveries | 124 | 208 | 8 | 21 | 24 | 385 | ||||||
1,201 | - | - | 201 | 236 | 1,638 | |||||||
Allowance on accrued interest receivable | ||||||||||||
Balance at the beginning of the period | 813 | 25 | 24 | - | 10 | 872 | ||||||
Provision for credit losses | (54) | - | 20 | - | 2 | (32) | ||||||
759 | 25 | 44 | - | 12 | 840 | |||||||
Total individual allowance | 1,960 | 25 | 44 | 201 | 248 | 2,478 | ||||||
Collective allowance | ||||||||||||
Balance at the beginning of the period | 17,313 | 446 | 9,300 | 3,541 | 300 | 30,900 | ||||||
Provision for credit losses | 719 | (119) | - | - | - | 600 | ||||||
18,032 | 327 | 9,300 | 3,541 | 300 | 31,500 | |||||||
Total allowance | $ | 19,992 | $ | 352 | $ | 9,344 | $ | 3,742 | $ | 548 | $ | 33,978 |
Total provision | $ | 3,560 | $ | 49 | $ | 99 | $ | 183 | $ | 113 | $ | 4,004 |
(000s) | For the three months ended September 30, 2013 | |||||||||||
Single-family | Residential | Non-residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Individual allowances | ||||||||||||
Allowance on loan principal | ||||||||||||
Balance at the beginning of the period | $ | 929 | $ | - | $ | 170 | $ | 506 | $ | 262 | $ | 1,867 |
Provision for credit losses | 2,246 | - | (17) | (99) | 53 | 2,183 | ||||||
Write-offs | (2,123) | - | (154) | (106) | (111) | (2,494) | ||||||
Recoveries | 389 | - | 1 | 10 | 15 | 415 | ||||||
1,441 | - | - | 311 | 219 | 1,971 | |||||||
Allowance on accrued interest receivable | ||||||||||||
Balance at the beginning of the period | 628 | - | 45 | - | 14 | 687 | ||||||
Provision for credit losses | 185 | 25 | (21) | - | (4) | 185 | ||||||
813 | 25 | 24 | - | 10 | 872 | |||||||
Total individual allowance | 2,254 | 25 | 24 | 311 | 229 | 2,843 | ||||||
Collective allowance | ||||||||||||
Balance at the beginning of the period | 17,040 | 319 | 9,300 | 3,541 | 300 | 30,500 | ||||||
Provision for credit losses | 273 | 127 | - | - | - | 400 | ||||||
17,313 | 446 | 9,300 | 3,541 | 300 | 30,900 | |||||||
Total allowance | $ | 19,567 | $ | 471 | $ | 9,324 | $ | 3,852 | $ | 529 | $ | 33,743 |
Total provision | $ | 2,704 | $ | 152 | $ | (38) | $ | (99) | $ | 49 | $ | 2,768 |
(000s) | For the three months ended December 31, 2012 | |||||||||||
Single-family | Residential | Non-residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Individual allowances | ||||||||||||
Allowance on loan principal | ||||||||||||
Balance at the beginning of the period | $ | 1,660 | $ | - | $ | - | $ | 628 | $ | 291 | $ | 2,579 |
Provision for credit losses | 3,267 | - | 146 | (5) | 13 | 3,421 | ||||||
Write-offs | (2,699) | - | (149) | (685) | (109) | (3,642) | ||||||
Recoveries | 153 | - | 3 | 173 | 19 | 348 | ||||||
2,381 | - | - | 111 | 214 | 2,706 | |||||||
Allowance on accrued interest receivable | ||||||||||||
Balance at the beginning of the period | 503 | 365 | - | - | - | 868 | ||||||
Provision for credit losses | (16) | 67 | - | - | 13 | 64 | ||||||
487 | 432 | - | - | 13 | 932 | |||||||
Total individual allowance | 2,868 | 432 | - | 111 | 227 | 3,638 | ||||||
Collective allowance | ||||||||||||
Balance at the beginning of the period | 16,304 | 355 | 9,300 | 3,541 | 300 | 29,800 | ||||||
Provision for credit losses | 219 | (19) | - | - | - | 200 | ||||||
16,523 | 336 | 9,300 | 3,541 | 300 | 30,000 | |||||||
Total allowance | $ | 19,391 | $ | 768 | $ | 9,300 | $ | 3,652 | $ | 527 | $ | 33,638 |
Total provision | $ | 3,470 | $ | 48 | $ | 146 | $ | (5) | $ | 26 | $ | 3,685 |
(000s) | For the year ended December 31, 2013 | |||||||||||
Single-family | Residential | Non-residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Individual allowances | ||||||||||||
Allowance on loan principal | ||||||||||||
Balance at the beginning of the year | $ | 2,381 | $ | - | $ | - | $ | 111 | $ | 214 | $ | 2,706 |
Provision for credit losses | 9,985 | 3,199 | 230 | 679 | 367 | 14,460 | ||||||
Write-offs | (12,048) | (3,407) | (241) | (1,129) | (436) | (17,261) | ||||||
Recoveries | 883 | 208 | 11 | 540 | 91 | 1,733 | ||||||
1,201 | - | - | 201 | 236 | 1,638 | |||||||
Allowance on accrued interest receivable | ||||||||||||
Balance at the beginning of the year | 487 | 432 | - | - | 13 | 932 | ||||||
Provision for credit losses | 272 | (407) | 44 | - | (1) | (92) | ||||||
759 | 25 | 44 | - | 12 | 840 | |||||||
Total individual allowance | 1,960 | 25 | 44 | 201 | 248 | 2,478 | ||||||
Collective allowance | ||||||||||||
Balance at the beginning of the year | 16,523 | 336 | 9,300 | 3,541 | 300 | 30,000 | ||||||
Provision for credit losses | 1,509 | (9) | - | - | - | 1,500 | ||||||
18,032 | 327 | 9,300 | 3,541 | 300 | 31,500 | |||||||
Total allowance | $ | 19,992 | $ | 352 | $ | 9,344 | $ | 3,742 | $ | 548 | $ | 33,978 |
Total provision | $ | 11,766 | $ | 2,783 | $ | 274 | $ | 679 | $ | 366 | $ | 15,868 |
(000s) | For the year ended December 31, 2012 | |||||||||||
Single-family | Residential | Non-residential | Other | |||||||||
Residential | Commercial | Commercial | Credit Card | Consumer | ||||||||
Mortgages | Mortgages | Mortgages | Loans | Retail Loans | Total | |||||||
Individual allowances | ||||||||||||
Allowance on loan principal | ||||||||||||
Balance at the beginning of the year | $ | 760 | $ | - | $ | 60 | $ | 392 | $ | 290 | $ | 1,502 |
Provision for credit losses | 11,769 | - | 259 | 1,291 | 266 | 13,585 | ||||||
Write-offs | (10,598) | - | (322) | (1,914) | (419) | (13,253) | ||||||
Recoveries | 450 | - | 3 | 342 | 77 | 872 | ||||||
2,381 | - | - | 111 | 214 | 2,706 | |||||||
Allowance on accrued interest receivable | ||||||||||||
Balance at the beginning of the year | 327 | - | 18 | - | 12 | 357 | ||||||
Provision for credit losses | 160 | 432 | (18) | - | 1 | 575 | ||||||
487 | 432 | - | - | 13 | 932 | |||||||
Total individual allowance | 2,868 | 432 | - | 111 | 227 | 3,638 | ||||||
Collective allowance | ||||||||||||
Balance at the beginning of the year | 15,871 | 428 | 9,300 | 3,541 | 300 | 29,440 | ||||||
Provision for credit losses | 652 | (92) | - | - | - | 560 | ||||||
16,523 | 336 | 9,300 | 3,541 | 300 | 30,000 | |||||||
Total allowance | $ | 19,391 | $ | 768 | $ | 9,300 | $ | 3,652 | $ | 527 | $ | 33,638 |
Total provision | $ | 12,581 | $ | 340 | $ | 241 | $ | 1,291 | $ | 267 | $ | 14,720 |
Securitization Activities | ||||||||||||
(000s) | For the three months ended | |||||||||||
December 31 | September 30 | |||||||||||
2013 | 2013 | |||||||||||
Single-Family | Multi-Unit | Single-Family | Multi-Unit | |||||||||
Residential MBS | Residential MBS | Total MBS | Residential MBS | Residential MBS | Total MBS | |||||||
Carrying value of underlying mortgages derecognized | $ | 327,500 | $ | 177,700 | $ | 505,200 | $ | 191,761 | $ | 235,483 | $ | 427,244 |
Gains on sale of mortgages or residual interest 1 | 3,460 | 1,189 | 4,649 | 1,894 | 2,647 | 4,541 | ||||||
Retained interests recorded | - | 7,983 | 7,983 | - | 11,146 | 11,146 | ||||||
Servicing liability recorded | - | 1,186 | 1,186 | - | 1,809 | 1,809 | ||||||
(000s) | For the three months ended | |||||||||||
December 31 | ||||||||||||
2012 | ||||||||||||
Single-Family | Multi-Unit | |||||||||||
Residential MBS | Residential MBS | Total MBS | ||||||||||
Carrying value of underlying mortgages derecognized | $ | 662,153 | $ | 64,634 | $ | 726,787 | ||||||
Gains on sale of mortgages or residual interest 1 | 4,845 | 891 | 5,736 | |||||||||
Retained interests recorded | - | 2,447 | 2,447 | |||||||||
Servicing liability recorded | - | 487 | 487 | |||||||||
(000s) | For the year ended December 31, 2013 | For the year ended December 31, 2012 | ||||||||||
Single-Family | Multi-Unit | Single Family | Multi-Unit | |||||||||
Residential MBS | Residential MBS | Total MBS | Residential MBS | Residential MBS | Total MBS | |||||||
Carrying value of underlying mortgages derecognized | $ | 519,261 | $ | 617,244 | $ | 1,136,505 | $ | 662,153 | $ | 233,892 | $ | 896,045 |
Gains on sale of mortgages or residual interest 1 | 5,354 | 5,687 | 11,041 | 4,845 | 3,300 | 8,145 | ||||||
Retained interests recorded | - | 26,131 | 26,131 | - | 9,691 | 9,691 | ||||||
Servicing liability recorded | - | 4,563 | 4,563 | - | 1,786 | 1,786 |
1 Gains on sale of mortgages are net of hedging impact.
Management's Responsibility for Financial Information
The Company's Audit Committee reviewed this document along with the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report. The Company's Board of Directors approved both documents prior to their release. A full description of management's responsibility for financial information is included in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report.
Caution Regarding Forward-looking Statements
From time to time Home Capital makes written and verbal forward-looking statements. These are included in the Annual Report, periodic reports to shareholders, regulatory filings, press releases, Company presentations and other Company communications. Forward-looking statements are made in connection with business objectives and targets, Company strategies, operations, anticipated financial results and the outlook for the Company, its industry, and the Canadian economy. These statements regarding expected future performance are "financial outlooks" within the meaning of National Instrument 51-102. Please see the risk factors, which are set forth in detail in the Risk Management and Other Risks sections of the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report, as well as its other publicly filed information, which are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors that could cause the Company's actual results to differ materially from these statements. These risk factors are material risk factors a reader should consider, and include credit risk, funding and liquidity risk, structural interest rate risk, operational risk, investment risk, strategic and business risk, reputational risk and regulatory and legal risk along with additional risk factors that may affect future results. Forward-looking statements can be found in the Report to the Shareholders and the Outlook sections in the Annual Report. Forward-looking statements are typically identified by words such as "will," "believe," "expect," "anticipate," "estimate," "plan," "forecast," "may," and "could" or other similar expressions.
By their very nature, these statements require the Company to make assumptions and are subject to inherent risks and uncertainties, general and specific, which may cause actual results to differ materially from the expectations expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, global capital market activity, changes in government monetary and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments, competition and technological change. The preceding list is not exhaustive of possible factors.
These and other factors should be considered carefully and readers are cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any forward-looking statements, whether written or verbal, that may be made from time to time by it or on its behalf, except as required by securities laws.
Assumptions about the performance of the Canadian economy in 2014 and its effect on Home Capital's business are material factors the Company considers when setting its objectives and outlook. In determining expectations for economic growth, both broadly and in the financial services sector, the Company primarily considers historical and forecasted economic data provided by the Canadian government and its agencies. In setting and reviewing its target, objectives and outlook for 2014, management's expectations assume:
- The Canadian economy will continue produce modest growth in 2014 with stable to modestly improving employment conditions in most regions and inflation will generally be within the Bank of Canada's target of 1% to 3%, leading to stable credit losses and strong demand for the Company's lending products.
- The Canadian economy will continue to be influenced by the economic conditions in the United States and global markets; as such, the Company is prepared for the variability to plan that may result.
- The Bank of Canada continues to indicate that increases to its target overnight interest rate are not imminent and, as such, the Company is assuming the rate will remain at its current rate into 2014, with the potential for modest increases later in 2014. This is expected to continue to support relatively low mortgage interest rates for the foreseeable future.
- The housing market will likely remain stable with balanced supply and demand conditions in most regions supported by continued low interest rates, stable to improving employment, and immigration. There will be modest declines in housing starts and resale activity with stable prices throughout most of Canada. This supports stable credit losses and strong demand for the Company's lending products.
- Consumer debt levels will remain serviceable by Canadian households.
- The Company will maintain uninterrupted access to the mortgage and deposit markets through broker networks.
Non-GAAP Measures
The Company has adopted IFRS as its accounting framework. IFRS are the generally accepted accounting principles (GAAP) for Canadian publicly accountable enterprises for years beginning on or after January 1, 2011. The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with GAAP, are not defined by GAAP, and do not have standardized meanings that would ensure consistency and comparability between companies using these measures. Definitions of non-GAAP measures used in this report can be found under Non-GAAP Measures in the Management's Discussion and Analysis included in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report.
Reconciliation of Net Income to Adjusted Net Income | ||||||||||||||
Quarter | Year to date | |||||||||||||
(000s, except % and per share amounts) | Q4 | Q3 | % | Q4 | % | % | ||||||||
2013 | 2013 | Change | 2012 | Change | 2013 | 2012 | Change | |||||||
Net income | $ | 68,827 | $ | 66,417 | 3.6% | $ | 58,965 | 16.7% | $ | 256,542 | $ | 221,983 | 15.6% | |
Adjustment for derivative restructuring - IFRS conversion (net of tax) | 850 | 931 | (8.7)% | 2,602 | (67.3)% | 5,873 | 2,602 | 125.7% | ||||||
Adjustment for disputed loans to condominium corporations (net of tax) | - | - | - | - | - | 1,508 | - | - | ||||||
Adjustment for investment tax credit benefits (net of tax) | (1,470) | (2,735) | (46.3)% | - | - | (6,190) | - | - | ||||||
Adjusted Net Income1 | $ | 68,207 | $ | 64,613 | 5.6% | $ | 61,567 | 10.8% | $ | 257,733 | $ | 224,585 | 14.8% | |
Adjusted Basic Earnings per Share1 | $ | 1.96 | $ | 1.86 | 5.4% | $ | 1.78 | 10.1% | $ | 7.43 | $ | 6.47 | 14.8% | |
Adjusted Diluted Earnings per Share1 | $ | 1.95 | $ | 1.85 | 5.4% | $ | 1.77 | 10.2% | $ | 7.36 | $ | 6.45 | 14.1% | |
1 Adjusted net income and Adjusted earnings per share are defined in the Non-GAAP section of the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report. |
Regulatory Filings
The Company's continuous disclosure materials, including interim filings, annual Management's Discussion and Analysis and audited consolidated financial statements, Annual Information Form, Notice of Annual Meeting of Shareholders, and Proxy Circular are available on the Company's website at www.homecapital.com and on the Canadian Securities Administrators' website at www.sedar.com.
Home Capital Group Inc. is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering deposits, residential and non-residential mortgage lending, securitization of insured residential first mortgage products, consumer lending and credit card services. Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.
SOURCE: Home Capital Group Inc.
![](http://rt.newswire.ca/rt.gif?NewsItemId=C9488&Transmission_Id=201402121700CANADANWCANADAPR_C9488&DateId=20140212)
Gerald M. Soloway, CEO, or
Martin Reid, President
416-360-4663
www.homecapital.com
Share this article